Charlene Li:   
Yeah, I was already at Foreste,r and I came to  Forrester in ’99, right at the peak of Web 1.0. I was the person doing the online advertising sizing forecasts that most people put into their pitches to VCs. And it was interesting to see what the reporters were doing, but I just thought that was going to be a lot more.

And I remember Tim Berners-Lee talking about his vision for the Web way back in 1993: “This is not an opportunity for companies to talk to each other; it’s for people to talk to each other.” And that was never fulfilled back in ’99-2000. It was just this missing piece, which is the people part.

Another colleague of mine, Marianne Modell, used to say that “the Internet felt like a neutron bomb went off.” All the buildings were there, but where were the people? And I think the fact that these technologies started getting a lot easier – that people could get these tools into their hands and get power from that – really started changing the dynamic about 2003-2004.

Aaron Strout: 
Now, do you think this is here to stay? I know there are some people that are excited about the movement. There are some people that are skeptical that this is just a flash in the pan.

Charlene Li:   
Oh, it’s absolutely here to stay, and it’s just gonna get even crazier, absolutely crazier. Because whenever people can get together -- whenever we have more than two people in a room, there’s politics involved. You know, three’s a crowd?

And I think it’s just so fascinating to see what happens when you throw a social dynamic on top of anything. And if it’s anything that we’ve seen in the past week – announcements by MySpace, Facebook and today Google. For [inaudible] connect, it’s pretty astounding what the potential is going to be, but we’re just beginning to see the tip of the iceberg here.

Aaron Strout: 
So you mentioned your book, Groundswell, that you and your colleague, Josh Bernoff, wrote – among many of the other folks at  Forrester, I think – helped you collaborate. Can you talk a little bit about what the book really stands for and some of the lessons that it talks about? I just got finished reading it myself and really enjoyed it quite a bit.

Charlene Li:   
Well, thank you for reading it. In talking about the space to a lot of companies, we kept coming across one very specific thing, and that was it’s really confusing. It feels like a totally different, foreign world.

And so, we felt there was a need to put it into one place: all the frameworks, the processes, the ideas, the data, the case studies, the metrics. Put it in one place as sort of a recipe book on how to deal with this new space, because it’s very strange, very confusing. The rules are completely different. I often times feel like I’m explaining this alien world over there that people are a little bit scared and are watching it from a distance and a little bit afraid to go visit.

Aaron Strout: 
Great. Now, Jim, I know you’ve got a question about online advertising.

Jim Storer:     
Right. It’s interesting, you brought up online advertising, and I’m just wondering: A lot of the Web 2.0 companies -- the applications that are out there right now, seems like they're banking on online advertising being their business model. And I wonder if you think that’s going to come to fruition or if not, what do you think is really going to come to their rescue?

Charlene Li:   
I think it’s definitely online advertising, because the other parts are consumer payments, subscriptions. I just don’t see that happening. There are just so many choices and options that unless you're providing a tremendous amount of value – unique value and tremendous lock-in – it’s really hard to get payments from people. So it has to be online advertising, basically a business overhead. I think the biggest problem is that today’s online advertising just isn’t very good.

Jim Storer:     
Right. And there are companies that are trying to really target the advertisements; certainly, Facebook’s done a lot in that area. Do you think that’s going to pan out and more and more companies will –

Charlene Li:   
I think it will. I think it definitely well. Because the one thing advertisers love is attention. And if you can show that you're influencing decisions, then by all means you have a business there. And I think there's something really interesting here. It’s going to be much more indirect.

Whereas advertising in the past, you had the captive attention of somebody, in this space, it’s not so much captive as it is influence through your friends. So if your friends are a big influence and you were influenced through them, then that has an interesting sort of downstream impact. And so, advertising’s still very confused about how do you actually tap into somebody’s influence and use that as something that you want to actually target, and not just somebody’s demographic.

Jim Storer:     
So I’m only halfway through the book at this point, but I’ve been reading it as well. And one of the case studies you brought up is Twitter. And it seems like you brought it in maybe at the tail end of when you were writing the book as one of the cases. If you were writing the book today, how would you change what you wrote in the book? Or what would you say today about it?

Charlene Li:   
Yeah, we used Twitter as an example of a new technology, and there's a lot of questions still whether Twitter matters or not. And it was interesting. When I was writing that chapter with Josh, we were facing this whole sort of Twitter RIP in 2007 kind of phenomenon. So we put in place a sort of technology checklist in terms of, “How can you tell whether something’s worth paying attention to?”

So I wouldn’t change that much in terms of that technology chapter, because we wrote that chapter more or less to give a snapshot of what the technologies are in place today, but also to take into account all the new technologies that could come out of the pike. And the most important thing is to look at these new technologies and say, “Does it change your relationship? Does it fundamentally change relationships between people?”

There were a lot of other things, but Twitter definitely does that. It changes how much I communicate with people, how often I do it, the kind of asynchronous, synchronous behavior that’s there. And also, what I love about Twitter is that it’s very open and it’s plugged into so many different aspects wherever I want to use it as a communication tool and platform. So, I think that is a platform that’s here to stay for a while.

Jim Storer:     
So, I’ve got another question just about companies that are thinking about getting started here. And I know a lot of Groundswell is about companies just getting started and thinking about how they can apply community or social media to different business processes. So, if you just speak a couple of minutes about that, that would be great.

Charlene Li:   
Yeah, I think the biggest thing I would say to companies is to start small. I mean the one thing that we saw in every single case study that we did is that they really needed to -- because it’s so different; it’s so hard to take on a huge project and put out a full-fledged program right from the very beginning. It’s going to be nearly impossible.

Now, it doesn’t mean that you can't think big. You need to think about where you're going to take these relationships with people, but it’s important to start small, try small tests, and then quickly iterate on top of that. So, it’s don’t be afraid to get out there. There’s absolutely no reason [not] to get out there and just get your feet dirty, especially if you keep the stakes really light and small.

Aaron Strout: 
So, I have one final question and it’s a little bit of a wild-card question. George Colony put out a piece last year. It was a fairly simple, straightforward -- I’ll say it was almost like an open letter that talked about some of the things that he believed in and he espoused. And that was sort of freeing digital bits, and the fact that CEOs really needed to embrace this overall phenomenon that’s happening.

Do you feel, looking at Forrester, that they really have embraced it? I certainly have seen it in some of the analysts that I follow, like yourself, and Josh, and Jeremiah. Are they getting it? Are they doing it fast enough? And will they sort of become this thing that Groundswell is espousing sometime in the next few years?

Charlene Li:   
Yeah, I had an interesting talk with George and he says, “I’m so frustrated. I wish I could move faster.” And then he said, “But reading the book, I realized that I had to be patient.” So, these things take time. Often times what you find is the CEO gets it and wants really an organization at light speed. And people at the ground level -- the groundswell, literally – get it and they want to use the tools.

And the people in the middle are the ones who are extremely threatened by the new order, and so they need to be sort of brought along carefully and slowing along the way. It’s really hard, I think, to completely transform the organization overnight, because we are talking about a wholesale transformation about the way organizations work.

So at Forrester, it is hard. It is really hard. And George is blogging it. And he has this wonderful post about why it’s so hard to be a CEO blogger. And he’s confused. He goes, “Nobody’s paying attention to me.” You know, just really personal things that every CEO kind of goes through but he’s actually talking about.

And we as an organization have growing pains just like any other ones – about how much control to give up, how much control to keep, putting blogging policies in place, when can you blog, when can you not, how do you participate in discussion groups? It goes on and on. Every organization deals with this.

Aaron Strout: 
Now, one final question. You guys seem to be at the forefront of this movement. If you had advice that you could give to other analyst companies, what would you say? How do they begin this journey, and what are some of the pitfalls that they look out for?

Charlene Li:   
For analyst companies specifically?

Aaron Strout: 
Because I think this is a hard thing. I mean, analysts want to keep things in. It’s really sort of the belief, traditionally, has been, “Keep it in a walled garden and let people pay for it.” You guys are breaking that model to a degree, and I think a lot of analyst companies get scared by this concept because it really is turning the model on its head.

Charlene Li:   
I had built so much business through being open and transparent. And the more – what astounds me is that the more open and transparent I am, the more business comes in. So I will put out a report – I did a report on ROI of blogging; I wasn’t getting anywhere. And every analyst knows what this feels like. You're doing the research and you just hit a wall. There's just nothing else that you can come up with. The research is dry. The interviews are flat. It’s just, “blah.”

So, we threw everything up on the blog. We organized it; we put out the frameworks; and put it out there for the community to give comment on. And people are like, “This is great stuff.” We’re like, “Wait, it’s not done.” And we got a huge amount of feedback. And I’m like, “I’m never going to write a report inside of my wall garden ever again.”

So, I keep thinking that this is an opportunity to really be closer to our clients, be closer to the industry, and really understand what's going on out there. You get better at being an analyst, I think, by being open and transparent. And because you're better, more people will want you. And because you produce better research, and that in the end is what draws clients in.

Aaron Strout:  Well, it’s great, and you know we’re one of your clients and it’s one of the reasons why we actually were attracted to you guys, was the openness that folks like yourself, and Josh, and Jeremiah, and Peter brought to the table. So thank you for spending this time with us. I’m here with Jim Storer. This is Aaron Strout. We have Charlene Li of Forrester Research. Appreciate it.

Jim Storer:     
If somebody wants to learn more about Groundswell, where do they go?

Charlene Li:   
Thank you for that. They go to Groundswell.Forrester.com.

Jim Storer:     
Fantastic. Thank you.

Charlene Li:   
Thanks.

Outro:
For more conversations from the 2008 Community 2.0 Conference, visit iirusa.com/community and WeAreSmarter.org.