The following is a guest post from Peter Gloor, author of Coolfarming: Turn Your Great Idea into the Next Big Thing. He shares some ways to leverage coolhunting and coolfarming for Twitter and Facebook.
In the last two years, usage of Twitter and Facebook exploded. According to Techcrunch Twitter has now over 190 million active users tweeting 65 million times a day. Analyzing this huge information stream open up a new treasure trove to discover the next big thing. Facebook on the other hand recently took the 500 million user mark, thus providing a huge testbed to foster diffusion of innovative new ideas through viral marketing on friendship networks of global reach.
In my Coolhunting and Coolfarming books I described how to coolhunt – look for new trends, and coolfarm – develop new trends, by finding the most innovative people and what they are talking about on the Web. Coolhunting means looking for Collaborative Innovation Networks or COINs, small groups of intrinsically motivated people who get together to create the next big thing, coolfarming means developing and growing the COINs. People in COINs communicate in a close-knit group, leaving behind digital traces in e-mail archives, online forums, Web sites, and Blogs. With our software tools we look for those clusters of close collaborators, and try to predict what they are up to. In this post I describe how to apply Coolhunting and Coolfarming to Twitter and Facebook.
For example, in our own work Coolhunting on Twitter we are able to predict stock market indicators such as Dow Jones, NASDAQ and S&P 500 one to three days ahead by analyzing Twitter posts. How we did it? We collected the twitter feeds for six months and got a randomized subsample of about one hundredth of the full volume of all tweets. We measured collective hope and fear on each day and analyzed the correlation between these indices and the stock market indicators by counting the number of times words like “hope”, “fear” and “worry” occurred in the tweets. We found that the number of positive tweets is much higher than that of negative ones, more than double on average, which might suggest that people prefer optimistic to pessimistic words.
We initially expected that the correlation between optimistic mood and stock market indicators would be positive, while the pessimistic mood would negatively correlate with stock indices. Surprisingly, we found negative correlation with Dow, NASDAQ and S&P500 for both positive mood words like “hope” and negative mood words like “fear” and “worry”. This implies that people start using more emotional words such as hope, fear and worry in times of economic uncertainty, independent of whether they have a positive or negative context.
To put it in simple words, when the emotions on Twitter fly high, that is when people express a lot of hope, fear, and worry, the Dow goes down the next day. When people have less hope, fear, and worry, the Dow goes up. It therefore seems that just checking on Twitter for emotional outbursts of any kind gives a predictor of how the stock market will be doing the next day.
We also studied the friendship networks of Facebook fan pages. We collected – as far a publicly accessible – the friendship network of the people who clicked on the “like” button on a fan page of 15 Facebook fan pages.
We ranked groups by emotionality from 1 (product brands) to 5 (medical causes). We found positive correlation between the network density and emotionality. This means that the more connected the friends of a cause or brand are, the more emotional they are about their cause. Even more interestingly, we found negative correlation between the clustering coefficient and emotionality. This means that the more the friends of fans are split up in subgroups, the less emotional they are. The conclusions would be that the causes with the most emotional supporters have a dense, but evenly spread out network, with no recognizable subgroups.
This leads to two recommendations for coolfarmers who want to spread their idea: First – broker connections between thy supporters, and two – fight fragmentation of thy supporters by connecting subgroups. In short – it pays to help build one large happy family!
Peter Gloor, has enjoyed a 20-year career as an executive for UBS, PwC, and Deloitte. He divides his time between the MIT Sloan School of Management, Helsinki University of Technology, and the University of Cologne, and has been growing his startup company, Galaxy Advisors. He is the author of Coolfarming: Turn Your Great Idea into the Next Big Thing and the co-author of Coolhunting: Chasing Down the Next Big Thing.