In a recent post, I argued that much of the social media hype is being promulgated by a relatively small circle of people who have vested interests in promoting the notion that social media is a revolution.

I have also been critical of the plethora of conferences that always seem to be created around hype, something that has been especially prevalent in the world of social media.

So it was timely that News.com’s Stefanie Olsen decided to write a piece about the experience of Ian and Kelly Dunbar, a couple that run Sirius Puppy Training, a professional puppy training service.

The Dunbars were lured to EconSM, “the first conference focused on business models and deals as much as the creative process and enabling technologies in the social media ecosystem,” in search of social media success.

The Dunbars were convinced to make the trip to Los Angeles for EconSM after Kelly received an email from Fast Company offering “a discount rate on EconSM 2008 tickets.

Fast Company, of course, is home to Robert Scoble, Shel Israel and lots of hype.

Already “obsessing about social media and successful community Web sites,” the Dunbars decided that EconSM would be the perfect place to learn more about social media:

“…Dunbar understands the world is changing fast–and dog-training amateurs are grabbing the limelight on YouTube with tips on doggie roll-overs and jumps. His professional fame hasn’t translated online yet. So he wants to turn his puppy-teaching acumen into a marketable online franchise, with six-minute how-to videos, audio books, and a thriving community of dog lovers. That way, he can go directly to the public, without the need for traditional media.”

Having invested $20,000 into their website DogStarDaily.com, the Dunbars have thus far seen a return of only $400 from book sales and advertising.

The Dunbars already own and operate a 27 year-old puppy training academy that pays the bills but social media is far more alluring:

“…they’d like to build a successful online ‘vertical’ so that they could travel regularly or work remotely from a place like Barbados–or not work at all.”

So what did the Dunbars experience at EconSM?

A bit of ironic anti-social salesmanship:

“The evening cocktail party turned out to be less fruitful schmoozing than they hoped. Executives from upstarts like Ning and KickApps spent less time explaining their social-networking applications and more time trashing each other.”

Lots of hype:

“Jim Louderback, for example, CEO of Internet TV network Revision3, was bullish about companies that create new niche shows of video content that can attract loyal followings of people. (Of course, that’s the business of Revision3.) Advertisers are willing to pay rates as high as $80 per thousand viewers to reach people in a valuable niche like technology, he said.”

And a price tag:

“After a demo of the technology, Dunbar wanted to use Bunchball to personalize his own Web site. But Mauro gave him a ballpark figure of about $50,000 to use the technology, a high multiple of DogStar’s monthly operating budget.”

All told, the Dunbars “left the conference $3,000 lighter” but were “hopeful about turning [DogStarDaily.com] into a powerhouse social network for dog lovers.

Fortunately, the Dunbars are “having fun together in the process” because like so many others who have been attracted to social media by big money and big hype, the Dunbars will probably continue to make money from their existing business and lose money on their social media experiment.

Olsen’s News.com piece is valuable because it highlights the fact that the hype around social media is not only luring in unsuspecting internet entrepreneur types, but average folks as well.

The notion that “times are changing” and that everything is about “community” is clearly infecting individuals outside of the small world of Web 2.0. And many won’t ask the critical questions necessary – they’ll waste money pursuing Web 2.0 dreams.

In the case of the Dunbars, a few simple questions could have saved them money:

  • What does something like YouTube “fame” really do for us business-wise?
  • What is the goal of our community for dog lovers and how can we make money from one?
  • Are there already established communities for dog lovers on the internet?
  • What is the realistic size of the market for our niche content?
  • How much will it cost for us to produce and market our content?
  • Given the costs, what is our break even and is there considerable upside potential after that point?

I suspect that if the Dunbars had asked themselves these questions, they would have decided that a trip to EconSM wasn’t worth the cost.

While I’m not one to discourage people from pursuing their dreams and understand quite well that risk is a prerequisite for success, choosing the right opportunities and avoiding the blatantly poor ones is also a prerequisite for success.

Frankly, I find that in many ways, social media has become almost indistinguishable from the “

business opportunities

” that are advertised on late-night infomercials – lots of bark but no bite.

The real money is in selling those opportunities to greater fools as the Dunbars’ experience at EconSM demonstrates so well.