Adam Neumann spotted a big funding bubble, and found the most efficient way to exploit it, by taking an existing asset that he could buy at a real estate multiple funded by equity he raised at a startup multiple. This drew money away from better companies in a sense, but the money it was going after probably would have ended up in some other business with similarly bad returns on capital. What WeWork accomplished was to speed up this process and make it more visible—someone who ruthlessly exploits a poorly-justified bubble is basically an efficient markets accelerationist who is heightening the contradictions and pushing the system towards its inevitable collapse as a side effect of their effort to get rich quick at the expense of others.
“I don’t have any wonderful insights that other people don’t have. I just have slightly more consistently than others avoided idiocy. Other people are trying to be smart. All I’m trying to be is non-idiotic. I find that all you have to do to get ahead in life is to be non-idiotic and live a long time. It’s harder to be non-idiotic than most people think.”
This also reminded me of the Monster/AB InBev deal mentioned in “The Little Book that Builds Wealth:”
To be fair, it is occasionally possible to take the success of a blockbuster product or service and leverage it into an economic moat. Look at Hansen Natural, which markets the Monster brand of energy drinks that surged onto the market in the early part of this decade. Rather than resting on its laurels, Hansen used Monster’s success to secure a long-term distribution agreement with beverage giant Anheuser-Busch, giving it an advantage over competitors in the energy-drink market.
Anyone who wants to compete with Monster now has to overcome Hansen’s distribution advantage. Is this impossible to do? Of course not, because Pepsi and Coke have their own distribution networks. But it does help protect Hansen’s profit stream by making it harder for the next upstart energy drink to get in front of consumers, and that’s the essence of an economic moat.
Once you find product-market fit you need to quickly scale distribution to own as much of the market as possible and preempt new entrants.
This is a great article from Ars Technica that explains how a bunch of published and defacto standards come together – more or less – to make Mastodon go and create a decentralized social web.
Twitter and Facebook appear to be in trouble. Twitter has been hemorrhaging users, with the Elon deal as a tipping point. Facebook just laid off thousands in an effort to re-focus on their core business and improve profitability. In light of that, and the sudden traction of Mastodon and the Fediverse, I started thinking about what the Fediverse could look like for brands.
The Fediverse is decentralized. That makes it different.
The Fediverse is a collection of “social media feed” services that use the ActivityPub protocol.
Mastodon is an open-source microblogging server that looks and feels a lot like Twitter.
The main difference is that there is no one Mastodon “service” – there are thousands of servers managed independently, running servers that speak ActivityPub.
There is no one organization or company that manages the site, creates recommendation algorithms, validates users or does moderation.
It’s different – and these differences mean that brands have to think differently.
But it’s also like Twitter, Facebook, Instagram, Snapchat and TikTok
It’s like a legacy social network:
Individuals, brands and publishers identify themselves with “handles” and “profile pages”
There’s “verification,” although it means something different, and works differently.
People “follow” accounts, tag their posts with hashtags and engage with followers.
By default, everything that gets posted on one server gets pushed to the entire network. Brands, publishers and individual users can even set up their own servers – just like email – for extra assurance.
With a dash of podcasting
Podcasts are distributed across a federated network using standards like RSS and MP3. Podcasts are consumed in proprietary apps like Spotify. But there’s no built-in back channel as there is on the Fediverse.
It’s all earned and owned media
Just like with email, you can own your own subscriber list. You can set-up an instance of Mastodon (or any other ActivityPub server) and then you effectively become the admin – not Twitter or Meta.
So instead of being @nike on twitter or Instagram, or facebook.com/nike, you can be @nike@nike.com (or @lebron@nike.com) – and your posts will be visible on every server on the Fediverse. If ActivityPub works, I can see brands signing up for hosted mastodon services just like they do email or web hosting.
You can share text posts, photos, live streams and recorded videos in native experiences from the same account
Today’s social networks are media specific: twitter for short text, Instagram for photos, twitch for live video and so on. The Fediverse offers a single network that any media format can (and does) ride on. This also means that your identity works across every format.
There is no one algorithm
Algorithmic discovery (e.g. trending) is not built in. Different Fediverse services can implement it in different ways. Different client applications handle discovery differently. Some servers let you follow hashtags, some don’t. It’s a mess. It’s also an opportunity for brands and publishers to build their own client experiences. Like a Facebook page turned inside out.
Paid advertising isn’t quite a thing
Although some servers do accept advertising, ads do not flow across the network. Every server in the Fediverse can set its own terms of use. Most instances are run by volunteers. Allowable content rules vary.
Admins (server administrators) control content by blocking specific accounts and servers. This needs to get standardized.
I could imagine some sort of “brand-safe” ad network that servers and client applications could participate in, provided that they also use an approved moderation service.
It’s less about “decentralization,” and more about “unbundling”
Brands will need to break their social strategy down another level. It won’t just be Instagram, twitter and Facebook. It will be which sub-brands get get visibility, how they are affiliated, and how reputations are managed. It’s more like the “old” web, with website URL, search position and email deliverability all being factors.
Facebook, TikTok, Snapchat and Twitter bundle together moderation, brand safety, and ad sales. This is unbundled on the fediverse, more like email or podcasts.
This could actually give brands and publishers even more power; they can pick and choose the bundles of services, audiences and media types that make sense for them.
Get to work!
The most important thing is to start experimenting with the Fediverse, now. Create a personal or stealth account, find the people who are joining Mastodon who are influencers in your domain. Follow them, let them follow you. Cross-post your personal twitter account. Try to figure out the neighbourhood and it’s norms. If you do that, you will be well positioned to figure out an experimentation strategy for your brand (or your publisher), and then start to roll that out if you see value in it.
