It’s been noted that Facebook will be the last network that can use “Surveillance Capitalism” as it’s primary revenue source.
If that is true, and I think it is, then we are stuck with Facebook and IG ruining the internet forever.
Scott Galloway has some ideas, but with all due respect, they are weak. Arresting, breaking up, and age gating social media isn’t going to work to make the web a joyful place.
Jonathan Haidt has a bunch of ideas as well and they suck.
These people and their ilk claim Meta is a criminal enterprise that needs to changed in some dramatic way.
But how should Facebook or other Meta properties be different?
Let’s do a thought experiment.
Imagine you are transported to Harvard in Spring of 2004. It’s cold outside so you walk into a building that you are surprised isn’t prettier since it’s Harvard and all.
You meet an undergrad named Mark and he is telling you about a website he made that’s like a yearbook only online. Little does he know that you are from the future and you know exactly what he is talking about.
What do you tell him? That he should move to Silicon Valley? Not to trust Cheryl Sandberg? Don’t show ads based on what people are talking about around their phone?
Remember this is an experiment and you know the future.
People hate a lot on Zuckerburg but what else was he supposed to do? Should he not have raised money from VC’s? Should he not have run ads? Was he not supposed to use the info you gave him to make those ads more valuable? Was he not supposed to go public?
Should he show you ads of products your grandma wants? And what about speech? What about content moderation? Design? Kids on the platform? News source publishing?
Tell us! Tell him.
Mark Zuckerburg took a path that made the most sense to someone who just wanted to build The Social Network. He raised money, moved to Silicon Valley, went public, sold ads, and he got everyone he possibly could onto his network.
He then used the money he made to buy other up and coming networks; Instagram and WhatsApp and an attempt to buy Snapchat.
And it worked. Mark Zuckerburg is worth $254 Billion. So think carefully before you open your mouth to the young lad.
Are you worth $254 Billion? I didn’t think so.
But what is there other than advertising to fund a network? Most Americans at the time would never dream of paying for social media. We still don’t.
And that is why Facebook will not be dislodged anytime soon. Zuck’s billions are safe.
The problem with Facebook is evident to anyone who remembers the internet before, say, 2007.
The internet was a beautiful place and now it’s crickets.
The party is over at Zuck’s place and even though the decor and music suck at least there are people to talk to and look at. The IG house has lots of hot girls and it’s a great place to start an affair if you’re looking.
A word on networks Networks are incredibly valuable. They are valuable because they allow humans to save energy.
The value of a network is described in Metcalf’s law as V ~ N^2, meaning the value of the network grows exponentially with each new user.
And it has to save it’s members energy.
Networks also have the famed “network effect” meaning the network members grow the network since the network works better with your friends on it.
No one wants to own the only telephone but if you do, you want your best friend to have one as well. It’s a marketing strategy that beats going door to door but it’s really hard to sell that first phone. It’s even harder to raise the money to build the first phone since no ones wants it.
There is also an inverse problem with social networks; that is, as their value goes up ala Metcalf’s Law, the quality of the network goes down. 100 people talking in a large room is a party. There are probably 20 conversations going and a few that would interest you to join. There is variety without chaos.
A million people talking at ounce is, well, rather awful (see X).
Have you been in a mob of people? I can tell you, the conversation suffers.
Social media has a funding problem Let’s say you want to start a social network in 2025. It’s like Facebook or some other platform only it’s going to be so much better. You are going to have a hard time raising the money.
Consumer internet startups account for less than 7% of venture funding compared to 30% a decade ago according to Silicon Valley Bank. VC’s understand the issue with making money in the space. VC’s understand you aren’t going to pull a Zuck over everyone’s eyes and use surveillance capitalism to make billions.
People aren’t falling for it again.
And if you are going to get people to leave Meta platforms or YouTube you are going to have to pay people like Rumble.
(I don’t include Rumble (lol), Tik Tok, or YouTube as I consider those social media and not social networks)
Paying people to leave the biggest network so you can’t monetize their audience isn’t great business. It’s the laziest sort of me too posing without thought. But hey, if you know a rich person who wants to waste their money then it would be fun for a few years!
In 2025 VC money is going to AI startups and corporate money to data centers. Zuckerburg has a free hand to waste billions on the Metaverse or ruining the careers of AI researchers, as long as Grandma keeps clicking those ads.
The failure of Web 3.0 Then there were the blockchain style networks. These have all been abject failures. Their idea of decentralization and paying or getting paid in crypto for posting, hanging out for airdrops, etc, is ridiculous. Monetization is baked right in from the start but people don’t go to social media to make money but to connect.
The idea that rather than paying you are going to get paid to “make content” doesn’t make sense. Only a decentralization true believer could get on board with such a scheme and those people show up anonymously. And they already have a network and few use it.
This is a solution to an invented problem, the problem that only Facebook makes money and not the users.
In truth, these Web 3.0 attempts are schemes to become cyrpto billionaires. Flat out lies.
Buy this coin and power to the people! Workers of the world unite!
Twitter, X, Bluesky, Reddit, Snap, Gab, etc X is a shit show and it’s been one for awhile. Gab and Bluesky are different twists on the same thing.
It’s a giant town hall meeting where everyone gets to yell at once. Due to their natures, they cannot compete with Meta. X’s advertising is down a lot supposedly. I doubt Gab or Bluesky are making much either in ad revenue.
Bluesky is trying it’s hand at different strategies. As a Public Benefit Corporation (haha), it’s hands are tied when it comes to “enshittification” but they are going to attempt…….micro payments! Try try again!
Gab and Bluesky are fringe networks that could only make money by being extremely small.
Bluesky has raised $36 million or $23 million depending on how you count. That’s a lot of micro payments! Gab somehow keeps the lights on.
What’s worse for these small networks is that their user bases are made up of what I term “protesters;” meaning, they are not going to be easily monetized. Gab has monetized with paid subscriptions and I heard there was a lot of wailing and gnashing of teeth, I can imagine the Bluesky network having an even harder time.
It’s hard to make money off people who think the network making money is the problem.
Snapchat has said they “may never achieve or maintain profitability” in their S-1 but hey they made it public! But this just goes to show investors that making money from social networks is hard even if you do reach scale.
Reddit also made it public and is making money from selling their awful content to train LLMs, a truly sad development for our children. And, Reddit is horrible but they’ve shown there is at least one way to make money from a social network other than selling ads, however shortly lived it turns out to be.
Lessons for a new network If you want to start a better social network you can’t keep doing what people have done in the past; you can’t make money from ads and you can’t survive by “being like Facebook without the surveillance.” That moment in time has passed.
And you can’t niche down either because Facebook Groups and Reddit owns those spaces as well.
So what is left? Something different than blockchain, ad free, niched down, “like blank with a twist.”
What are you going to tell Young Mark Zuckerburg? Have you thought of what you are going to tell him?
Here is what I would tell him:
Stay small. Stay small and charge.
You’re life is going to be much better doing it this way and you’ll still make a ton of cash.
Here’s how it would work;
“Mark, you are soon going to own the Ivy League’s social network. They are all going to be in your database with all of their connections. This is worth a ton of money and all you need to do is get a credit card processor.
“you will do this with your network, only people who attend a top 50 university will be allowed into Facebook. That’s it. After students graduate they can pay $100-500 a year to be apart of the network.
“People who want to join the network have to pay more the first year and will be added from newest graduating class to oldest to keep the culture in line with the early culture.
“Here’s the math, in the year 2025 there will be something like 12,000,000 living graduates and students at top 50 universities. At $200 per year, that’s $2,400,000,000 in revenue. That is extremely high margin business as well.”( Think how much leaner Meta would be today if that is all it had to do. The content moderation would be a fraction of the cost as would R&D, HR, etc. )
“You’ll be making over a billion in cash a year. Think of what you could do with all that money while having a highly valuable business that basically runs itself.”
“But what about all of the other people in the world?” Mark says. I want all of them so that I can be Caesar one day!”
“Take your cash and invest in all the other potential networks. The Big Ten network, The SEC Network, multiple networks for college kids and an unlimited potential for other networks. A network for family, states, small towns, Democrats, Republicans, hunters, whatever you can think.”
This way is a better way. No Congress, no legislation, none of the craziness.
And Zuck is still a multi-billionaire only people like him.
And we still have a long way to go.