Doctorow on Social Quitting

Cory Doctorow has been writing incisively about social media for a long time now. This week, in Social Quitting, he goes to the heart of how all the big social platforms work, and why the landscape is starting to shift rapidly.

The summary of his analysis on how every social platform so far makes money goes something like this:

• The economics of social media platforms are based on value extraction, and the platform design decisions that modify who benefits from that value.
• The end-goal for the platform companies is to move as much as possible of the value extraction in their favour, progressively making the service worse for end-users and businesses.
• To keep users and businesses on the platform while their value proposition is weakened ("enshittification" as Doctorow eloquently puts it), the platform companies are skilled in exploiting network effects and switching costs. Blocking interoperability with other platforms is a key and deliberate factor in this. The art is to keep users and businesses just happy enough that the pain of moving (and potentially losing their networks) is slightly more than the pain of using an increasingly enshittified platform
• The platform lifecycle typically goes like this:
  1. lure users with fun and satisfying features, and a minimum of pain points like ads, data collection, manipulation of what you see
  2. at critical mass, lure in businesses, trading the user attention surplus for revenue generators like targeted advertising, whilst keeping the hurdles for business low
  3. the implicit side-effect of increasing value for businesses is reducing value for users as they see more and more ads, and their feeds fill with promoted content over the content they want
  4. once a business sector is almost universally using your platform, start using that network effect against them by pushing up fees, forcing them to use your monetisation options etc.
  5. when enough business revenue is effectively locked-in through network effects and blocks on interoperability, the service to businesses is progressively worsened to extract more value for the platform company

Success relies on a skillful balancing act:

The platforms try to establish an equilibrium where they only leave business customers and users with the absolute bare minimum needed to keep them on the service, and extract the rest for their shareholders But this is a very brittle equilibrium, because the prices that platforms impose on their users and business customers can change very quickly, even if the platforms don’t do anything differently.

Citing Stein’s Law “If something cannot go on forever, it will stop”, Doctorow draws parallels between social media baronies, supply chain failures, and even modern (“end-stage”) capitalism itself:

companies can go on for years paying their workers just barely enough to survive (or even less, expecting them to get public assistance and/or a side-hustle), and those workers can tolerate it, and tolerate it, and tolerate it — until one day, they stop - The Great Resignation, Quiet Quitting, mass desertions from the gig economy.

An inevitable comparison springs to mind with the current relationship between the British electorate and the increasingly desperate shenanigans from those clinging to power. Sadly, whereas with social media there are an increasing range of alternatives that are designed to minimise the harvesting of surplus value, I’m not clear what an equivalent would be for government!

This was post 4/100 in #100DaysToOffload.