A PSFK Good Idea For The Future: The 50/50 Corporation

At the final Good Ideas Salon in New York, the PSFK team of writers presented their Good Ideas for 2009 from their writing over the previous year (video here). I presented the 50/50 Corporation theory that I wrote back in February.

The theory argued that products, services and companies that were built for both social reasons and profit would be more successful than those that were built for mainly social reasons or profit. Here’s an extract of the original piece (which I recommend you browse):

To leverage the opportunities that digital connectivity has fueled a company should be a 50/50 Corporation. 50% about being social, 50% about making profit. By doing so, that organization should attract more profit than a company that follows a 100% Profit strategy.

Being 50% social doesn’t have to be all about having a social network. Having a corporate social responsibility policy that your customers love should work too.

…So, let’s take that theory and aim it at a few well known ventures.

My Space – 100% Social – It started out as a place for everyone to meet and show off. Beyond ambient profit making activity like advertising, MySpace shouldn’t be able to make money from non-social activity. MySpace size of course helps realize a lot of money from advertising.

Google – 80% Profit – The first day you came to Google.com you knew it wasn’t just there for fun. Still, the most profitable revenue generation is ambient – from advertising that’s contextually designed to be more ‘helpful’.

YouTube – 100% Social – It was created by the people for the people. And now Google is trying to change that. And if we follow the theory, it would suggest that as soon as the ‘for profit’ and ‘for the people’ balance gets uncomfortable for the users, it’s going to break the product.

American Apparel – a 50/50 Corporation – Probably. AA hasn’t grown into a global retailer just through sexy ads and bright T-Shirts. It’s socially aware approach towards its staffing, partners and raw materials sources has a vast impact on the popularity of the brand.

… Remember that it’s not a big problem if you’re 100% Social – it’s just that you have to realize that you’re not going to make as much money per user/customer/member as a 100% Profit venture and adjust. The question that I pose is: will being a 100% Profit venture be a big problem? Is by being a 100% Profit venture it the sort of company customers want as the consumer-company power balance changes?

Maybe the optimum is to set up a company that is equal in its aims to be social and profitable – a 50/50 Corporation.

The 50/50 Corportation