TLDR: Big social has prioritized revenue over member experience and it’s leaving massive gaps to be filled in consumer social.
I’ve written about this before, when Instagram updated their algorithm to more closely resemble TikTok’s, but it bears repeating: social media is losing its way.
In fact, I’d go as far as to say social media is ruining itself.
In my opinion, there are really two things that make social media magical:
Connection
Context
Connection is the obvious piece—the social piece.
Context however, is the core differentiator and the core value that is created. The reason why we engage. Here’s how I view it:
Facebook was all about your personal life and friendships. Pictures, your wall, birthdays, and events, but it deteriorated over time becoming too many things to too many people.
So they bought Instagram. The connection remained, and the context of friendship shifted to a new platform. Pictures moved over, and the dopamine hits from your wall moved over to likes, views, comments, and messages. Then they tried to become TikTok and our feeds lost their context once again—filling it with suggested content rather than what we actually crave when we hit that little multi-colored camera icon.
Twitter was the town square, the place for real-time news and thought leaders being a more authentic version of themselves. Then came the lists and the groups and the threads and the bots, the politics and echo chambers, closely followed with copycat products like Spaces that diluted the context of the platform by making it feature rich rather than value rich.
Clubhouse was live audio with the rarified air of curated speakers and hard-to-come-by invites, but then the floodgates opened, recorded rooms were added, and the quality of content was diluted. As they lost their context, so too went the connection to the platform.
Snap was about private conversation, the security of disappearing messages, and the cool factor of filters and geofencing events, but then came their own version of stories and media placements—albeit a tough battle when Instagram copied Stories and Reels—nevertheless, as the context shifted, the connections were also diluted.
Then on the messaging front we’ve got Discord, WhatsApp, Slack, Teams, Telegram, and so forth. If you’ve spent anytime on really any of them, you know it’s like drinking from a firehose—hard to consume and to keep up with. Each of these started with a core centered around connection and context, but have quickly grown to become noisy town halls.
I do still think there are still two that are doing it well. Not without their flaws, but hanging in the game.
LinkedIn is about your professional network, making professionals more productive and successful, and while it still focuses on professional output with enterprise products like Recruiter & Navigator, it has also become increasingly about professional consumption—news, updates, and thought leadership that drive page views and increases inventory for advertising sales. While not ideal, at least the focus is still on the members, and the context of a professional network still holds its own.
And of course there’s TikTok, where instead of starting with connection like all of the rest, they started with context. You go to TikTok to discover, not to connect. You’re looking to engage and find new things rather than make new friends. The first thing you see when you download the app is an endless scroll and a random username—connection comes later, or in many cases, not at all. By being context first, particularly where that context is discovery and engagement, they have no need to trojan horse us with copycat products or dilutive experiences to increase revenue.
And then there’s Threads.
Meta has an absurd distribution advantage, so of course they’re north of 70 million users in 48 hours. So what? Do we really need another unfocused social media platform? Much less one that is a copycat product, uninspired on originality?
Maybe it will be hot for now, or hot for a while—like Facebook was, or like Instagram has been—still an incredible success by most standards, but at the end of the day, most the social networks are just archaic advertising machines and distribution channels devoid of true value in favor of a human addiction to dopamine.
And it’s that underlying business model that is their Achilles heel—the need to monetize user data for marketing requires companies to increase engagement at the expense of their context—their core asset—and subsequently their users.
Marketers are being squeezed, and social media companies are vulnerable.
Companies are tightening their belts in this economy, and those who figure out how to grow and gain market share while others retreat will emerge as the winners.
In order to do that however, they need to find more efficient ways to grow. Social media advertising and advertising in general has become a multi-touch attribution nightmare and an inefficient way to reach consumers relative to what’s truly possible if we rethink context and reach.
There is a real opportunity for new (social media) companies to emerge that don’t obfuscate their business model relative to the user experience, and where the value exchange is apparent, fair, and efficient.
For example, local stores should not be advertising on Google and Facebook—they should be giving that money directly to their customers—both bringing in new ones, while offsetting the cost of inflation to everyone.
SaaS marketers should not be paying thousands of dollars per lead, but instead charging for their products based on usage and building technology and services so good that the value itself is what drives the growth—like AWS or Azure.
Direct-to-consumer companies shouldn’t be eating up our social feeds, but instead there should be a social network purely for advertising and shopping. A place that is unapologetic about its context and passes on that value directly to its user and consumer.
Ultimately, I’m disappointed in the evolution of social media to prioritize ad revenue over member experience, but that’s the story of most public companies, and I do think it paves the way for new and more focused businesses to emerge and deliver the value that so many users crave from the big names in tech.
Right now, where do you go to engage with your closest social circles without the noise? Where do you go to find and shop for new brands? Where do you go to discover new restaurants? Learn new hobbies? Find things to do? Manage your connections?
These, and many others, are all massive consumer opportunities that big social have failed to deliver on in a profound way by virtue of being too big, lacking focus, and being forced to drive revenue at the expense of the members.
As an investor, I see countless companies trying to decouple these giants. The question is, will anyone break through, or are those same distribution advantages that fueled Threads’ overnight popularity simply prove impenetrable and too big to fail?
Think about it. Tell me what you think.
See you Monday.
I think social media is destroying social skills, real relationships, and wasting our most valuable resource- our time. Wasted !