I enjoyed this. It feels obvious doesn’t it ? But - it’s so hard to see anything grassroots changing here for exactly the same reason the apps become attention-gamified - how can some small organically-grown thing compete with the money ?
Kind of. Those examples are often trotted out as discussion killers a la “regulating these vices didn’t work, so don’t bother trying to regulate $whatever (addictive dark patterns in this instance)”.
But that’s not exactly true, is it?
Calling out alcohol and tobacco ignores all the vices that were made durably illegal all over the world: prostitution, blood sport, slavery, forced marriage, and so on—and yes, institutionalized slavery was a vice, an economic one rather than a habitual one, but every bit as behaviorally seductive for slavers as speculative investing, MLM, or subprime asset flipping are for some people today.
Sure, not all of those things are illegal everywhere, and reasonable people may disagree as to whether illegality is appropriate for some of them (e.g. prostitution). But in total they do indicate that vice regulation can “stick” better than it did for alcohol and tobacco.
Hell, we used to put cocaine in soda! Whether or not you believe that the current prohibition/penalty practices around that drug are good, I assume most folks agree that it’s better now that we can’t get addicted to it via products available at the supermarket. Even as addiction-engineered as current-generation hyper-processed foods are, it was once much worse, and that was pretty successfully addressed via regulatory prohibition.
In most places liquor, while legal, is seriously regulated, and alcoholism is considered a sickness worth treating. Alcohol's effects are visibly debilitating, from poor driving to the very ability to stand without falling or speak coherently.
Addictive games though don't show such easily detectable effects. So it's more like a discussion on gambling, casinos, etc, but the current forms of addiction-forming experiences are much more underhanded.
The right question is: how can some small organically grown thing compete for attention?
If everyone is engaged with addiction machines nobody will use it.
Engineered addiction is mind control. It is abuse. Hacking the human brain is violence — a term that has been robbed of its impact through overuse for things that are not violence, but this is.
Engineering of addiction in any form should not be legal for the same reason that kidnapping someone and raping them or forcing them to do my labor is not legal.
Fix this problem — remove the mind control and violence — and a market niche opens up for honest business models. As it stands nobody can compete with these platforms because volition can’t compete with violence and honest commerce can’t compete with slavery through dopamine system hacking.
BTW if you work for these companies, quit. Ten to fifteen years ago ignorance was an excuse. I don’t think the original inventors of this nightmare knew quite what they were doing. Ignorance is no longer an excuse. If you are “optimizing engagement” in this context and in these ways you are a bad person.
It’s interesting that the examples you provided - kidnapping and forced labor - are somewhat legal in the U.S. in the context of the treatment of people of color by law enforcement and incarceration industry.
Similarly, suppression of wages, taking away healthcare, food, employee protections (at-will employment), legally required vacation days and maternity leave, and any meaningful safety nets for employees, pushes the social contract for workers toward violent nonconsensual extraction.
Maximizing extraction inevitably requires violence and cruelty.
Yes. Given that, how can we do what GP suggested and move the perception and legal treatment of these behaviors towards “ethically repugnant” rather than “conditionally (and, as you pointed out, very unequally) socially permitted”?
By...not competing? As long as you're profitable (read: your expenses are lower than your incomes), what does competing to be "the best" (whatever that even means) provide you?
I think in this context "competing" means having a meaningful market share, which would help reduce time the world spends on the alternative useless gamified/addictive apps
That's a narrative that makes no sense. If a company is profitable, it doesn't "die". If customers like your product and their friends are on your platform, they have no reason to leave to another.
I agree. I see this becoming a bigger and bigger problem unless someone steps in with significant regulation or major changes like the article says.
The other challenge is the regulation part is much easier when the product is, say, heroin. Algorithms are technically complex (hard for policymakers to grasp), flexible (can be tweaked to work around guidelines?), and operating in the digital world (harder to monitor/block).
Maybe a major factor here is social acceptance vs stigma. In the future will it be considered extremely weird and antisocial to be on your phone nonstop?
> Maybe a major factor here is social acceptance vs stigma. In the future will it be considered extremely weird and antisocial to be on your phone nonstop?
Valid question - however I have a feeling that for shaping perception of such behaviors we need a stronger middle class - and my hope for it shrinks every day
What this all boils down to is the major weak point of capitalism: profit over all. It’s a darwinistic system, and survival depends upon the ability to abandon ethics in the name of money. Not that ethics doesn’t have some value - it does - but only as a money generator as some customers are motivated to spend on it or at least the idea of it. By and large, however, ethics becomes a weakness in this system.
So in my view, the solution has to abide by this law of the jungle, but also short circuit the psychological mechanisms that tech companies are using to harvest attention. Somehow, people will have to pay for their freedom, similar to how drug addicts can pay for rehabilitation once they see the damage the drug has done to their life. It’s still a business, but one that contributes to the greater good.
Most of the solutions in this article require some kind of government intervention, which I don't see happening any time soon. Eventually, maybe, but probably only after society has nearly (or completely) ripped itself apart due to social media, the negatives are laid bare, and people start pushing for change.
Going to recommend "Addiction by Design" here. Superb book about the addiction design dynamics in the gambling industry and very reminiscent of what we see in the smartphone/internet universe today. Shout out to the forgotten HN user who recommended it originally, one of the best and most salient books I've read in years.
Been going on long before Silicon Valley was even a thing. Sugar industry for example.
> What might actually work
This section is idealistic. I guess the author was too damaged by his own experience to actually study the wave of twitter replacements. I would love to see an analysis of those. "Different Funding Methods" is clearly required but perhaps not sufficient.
For sure… but digital distribution and deep understanding of the mental processes behind addiction make it even more accessible for new products / games today.
Indeed. The first thing I think of when I read "engineered addictions" is fast food like McDonalds and Subway. People work very hard to make sure the taste and smell is addictive but that the food is not satiating.
Alcohol, nicotine / cigarettes, sugar packed junk food. The digital realm of addiction is a new face of the same pattern.
Cheap hits to increase pleasure centers in the brain that overall have a detrimental cost to humanity with entire industries to deal with the health consequences.
This is the mining of wealth from health reducing the overall productivity of humanity for the sake of near term profits. Optimizing short term gains for long term progress.
True. Regulatory prohibition has sometimes succeeded at addressing these problems, though. More info on that in my adjacent comment, here: https://news.ycombinator.com/item?id=44407009
I remember when ‘Hooked: How to Build Habit-Forming Products’ came out by Nir Eyal. It came out the same year as ‘Addiction by Design’ and was rapidly adopted in the SV and HN circles. I heard somewhere he felt bad about the impact of Hooked… but I don’t have a source.
Eyal wrote another book 5 years later trying to help people control their attention & not falling victim to the playbook he outlined in Hooked.
Honestly it always comes back to, we need a healthier relationship with our tools. The phone, social media, etc. It's all a tool. And yes it can be highly addictive but so are drugs, alcohol, TV, etc. all easily accessible and how we deal with it comes down to ourselves. It's what environment you put yourself in, and if that environment is one that includes a lot of screens then there's a sliding scale as to how corrupted you'll become by it. If you're at places where theres alcohol and cigarettes I mean it's highly likely you're going to smoke and drink. The only things that really beat all of this is a way of life that recognises that it can or is poisonous and many things must be avoided e.g get off social media. It was built to be addictive, that's not going to change.
As someone who's a lifelong Muslim and even more dedicated to that in my late 30s and now at 40 I'll say we were put on this earth for a purpose. As engineers we need to understand our own design. We need to understand that all the things we constructed for ourselves isn't all for our benefit but actually a lot of it is harmful, whether it be the digital life or processed food. This is a more holistic way to live. The author obviously wanted to get people offline. I think the issue is when the algorithm of silicon valley is making money then anything inherently social becomes about addiction and gamification. There are alternative routes forward but probably by first getting offline or reassessing ones relationship with the world..
My hope, and it may be a naïve hope, is that with the rise of AI will see more and more people be able to build the kind of digital experience that they envision, including social media experiences, because of the democratization of software engineering.
That being said, what does it take to build a social media app using AI and also perhaps just as important to market it worldwide?
I "hope" that will happen as well. It is a naïve hope indeed. Almost all current AI systems and all future ones I foresee, are made by large corporations that are looking to turn a profit. Enabling, ordinary "people ... to build the kind of digital experience that they envision" does not maximise profit. Instead AI systems will work for their owners to maximize profits by extracting revenue from the users. Some of this revenu could come from advertising. AIs could build ads that are far more personalized and convincing than anything we can imagine now. AI agents will work first and foremost for their corporate owners and will only do the users bidding if it benefits the owners. There is absolutely no reason to believe that it will be different this time and that now corporations will happily hand out everything for free and users will be empowered. I don't doubt that open source and freedom respecting AI will exist and that some will be able to use it. The great thing about free markets is that those who want to will be able to opt out. But it will always be niche and small just like it is now.
Building the social media platform you want to see isn’t really the problem though. They are relatively easy to build, the hard part is making it valuable enough to attract users and earning enough to keep it running.
Using AI introduces additional costs without solving the core challenge there.
> Then it raised venture capital, hit scale, and needed to hit growth numbers and meet quarterly metric goals. The focus shifted from “authenticity” to “daily active users.”
Having spent a few years in the VC world I have been increasingly convinced outside investment is the biggest reason why companies lose their morals. The legal obligation to represent shareholders erodes morality. When the people running these companies feel they’re beholden to shareholders and can’t act on their own agency of course they will turn to addiction research not as a warning but as a guidebook. It’s Stanford Prison Experiment stuff.
I hate being reductionist, and I am posting this on a historically YC forum so of course there’s nuance, but there’s a pretty huge throughline of outside investment and addiction engineering. It sucks we’re seeing less grants and less security net to encourage risks under current administration, because it leaves investment as the quickest path to starting or scaling a company. Donate to open source, IMO
To be clear, business operators have extremely, extremely broad latitude in how they interpret their fiduciary duty to shareholders.
We actually need to combat this notion that somehow exclusive focus on short term returns is somehow legally, morally, or ethically required. It is actually antisocial and obviously destructive.
Businesses are powerful tools for the common good and the fact they produce returns for investors is absolutely critical to their continued existence and long-term viability.
But the point for businesses to exist at all is to produce positive externalities and they need to produce those externalities for more than just their owners.
It cannot be "either/or" and it's not immoral to pursue profits.
You can explicitly build the business to say "delivering shareholder value is not our highest goal, we must remember that we live in a society and upon a planet".
Their purpose is absolutely not "to produce positive externalities" (whatever that even means). What makes you say that? You can, and people do, run a business doing all sorts of heinous things
There's an old saying: The purpose of a system is what it does[1]. You can't (well, shouldn't) judge something by its intended purpose if what it ends up doing goes against it.
Human quality of life tends to be pretty shit without them though, and that is ignoring all of the competitively a necessity "choices" where not doing so is literally suicidal. Not adopting early agriculture and settling down leads to nomadic hunter gatherers being outnumbered and genocided by sedentary farmers sorts of necessity. Refusing to mine and pollute means bad things happen to you when you encounter metallic armed and armored foes.
Voting obviously works, you can vote away capitalism, some countries did that.
The only reason it "doesn't work" is that the countries that did vote away capitalism didn't fare very well, so other countries people are very reluctant to try that again. But they absolutely could if they wanted.
This is a dumb saying. And if you start to apply it to everything capitalism still seems pretty ok. For example: "The purpose of Communism is killing 20+ million people"[1]
I agree that when taken literally, it's a dumb thing to say: literally (i.e., the dictionary definition), the purpose of a system is the reason why it was built, not what it does. But it's a slogan, and slogans don't always make sense taken literally. The point of the slogan is to remind people of the (obvious, I hope) fact that, as I wrote:
> you can't (well, shouldn't) judge something by its intended purpose if what it ends up doing goes against it
If you check my Wikipedia link it shows that the original quote says more or less the same thing: "[this slogan] makes a better starting point in seeking understanding than the familiar attributions of good intention, prejudices about expectations, moral judgement, or sheer ignorance of circumstances".
In other words, it doesn't matter what's the historical context of why corporations were created, what matters is what they do now. You can argue, like it was argued, that corporations as a whole currently are a net benefit. My point is that bringing up the historical context of their original purpose adds nothing to the discussion.
As to your other point, I completely agree that it would be useless to try to defend the Staling regime by pointing out what communism was intended to be. That's more or less the point I was trying to make.
That line is blatant projection on the part of central planners. Both in the sense of how they see the world and it must be planned rather than arising from interactions of independent parties and random vatiables and because it is casting their own flaws onto others.
I'm curious to know why you see it that way, as I don't interpret it like that at all.
Quite the opposite in fact: if anything it's a reaction to people who do try to understand a system by looking at its original plan: it says that you should disregard that and look at what the system actually does (which includes "interactions of independent parties and random variables", as you say).
In any case, that's how I meant it: it's a bit useless to dig up the original purpose of corporations in history books to talk about how corporations work today, like the comment I replied to suggested.
It’s pretty rare for businesses to produce positive externalities. Businesses create value and some of that value goes to others, but that normally happens through explicit transactions.
>But the point for businesses to exist at all is to produce positive externalities and they need to produce those externalities for more than just their owners.
I see little evidence that this is true. If anything, modern VC companies are "externality parasites". They produce positive externalities for some (ie. shareholders), by putting a lot of negative externalities on society as a whole (see for example the cost to democracy, societal cohesion, etc. that comes for Facebook and the like).
If I had to choose between common good and shareholder value all else being equal, I'd choose common good every time.
We should be suspicious of games that favor shareholder value over common good and repair them. Of course this is harder than it sounds, but letting the person with the most money in a Monopoly game also set the rules is absurd and and obviously wrong. Wrong even without having a consensus reality on what "common good" entails and this is important.
The "capital game" should serve us, rather than us serving it. A fatalistic lack of imagination is no longer an option. When we're more afraid of unintended consequences than accepting that we have a responsibility to the current consequences, our current consequences look rather intended.
I hear you but disagree. Who decides what the common good is? You end up with companies moralizing, forcing employees to adhere to those common goods in both their work and personal lives. Forcing people to get the vaccine was for the common good. DEI was common good and that in turn led to Trump being elected. The pendulum swings.
At least with share holder value, you know where you stand. The common good is a constantly changing thing determined by the moral authority in charge at a moment in time.
Common good: humans, according to systems theory, have the same needs and there's a finite set. We can map them & then design systems so as to satisfice all of them.
If one of human needs is status and status is zero-sum, then why does it matter what economic system is in place at all? We could equally rely on feats of strength, or games of chess, or rolling dice for all I care.
Besides why can't one of human needs also be an economic system that doesn't have the failure mode of poverty?
> We could equally rely on feats of strength, or games of chess, or rolling dice for all I care.
Those aren't very productive, our current system makes people produce value for others in their chase for status. Older systems people destroyed value for others in that chase, creating wars or other miseries, we have much less of that today.
I'd much rather have another billionaire than another authoritarian warmongering dictator.
> our current system makes people produce value for others in their chase for status
I don't think most of the people who have extremely high status are doing anything remotely close to producing value
They just own capital which they use to pay other people to produce value, which they then take credit for, which boosts their status
So it would seem that we're pretty divorced from the idea of "produce value -> get status" these days, if you can just pay people to produce value for you instead
Billionaires are the warlords of the 21st century. The only difference is that we've switched the map. We don't compete on the map, we compete on economic territory. But the results are the same - they fill the same role.
Expansionism, cult of follower, dispensing boons, and absolute control over their territory? check. The only reason we don't recognize them as warlords is because they don't wave scimitars and wear turbans. Neolibrral warlords wear Patagonia vests and beige slacks.
We're terrible at mistaking asthetics for function. Fortresses have been replaced by platforms; trade routes replaced by data sharing agreements. Armies have been ursurped by legal teams and lobbyists. We barely escaped feudalism and it's not clear we're out of the orbit of neo feudalism.
If we're able to be honest with ourselves, we need to learn that asthetics and function are different things. Just because they look different doesn't mean they don't fulfill the same function.
If it's zero sum you can design a system where everyone gets three sane amount. That's what strict monogamy does for mating, and you can easily imagine some "everyone is equal" communism-like system.
In practice that doesn't work, and the most successful "common good" systems instead ensure the disparity is limited and access is as equal as possible (e.g. not everyone can be wealthy, but the wealthy are not too rich and anyone had a chance to become rich instead of needing rich parents; or everyone can only have one married partner at a time instead of people who can afford it amassing big harems and not leaving any partners for the rest; or anyone can become famous, and famous people pushing their kids into fame is looked down on)
This is capitalist mythology. You'll need to account for "best" here because millions of people under the thumb of large-scale genocide, such as the policy decisions to implement poverty (which capitalism requires), likely have something to say about what you think is "best".
Can you present me with an alternative that was implemented, ran for a significant period of time and resulted in a better quality of life for those under it? Also poverty is not genocide, if you are going to present an argument please make it factual. You insult victims of actual genocide and minimize what they have endured with this comparison.
Not really - in practice on paper capitalistic countries need tons of socialist policies in order to prevent the system from eating the people it depends on.
Humans don't generally have the same needs, and to the extent they do they're competing over limited resources.
At one extreme you get theories like communism or socialism that treat humans as disposable cattle to be murdered or starved when they stand in the way of whatever the party leaders decide is the common good.
The common good is something that has to be worked out deliberatively and is more like taking the resultant of a huge number of force vectors than it is like mass producing units of the same good for everyone.
The word "Common Good" has a specific meaning. It steams from the word "Common" which means the people that share common values at our most basic levels, and "Good" means whats best for the people that share these common values.
What you are talking about is imposed self-interest at the level of the population from one or a small population that do not represent the common good. Not the same thing IMHO.
That's not what common good is. Common good never requires that people share core values.
Common good historically was what's good for the city/polis/country/band/family. Basically, you make some (ideally relatively small) sacrifice to your own interest for the sake of a larger group you share fate with.
There are more formal/mathematical versions of it, for example in Bentham where the common good is essentially a weighted sum over the good to each individual. Rousseau described it almost exactly as the resultant of force vectors. There are more authoritarian versions like in historical Sparta and more recently in Marx and Engels where it's imposed through violence.
> imposed self-interest
I'm not sure exactly what you're saying here, but self-interest is almost by definition not externally imposed. In Marxism one particular vision of the common good is imposed externally via a "revolutionary terror."
c. 1300, "belonging to all, owned or used jointly, general, of a public nature or character," from Old French comun "common, general, free, open, public" (9c., Modern French commun), from Latin communis "in common, public, shared by all or many; general, not specific; familiar, not pretentious." This is from a reconstructed PIE compound ko-moin-i- "held in common," compound adjective formed from ko- "together" + moi-n-, suffixed form of root mei- (1) "to change, go, move," hence literally "shared by all."
Your confusing political language with what came before this. Common good is the will of the people. It has nothing to do with cities, countries, or states. All of those things were created by people that wield political power. This is not the same as the common good. Common good directly relates to what is good for the people that share common values. You have been misinformed, by political society unfortunately.
In this context, I disagree.
Its really clear what the good in "Common" means.
Its like principles of what the Constitution was written on. Life, Liberty and the pursuit of happiness.
Principles like these are qualities we all naturally exhibit and as such doesn't need any explanation or qualifications. I know in our modern world people have decided that everything is open to interpretation. But I believe this was indoctrinated into us, over a long period of time, not to consider the human value[0] aspect of our being that we are born with. This was done by watering down the direct meaning of words and slowly changing the perception that humanity doesn't have infinite value and has to rely on external power structures to give it meaning.
The idea of common good is centuries older than the appearance of French or the English translation.
It has nothing to do with shared values. It's exactly as I described it above.
Notice the reconstructed PIE means to move together. Common good is about the interests of groups that co-move rather than groups that share values.
This makes sense even in family contexts. What is good for the family is often different from what any one person wants. Think about things like choosing dinner for a big hungry family on a long road trip.
Often the best solution is at best everyone's third or fourth choice because values and desires differ.
So "Common Good" is directly related to "Common Law" which showed up in 509-27 BC Rome during the Republic period and it was a way to have a common understanding between the "Common People" when Rome's political state was trying to use political law against non-Romans. The common people needed a way to protect themselves from the rising emperors and their decrees.
So I understand that you think its about families, but in this context, its really not. It was a way or a method to protect commoners.
When I say value, I mean if we both value freedom then we have a "Shared Value". This is really about the rights of the people which differs what rulers, want for the people. And I mean rulers that want to wield power against the people, for self-interested purposes.
You're never going to be able to change the economic system for the entire population where you live. Better to vote with your feet and move to a country where all economic activity is arranged for "the common good". There are many, many such countries. You're not the first with that idea.
That of course won't mean that you will have the privilege of deciding for everyone else what counts as "the common good". It's unfortunately not like the Arch Linux terminal where you are omnipotent.
I say that sincerely, as somebody who had to do just that. It's easier for Mohammad to go to the mountain.
Edit: To say: I voted with my feet and moved to a place which better aligns with my values. From a "common good" society to a "freedom" society.
Switzerland is not a good place for working moms. It is a very conservative country, for example working moms are systematically discriminated. The society, police, insurance, and banks enforce a conformity to a conservative, male-dominated society.
After Stalin's death, the Soviet union wasn't a total failure. And few can argue that China is a total failure today. But they paid a much higher price than what's acceptable. To make a somewhat successful "common good" society you first need to exterminate large swatches of the population. (This includes Scandinavian countries, which is less common knowledge). Then you can build on the new generation which won't resist - for a while. And the results are still lack luster, depending on your measuring stick.
There's no general way to model, only empirical evidence. Unless I'm supposed to enter the mind and soul of people and see their motives and reasoning.
Kind of sounds like what is happening now in the west under our current financial/economic system, albeit slowly by manufacturing crisis's and health problems to whittle down the population.
>To make a somewhat successful "common good" society you first need to exterminate large swatches of the population
It sounds like you are conflating "common good" with authoritarianism.
Common good happens at the grass roots level and then spreads by consensus. Doesnt mean it will happen on a large scale, esp if there are larger forces at work.
It seems like this is a population size problem to me. Or at least a concentration of large populations in a small area (Cities). Maybe the trick is to spread out the population a bit more and prevent areas from becoming over populated somehow.
I don't have the data in front of me right now, but there are some sources that say when groups become to large people vie for attention which causes the most egoic people to try and dominate the areas that they are in.
Thus this creates social circles that try to gain power for powers sake and do not contribute to society.
> when groups become to large people vie for attention which causes the most egoic people to try and dominate the areas that they are in.
You may be interested in this essay from the feminist movement in the 60s: https://www.jofreeman.com/joreen/tyranny.htm. It describes how the lack of structure or process forces the group to be run primarily by social dynamics like friendship, charm and influence.
There are lots of effects that happen as groups scale. But this capture of consensus-based and flat groups by ego-centric charismatic members happens in even tiny groups.
That's why successful flat groups (e.g. parliaments) have structure (e.g. Robert's rules) and make decisions by majority vote rather than consensus.
Yeah I can see some truth in this. Structure and processes help us deal with this problem. And my experience has been that structures and process get corrupted, kind of like what has happens in or political systems over the years.
IMHO, it seems like it easier to deal with ego when the groups are smaller. When they get too large, we tend to use bureaucracies to manage decision making logistics. Bureaucracies make it easier for people that want power over others to hide.
> After Stalin's death, the Soviet union wasn't a total failure. And few can argue that China is a total failure today. But they paid a much higher price than what's acceptable. To make a somewhat successful "common good" society you first need to exterminate large swatches of the population. (This includes Scandinavian countries, which is less common knowledge). Then you can build on the new generation which won't resist - for a while. And the results are still lack luster, depending on your measuring stick.
What do you mean by exterminate large swatches of the population in Scandinavia? Yes the way the Sumi have (and to a degree still are) been treated is atrocious, but I'd argue that if anything this is not a feature of creating a "common good" society. I would argue that strongly capitalistic/mercetalistic societies have a horrible track record of treating (and still treat) indigenous populations.
They're called Sami, and I don't think they've been treated much worse than any other ethnicity in Nordic countries.
What I'm referring to are the eugenics programs in Sweden, where unfit people were sterilized and/or had their children taken from them. These kind of programs were also present in North America, for what it's worth. The complete extent of these programs will probably forever be unknown, in all countries. Scandinavian countries are probably the countries who are most open about this, just like with suicide reporting.
As for Finland, they had a communist revolution and a very brutal civil war about the same time as the Russians. So their "common good" society was also born from a bloodbath, although the communists lost the war.
Norway is probably an exception. They're building a "common good" society on oil fortunes, just like the Gulf states have no problem with giving generous welfare for all of their citizens.
Many EU countries are pretty nice places to live, and didn't need a violent revolution to make it happen. All it took was democracy, a population willing to stand for its rights, and an elite which understood that building a welfare state is preferable outcome over having a violent Communist/Fascist revolution.
A capitalist system with right amount of social democracy to prevent worst concentration of wealth is the best model there is, at least for the well-being of its citizen and survival of its democracy.
"Stand for it's rights" is just weasel words for "Was willing to use violence in order to obtain their rights"
Even if they never actually had to become violent, violence or the credible threat of violence is the only thing that has ever in history convinced "The Elites" to change things
I'm not sure this is true. My analysis shows that 75% of economic transitions are completed without violent revolt.
Just a quick glance at the 44 historic economic transitions in my dataset, most of them aren't well known. The most likely reason why we think economic revolutions are associated with violent revolt is due to selection bias - violent revolts are more memorable, take up a larger section of history books, etc.
Happy to take at look at your dataset and compare notes.
I wish it were that simple, I think capitalism works best when personal self-interested incentives are aligned with what creates common good - IE policy is like game design where you design the rules in a way that provides an overall good outcome. In this lens, there is a huge problem with PE right now (the rules incentivize buying out industries and gutting them), and something wrong with VC (the rules incentivize enshittification) so the rules need to be adjusted to align with the broader outcomes we want.
Would you give to charity? You are pointing at the heart of the prisoner's dilemma endlessly recreated by the very existence of capital: why choose long-term public benefit over a short-term personal gain?
People give to charity what they don't need. If all businesses are expected to be charities, they cease to be profitable and thus cease to function, as no one will bankroll the initial investment required to set up a business without the prospect of making money on it.
Let's look at an example. In order to produce e.g. wind turbines, a large factory is needed, full of expensive machines. Let's assume that the buldings plus the machines all costs $500 million altogether. Where would that $500m come from, if the factory will never be profitable, so entities with money will never bankroll it? The only alternative I can think of is 100% socialism and centrally managed economy, where all businesses are owned and bankrolled by the state. However, in practice all such implementations so far (over probably at least a dozen different countries) has been terribly inefficient and corrupt.
Then don't make a company with shares. This is like complaining in a tennis court that it's better to play football. Anybody who makes his business a company with shares will be beholden to shareholders, even if he's the only shareholder. There are plenty of venues for any activity, which isn't structured in this way.
1. Nobody forces you to use a smart phone.
2. Nobody forces you to have social media or use it.
3. Nobody forces you to watch Netflix.
#1 is rapidly approaching the practicality of “nobody forces you to have money.” Technically true but deeply impractical.
#2 is heading that way. Lots of official info is only available on social media. Travel to certain countries can be difficult if you don’t have any social media presence as they’ll decide you’re trying to hide something.
The only way to make that happen is to have that common good be priced into the shareholder value, i.e., removing externalities that allow the privatization of profit and the public subsidies of the remediation of the damage done.
There is no latitude. They have only one requirement: growth growth growth.
If you hit the growth targets, they will pat you in the back and will demand Hyperscale growth growth growth and will throw money at you to supercharge it.
If you refuse to chase the growth, they will simply kick you off the company via Board or fund your competitor that will chase the growth at all means
Yeah, but you not getting what you want, you not having own little imperium is not the same as "you having legal obligation".
This amounts to an argument that if doing something immoral gives you money and power, you can not possibly say no and no one can blame you. That somehow more money and power is good enough excuse.
So you don’t get sued, but you lose control or even your stake or even the whole business. Remember how Uber founder got kicked out? He had a strong hand.
Chilling effect is there one way or another, and even when that does not work adverse selection does.
You have to have a very strong market position to resist the investor pressure. Kinda like Google had twenty years ago.
Or you can have a diverse set of investors who can’t or won’t be swayed by activist investors. But that usually means being public at which point your employees are incentivized by RSUs.
I'm not arguing there isn't an incentive problem. I'm arguing that it doesn't have any basis in statute. The distinction is important because it points to a different solution and different moral culpability for the system's outcomes.
> To be clear, business operators have extremely, extremely broad latitude in how they interpret their fiduciary duty to shareholders.
That may be true legally, but practically it's only true if they control the board. Otherwise they will simply be replaced by people who are willing to do what the board wants.
The annoying tone is unnecessary. Yes, legally speaking operators can go against the board and get replaced, which they certainly should do if they feel they're being asked to do something unethical. But it's not going to change how the company is run.
For the executive, sure. Not for the impact of the overall incentive structure on the trajectory of the business. Which is what this discussion is about.
The root comment this thread is in reply to had the implication that people are only acting this way because of an inaccurate idea of how strict the legal obligations are, and the other comments are about how that’s obviously not the only force producing the current outcome
Yeah, obviously that's not "the only force producing this outcome." Nobody claimed it was.
But it's important for founders to understand they are not legally obligated to do any specific thing for their shareholders. It is their responsibility to act morally. Yes, there are other incentives and forces at play. "Legal obligation" is not the cop-out excuse that executives claim it is.
Genuine question because I think I might be wrong on this one, or maybe misunderstanding what you're saying - aren't there cases of shareholders suing CEOs for not acting in shareholders interest and winning? If there was no legal obligation to act on behalf of shareholders how could they win those cases?
My understanding is those kind of cases aren't common because a) they are hard to prove, b) the people being sued if they actually have the money to make it worth suing them also have the money to fight it, and c) it's a really bad look for an investor to be suing a previous member of their portfolio and would a strong adverse affect on their deal flow
Unless you're saying there is no explicit legal obligation / fiduciary duty in law, but it does emerge from civil court cases, which is how I understand it, but short paragraphs are not a good place for the amount of nuance so I just said "legal obligation" as a shorthand for something real but very complex.
I think Matt Levine coined this phrase: "everything is securities fraud."
Activist investors will sue for anything alleging that executives broke securities law by doing anything that harmed their portfolio. It doesn't mean they win the cases, or that anyone is guilty.
There's also something worth noting that even if there isn't a legal obligation for executives to act on their shareholders interests, they have a really strong incentive when their compensation is mostly stock grants and the shareholders can fire them.
> The Court declared that, in certain limited circumstances indicating that the "sale" or "break-up" of the company is inevitable, the fiduciary obligation of the directors of a target corporation are narrowed significantly, the singular responsibility of the board being to maximize immediate stockholder value by securing the highest price available.
Seems to imply that under normal operation (i.e. no inevitable break-up) the fiduciary obligations are quite different though?
Yes, under normal circumstances, the "business judgment rule" applies which is much more favorable to boards. Satisfying it requires only that directors:
- act in good faith;
- act in the best interests of the corporation;
- act on an informed basis;
- not be wasteful;
- not involve self-interest (duty of loyalty concept plays a role here).
Well, there was one case in the law over 100 years ago in the USA. A company had decided to sell itself for cash and go out of business. The Court ruled, that in that situation, it should sell to the highest bidder. This is long before Milton Friedman began advocating that corporations had a duty to their common shareholders that provided the only valid yardstick for evaluating corporate activities. Friedman was an economist, and a controversial one, not a lawyer, and how he got the lawyers behind him is itself a long strange story.
The idea that common shareholders own the corporation was not really obvious to anyone from the start. Common shareholders get from the corporation only what is their privilege according to the corporate bylaws and charter. There are now, and have been in the past, many different kinds of and classes of common shareholders. For example, some big corporations today have many common shareholders who do not have any voting rights. The thing that sets common shareholders apart from the other stakeholders who also hold pieces of paper from the corporation granting them various interests in the corporation, is that the common shareholders get to divide up whatever is left over if and when the corporation is liquidated and everyone else is given what they are owed first. They are more heirs than owners. It is more realistic to hold that the corporation, as an artificial person, is not and cannot be owned by other persons, and owns itself.
It’s incredible how many people don’t understand this. Google is an obvious example that has multiple classes of stock and only some are voting shares.
There is the “shareholder lawsuit” but that really is about enforcing a company’s stated goals to its shareholders, which can and often are things other than “try to make the stock price go up as much as possible”.
I am repeatedly entertained by the phenomenon of someone who reads a case, bothers to remember it, thinks it's important, describes it, but does not provide a citation.
Friedman deeply misunderstands agency law. Saying he got the lawyers behind him is misleading, because there are any corporate fiduciary duties owed by directors or officers to the shareholder other than 1) act informed 2) do not usurp corporate opportunity.
It's not legally required in the state of Delaware (or Michigan where Dodge v Ford occured) to _maximize_ shareholder value.
It's that if you're going to make a decision that affects 1/3 of the companies value you need to actually claim it's in the shareholders interest that you do so.
> To be clear, business operators have extremely, extremely broad latitude in how they interpret their fiduciary duty to shareholders.
Legally maybe. The market and shareholders will punish you if you deviate from the current standard behavior.
We’ve all seen companies do layoffs just because “Wall Street” was concerned about the economy and then instantly see the stock price spike up.
These negative consequences are all results of bog standard prisoner dilemma issues that need government regulation to make sure everyone picks the good square, but the tech industry and this boards community as well is allergic to the idea that regulations can improve the situation for everyone
Yeah, I think it honestly lets founders off the hook too much.
In 95% of cases, the founder isn't smashing moral barriers because the VCs and shareholders are making them, or lording the threat of legal action or any some such.
In 95% of cases, the founder is smashing through moral barriers because their interests are aligned with the VCs: because they think what they are doing will lead to stupendous mega-wealth for them personally.
Like sure, I think the idea that corporate execs must be beholden to maximizing share price is a) corrosive to our society and b) not as true as often portrayed, but I don't think that's even a real factor here.
That really doesn't follow. Explosive growth guarantees amorality? What sin is inherit to success? Has envy become so embedded in our thinking that success alone is proof of guilt? Or is it just Original Sin style bullshit where everone is automatically guilty?
To succeed, you have to execute many things well and avoid bad luck. Add to this an extra constraint that one also needs integrity or morals and it will drastically reduce your success rate.
My statement will be true as long as having integrity or morals could hinder growth in some way.
Maybe in theory, but in practice there is a strong power mismatch that causes investors to have a strong influence. Sand Hill learned it's lesson from Facebook/Zuckerberg and now always have a seat on the board. Only outliers like zuck/bezos/similar have the weight to push back against investors. Heck, even Dorsey couldn't for whatever reason.
And even if what you said is true, you can look at the results of years of this system, the difference between companies with outside investment vs without makes a strong case against what you're saying.
It's like saying educating people about their rights wrt police helps, but in practice police don't derive their power from actual laws and it comes at considerable personal expense to push it to courts, in the same way Delaware is very strongly biased towards shareholder rights.
Even focusing on short term profit would be fine, if you want to blow up the business go ahead, if those profits were actually shared fairly with shareholders. Too often companies can just dilute their stock over and over, which fucks over individual investors and benefits the 51% owners, and investors don't really get a say, yes there's a vote but if 51% is owned by a few it's not a vote.
Individual investors are largely operating on trust.
I feel that it's even simpler: The company is the product.
When we have that mindset, we absolutely don't care about the thing that we call "our product." It's just food for the actual product, where we want to fatten it up, and sell it to the biggest slaughterhouse.
That starts almost immediately. You can't even get an A round, without an "exit plan."
I feel that the very existence of an exit plan, dooms the user. No one cares about them. It's all about fattening the company, and making it look good. When we do that, we'll feed it nothing but junk food, in an effort to make it as fat as possible, as quickly as possible, with absolutely no thought as to long-term viability.
I would love to see the tech industry return to concentrating on truly delivering good to the end-user. It's still possible to make a decent living, but maybe not at the insane rates we see.
If you've ever dealt with Investor Relations at a public company, this becomes very apparent very quick.
Core fundamentals as a business can be strong, but if you cannot craft a unique story or thesis (which does not have to be tangentially related with active initiatives) about your company, you will not succeed.
Usually, the onus should fall on PM, EMs, and Sales Leadedship to drive customer outcomes, but the hyperfocus on short term deliverables AT THE EXPENSE of a long term product vision makes it difficult to push back.
Very few newly founded or public companies can do the latter - the most recent ones I can think of are maybe Datadog and Wiz (not public but they did drive a customer centric mentality internally).
Of course, a lot of this is also due to the extreme bloat that formed in the tech industry in the late 2010s to early 2020s. Teams grew unrealistically large with limited financial justification beyond cherry-picked growth metrics, and this meant a lot of companies lost the ability to innovate frugally or nimbly. Unrealistically high valuations also played a role because towards the end, founders could end up demanding IPO-sized multiples in private markets even without the underlying fundamentals (eg. Lacework's $9 BILLION valuation on what was at most $90 MILLION in revenue).
A lot of the current AI products and stories are cost-competitive due to that bloat itself, so some amount of rightsizing will help the industry.
In the short run if you can get acquired then the long run fundamentals don't matter. They just become noise in some larger company's financial statements.
Isn’t all this company is the product stuff an obvious side effect of wealth inequality?
There is way way more money up top looking for investments than there is in the hands of customers, so it’s far more profitable to chase that money and make the stock the product than it is to care about the actual product much.
It’s a special case of the more general big dumb money problem that happens whenever too much money ends up in too few hands, whether those hands are a government or a few private rich citizens. You end up with this giant piñata of big dumb money and everyone whacking it.
In the old USSR instead of the stock is the product it was the appearance in the eyes of other bureaucrats is the product, but it’s kind of the same phenomenon. The customer isn’t the customer.
I would be willing to bet addiction in general (gambling, drug, dopamine, etc) is probably a symptom/side effect of wealth inequality. Desperation -> "relatively cheap method of short term emotional/sensory boost" -> Further Desperation not mitigated by outside forces -> repeat
Then rich people would never be addicted to things, but a history of musicians dying from drug overdoses says that's not true. Addiction is a deep topic that doesn't simplify into one neat little pet theory for it.
Well it's not a neat little pet theory though, it's an opening up of the conversation, thinking in binary.. It's a "poor vs rich" disease isn't helpful. Thinking in gradients is... "It's 50% more likely in people with this income level vs 10% in this other population", that's still a problem. The point is to address problems, not hand wave them away as "complicated" etc etc, something something engineering
the article is about digital addictions, and not gambling or drugs.
The point of saying it's complicated isn't to dismiss the problem, but to invite a deeper understanding of the problem itself so as to be better equiped to help solve the underlying issue, rather than show up, guns blazing, and then not actually fix anything.
You must not know many rich people if you think addiction is not an issue for the wealthy. The drugs of choice are less immediately destructive, but cocaine, pills, MDMA and ketamine are all wildly abused by the 1%.
All humans are susceptible to addictions and addictive behavior, but the 1% that you mention are mostly shielded from their negative effects. It's far less of an issue for them, and it's not even just about choosing the less destructive drugs. If we talk about just drug addictions, their wealth ensures that:
1. They always have a reliable supply of their preferred drug. No matter how much they need, many of them will be able to afford it pretty much indefinitely. They can just live with the addiction.
2. They have first-class healthcare to mitigate the addiction and lessen its side effects.
3. They have the power to never run into any legal trouble over it. How often do 1%s get convicted on drug possession? This often applies even to the harshest regimes.
So, referring to what the other commenter said, the wealth inequality also affects addicts unequally. The rich, excluding the most extreme exceptions, are immune to the downward spirals of addictions and many of their consequences. The poor addicts become increasingly desperate as their drug habit consumes most of their income and savings. The poorest turn to the cheapest, most dangerous street drugs. Many get little to no medical help. Many are charged with drug-related crimes, ensuring their criminality keeps them down for the rest of their lives. This varies by country, but the patterns are all similar.
There's always going to be an underlying layer of people who tend to gravitate towards addictions, rich and poor - the real question is if more and more people are turning to them as they get desperate, who wouldn't otherwise have.
They are betting on whether richer people will bet on the same things so they can cash out. Repeat, all the way up.
The entire economy is to some degree a casino betting on itself. I think this is always true to an extent but the casino nature becomes much more dominant the more unbalanced things become.
> A lot of the current AI products and stories are cost-competitive due to that bloat itself, so some amount of rightsizing will help the industry.
The problem is, any amount of rightsizing has the potential to tank the entire economy. Too big to fail, just that it isn't banks this time but a bunch of companies who went all in on "AI".
Capitalism as we know it so far only reacts after a crash happens because of the fear of crashing the economy with any corrective action. My very personal opinion is this is more psychological than scientific.
No, the reason is because these "crashes" are very small so on average you lose more trying to avoid them than just staying invested. The emotional part is trying to avoid them, the rational part isn't.
"The company is the product." -> When I'm feeling more optimistic I see this is how VC sees their portfolio and how you sell it to them, but not what the company is in reality. Like playwrights who write under authoritarian regimes selling it to the censor as promoting the regime while it actually satirizes and undermines them. But even if it's possible to walk that line, the data just doesn't back it up as common.
Side note, on "exit plan" - the most ridiculous thing about raising money is you need an exit strategy but you cannot explicitly say you have an exit strategy, you have to imply it while the whole time pretending it's not a focus for you. It's a very weird dynamic.
It helps to formally understand who is who. Every company has staff, customers, suppliers and product.
If you go the VC route then the VC is the customer. Since any good business is focused on customer satisfaction, a VC funded business is focused on VC satisfaction.
VCs want an exit. Which necessarily means switching funding model. The only switch that has worked so far is advertising. Advertising requires attention.
Of course a business can succeed with say SaaS subscriptions instead of advertising. This works well for B2B, but less so for B2C. Amazon is the poster child for B2C success, but makes most of its money from AWS (which is B2B).
The pattern is now well understood, and well demonstrated. If your business is B2C then figure out the funding model. If you can't do that, if you can't do it without VC money, then your path is predestined.
That's what you get when an expert financial trader makes a company. He wanted billions from the start ... so how to do it? There's only one way, really: a pyramid scheme. But an atypical one: get lots of sales, lots of revenue and change any profit into capital. This is quite a common plan in Western Europe, and that's why it doesn't work there.
Why would you do that? Well companies are taxed on profit. And the money you pay to investors ... is also paid out of the profit. No profit -> all the money stays in the company, under the control of management, ready to be deployed on yachts and castles for the CEO. Governments get nothing. Investors get nothing.
Jeff Bezos (and very early investors) get everything. If they get desperate there is a buyback (no doubt matched by a greater stock package for the top of the company).
This is a pyramid scheme because the whole company only works because it only makes extremely minimal profit. If it starts demanding profit it will be eaten alive by competition in no time at all. Money has to be invested in, flows to the top, and is taken out at the top. No doubt Bezos was utterly baffled by the success of it and therefore isn't yet out, but ...
When you really think about it, this also applies to very many publicly traded companies. Tech especially, always searching to present next growth area. And then often shortly abandoning it or wasting massive resources on it...
We make fun of the state run businesses of old communist regimes, how wasteful they were, how mismanaged they were, how they produced stuff nobody wanted and so on. I'm increasingly getting a similar feeling for VC fueled tech. It's all smoke and mirrors of hype (was blockchain or web3.0 yesterday, AI and quantum today). There is so much wasted money, especially after quantitative easing and negative interest rates of the past decade.
Publicly traded is no better. Lets not forget whole Meta and Metaverse and VR "investment". Google basically launching entire physical products and then killing them and refunding everyone (Stadia)...
One might question would we as society be better off if that money was spend on more efficient factories or say nuclear powerplants?
The difference is that VC fueled startups is a very small part of the economy while communist regimes are the entire economy.
Imagine if every company was as wasteful as VC fueled startups and life would be hell, imagine going to the new smart grocery store where prices changes by the minute and now you have surge pricing since many wanted to buy toilet paper this minute...
They may be a small part of the economy as measured in imaginary numbers being shifted around but still have a significant negative effect on our lives that cannot be easily escaped. This is even more true when you also count publicly traded companies which have similar incentives to sell out their "customers" in order to benefit the real customers and are often just the final form of VC funded startups.
> state run businesses of old communist regimes, how wasteful they were, how mismanaged they were, how they produced stuff nobody wanted
I'm increasingly convinced that this is pure western capitalist propaganda. From what I observed in the 8 or so years I've been an adult, Western Capitalist economies (especially US) are much more bloated and wasteful. Nothing demonstrated this more clearly than Crypto/Web3 Hype-Bubble.
You force them to pay for the negative externalities they cause so that their profit incentives are not as misaligned with what is good for the rest of the world. This includes making companies pay for pollution but also for much more abstract damages like the reduced consumer choice from monopolies.
While “maximizing shareholder value” is a huge problem, aren’t there other problems too? Founders wanting to get rich as quickly and as easily as possible, customers/users refusing to pay even for most important services (for example, how many people are willing to pay 5 bucks a month for something as important to modern life as email? But they’re happy to pay 5$ for a crappy Starbucks coffee), lawmakers too old or too corrupt to understand the negative effects of the products/markets they’re supposed to regulate, general public more interested in convenience and cheap entertainment than subjects like privacy, parents simply hooking their kids up with iPads so they don’t have to deal with tantrums (one of my colleagues told me he was raised by TV/internet, not by humans)… and on and on.
I suppose we’re living in an age of unchecked capitalism. But there are other issues too
I think its bigger. Morality and social contract have eroded and continue to erode.
Look at Mozila for the most insidious example. Take a privacy focused product. Rope in a bunch of suckers. Then literally delete the privacy focus from your mission statment and start the "slaughter"
Craiglist is proof it can be done at scale.. Its just that so few people with them means and morality exist anymore. The Sodom and Gomorrah fable is a warning not to let this happen or your society will destroy itself.
> Craiglist is proof it can be done at scale.. Its just that so few people with them means and morality exist anymore.
I don't think this is a good example. Back then, the internet was a new thing only a small cohort of people cared about. Something small could just stay small because none of the big players with money cared. Nowadays, if someone wanted to start something like Craigslist, they would be outrun by someone else going the VC route before the small company could get big enough on its own. I think it boils down to the difference between slower growth, boot-strapped companies vs. VC-backed.
Another reason is optimization for profit, combined with competition making it a survival necessity to do this.
Early in a nascent industry, you focus on the core product. You bring scale and scope economies. You make the supply chain more efficient. You improve the logistics. More abundant basic food stuffs for everyone, and more profits for agriculture shareholders. A true win-win.
Later on when the industry matures, the easy wins are all gone. Logistics and agriculture is fully optimized. The only scope for improvement is in marketing, adding sweeteners, and cutting out expensive ingredients. Now it's a lose-win, but from the shareholders perspective only, it's a win.
The problem is, you can't just ask companies to act nicely. While that would be a good start, even if they genuinely wanted to, competition largely forces their hand. The solution is careful and minimal regulation, to deter the pathological late-stage optimizations.
This is what always frustrates me: why do companies need to bother with "pathological late stage optimisations" at all, if not for perverse incentives in the fundamental economic and political structure of how companies operate? Why is reaching a growth plateau perceived as stagnation instead of success? Why must a company feel pressured to grow forever, without bound? What's wrong with building a business to sustainability and equilibrium? Why does this almost never happen? Why do we instead see enshittification literally EVERYWHERE?
Cause some sociopath name Friedman wrote something that the ruling class/ generationally wealthy loved. That business should only serve the owner to the expense of literally everything else.
Since the rich and powerful get what they want. This race to the bottom mentality has saturated anything where a company accepts outside investment. This means any public company and any investment into the company outside of a bank loan. Which is basically every company nowdays since private equity company have bought stake in literally almost everything.
For the last 5-10 years I've noticed a lot of people here are more willing to question VC as the sole or even ideal way to start a company, and since a major chunk of YC is to train how to raise money and connect people via demo day or mentors to VC, I think that marks how the HN community has departed from the YC community. Obviously there's a lot of overlap, and HN clearly has it's roots in YC by it's literal founder, but I think it's wrong to say HN community is the same as YC community, which I say "historically"
YC parted ways with the broader HN community at some ill-defined moment coming up on a decade ago. YC started as an inspiring rejection of credentialism and cronyism and slick people jumping the queue in front of tech-focused problem solvers from diverse backgrounds. The values of HN around curiosity, technical meritococracy, tangible solutions to real pain points in the lives of real people underserved by big money tech establishment dynamics were completely aligned with early YC, they went hand-in-glove.
But it got captured by slick dealmakers who managed to cop the hoodie aesthetic and youthful ambition vibe but were the same born-to-privilege punks that have always ruined everything good in computing eventually. Now its messaging is vibe code and gladhand and suck up to whichever political party won last. Its a more insular, more inbred, less substantial network of the "right" kinds of people than the Ivy League was when it stepped on the scene.
And there's nothing inevitable about it, no "big money always goes to shit" story here: its 4 or 5 key people who abruptly had a serious seat at the table and chose very fucking selfishly.
HN is still here geeking out and being a gem on the internet.
Its not just shareholders, stock based equity also has all the employees pushing profit.
Engineering addiction is also probably more often than not intentional. When all the business metrics/KPIs are stuff like "engagement time", "$ spent", even AB testing of random features leads to manufacturing addiction
“Shareholder value” is what turned “we’re a family here” into a joke and cliche. It turns people into lines on a spreadsheet and strips leadership of their ability to care or treat people as humans. It’s represents the very darkest side of capitalism. Im very much a capitalist but it doesn’t mean I have to ignore the realities of it, both good and bad. I’ll take it over all alternatives though as it actually works and improves the lot of society as a whole
Of course VC loan sharking is a major part of the problem. But it's also tiring reading blog after blog of people who say they want to do the right things and do them right or whatever the trendy thing is that month, all as a thinly veiled pretence to get as much funding from whoever wants to give it to them and try to make themselves the next Zuckerberg or Bezos.
If people actually believed in something they'd make it open source or a non-profit, not a convenient vehicle for personal enrichment. Imagine if Wikipedia was a for-profit startup, it would've eventually ended up as an unusable cesspool of advertising.
Yes, and there is a huge problem connected to that:
If you don’t play this game you’ll lose. Look at Europe for example, they haven’t played the VC game properly and thus have no really significant tech player compared to the US / China.
So what options are left? Play the game or be ruled by those that play it.
I’d rather play even if moral erosion is required.
I think Europe is moving g toward digital independence even more. They've still got Instagram and WhatsApp and everything, but I can see them moving more aggressively toward Facebooks core business model (ie, programmatic adverising) and essentially creating a European internet bubble. Would be nice for Europeans to be able to have their own social media sites which operate less aggressively on your attention span - like Facebook circa 2009 or even MySpace. Chronological feeds, less invasive advertising practices.
We are building a social network with chronological feed.
I am thinking how to make it sustainable without raising VC funding but not doing aggressive ad targeting. Obviously people are not going to pay for a social network. So maybe just very generic sponsered links?
Maybe the model should be more like public roads - for-profit companies are involved in building parts of them but they don't control the whole system.
I think the VC thing is indicative of the entire thing; the goal is profit and everything is subordinated to that. This is how the system works and how it is designed to work. When profit and some external thing like social responsibility are at odds, profit is going to win out every time. The mercenary mentality rules the scene.
In Magickal Faerieland, we have regulations to align those 2 things by incentivizing the "goodguy" path and/or disincentivizing the "cackling villain" path but we live in reality where money rules and regulatory capture is a thing. So a Facebook or other megacorp can get away with using neuroscience and psychology to engineer a virtual slot machine with a terrible payout and ExxonMobile et al can get away with being an architect of environmental degradation and the accompanying humanitarian disasters.
Just a heads up, the experiment was complete fraud and could never be replicated.[1]
I agree with you that outside investment can work as a strong accelerator for these things. It enables founders to externalize responsibility.
However, it is not the main reason. Exploitative companies have existed long before venture capital was invented. In the end every company exists to make money and so is inherently immoral. That is why the state is needed to regulate the market so companies don't hurt society too much.
Those founders didn't get corrupted by evil venture capital, they didn't have that strong of a morality to begin with.
> The legal obligation to represent shareholders erodes morality
This "legal obligation" is an internet rumor that does not exist in the real world. Yes, if your company has competing buyout offers of $1m and $2m and the board takes the $1m offer because they received a bribe, it will come up. Otherwise, it never does.
The proof is in the pudding (please go find me even one case where shareholders have successfully imposed their will on a board or executives because of this obligation), but it doesn't even logically make sense. Other than the buyout example, it's hard to think of almost any action a company could take that doesn't have some justification that it is for the benefit of shareholders. i.e. if we make our app too addictive, we risk social backlash and regulatory intervention by governments which will hurt out shareholders. And that's all that is needed, because there is no associated time frame with this obligation.
To be clear, boards and executives might strive to please investors, but it is not based on a legal obligation. An executive that ignores the interests of shareholders might be concerned about their reputation as a capable entrepreneur, risk losing their job, or devalue their own shares, but they are no in legal jeopardy.
Just because the risk of getting successfully sued for making decisions against the interests of shareholders is low, it doesn't mean that it won't influence executive decision making. CEOs want to avoid legal risks above all else and thus the laws around fiduciary duty can have a chilling effect even if judges generally go along with the CEO's interpretation of what is in the interest of shareholders.
> Having spent a few years in the VC world I have been increasingly convinced outside investment is the biggest reason why companies lose their morals. The legal obligation to represent shareholders erodes morality.
Oh 1000%.
I once worked at a company where the founder had famously said many times that he would never take the company public. But then, he had a stroke. And within two years they had an IPO. Started doing what every other 'big company' did instead of their own thing. And from what I heard from folks on the inside, Enshittification happened pretty quick after I left.
The lack of addressing the loose ethics of 'Behavioral Psychologists' working in these fields, is TBH a bit of a stain on the whole profession.
Reductionism is fine when a supermajority of available data paints the same picture, and that's what's happening here.
* Founders aren't trying to solve a problem, they're trying to grab table scraps from VCs and the already-wealthy to try and save their own skins. As a result, it's all about exit strategy, growth, and moat instead of business fundamentals and customer experience.
* VCs and their wealthy backers aren't looking for good business, they're looking for good profit. It's why they'll gladly invest into slop or outright grifts, and why they demand anything they invest into have an exit strategy (i.e., IPO) planned so they can cash out before the company collapses.
* Talent who wants to build a long-term career with a company - and accordingly focus on fixing its flaws, improving the customer experience, and saving expenditures - can't, because companies no longer fundamentally exist to provide long-term solutions and products, only short-term growth YoY. This ultimately ends up harming output and innovation, because why bother giving it your all when such efforts are counter to the "explosive growth" narrative and likely to get you PIPed?
* Retail investors and Business News are left feeding a monster that runs on Fairy Tales and ignorance, promoting big gains and huge losses rather than actual investing advice or corporate accountability.
It's all just a disgusting grift, is what I'm reducing it to, and I can't really fault Founders either since they're just trying to strike gold in an emptying mine shaft before it's closed off or collapses in. They're playing the game they think will net them safety and success...even though they may have better odds on some casino games instead.
And how these shareholders materialize. I don't think show up at guileless founder's workplace with guns and make them offer they can't refuse?
> but there’s a pretty huge throughline of outside investment and addiction engineering..
Personally I don't doubt that. But if people are taking outside money while being aware of its effects I don't know what kind of sympathy they deserve.
It can end up being a more circuitous path than you might expect.
For instance, I took investment in my business, about five years in, from a very ethically and strategically aligned individual, as we mutually saw an opportunity to do something good together.
His life took a left turn. Two kids and wife in a horrendous car crash, all left extremely disabled, enormous medical and emotional costs. After a year or so he had little option but to sell his holding in our business, and we allowed it, knowing that his situation had become dire. He sold to a small PE consortium, who again, looked pretty well aligned with what we were doing.
The consortium all then had a falling out, as one member had brokered a deal with a large PE group to be bought out. This ground on for another year or so, us on the sidelines, until eventually the large PE group managed a hostile takeover.
And that’s how we found ourselves with blackstone as our corporate overlords.
It all went to shit over the following years as we were forced to squeeze margins, cut R&D investment, and depart from our original mission to instead gouge our customers.
I ended up leaving, as going to bat for the dark side every morning was beyond corrosive for me, and while it was a pretty terrible financial decision, it saved my life.
The company grinds on, a thing utterly different to what I founded. I don’t ask for sympathy, just… perhaps awareness that taking any investment, no matter how benign, can take you places you’d never wish to go.
It can happen even without investment. I’ve seen businesses where cofounders have had to sell out due to poor health or similar, and the outcomes have ended up pretty much the same.
> Having spent a few years in the VC world I have been increasingly convinced outside investment is the biggest reason why companies lose their morals. The legal obligation to represent shareholders erodes morality. When the people running these companies feel they’re beholden to shareholders and can’t act on their own agency of course they will turn to addiction research not as a warning but as a guidebook.
As an outsider I don’t believe it. Morals? I don’t even see a nugget or trace of some elevated goal in all of these stories.
Shareholders or not, the companies have to make money. Now us users have been gaslit for years about us just being too stingy to “pay for the product”, therefore we “become the product”. But all of these gamification/social media platforms were made to be free. Obviously there had to be a path to monetization. Morals or not. And they all end up in the same place.
Duolingo was co-founded by the inventor of Captcha. One of the ideas was to use people as translators, similar to the Mechanical Turk idea of letting people do some chore and using the product. Anyway, they also monetized eventually. Now what has Duolingo actually done for langauge learning? According to many people now, nothing. Look on YouTube. People post about their streaks. I.e. the gamification. The last video I saw was barely about how Duolingo helped at all. They had the typical “of course you can’t use only Duolingo” and then they listed all the other approaches and techniques. Well, did Duolingo serve any role? They said repetition. Well the repetition is for very artificial and out of context words and phrases. That Duolingo learners are like fish out of water in a context where they have to apply their knowledge is a meme at this point.
Another fun, very SC thing[1] about DuoLingo is/was the volunteer community. Yes of course a volunteer community to boost the for-profit platform. That’s how you get Klingon.
The AI-fication, aggressive ads, and pay-to-streak (you can artificially pause a streak for a whole month apparently) has made people worry and complain. And not because they are making a good language learning app worse to use, even. It seems to be mostly that people are hooked to the streak and are now even more annoyed by the hoop they have to go through (the app itself) to maintain it.
So what did Duolingo (DL) achieve? It made people fret and worry about their streak. That’s it. I had a friend who was so glad that he was getting close to a one-year streak on DL. Why? Because then he could quit. I wrote like one or two sentences that I recalled in his target language. He didn’t understand it.
[1] See StackExchange. I remember Jeff Atwood’s very humble blog piece about how he made his millions. It was of course all him but he had a good upbringing and access to good schools of course. No mention of the employees, but that’s just normal capitalist things so that’s fine. But also no mention that he made a platform based on volunteer work. Hmm. Self-made man? In SC culture he is. Because getting users/fools to work for you for free is the ultimate disruption.
Well, yes. Encouraging people to avoid Marxism and all the successive schools of thought has done irreparable damage to this country (and likely the entire west). And I'm not even dogmatic about this: you can read Schumpeter, the father of VC, to reach the same conclusion. Private investment will eat the world and our childrens' lives, even at the cost of self-preservation.
I'm pretty sure that there was a case before the Supreme Court (or other federal court?) back in the late 1980s, where shareholders of a firm sued for the firm to focus exclusively on profit, when the company had been taking a broader view of stakeholders (community, workers, etc.).
> We built these platforms. We can build better ones. But only if we're willing to abandon the economic models that made the current ones inevitable. Until we change those incentives, every attempt to fix social media will become part of the problem it’s trying to solve. We’ll keep wondering why we can’t just put our phones down, not realizing that billion-dollar companies have spent a decade making sure we can’t.
> The solution isn't another app. It's changing the rules of the game entirely.
In direct language, what exactly is the author suggesting we do here?
He's not. Anything he has in mind is socially unacceptable and he knows it.
We'd all love to rebuild economics from the ground up. But as soon as you try you realize that everyone has a different idea and they can't agree on anything.
The author doesn’t suggest it, but the implicit solution is public funding for social goods.
That could be through a robust grant process, providing funding for social media that is not supported other ways.
Alternately, it could be through a UBI, giving people basic cash flow that could be allocated to paid social media platforms rather than everyone relying on ad-supported social media.
And whats more, there is only one law you need to change. You simply need to remove common carrier exemptions from hosts so that if false or misleading information is delivered to a user from a platform, that platform can be sued for damages.
Its the rule that newspapers and TV need to live by, social media should play by the same rules.
The platforms then simply need to protect themselves my making sure they accurately identify users posting on their networks, so they can pass the cost of any lost lawsuit onto the original poster.
> We need a fundamental re-evaluation of what our phones should be for, whether these platforms can ever return to their original purpose of actually bringing us together instead of keeping us scrolling
Unpopular opinion but I think we need to stop building social networks if we want to bring people together. Let people meet each other in real life. Let the relationships flourish organically. No amount of tech will ever build the trust that face to face interactions can build. When people are in presence of each other they are just not exchanging ideas. There is so much of non verbal exchange through body language, tone of voice, facial expressions. I think all this helps in building trust. Social media on other hand just does the opposite unless the user is very conscious of the effects of social media.
> Unpopular opinion but I think we need to stop building social networks if we want to bring people together.
Agreed. Social networks not only didn't bring us together, they've actually done the opposite and made us more tribal. Excellent book on the topic is Superbloom: How Technologies of Connection Tear us Apart by Nicholas Carr.
This is an idealized version of real life. If youre autistic you know the pains of having to feign every time in order to not stand out because of your inexpressions or how you dont find what others say very interesting. On top of that, most things youre interested on are in some small forum on the internet where its the only small space where you find your peace.
I agree with some things especially about how we spend so much time on unreal things but lets not idealize real life where if you dont talk about something, youre boring. And that something is most of the time about critisizing others all the time. We truly prefer being angry or very sad rather than alone. Thats basically why the algorithm works. It exploits our solitude. But its being built exponentially, its just the natural step on books, radio, tv , each medium more summarised, quick and polarising and monolithic than the previous one.
addiction drives revenue but isn't the only model .monetize outcomes: charge writing tools per export, focus apps per session, design tools per final asset .soak in usage decay : session lengths shrink unless reengaged .let users set caps, pick 'read-only' or 'close-friends' modes .in social apps, rank by saves/comments, not scroll time .monetize filters, advanced DM settings, creator tools .intentional use stays high, manipulation drops .i want to build something like this someday lets see
I'll tell you what's been working for me: an e-ink phone. It's a Bigme Hibreak Pro. The interface is a bit clunky but it gets the job done. Social media is just not fun on this phone. It's still very usable if I need it, however. I'm also knocking out books at a rate that I haven't in years.
Battery life isn't as good as I expected, but I do leave the backlight on quite a bit. I'm not a big phone gamer, but some people do enjoy playing original (black and white) game boy games on them.
Texting works very well. I'm typing this on the phone right now. It's one of the smoothest eink devices I've ever encountered.
Camera isn't the greatest but it's fine for everyday needs. I haven't tried a video call yet. I imagine it will work okay, though. Tap to pay works fine for me, too.
yep, good luck figuring out how to make a social media site that is engaging enough for people to keep coming back, able to pay its hosting bills, and just generally sustainable, without falling into the dark patterns.
If it can’t exist, should it? Or are we arguing about which color of unicorn would be the best?
In TFA… I guess he wants a government Unicorn, because surely there could be no issues with that and with strong regulation it will remain cool and competitive… everyone raves about how fucking awesome their water company is.
> Regulated Algorithms: We regulate tobacco companies because their products are addictive and harmful. Algorithmic transparency or giving users control could preserve the benefits while reducing the addictive design patterns. The EU’s Digital Services Act already requires algorithmic transparency from large platforms.
You effectively need or greatly benefit from gas, water, electricity and an ISP.
What do you really get out of social media? I mean other than most of you getting crippling anxieties about things that aren’t even real, of course.
Sure sure, I know, everyone wants it because they need to share photos of the kiddos with grandma out of country. No one needs it because they enjoy the shallow bullshit and dopamine and snarky retorts that enforce their ideology.
Social media is relied on by a lot of people for official notifications. When I was in high school, my only use for Twitter was checking if my school was closed or not on snow days. I'm sure there are lots of valid reasons for schools, hospitals, emergency services, garbage collection, official media networks etc. to have social media accounts, and for regular people to follow them.
I've always thought it would be a good idea for governments to run their own mastodon servers for this, but something else with accounts (not publicly) tied to real identities could be interesting.
> my only use for Twitter was checking if my school was closed or not on snow days
Believe it or not, they post that on their own websites.
We had to turn on the TV and watch the marquee they would add to all shows. If you missed your school you had to go to another channel to see where in the alphabet they were.
You have not made a convincing argument. Social media has specifically moved away from synchronous time-prioritized posting in favor of algorithm engagement. So I can’t accept “notifications” as a legitimate use.
Social media is a pretty wide term and includes networks where you mostly talk to your friends and relatives to networks where you mostly consume content from strangers.
The former has a clear benefit (especially where it challenges legacy industries with exploitative pricing like mobile phone networks) and even the latter can benefit you by exposing you to new ideas and information.
That social media is incentivized to push meaningless but addictive fluff over genuine communication due to monetary incentives is the point of TFA. This is a reason for making social media a public utility, not against it.
So the master plan is to let governments (known for tech illiteracy and 20-year procurement cycles) regulate hyper-evolving social media platforms?
Why teach people to think critically or resist engineered dopamine traps when we can have a bunch of career bureaucrats draft laws while using Wordpad or Internet Explorer to Google “AI” xD
Regulation doesn't have to be at the level of controlling how technology is designed. It can be more creative, at the level of organizations or incentives, for example:
- Require advertising companies to follow special rules, including only doing advertising and nothing else
- Fund an agency that measures the health harms of large platforms and imposes fines or restrictions based on harm
it is. There are many websites and applications that I use, like wikipedia and linux / kde that could help if they picked an application like Mastodon and promoted it on their site. I only use social media about once a month so I am far from expert but an ad supported open source facebook clone that stayed non profit by sending its profits to other open source sites would be ideal.
For that matter—the apps that communities are using that aren’t so aggressively exploiting addictive patterns—like the one you and I are using now—could it be that they’re at some level the norm, they’re just kind of boring beyond the small group of people who find them useful?
Methamphetamine is flashy and destructive, and its supply chain and sales force are the sort of thing romanticized in Breaking Bad—but billions drink tea (and nobody really glamorizes it).
To my mind, the norms of a specific subreddit or Local Co-Op Facebook Group or neighborhood gossip board tend to fall closer to the “tea” pattern than the “viral growth” paradigm. And those, and boring email, and transactional interfaces to companies that primarily do real-world stuff—those tend to take up the bulk of the time of the people in my life. But maybe I’m just old fashioned :)
You should look at the history of tea closer, namely the Opium Wars and how the desire to not deflate their economy via consumption lead to it. Technically also a demonstration of the harm of bad economic practices likd precious metal standards and mercantalism as well.
The best thing we could possibly do, besides throwing Musk and Zuckerberg in The Hague, is destroy targeted advertising as a business model. Everything, absolutely all of this is done so they can make fractions of a cent off of clicks. So long as they can, they will do everything possible to damage your brains into clicking more.
I'd go on further, we cannot have advertising as a business model, targeted or not. It worked previously, classic Google was a good example, but mixed with shareholders, it doesn't work, incentives screw up any attempt of providing a better product, because the product become the ad space.
Throwing Musk in there is strange. To my knowledge he doesn't really profit of ads, X probably have ad revenue, but that's not really his business model. Tesla stock however, that's a completely different addiction, mostly not relevant to consumers, but that stuff is immune to any type of common sense and traders can't seem to get enough of it.
The first and simpler question is what is a valuable software product? For products where the user expects to pay nothing, like almost all social media, the answer is: the product with the most user-hours. Therefore products that attract many user-hours attract much investment. There isn't some kind of insidious conspiracy to push specific types of products: investors don't care, they care about how many minutes of ads they can push down the pipe (legally).
The second question is: (again for products where the user expects to pay nothing) what products attract the most user-hours?
It seems folks dance around and rarely confront what I consider to be the main explanation here and where the primary cause is: humans choose and prefer to consume and interact with content that induces in them a set of emotions. They generally choose to experience stuff that gets them upset, looks cute, inspires longing, makes them feel lonely, etc.
If one categorizes the things that the consumer chooses as "problematic," where is the problem? The problem as stated is the consumer. One can't engineer a way out of that: folks have tried to provide alternative options and these mostly fail to attract heaps of users.
To put this in the language of TFA: the addiction isn't engineered into the consumer. The addiction was there from the beginning: a million products were tried out, products evolved to better align with preferences, and now the products are "addictive."
What I haven't found in the article is what would happen if people paid for a true social network, completely free of all the nasty things we already know. Is there any chance that a carefully crafted paid social network can actually succeed?
My plan is/was to structure the payments as a single annual payment that only one person in a group or family needs to pay. Then all the members of the group/family join free. That way you only need to convince one person in a group its worth the change.
I can't see why wouldn't it work. You definitely have some options. Group or family subscriptions is one. Then you can have extra charges for people for example that post above the average (it would make sense to extra charge those who abuse posting). If someone is unable to pay for some reason don't cancel the account(s) simply make those read-only. So even if they don't pay they are not excluded. Bear in mind that people pay for lots of subscriptions! Streaming services, newspapers, vpns, etc. So again if is setup as a profitable but not greedy profit business it should work. One of the key things is convincing people why using a non-manipulative social network is a way better choice than the "free" options. I'm not very good with business ideas but I do believe that there's absolutely room for a healthy social network out there.
It's not about addiction. It's about providing value.
>The focus shifted from “authenticity” to “daily active users.”
It's more like limiting themselves to just sharing a single photo per day is limiting to how much value they can provide users and advertisers.
>Apps like TikTok, Instagram, and X aren't neutral tools. They're carefully crafted slot machines engineered to get you hooked. Pull to refresh. Tap to like. Scroll forever. Random rewards. Notifications timed to spike your cortisol. The same behavioral loops that addict gamblers now hook children and adults alike.
This is quite a stretch. Users finding immense value is not the same as addiction.
>Subscription models, cooperatives, or public funding could prioritize user wellbeing over engagement metrics.
Even if YouTube forced people to have premium they would still optimize for engagement. Loading up the home page and getting terrible recommendations is a terrible experience. Finding the best content for user provides the most value.
>Instead of measuring daily active users and time-on-platform, what if platforms were evaluated on user wellbeing, relationship quality, or real-world connections facilitated? What if we measured social platforms like we measure hospitals?
Feel free to use those metrics if you want, but most people will continue to use the apps that provide them the most value.
To add to this, BeReal flamed out because it was a gimmick that was quickly copied and then forgotten by all the other platforms.
Agree that blaming VCs for why TikTok has an algorithmic feed and hundreds of millions of users is simplistic. A non-algorithmic TikTok would have no users.
And without a personalized algorithms, the feed ranking would just be showing content from popular accounts, which is a worse experience.
With technological products in particular—where an idiosyncratic nerd with an old computer under the desk can run a vibrant forum, a couple of plucky young “cofounders” can conjure a company from nothing, and HN (at least at one point [0]) can sway the entire tech culture from a single process on a single server—isn’t it an option to… not grow?
I guess the LLM era makes credible products more capital-intensive than they used to be, but even so, the vendors are pricing their stuff aggressively, and even when they try to squeeze the prices later, half these foundation models that are better-than-last-year’s-SOTA are open-source!
If you want to play with lots of money and seek out lots of money, there’s lots of money swirling around seeking to involve you in that game. But if you just want to make something nice and human-scale and small, what better time than now?
The path to billions of bucks may require mercenary bucks-extracting behavior, but that’s not the same as a growth imperative being an inevitable force of nature.
I can’t help but feel like the Small Web folks are on to something.
Good people of HN, could anyone tell me why buying an MVP of a social network for $10K from a Belarusian contractor on Upwork (it couldn’t cost much more, it’s like five SQL tables and a web CRUD) and then charging users $2/month to use it wouldn’t work?
Why does the author need to moan about how morally destructive it was to raise VC? Just run your social network from your bedroom, while asking ChatGPT how to rewrite the landing page in React.
Only if people pay. Which they won't when there's nobody else on there. How do you get your first 100k users?
You might say, well, start with 1000 users. But 1000, or 10,000 isn't enough to make a social network interesting. Maybe you could get around this by making it about a specific niche to start with. But that probably won't work, and if it does, you'll end up stuck in that niche.
On the other hand, I don't think this idea is as impossible as people say it is. It's just highly unlikely to be successful, and far more complicated than simply paying someone on Upwork to make it for you.
If you want to launch a big viral marketing campaign, you also need someone who's willing to trade your predictions of future revenue for cash today, and VCs are by definition the people interested in making that trade. For something that depends on network effects, slowly trickling out one new ad every time you get 10 new signups isn't going to work.
> and then charging users $2/month to use it wouldn’t work?
Commenters all across the internet will say they’d pay good money for a site that does something specific that sounds like a good idea.
Then when the site is built, you will discover that they will not, in fact, pay any money for it at all. You will continue to add the features they request and the goalposts will continue to move.
Social networks are even more difficult to bootstrap because they’re not worth paying for if you can’t find people to socialize with. Nobody wants to sign up for an empty social network.
Even the free social networks have a hard time getting started. There were dozens of Twitter competitors created after Twitter was acquired, but most of them languished. The few that have survived have their own problems that are driving many of their own fans away.
You description is probably spot on, but boy I’d love to have a version of Instagram where I could just pay $5/month and get a time-sorted stream of photos of my friends’ babies, Piña coladas with a beach background, and sweaty mirror selfies in a gym without any stupid ads in the middle.
The whole idea of running your company while thinking about TAM and whatever is totally from a VC playbook. If you don’t take VC funding, you stop caring about TAM. Instead, you care about whether having the profit you have makes you — yes, you, personally — comfortable about your life. This is a much, much healthier line of thinking than trying to capture every bloody dollar in this world you can reach.
trying to capture every bloody dollar in this world you can reach is the VC part. Looking and making sure that there's a market for the widget your factory produces is just due diligence.
Sorry to mumble, I'll add one more thing. Back in 2013, I was running a productivity startup, and we tried courting Evernote into acquiring us (unsuccessfully, though damn we were a good match). I remember those times vividly: Evernote raises a sizeable fraction of a billion in funding in several rounds, employs like 400 people, their CEO goes to places like Le Web or whatever and expatiates from stage about building a "100 year company".
Fast forward to 2022: Evernote itself is acquired by a random app studio, and the whole service is now run by something like a dozen people. The CEO of what used to be a "100 year company" moved on.
I thought about this a lot. They never needed those 400 employees, even in 2013, it was absolutely possible to run the same service with a tiny team, it's just that the people at the company's top would be completely different people with completely different aptitude towards building their businesses. It's only if you really, really want to be on stage at Le Web, then you go to investors over and over again and convince them and yourself that a note-taking app needs 400 employees, and you're building a company as a product, not a product as a product.
Looks like the author of the original article here also didn't actually want to build a social network business but rather wants to be in the hothouse of Silicon Valley. Well, good luck to them.
Maybe they needed the staff to build the software back then and now they could be leaner cos the product is already built. Maintaining is much easier than building.
In all honesty, it doesn't seem like 400 people were really needed to build the software. If you just look at credits in Adobe Premiere, for example, there's not 400 people in there, and it's a way more complex product than what Evernote is/was.
Given how many complaints about Google search you regularly see on this website and elsewhere, you would think there will be a lot more people willing to pay for non shitty search. And yet Kagi does not have enough paying users to fill a football stadium. To me, this validates GP’s point about how people love to talk about paying for services and then proceed to not pay for any services.
Kagi doesn't have network effects stacked against them. If your friends don't use Kagi, you still benefit from it. The same is not true for social media.
People pay for software all the time. Hell I pay $30/month for a fucking email client (Superhuman). But no one has tried it for a social network. I think the problem is that people think a social network is worthless unless you hit Twitter scale, but perhaps lots of smaller, focused social networks at $2/pop could work. People are now saying that Discord is being enshittified, right on schedule. Maybe there's an opportunity to poach some communities.
Well obviously some people would pay. The hurdle that a company needs to clear is getting enough people to pay to support both an engineering staff and the infrastructure costs.
Do the math on how many people are necessary to run a web site with on-call rotation, minimum moderation, and someone to run the business. The number of $2/month subscription required to make that work is prohbitively high.
> but perhaps lots of smaller, focused social networks at $2/pop could work
Even large, free, well-funded social networks are failing to get significant traction or running into echo chamber problems (Bluesky).
I've been hearing for years that a paid social network would work, but if the unpaid social network competitors can't get any traction, what makes you think adding a $2/month signup hurdle would improve the situation?
If you want to see a real-world example of people squirming out of their claims that they'd pay for ad-free services, take a look at any HN thread discussing YouTube premium or their ad-block evasion efforts. The price for ad-free YouTube is reasonable for as much as people watch it, yet when cornered the same audiences who claimed they'd pay for an ad-free version suddenly come up with a multitude of new excuses for why they're refusing to pay. My personal favorite claim (which invariably surfaces in every thread) is when people say they would happily pay for YouTube premium if they weren't so aggressive about adblockers.
Do the math on how many people are necessary to run a web site with on-call rotation, minimum moderation, and someone to run the business. The number of $2/month subscription required to make that work is prohbitively high.
Is this really so? Let's try doing the math: you're describing a distributed team of maybe 10 people, likely less. Let's assume you need $600K/year to run this business (is this the right number? not sure, feel free to correct me). At $2/month, that requires 25000 paying users.
Difficult, but not impossible. At $5/month (the $3 difference wouldn't trigger any price sensitivity, talking from real experience) that's 10000 users. If your service actually provides value, you can crank it even higher. Again, difficult, but totally within the realm of possible.
if the unpaid social network competitors can't get any traction, what makes you think adding a $2/month signup hurdle would improve the situation?
Because the "traction" needed to make free and paid social network work is vastly different. You need insane scale (millions or tens of millions of users) to make free social network viable, hell, my stomach hurts from only thinking about it. A paid social network business, run with certain austerity, can be profitable with one thousand paid users.
> Do the math on how many people are necessary... you're describing a distributed team of maybe 10 people, likely less. Let's assume you need $600K/year to run this business
Using the heuristic that HR costs are 2x the gross salary, the 10 people are earning 30K/year gross salary (no bonus). And I'm not leaving any room to pay for the compute/storage infra.
The hard part is how to acquire that 10000 paying users and how to make them stay.
I think a the problem is for every social media user who finds it valuable enough to pay, there are ten more who don’t use it enough justify paying. And if you only serve the first group but not the later, then the first group will just get bored and move back to X or Instagram, or they just ditch social media entirely and move into private group chats. And if you serve the later then your operation expenses will multiply.
i think that people vastly overstate the costs of this sort of thing and it's super bizarre. if you're treating this as a big official corporation™ and such and want to pay 500 devs like $200k/year or something to make work, then yeah you're gonna have problems.
but if you want to build a social network and aren't dreaming of being gazillionaires for it (which is quite reasonable), then you can get by very easily. how do I know this? because... well it's being done successfully. not was done successfully, is done successfully.
you can probably even get people to help out on it.
you can build a social network with a dedi running nginx hosting your Python application running on a Linux box backed against Postgres (and redis for session storage, although even that is a bit overkill) for like $80/month deployed with a "deploy.sh" script that you run to kick the damn thing into running (Docker is used in dev only, but could easily work here). should you probably add health checks or whatever? yeah. it still works really well.
this scales well past the 100k users mark.
what about video/images/etc? well, this nginx server happily sends out user uploaded video storing them as files on a bog standard ext4 filesystem. backups exist of the site.
the "stack" i mentioned here isn't fancy or particularly tightly optimized, it's in fact pessimized in a lot of ways. hell I know there were a gazillion ways we could improve performance of our application. show the backend app to a game dev and they'd probably want to start strangling people with how poorly optimized most of the actual app is.
and still, it scales well.
again, I stress that this isn't some theoretical idea, this is actively being executed. the entire venture makes money for the team from the users who willingly (and unforcibly in order to use the service, the actual site is free to use in its full form) give money. this isn't ZFS. this isn't Rust. this isn't using some blue-green deployment. this isn't spending hours toiling away at which sysctl to set to squeeze every last cycle out of each box. this isn't behind some massive CDN with "internet scale" boxen or even (for the video serving part) behind any anti-DDoS service.
it's just a matter of doing actual engineering and being willing to actually build the things you want to build.
I like stories like these, but I think you just never hit a breaking point with the infra and approaches you got. You've never exceeded your ext4 volume size, so no need for object storage. You've never had a server die, so one dedi box is fine. You've never had a paying customer call you with an issue, so oncall support is not needed.
yeah, i mean i guess what i'm trying to say is that the breaking point is very far up there as computers have gotten towards breakneck speeds, especially on the technology side, for the goal being achieved. it's downright difficult to hit the limits unless you're throwing effectively a DDoS at it.
i think the big thing though is that it's a community and so people are actually willing to support that even if it means the amount of 9s of availability is slightly fewer (although in practice, many providers bust right through their "9s" SLAs without a care in the world) and given a migration from a VM provider to the dedi occurred, migrations obviously can happen if failure presents itself.
> The price for ad-free YouTube is reasonable for as much as people watch it
Perhaps for you (in the US, I assume). The price is the same everywhere in the world, wages aren't. If you've the choice between paying for food and ad-blocking YouTube, or paying YouTube but having no money for food, the choice is obvious. Just like people here claiming Photoshop is an affordable piece of software...
Ning, Substack, OnlyFans, Nostr, mirror.xyz, Farcaster are paid social networks, among others. It's been tried, with varying degrees of success based on user base.
But people are cheap as fuck. Even here we post links to archive.is to get around paywalls (which rubs me the wrong way). Every time YouTube Premium come up the comments are full of people saying they won't pay up.
I’m not going to pay for something and still be the product. These sites would have to be fundamentally different from what they are today, for me to justify paying for them, starting with: they should not be collecting, selling, or profiting off of data about me. They should also not be deciding for me what ways I can use their products.
People bemoan “nobody’s willing to pay for an online newspaper” and that’s true: they won’t pay for them in their current user-monetizing form. Same with YouTube: I’m not going to pay for an ad-free YouTube in its current form: with auto-playing next videos, algorithmic recommendations, Shorts, and sponsored content embedded in some creators’ videos. Give me a different, better product that does not try to monetize me, and I might pay for it.
If you’re not trying to make a business out of it, you don’t even need that much money. You could set up a Mastodon server and invite your friends. It might not get a lot of attention, but it will work.
It works for a niche (probably a professional one) but not for general population. You'd be hard pushed to get mum and pop to pay for this when FB is free and already has everyone on there. To them your new network seems inferior. It is more expensive and has less friends.
As a fun fact this existed circa 2002 in a big way in the UK. The site was friendsreunited. I'd love to have that back (along with associated hype a 5 quid a year pricing)
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[ 3.4 ms ] story [ 191 ms ] threadBut that’s not exactly true, is it?
Calling out alcohol and tobacco ignores all the vices that were made durably illegal all over the world: prostitution, blood sport, slavery, forced marriage, and so on—and yes, institutionalized slavery was a vice, an economic one rather than a habitual one, but every bit as behaviorally seductive for slavers as speculative investing, MLM, or subprime asset flipping are for some people today.
Sure, not all of those things are illegal everywhere, and reasonable people may disagree as to whether illegality is appropriate for some of them (e.g. prostitution). But in total they do indicate that vice regulation can “stick” better than it did for alcohol and tobacco.
Hell, we used to put cocaine in soda! Whether or not you believe that the current prohibition/penalty practices around that drug are good, I assume most folks agree that it’s better now that we can’t get addicted to it via products available at the supermarket. Even as addiction-engineered as current-generation hyper-processed foods are, it was once much worse, and that was pretty successfully addressed via regulatory prohibition.
Addictive games though don't show such easily detectable effects. So it's more like a discussion on gambling, casinos, etc, but the current forms of addiction-forming experiences are much more underhanded.
If everyone is engaged with addiction machines nobody will use it.
Engineered addiction is mind control. It is abuse. Hacking the human brain is violence — a term that has been robbed of its impact through overuse for things that are not violence, but this is.
Engineering of addiction in any form should not be legal for the same reason that kidnapping someone and raping them or forcing them to do my labor is not legal.
Fix this problem — remove the mind control and violence — and a market niche opens up for honest business models. As it stands nobody can compete with these platforms because volition can’t compete with violence and honest commerce can’t compete with slavery through dopamine system hacking.
BTW if you work for these companies, quit. Ten to fifteen years ago ignorance was an excuse. I don’t think the original inventors of this nightmare knew quite what they were doing. Ignorance is no longer an excuse. If you are “optimizing engagement” in this context and in these ways you are a bad person.
Similarly, suppression of wages, taking away healthcare, food, employee protections (at-will employment), legally required vacation days and maternity leave, and any meaningful safety nets for employees, pushes the social contract for workers toward violent nonconsensual extraction.
Maximizing extraction inevitably requires violence and cruelty.
Media takes a lot of storage and bandwidth, and you basically have unbounded costs if you want to meet user expectations for posting media.
The other challenge is the regulation part is much easier when the product is, say, heroin. Algorithms are technically complex (hard for policymakers to grasp), flexible (can be tweaked to work around guidelines?), and operating in the digital world (harder to monitor/block).
Maybe a major factor here is social acceptance vs stigma. In the future will it be considered extremely weird and antisocial to be on your phone nonstop?
Valid question - however I have a feeling that for shaping perception of such behaviors we need a stronger middle class - and my hope for it shrinks every day
So in my view, the solution has to abide by this law of the jungle, but also short circuit the psychological mechanisms that tech companies are using to harvest attention. Somehow, people will have to pay for their freedom, similar to how drug addicts can pay for rehabilitation once they see the damage the drug has done to their life. It’s still a business, but one that contributes to the greater good.
Most of the solutions in this article require some kind of government intervention, which I don't see happening any time soon. Eventually, maybe, but probably only after society has nearly (or completely) ripped itself apart due to social media, the negatives are laid bare, and people start pushing for change.
> What might actually work
This section is idealistic. I guess the author was too damaged by his own experience to actually study the wave of twitter replacements. I would love to see an analysis of those. "Different Funding Methods" is clearly required but perhaps not sufficient.
Cheap hits to increase pleasure centers in the brain that overall have a detrimental cost to humanity with entire industries to deal with the health consequences.
This is the mining of wealth from health reducing the overall productivity of humanity for the sake of near term profits. Optimizing short term gains for long term progress.
Eyal wrote another book 5 years later trying to help people control their attention & not falling victim to the playbook he outlined in Hooked.
As someone who's a lifelong Muslim and even more dedicated to that in my late 30s and now at 40 I'll say we were put on this earth for a purpose. As engineers we need to understand our own design. We need to understand that all the things we constructed for ourselves isn't all for our benefit but actually a lot of it is harmful, whether it be the digital life or processed food. This is a more holistic way to live. The author obviously wanted to get people offline. I think the issue is when the algorithm of silicon valley is making money then anything inherently social becomes about addiction and gamification. There are alternative routes forward but probably by first getting offline or reassessing ones relationship with the world..
The point is that these are not tools, they provide a direct kick, which is a goal in itself. Whisky is not a tool.
We got a solid 5 maybe 10 years of that (up through 2k)?
Social media is all about network effects and first mover advantage, one network turned textbook fascist and it's still going strong.
Using AI introduces additional costs without solving the core challenge there.
Having spent a few years in the VC world I have been increasingly convinced outside investment is the biggest reason why companies lose their morals. The legal obligation to represent shareholders erodes morality. When the people running these companies feel they’re beholden to shareholders and can’t act on their own agency of course they will turn to addiction research not as a warning but as a guidebook. It’s Stanford Prison Experiment stuff.
I hate being reductionist, and I am posting this on a historically YC forum so of course there’s nuance, but there’s a pretty huge throughline of outside investment and addiction engineering. It sucks we’re seeing less grants and less security net to encourage risks under current administration, because it leaves investment as the quickest path to starting or scaling a company. Donate to open source, IMO
We actually need to combat this notion that somehow exclusive focus on short term returns is somehow legally, morally, or ethically required. It is actually antisocial and obviously destructive.
Businesses are powerful tools for the common good and the fact they produce returns for investors is absolutely critical to their continued existence and long-term viability.
But the point for businesses to exist at all is to produce positive externalities and they need to produce those externalities for more than just their owners.
It cannot be "either/or" and it's not immoral to pursue profits.
https://en.wikipedia.org/wiki/Benefit_corporation
[1] https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
Who is “we”? I can’t do anything about it. No more than peasants “allow” the king to exist..
You don't understand how kings work if you think it's equivalent to your situation in a western democracy.
"Voting obviously doesn't work." - Troll
The only reason it "doesn't work" is that the countries that did vote away capitalism didn't fare very well, so other countries people are very reluctant to try that again. But they absolutely could if they wanted.
What capitalism does is apparent in its worldwide success.
This is a dumb saying. And if you start to apply it to everything capitalism still seems pretty ok. For example: "The purpose of Communism is killing 20+ million people"[1]
[1] https://en.m.wikipedia.org/wiki/Excess_mortality_in_the_Sovi...
> you can't (well, shouldn't) judge something by its intended purpose if what it ends up doing goes against it
If you check my Wikipedia link it shows that the original quote says more or less the same thing: "[this slogan] makes a better starting point in seeking understanding than the familiar attributions of good intention, prejudices about expectations, moral judgement, or sheer ignorance of circumstances".
In other words, it doesn't matter what's the historical context of why corporations were created, what matters is what they do now. You can argue, like it was argued, that corporations as a whole currently are a net benefit. My point is that bringing up the historical context of their original purpose adds nothing to the discussion.
As to your other point, I completely agree that it would be useless to try to defend the Staling regime by pointing out what communism was intended to be. That's more or less the point I was trying to make.
Quite the opposite in fact: if anything it's a reaction to people who do try to understand a system by looking at its original plan: it says that you should disregard that and look at what the system actually does (which includes "interactions of independent parties and random variables", as you say).
In any case, that's how I meant it: it's a bit useless to dig up the original purpose of corporations in history books to talk about how corporations work today, like the comment I replied to suggested.
I see little evidence that this is true. If anything, modern VC companies are "externality parasites". They produce positive externalities for some (ie. shareholders), by putting a lot of negative externalities on society as a whole (see for example the cost to democracy, societal cohesion, etc. that comes for Facebook and the like).
We should be suspicious of games that favor shareholder value over common good and repair them. Of course this is harder than it sounds, but letting the person with the most money in a Monopoly game also set the rules is absurd and and obviously wrong. Wrong even without having a consensus reality on what "common good" entails and this is important.
The "capital game" should serve us, rather than us serving it. A fatalistic lack of imagination is no longer an option. When we're more afraid of unintended consequences than accepting that we have a responsibility to the current consequences, our current consequences look rather intended.
At least with share holder value, you know where you stand. The common good is a constantly changing thing determined by the moral authority in charge at a moment in time.
If anything those two are probably the most important needs so it's not possible to build such a system.
Besides why can't one of human needs also be an economic system that doesn't have the failure mode of poverty?
Those aren't very productive, our current system makes people produce value for others in their chase for status. Older systems people destroyed value for others in that chase, creating wars or other miseries, we have much less of that today.
I'd much rather have another billionaire than another authoritarian warmongering dictator.
I don't think most of the people who have extremely high status are doing anything remotely close to producing value
They just own capital which they use to pay other people to produce value, which they then take credit for, which boosts their status
So it would seem that we're pretty divorced from the idea of "produce value -> get status" these days, if you can just pay people to produce value for you instead
Expansionism, cult of follower, dispensing boons, and absolute control over their territory? check. The only reason we don't recognize them as warlords is because they don't wave scimitars and wear turbans. Neolibrral warlords wear Patagonia vests and beige slacks.
We're terrible at mistaking asthetics for function. Fortresses have been replaced by platforms; trade routes replaced by data sharing agreements. Armies have been ursurped by legal teams and lobbyists. We barely escaped feudalism and it's not clear we're out of the orbit of neo feudalism.
If we're able to be honest with ourselves, we need to learn that asthetics and function are different things. Just because they look different doesn't mean they don't fulfill the same function.
In practice that doesn't work, and the most successful "common good" systems instead ensure the disparity is limited and access is as equal as possible (e.g. not everyone can be wealthy, but the wealthy are not too rich and anyone had a chance to become rich instead of needing rich parents; or everyone can only have one married partner at a time instead of people who can afford it amassing big harems and not leaving any partners for the rest; or anyone can become famous, and famous people pushing their kids into fame is looked down on)
I didn’t say perfect, i said best.
At one extreme you get theories like communism or socialism that treat humans as disposable cattle to be murdered or starved when they stand in the way of whatever the party leaders decide is the common good.
The common good is something that has to be worked out deliberatively and is more like taking the resultant of a huge number of force vectors than it is like mass producing units of the same good for everyone.
What you are talking about is imposed self-interest at the level of the population from one or a small population that do not represent the common good. Not the same thing IMHO.
Common good historically was what's good for the city/polis/country/band/family. Basically, you make some (ideally relatively small) sacrifice to your own interest for the sake of a larger group you share fate with.
There are more formal/mathematical versions of it, for example in Bentham where the common good is essentially a weighted sum over the good to each individual. Rousseau described it almost exactly as the resultant of force vectors. There are more authoritarian versions like in historical Sparta and more recently in Marx and Engels where it's imposed through violence.
> imposed self-interest
I'm not sure exactly what you're saying here, but self-interest is almost by definition not externally imposed. In Marxism one particular vision of the common good is imposed externally via a "revolutionary terror."
common(adj.)
c. 1300, "belonging to all, owned or used jointly, general, of a public nature or character," from Old French comun "common, general, free, open, public" (9c., Modern French commun), from Latin communis "in common, public, shared by all or many; general, not specific; familiar, not pretentious." This is from a reconstructed PIE compound ko-moin-i- "held in common," compound adjective formed from ko- "together" + moi-n-, suffixed form of root mei- (1) "to change, go, move," hence literally "shared by all."
Your confusing political language with what came before this. Common good is the will of the people. It has nothing to do with cities, countries, or states. All of those things were created by people that wield political power. This is not the same as the common good. Common good directly relates to what is good for the people that share common values. You have been misinformed, by political society unfortunately.
The problem with common good is that it's hard to agree upon what is good, and if you find a good, there's often a group that's outside this "common".
Its like principles of what the Constitution was written on. Life, Liberty and the pursuit of happiness.
Principles like these are qualities we all naturally exhibit and as such doesn't need any explanation or qualifications. I know in our modern world people have decided that everything is open to interpretation. But I believe this was indoctrinated into us, over a long period of time, not to consider the human value[0] aspect of our being that we are born with. This was done by watering down the direct meaning of words and slowly changing the perception that humanity doesn't have infinite value and has to rely on external power structures to give it meaning.
[0]: https://archive.org/details/end-of-all-evil/page/n1/mode/2up
It has nothing to do with shared values. It's exactly as I described it above.
Notice the reconstructed PIE means to move together. Common good is about the interests of groups that co-move rather than groups that share values.
This makes sense even in family contexts. What is good for the family is often different from what any one person wants. Think about things like choosing dinner for a big hungry family on a long road trip.
Often the best solution is at best everyone's third or fourth choice because values and desires differ.
So I understand that you think its about families, but in this context, its really not. It was a way or a method to protect commoners.
When I say value, I mean if we both value freedom then we have a "Shared Value". This is really about the rights of the people which differs what rulers, want for the people. And I mean rulers that want to wield power against the people, for self-interested purposes.
Would you cite sources for this claim?
That of course won't mean that you will have the privilege of deciding for everyone else what counts as "the common good". It's unfortunately not like the Arch Linux terminal where you are omnipotent.
I say that sincerely, as somebody who had to do just that. It's easier for Mohammad to go to the mountain.
Edit: To say: I voted with my feet and moved to a place which better aligns with my values. From a "common good" society to a "freedom" society.
A good read: https://www.project-syndicate.org/commentary/costa-rica-enli...
All freedom US craves so much for (and much more) while stronger social state than next to nothing US has for its weaker part of society
https://www.businessinsider.com/female-breadwinner-moved-swi...
There's no general way to model, only empirical evidence. Unless I'm supposed to enter the mind and soul of people and see their motives and reasoning.
But I'll give a one word answer: pride.
>To make a somewhat successful "common good" society you first need to exterminate large swatches of the population
It sounds like you are conflating "common good" with authoritarianism.
Common good happens at the grass roots level and then spreads by consensus. Doesnt mean it will happen on a large scale, esp if there are larger forces at work.
It seems like this is a population size problem to me. Or at least a concentration of large populations in a small area (Cities). Maybe the trick is to spread out the population a bit more and prevent areas from becoming over populated somehow.
I don't have the data in front of me right now, but there are some sources that say when groups become to large people vie for attention which causes the most egoic people to try and dominate the areas that they are in.
Thus this creates social circles that try to gain power for powers sake and do not contribute to society.
You may be interested in this essay from the feminist movement in the 60s: https://www.jofreeman.com/joreen/tyranny.htm. It describes how the lack of structure or process forces the group to be run primarily by social dynamics like friendship, charm and influence.
There are lots of effects that happen as groups scale. But this capture of consensus-based and flat groups by ego-centric charismatic members happens in even tiny groups.
That's why successful flat groups (e.g. parliaments) have structure (e.g. Robert's rules) and make decisions by majority vote rather than consensus.
IMHO, it seems like it easier to deal with ego when the groups are smaller. When they get too large, we tend to use bureaucracies to manage decision making logistics. Bureaucracies make it easier for people that want power over others to hide.
What do you mean by exterminate large swatches of the population in Scandinavia? Yes the way the Sumi have (and to a degree still are) been treated is atrocious, but I'd argue that if anything this is not a feature of creating a "common good" society. I would argue that strongly capitalistic/mercetalistic societies have a horrible track record of treating (and still treat) indigenous populations.
What I'm referring to are the eugenics programs in Sweden, where unfit people were sterilized and/or had their children taken from them. These kind of programs were also present in North America, for what it's worth. The complete extent of these programs will probably forever be unknown, in all countries. Scandinavian countries are probably the countries who are most open about this, just like with suicide reporting.
As for Finland, they had a communist revolution and a very brutal civil war about the same time as the Russians. So their "common good" society was also born from a bloodbath, although the communists lost the war.
Norway is probably an exception. They're building a "common good" society on oil fortunes, just like the Gulf states have no problem with giving generous welfare for all of their citizens.
I don't think the appetite is there in most places
A capitalist system with right amount of social democracy to prevent worst concentration of wealth is the best model there is, at least for the well-being of its citizen and survival of its democracy.
You really need to read more history about Europe.
"Stand for it's rights" is just weasel words for "Was willing to use violence in order to obtain their rights"
Even if they never actually had to become violent, violence or the credible threat of violence is the only thing that has ever in history convinced "The Elites" to change things
Just a quick glance at the 44 historic economic transitions in my dataset, most of them aren't well known. The most likely reason why we think economic revolutions are associated with violent revolt is due to selection bias - violent revolts are more memorable, take up a larger section of history books, etc.
Happy to take at look at your dataset and compare notes.
Absolutely and me too. And that's why neither of us are actually CEO of anything (I assume)
Let's look at an example. In order to produce e.g. wind turbines, a large factory is needed, full of expensive machines. Let's assume that the buldings plus the machines all costs $500 million altogether. Where would that $500m come from, if the factory will never be profitable, so entities with money will never bankroll it? The only alternative I can think of is 100% socialism and centrally managed economy, where all businesses are owned and bankrolled by the state. However, in practice all such implementations so far (over probably at least a dozen different countries) has been terribly inefficient and corrupt.
1. Nobody forces you to use a smart phone. 2. Nobody forces you to have social media or use it. 3. Nobody forces you to watch Netflix.
We all choose what we do in life.
#2 is heading that way. Lots of official info is only available on social media. Travel to certain countries can be difficult if you don’t have any social media presence as they’ll decide you’re trying to hide something.
#2, I have to use SM for marketing.
To avoid these I’d need to basically be a homeless vagrant.
Easy peasy, no?
If you hit the growth targets, they will pat you in the back and will demand Hyperscale growth growth growth and will throw money at you to supercharge it.
If you refuse to chase the growth, they will simply kick you off the company via Board or fund your competitor that will chase the growth at all means
If you get the money and then try to U-turn and refuse to chase growth, the board will start asking questions
The legal obligation is that CEO does whatever board tells him to, otherwise board can fire ceo
This amounts to an argument that if doing something immoral gives you money and power, you can not possibly say no and no one can blame you. That somehow more money and power is good enough excuse.
Chilling effect is there one way or another, and even when that does not work adverse selection does.
You have to have a very strong market position to resist the investor pressure. Kinda like Google had twenty years ago.
Or you can have a diverse set of investors who can’t or won’t be swayed by activist investors. But that usually means being public at which point your employees are incentivized by RSUs.
That may be true legally, but practically it's only true if they control the board. Otherwise they will simply be replaced by people who are willing to do what the board wants.
That's what I was responding to.
But it's important for founders to understand they are not legally obligated to do any specific thing for their shareholders. It is their responsibility to act morally. Yes, there are other incentives and forces at play. "Legal obligation" is not the cop-out excuse that executives claim it is.
I say this because you used the phrase "fiduciary duty" which does not exist in this context.
My understanding is those kind of cases aren't common because a) they are hard to prove, b) the people being sued if they actually have the money to make it worth suing them also have the money to fight it, and c) it's a really bad look for an investor to be suing a previous member of their portfolio and would a strong adverse affect on their deal flow
Unless you're saying there is no explicit legal obligation / fiduciary duty in law, but it does emerge from civil court cases, which is how I understand it, but short paragraphs are not a good place for the amount of nuance so I just said "legal obligation" as a shorthand for something real but very complex.
Activist investors will sue for anything alleging that executives broke securities law by doing anything that harmed their portfolio. It doesn't mean they win the cases, or that anyone is guilty.
There's also something worth noting that even if there isn't a legal obligation for executives to act on their shareholders interests, they have a really strong incentive when their compensation is mostly stock grants and the shareholders can fire them.
For CEO see https://www.rgrdlaw.com/cases-in-re-dole-food-co-inc-stockho...
> The Court declared that, in certain limited circumstances indicating that the "sale" or "break-up" of the company is inevitable, the fiduciary obligation of the directors of a target corporation are narrowed significantly, the singular responsibility of the board being to maximize immediate stockholder value by securing the highest price available.
Seems to imply that under normal operation (i.e. no inevitable break-up) the fiduciary obligations are quite different though?
Well, there was one case in the law over 100 years ago in the USA. A company had decided to sell itself for cash and go out of business. The Court ruled, that in that situation, it should sell to the highest bidder. This is long before Milton Friedman began advocating that corporations had a duty to their common shareholders that provided the only valid yardstick for evaluating corporate activities. Friedman was an economist, and a controversial one, not a lawyer, and how he got the lawyers behind him is itself a long strange story.
The idea that common shareholders own the corporation was not really obvious to anyone from the start. Common shareholders get from the corporation only what is their privilege according to the corporate bylaws and charter. There are now, and have been in the past, many different kinds of and classes of common shareholders. For example, some big corporations today have many common shareholders who do not have any voting rights. The thing that sets common shareholders apart from the other stakeholders who also hold pieces of paper from the corporation granting them various interests in the corporation, is that the common shareholders get to divide up whatever is left over if and when the corporation is liquidated and everyone else is given what they are owed first. They are more heirs than owners. It is more realistic to hold that the corporation, as an artificial person, is not and cannot be owned by other persons, and owns itself.
There is the “shareholder lawsuit” but that really is about enforcing a company’s stated goals to its shareholders, which can and often are things other than “try to make the stock price go up as much as possible”.
Friedman deeply misunderstands agency law. Saying he got the lawyers behind him is misleading, because there are any corporate fiduciary duties owed by directors or officers to the shareholder other than 1) act informed 2) do not usurp corporate opportunity.
This is not statute, but it remains legally binding in Delaware so long as the courts uphold it.
It's that if you're going to make a decision that affects 1/3 of the companies value you need to actually claim it's in the shareholders interest that you do so.
Legally maybe. The market and shareholders will punish you if you deviate from the current standard behavior.
We’ve all seen companies do layoffs just because “Wall Street” was concerned about the economy and then instantly see the stock price spike up.
These negative consequences are all results of bog standard prisoner dilemma issues that need government regulation to make sure everyone picks the good square, but the tech industry and this boards community as well is allergic to the idea that regulations can improve the situation for everyone
In 95% of cases, the founder isn't smashing moral barriers because the VCs and shareholders are making them, or lording the threat of legal action or any some such.
In 95% of cases, the founder is smashing through moral barriers because their interests are aligned with the VCs: because they think what they are doing will lead to stupendous mega-wealth for them personally.
Like sure, I think the idea that corporate execs must be beholden to maximizing share price is a) corrosive to our society and b) not as true as often portrayed, but I don't think that's even a real factor here.
The ones who play the game with integrity and morals never have the type of growth that makes headlines. But I’m sure they exist.
To succeed, you have to execute many things well and avoid bad luck. Add to this an extra constraint that one also needs integrity or morals and it will drastically reduce your success rate.
My statement will be true as long as having integrity or morals could hinder growth in some way.
And even if what you said is true, you can look at the results of years of this system, the difference between companies with outside investment vs without makes a strong case against what you're saying.
It's like saying educating people about their rights wrt police helps, but in practice police don't derive their power from actual laws and it comes at considerable personal expense to push it to courts, in the same way Delaware is very strongly biased towards shareholder rights.
Individual investors are largely operating on trust.
Show me the incentive, and I'll show you the outcome - Charlie Munger
It's the same with politics and money.
We don't get the leaders we want, because it costs money to buy people's attention. We get the people who have some way to pay for attention
(in recent years, one of those ways is increasingly corruption - e.g. senator of NJ, mayor of NY, etc.)
An article today talks about Cuomo following the "local TV buys" playbook, which WAS a fairly reliable way to win elections:
https://www.nytimes.com/2025/06/28/opinion/ezra-klein-show-c...
That didn't work this time, but the mechanism is simple and clear
Who watches local TV anymore? Probably not many people under 60.
When we have that mindset, we absolutely don't care about the thing that we call "our product." It's just food for the actual product, where we want to fatten it up, and sell it to the biggest slaughterhouse.
That starts almost immediately. You can't even get an A round, without an "exit plan."
I feel that the very existence of an exit plan, dooms the user. No one cares about them. It's all about fattening the company, and making it look good. When we do that, we'll feed it nothing but junk food, in an effort to make it as fat as possible, as quickly as possible, with absolutely no thought as to long-term viability.
I would love to see the tech industry return to concentrating on truly delivering good to the end-user. It's still possible to make a decent living, but maybe not at the insane rates we see.
If you've ever dealt with Investor Relations at a public company, this becomes very apparent very quick.
Core fundamentals as a business can be strong, but if you cannot craft a unique story or thesis (which does not have to be tangentially related with active initiatives) about your company, you will not succeed.
Usually, the onus should fall on PM, EMs, and Sales Leadedship to drive customer outcomes, but the hyperfocus on short term deliverables AT THE EXPENSE of a long term product vision makes it difficult to push back.
Very few newly founded or public companies can do the latter - the most recent ones I can think of are maybe Datadog and Wiz (not public but they did drive a customer centric mentality internally).
Of course, a lot of this is also due to the extreme bloat that formed in the tech industry in the late 2010s to early 2020s. Teams grew unrealistically large with limited financial justification beyond cherry-picked growth metrics, and this meant a lot of companies lost the ability to innovate frugally or nimbly. Unrealistically high valuations also played a role because towards the end, founders could end up demanding IPO-sized multiples in private markets even without the underlying fundamentals (eg. Lacework's $9 BILLION valuation on what was at most $90 MILLION in revenue).
A lot of the current AI products and stories are cost-competitive due to that bloat itself, so some amount of rightsizing will help the industry.
Halfway true. There's a famous quote:
> In the short run, the market is a voting machine, but in the long run, it is a weighing machine.
At some point, strong fundamentals will catch up with you.
There is way way more money up top looking for investments than there is in the hands of customers, so it’s far more profitable to chase that money and make the stock the product than it is to care about the actual product much.
It’s a special case of the more general big dumb money problem that happens whenever too much money ends up in too few hands, whether those hands are a government or a few private rich citizens. You end up with this giant piñata of big dumb money and everyone whacking it.
In the old USSR instead of the stock is the product it was the appearance in the eyes of other bureaucrats is the product, but it’s kind of the same phenomenon. The customer isn’t the customer.
The point of saying it's complicated isn't to dismiss the problem, but to invite a deeper understanding of the problem itself so as to be better equiped to help solve the underlying issue, rather than show up, guns blazing, and then not actually fix anything.
> For every complex problem there is an answer that is clear, simple, and wrong.
-H.L. Mencken
1. They always have a reliable supply of their preferred drug. No matter how much they need, many of them will be able to afford it pretty much indefinitely. They can just live with the addiction.
2. They have first-class healthcare to mitigate the addiction and lessen its side effects.
3. They have the power to never run into any legal trouble over it. How often do 1%s get convicted on drug possession? This often applies even to the harshest regimes.
So, referring to what the other commenter said, the wealth inequality also affects addicts unequally. The rich, excluding the most extreme exceptions, are immune to the downward spirals of addictions and many of their consequences. The poor addicts become increasingly desperate as their drug habit consumes most of their income and savings. The poorest turn to the cheapest, most dangerous street drugs. Many get little to no medical help. Many are charged with drug-related crimes, ensuring their criminality keeps them down for the rest of their lives. This varies by country, but the patterns are all similar.
There's always going to be an underlying layer of people who tend to gravitate towards addictions, rich and poor - the real question is if more and more people are turning to them as they get desperate, who wouldn't otherwise have.
The entire economy is to some degree a casino betting on itself. I think this is always true to an extent but the casino nature becomes much more dominant the more unbalanced things become.
The problem is, any amount of rightsizing has the potential to tank the entire economy. Too big to fail, just that it isn't banks this time but a bunch of companies who went all in on "AI".
Inevitable when you tie the pension of people to the performance of the stonk markets.
As Action Jack Barker said, Pied Piper's product is its stock.
Side note, on "exit plan" - the most ridiculous thing about raising money is you need an exit strategy but you cannot explicitly say you have an exit strategy, you have to imply it while the whole time pretending it's not a focus for you. It's a very weird dynamic.
If you go the VC route then the VC is the customer. Since any good business is focused on customer satisfaction, a VC funded business is focused on VC satisfaction.
VCs want an exit. Which necessarily means switching funding model. The only switch that has worked so far is advertising. Advertising requires attention.
Of course a business can succeed with say SaaS subscriptions instead of advertising. This works well for B2B, but less so for B2C. Amazon is the poster child for B2C success, but makes most of its money from AWS (which is B2B).
The pattern is now well understood, and well demonstrated. If your business is B2C then figure out the funding model. If you can't do that, if you can't do it without VC money, then your path is predestined.
Amazon still makes the most revenue from ecom.
Why would you do that? Well companies are taxed on profit. And the money you pay to investors ... is also paid out of the profit. No profit -> all the money stays in the company, under the control of management, ready to be deployed on yachts and castles for the CEO. Governments get nothing. Investors get nothing.
Jeff Bezos (and very early investors) get everything. If they get desperate there is a buyback (no doubt matched by a greater stock package for the top of the company).
This is a pyramid scheme because the whole company only works because it only makes extremely minimal profit. If it starts demanding profit it will be eaten alive by competition in no time at all. Money has to be invested in, flows to the top, and is taken out at the top. No doubt Bezos was utterly baffled by the success of it and therefore isn't yet out, but ...
Really does make me cynical on investing...
One might question would we as society be better off if that money was spend on more efficient factories or say nuclear powerplants?
Imagine if every company was as wasteful as VC fueled startups and life would be hell, imagine going to the new smart grocery store where prices changes by the minute and now you have surge pricing since many wanted to buy toilet paper this minute...
I'm increasingly convinced that this is pure western capitalist propaganda. From what I observed in the 8 or so years I've been an adult, Western Capitalist economies (especially US) are much more bloated and wasteful. Nothing demonstrated this more clearly than Crypto/Web3 Hype-Bubble.
Is it growth itself you are opposed to?
How do you force an industry to ignore profit incentive? Seems a little pollyannish to hope for.
I suppose we’re living in an age of unchecked capitalism. But there are other issues too
Look at Mozila for the most insidious example. Take a privacy focused product. Rope in a bunch of suckers. Then literally delete the privacy focus from your mission statment and start the "slaughter"
Craiglist is proof it can be done at scale.. Its just that so few people with them means and morality exist anymore. The Sodom and Gomorrah fable is a warning not to let this happen or your society will destroy itself.
I don't think this is a good example. Back then, the internet was a new thing only a small cohort of people cared about. Something small could just stay small because none of the big players with money cared. Nowadays, if someone wanted to start something like Craigslist, they would be outrun by someone else going the VC route before the small company could get big enough on its own. I think it boils down to the difference between slower growth, boot-strapped companies vs. VC-backed.
Early in a nascent industry, you focus on the core product. You bring scale and scope economies. You make the supply chain more efficient. You improve the logistics. More abundant basic food stuffs for everyone, and more profits for agriculture shareholders. A true win-win.
Later on when the industry matures, the easy wins are all gone. Logistics and agriculture is fully optimized. The only scope for improvement is in marketing, adding sweeteners, and cutting out expensive ingredients. Now it's a lose-win, but from the shareholders perspective only, it's a win.
The problem is, you can't just ask companies to act nicely. While that would be a good start, even if they genuinely wanted to, competition largely forces their hand. The solution is careful and minimal regulation, to deter the pathological late-stage optimizations.
Since the rich and powerful get what they want. This race to the bottom mentality has saturated anything where a company accepts outside investment. This means any public company and any investment into the company outside of a bank loan. Which is basically every company nowdays since private equity company have bought stake in literally almost everything.
But it got captured by slick dealmakers who managed to cop the hoodie aesthetic and youthful ambition vibe but were the same born-to-privilege punks that have always ruined everything good in computing eventually. Now its messaging is vibe code and gladhand and suck up to whichever political party won last. Its a more insular, more inbred, less substantial network of the "right" kinds of people than the Ivy League was when it stepped on the scene.
And there's nothing inevitable about it, no "big money always goes to shit" story here: its 4 or 5 key people who abruptly had a serious seat at the table and chose very fucking selfishly.
HN is still here geeking out and being a gem on the internet.
Engineering addiction is also probably more often than not intentional. When all the business metrics/KPIs are stuff like "engagement time", "$ spent", even AB testing of random features leads to manufacturing addiction
https://open.substack.com/pub/vonnik/p/how-to-take-your-brai...
Yes, the addictions are engineered in the service of shareholder value. There are many ways to fight it!
Fwiw, this dynamic goes way beyond VC and tech.
Douglas Courtwright writes about this in Age of Addiction:
https://www.amazon.com/The-Age-of-Addiction-audiobook/dp/B07...
https://wonderful.dev/download
If people actually believed in something they'd make it open source or a non-profit, not a convenient vehicle for personal enrichment. Imagine if Wikipedia was a for-profit startup, it would've eventually ended up as an unusable cesspool of advertising.
If you don’t play this game you’ll lose. Look at Europe for example, they haven’t played the VC game properly and thus have no really significant tech player compared to the US / China.
So what options are left? Play the game or be ruled by those that play it.
I’d rather play even if moral erosion is required.
I am thinking how to make it sustainable without raising VC funding but not doing aggressive ad targeting. Obviously people are not going to pay for a social network. So maybe just very generic sponsered links?
But one for the rare case of ours taking off
Gross.
In Magickal Faerieland, we have regulations to align those 2 things by incentivizing the "goodguy" path and/or disincentivizing the "cackling villain" path but we live in reality where money rules and regulatory capture is a thing. So a Facebook or other megacorp can get away with using neuroscience and psychology to engineer a virtual slot machine with a terrible payout and ExxonMobile et al can get away with being an architect of environmental degradation and the accompanying humanitarian disasters.
Just a heads up, the experiment was complete fraud and could never be replicated.[1]
I agree with you that outside investment can work as a strong accelerator for these things. It enables founders to externalize responsibility.
However, it is not the main reason. Exploitative companies have existed long before venture capital was invented. In the end every company exists to make money and so is inherently immoral. That is why the state is needed to regulate the market so companies don't hurt society too much.
Those founders didn't get corrupted by evil venture capital, they didn't have that strong of a morality to begin with.
[1] https://www.vox.com/2018/6/13/17449118/stanford-prison-exper...
I admit I don’t really know the cause and effect dynamic here. Is that what makes VC’s successful, or the reverse?
This "legal obligation" is an internet rumor that does not exist in the real world. Yes, if your company has competing buyout offers of $1m and $2m and the board takes the $1m offer because they received a bribe, it will come up. Otherwise, it never does.
The proof is in the pudding (please go find me even one case where shareholders have successfully imposed their will on a board or executives because of this obligation), but it doesn't even logically make sense. Other than the buyout example, it's hard to think of almost any action a company could take that doesn't have some justification that it is for the benefit of shareholders. i.e. if we make our app too addictive, we risk social backlash and regulatory intervention by governments which will hurt out shareholders. And that's all that is needed, because there is no associated time frame with this obligation.
To be clear, boards and executives might strive to please investors, but it is not based on a legal obligation. An executive that ignores the interests of shareholders might be concerned about their reputation as a capable entrepreneur, risk losing their job, or devalue their own shares, but they are no in legal jeopardy.
Find me a serious lawyer anywhere that says this is a legitimate concern.
Oh 1000%.
I once worked at a company where the founder had famously said many times that he would never take the company public. But then, he had a stroke. And within two years they had an IPO. Started doing what every other 'big company' did instead of their own thing. And from what I heard from folks on the inside, Enshittification happened pretty quick after I left.
The lack of addressing the loose ethics of 'Behavioral Psychologists' working in these fields, is TBH a bit of a stain on the whole profession.
* Founders aren't trying to solve a problem, they're trying to grab table scraps from VCs and the already-wealthy to try and save their own skins. As a result, it's all about exit strategy, growth, and moat instead of business fundamentals and customer experience.
* VCs and their wealthy backers aren't looking for good business, they're looking for good profit. It's why they'll gladly invest into slop or outright grifts, and why they demand anything they invest into have an exit strategy (i.e., IPO) planned so they can cash out before the company collapses.
* Talent who wants to build a long-term career with a company - and accordingly focus on fixing its flaws, improving the customer experience, and saving expenditures - can't, because companies no longer fundamentally exist to provide long-term solutions and products, only short-term growth YoY. This ultimately ends up harming output and innovation, because why bother giving it your all when such efforts are counter to the "explosive growth" narrative and likely to get you PIPed?
* Retail investors and Business News are left feeding a monster that runs on Fairy Tales and ignorance, promoting big gains and huge losses rather than actual investing advice or corporate accountability.
It's all just a disgusting grift, is what I'm reducing it to, and I can't really fault Founders either since they're just trying to strike gold in an emptying mine shaft before it's closed off or collapses in. They're playing the game they think will net them safety and success...even though they may have better odds on some casino games instead.
Either with a guy promising Mars while siegheiling or jeopardizing teens’ health or ruining the Earth. All that matters is the valuation.
And why not? Investors never get into trouble for the mess their investments cause. Worst-case scenario, they lose their investment.
> but there’s a pretty huge throughline of outside investment and addiction engineering..
Personally I don't doubt that. But if people are taking outside money while being aware of its effects I don't know what kind of sympathy they deserve.
For instance, I took investment in my business, about five years in, from a very ethically and strategically aligned individual, as we mutually saw an opportunity to do something good together.
His life took a left turn. Two kids and wife in a horrendous car crash, all left extremely disabled, enormous medical and emotional costs. After a year or so he had little option but to sell his holding in our business, and we allowed it, knowing that his situation had become dire. He sold to a small PE consortium, who again, looked pretty well aligned with what we were doing.
The consortium all then had a falling out, as one member had brokered a deal with a large PE group to be bought out. This ground on for another year or so, us on the sidelines, until eventually the large PE group managed a hostile takeover.
And that’s how we found ourselves with blackstone as our corporate overlords.
It all went to shit over the following years as we were forced to squeeze margins, cut R&D investment, and depart from our original mission to instead gouge our customers.
I ended up leaving, as going to bat for the dark side every morning was beyond corrosive for me, and while it was a pretty terrible financial decision, it saved my life.
The company grinds on, a thing utterly different to what I founded. I don’t ask for sympathy, just… perhaps awareness that taking any investment, no matter how benign, can take you places you’d never wish to go.
It can happen even without investment. I’ve seen businesses where cofounders have had to sell out due to poor health or similar, and the outcomes have ended up pretty much the same.
If you construct your business model so that revenue is derived from attention, then your business will become a machine for consuming attention.
As an outsider I don’t believe it. Morals? I don’t even see a nugget or trace of some elevated goal in all of these stories.
Shareholders or not, the companies have to make money. Now us users have been gaslit for years about us just being too stingy to “pay for the product”, therefore we “become the product”. But all of these gamification/social media platforms were made to be free. Obviously there had to be a path to monetization. Morals or not. And they all end up in the same place.
Duolingo was co-founded by the inventor of Captcha. One of the ideas was to use people as translators, similar to the Mechanical Turk idea of letting people do some chore and using the product. Anyway, they also monetized eventually. Now what has Duolingo actually done for langauge learning? According to many people now, nothing. Look on YouTube. People post about their streaks. I.e. the gamification. The last video I saw was barely about how Duolingo helped at all. They had the typical “of course you can’t use only Duolingo” and then they listed all the other approaches and techniques. Well, did Duolingo serve any role? They said repetition. Well the repetition is for very artificial and out of context words and phrases. That Duolingo learners are like fish out of water in a context where they have to apply their knowledge is a meme at this point.
Another fun, very SC thing[1] about DuoLingo is/was the volunteer community. Yes of course a volunteer community to boost the for-profit platform. That’s how you get Klingon.
The AI-fication, aggressive ads, and pay-to-streak (you can artificially pause a streak for a whole month apparently) has made people worry and complain. And not because they are making a good language learning app worse to use, even. It seems to be mostly that people are hooked to the streak and are now even more annoyed by the hoop they have to go through (the app itself) to maintain it.
So what did Duolingo (DL) achieve? It made people fret and worry about their streak. That’s it. I had a friend who was so glad that he was getting close to a one-year streak on DL. Why? Because then he could quit. I wrote like one or two sentences that I recalled in his target language. He didn’t understand it.
[1] See StackExchange. I remember Jeff Atwood’s very humble blog piece about how he made his millions. It was of course all him but he had a good upbringing and access to good schools of course. No mention of the employees, but that’s just normal capitalist things so that’s fine. But also no mention that he made a platform based on volunteer work. Hmm. Self-made man? In SC culture he is. Because getting users/fools to work for you for free is the ultimate disruption.
I'm pretty sure that there was a case before the Supreme Court (or other federal court?) back in the late 1980s, where shareholders of a firm sued for the firm to focus exclusively on profit, when the company had been taking a broader view of stakeholders (community, workers, etc.).
> We built these platforms. We can build better ones. But only if we're willing to abandon the economic models that made the current ones inevitable. Until we change those incentives, every attempt to fix social media will become part of the problem it’s trying to solve. We’ll keep wondering why we can’t just put our phones down, not realizing that billion-dollar companies have spent a decade making sure we can’t.
> The solution isn't another app. It's changing the rules of the game entirely.
In direct language, what exactly is the author suggesting we do here?
We'd all love to rebuild economics from the ground up. But as soon as you try you realize that everyone has a different idea and they can't agree on anything.
Which I'm pretty sure is an unsolved problem?
That could be through a robust grant process, providing funding for social media that is not supported other ways.
Alternately, it could be through a UBI, giving people basic cash flow that could be allocated to paid social media platforms rather than everyone relying on ad-supported social media.
Its the rule that newspapers and TV need to live by, social media should play by the same rules.
The platforms then simply need to protect themselves my making sure they accurately identify users posting on their networks, so they can pass the cost of any lost lawsuit onto the original poster.
It’s nothing to do with social media, and everything to do with the wrong KPIs.
Unpopular opinion but I think we need to stop building social networks if we want to bring people together. Let people meet each other in real life. Let the relationships flourish organically. No amount of tech will ever build the trust that face to face interactions can build. When people are in presence of each other they are just not exchanging ideas. There is so much of non verbal exchange through body language, tone of voice, facial expressions. I think all this helps in building trust. Social media on other hand just does the opposite unless the user is very conscious of the effects of social media.
Agreed. Social networks not only didn't bring us together, they've actually done the opposite and made us more tribal. Excellent book on the topic is Superbloom: How Technologies of Connection Tear us Apart by Nicholas Carr.
Texting works very well. I'm typing this on the phone right now. It's one of the smoothest eink devices I've ever encountered.
NFC payment works fine, but using google wallet on websites seem to fail for me.
Video calls are fine but obviously black and white and frame rate is approx 10fps or something.
Huge life upgrade compared to LCD smartphones. I’m crushing books like when in middle school. Best practical change to my life in maybe a decade
An e ink smartphone gives me hours of my life back daily.
Can not recommend enough
LCD screens attract us like ants to a dropped ice cream
In TFA… I guess he wants a government Unicorn, because surely there could be no issues with that and with strong regulation it will remain cool and competitive… everyone raves about how fucking awesome their water company is.
> Regulated Algorithms: We regulate tobacco companies because their products are addictive and harmful. Algorithmic transparency or giving users control could preserve the benefits while reducing the addictive design patterns. The EU’s Digital Services Act already requires algorithmic transparency from large platforms.
What do you really get out of social media? I mean other than most of you getting crippling anxieties about things that aren’t even real, of course.
Sure sure, I know, everyone wants it because they need to share photos of the kiddos with grandma out of country. No one needs it because they enjoy the shallow bullshit and dopamine and snarky retorts that enforce their ideology.
I've always thought it would be a good idea for governments to run their own mastodon servers for this, but something else with accounts (not publicly) tied to real identities could be interesting.
Believe it or not, they post that on their own websites.
We had to turn on the TV and watch the marquee they would add to all shows. If you missed your school you had to go to another channel to see where in the alphabet they were.
You have not made a convincing argument. Social media has specifically moved away from synchronous time-prioritized posting in favor of algorithm engagement. So I can’t accept “notifications” as a legitimate use.
The former has a clear benefit (especially where it challenges legacy industries with exploitative pricing like mobile phone networks) and even the latter can benefit you by exposing you to new ideas and information.
That social media is incentivized to push meaningless but addictive fluff over genuine communication due to monetary incentives is the point of TFA. This is a reason for making social media a public utility, not against it.
- Require advertising companies to follow special rules, including only doing advertising and nothing else
- Fund an agency that measures the health harms of large platforms and imposes fines or restrictions based on harm
I don’t think the VC money does much but accelerate the end state, the apps would become addictive if they were held privately their entire lifespan.
Now just need a successful startup to push the idea
Methamphetamine is flashy and destructive, and its supply chain and sales force are the sort of thing romanticized in Breaking Bad—but billions drink tea (and nobody really glamorizes it).
To my mind, the norms of a specific subreddit or Local Co-Op Facebook Group or neighborhood gossip board tend to fall closer to the “tea” pattern than the “viral growth” paradigm. And those, and boring email, and transactional interfaces to companies that primarily do real-world stuff—those tend to take up the bulk of the time of the people in my life. But maybe I’m just old fashioned :)
Throwing Musk in there is strange. To my knowledge he doesn't really profit of ads, X probably have ad revenue, but that's not really his business model. Tesla stock however, that's a completely different addiction, mostly not relevant to consumers, but that stuff is immune to any type of common sense and traders can't seem to get enough of it.
The first and simpler question is what is a valuable software product? For products where the user expects to pay nothing, like almost all social media, the answer is: the product with the most user-hours. Therefore products that attract many user-hours attract much investment. There isn't some kind of insidious conspiracy to push specific types of products: investors don't care, they care about how many minutes of ads they can push down the pipe (legally).
The second question is: (again for products where the user expects to pay nothing) what products attract the most user-hours?
It seems folks dance around and rarely confront what I consider to be the main explanation here and where the primary cause is: humans choose and prefer to consume and interact with content that induces in them a set of emotions. They generally choose to experience stuff that gets them upset, looks cute, inspires longing, makes them feel lonely, etc.
If one categorizes the things that the consumer chooses as "problematic," where is the problem? The problem as stated is the consumer. One can't engineer a way out of that: folks have tried to provide alternative options and these mostly fail to attract heaps of users.
To put this in the language of TFA: the addiction isn't engineered into the consumer. The addiction was there from the beginning: a million products were tried out, products evolved to better align with preferences, and now the products are "addictive."
>The focus shifted from “authenticity” to “daily active users.”
It's more like limiting themselves to just sharing a single photo per day is limiting to how much value they can provide users and advertisers.
>Apps like TikTok, Instagram, and X aren't neutral tools. They're carefully crafted slot machines engineered to get you hooked. Pull to refresh. Tap to like. Scroll forever. Random rewards. Notifications timed to spike your cortisol. The same behavioral loops that addict gamblers now hook children and adults alike.
This is quite a stretch. Users finding immense value is not the same as addiction.
>Subscription models, cooperatives, or public funding could prioritize user wellbeing over engagement metrics.
Even if YouTube forced people to have premium they would still optimize for engagement. Loading up the home page and getting terrible recommendations is a terrible experience. Finding the best content for user provides the most value.
>Instead of measuring daily active users and time-on-platform, what if platforms were evaluated on user wellbeing, relationship quality, or real-world connections facilitated? What if we measured social platforms like we measure hospitals?
Feel free to use those metrics if you want, but most people will continue to use the apps that provide them the most value.
Agree that blaming VCs for why TikTok has an algorithmic feed and hundreds of millions of users is simplistic. A non-algorithmic TikTok would have no users.
And without a personalized algorithms, the feed ranking would just be showing content from popular accounts, which is a worse experience.
I guess the LLM era makes credible products more capital-intensive than they used to be, but even so, the vendors are pricing their stuff aggressively, and even when they try to squeeze the prices later, half these foundation models that are better-than-last-year’s-SOTA are open-source!
If you want to play with lots of money and seek out lots of money, there’s lots of money swirling around seeking to involve you in that game. But if you just want to make something nice and human-scale and small, what better time than now?
The path to billions of bucks may require mercenary bucks-extracting behavior, but that’s not the same as a growth imperative being an inevitable force of nature.
I can’t help but feel like the Small Web folks are on to something.
[0] https://news.ycombinator.com/item?id=5229522
Why does the author need to moan about how morally destructive it was to raise VC? Just run your social network from your bedroom, while asking ChatGPT how to rewrite the landing page in React.
You might say, well, start with 1000 users. But 1000, or 10,000 isn't enough to make a social network interesting. Maybe you could get around this by making it about a specific niche to start with. But that probably won't work, and if it does, you'll end up stuck in that niche.
On the other hand, I don't think this idea is as impossible as people say it is. It's just highly unlikely to be successful, and far more complicated than simply paying someone on Upwork to make it for you.
Commenters all across the internet will say they’d pay good money for a site that does something specific that sounds like a good idea.
Then when the site is built, you will discover that they will not, in fact, pay any money for it at all. You will continue to add the features they request and the goalposts will continue to move.
Social networks are even more difficult to bootstrap because they’re not worth paying for if you can’t find people to socialize with. Nobody wants to sign up for an empty social network.
Even the free social networks have a hard time getting started. There were dozens of Twitter competitors created after Twitter was acquired, but most of them languished. The few that have survived have their own problems that are driving many of their own fans away.
They claim to be profitable, but the TAM for services people are used to thinking of as "free" is small.
The whole idea of running your company while thinking about TAM and whatever is totally from a VC playbook. If you don’t take VC funding, you stop caring about TAM. Instead, you care about whether having the profit you have makes you — yes, you, personally — comfortable about your life. This is a much, much healthier line of thinking than trying to capture every bloody dollar in this world you can reach.
Fast forward to 2022: Evernote itself is acquired by a random app studio, and the whole service is now run by something like a dozen people. The CEO of what used to be a "100 year company" moved on.
I thought about this a lot. They never needed those 400 employees, even in 2013, it was absolutely possible to run the same service with a tiny team, it's just that the people at the company's top would be completely different people with completely different aptitude towards building their businesses. It's only if you really, really want to be on stage at Le Web, then you go to investors over and over again and convince them and yourself that a note-taking app needs 400 employees, and you're building a company as a product, not a product as a product.
Looks like the author of the original article here also didn't actually want to build a social network business but rather wants to be in the hothouse of Silicon Valley. Well, good luck to them.
Well obviously some people would pay. The hurdle that a company needs to clear is getting enough people to pay to support both an engineering staff and the infrastructure costs.
Do the math on how many people are necessary to run a web site with on-call rotation, minimum moderation, and someone to run the business. The number of $2/month subscription required to make that work is prohbitively high.
> but perhaps lots of smaller, focused social networks at $2/pop could work
Even large, free, well-funded social networks are failing to get significant traction or running into echo chamber problems (Bluesky).
I've been hearing for years that a paid social network would work, but if the unpaid social network competitors can't get any traction, what makes you think adding a $2/month signup hurdle would improve the situation?
If you want to see a real-world example of people squirming out of their claims that they'd pay for ad-free services, take a look at any HN thread discussing YouTube premium or their ad-block evasion efforts. The price for ad-free YouTube is reasonable for as much as people watch it, yet when cornered the same audiences who claimed they'd pay for an ad-free version suddenly come up with a multitude of new excuses for why they're refusing to pay. My personal favorite claim (which invariably surfaces in every thread) is when people say they would happily pay for YouTube premium if they weren't so aggressive about adblockers.
Difficult, but not impossible. At $5/month (the $3 difference wouldn't trigger any price sensitivity, talking from real experience) that's 10000 users. If your service actually provides value, you can crank it even higher. Again, difficult, but totally within the realm of possible.
Because the "traction" needed to make free and paid social network work is vastly different. You need insane scale (millions or tens of millions of users) to make free social network viable, hell, my stomach hurts from only thinking about it. A paid social network business, run with certain austerity, can be profitable with one thousand paid users.Using the heuristic that HR costs are 2x the gross salary, the 10 people are earning 30K/year gross salary (no bonus). And I'm not leaving any room to pay for the compute/storage infra.
I think a the problem is for every social media user who finds it valuable enough to pay, there are ten more who don’t use it enough justify paying. And if you only serve the first group but not the later, then the first group will just get bored and move back to X or Instagram, or they just ditch social media entirely and move into private group chats. And if you serve the later then your operation expenses will multiply.
but if you want to build a social network and aren't dreaming of being gazillionaires for it (which is quite reasonable), then you can get by very easily. how do I know this? because... well it's being done successfully. not was done successfully, is done successfully.
you can probably even get people to help out on it.
you can build a social network with a dedi running nginx hosting your Python application running on a Linux box backed against Postgres (and redis for session storage, although even that is a bit overkill) for like $80/month deployed with a "deploy.sh" script that you run to kick the damn thing into running (Docker is used in dev only, but could easily work here). should you probably add health checks or whatever? yeah. it still works really well.
this scales well past the 100k users mark.
what about video/images/etc? well, this nginx server happily sends out user uploaded video storing them as files on a bog standard ext4 filesystem. backups exist of the site.
the "stack" i mentioned here isn't fancy or particularly tightly optimized, it's in fact pessimized in a lot of ways. hell I know there were a gazillion ways we could improve performance of our application. show the backend app to a game dev and they'd probably want to start strangling people with how poorly optimized most of the actual app is.
and still, it scales well.
again, I stress that this isn't some theoretical idea, this is actively being executed. the entire venture makes money for the team from the users who willingly (and unforcibly in order to use the service, the actual site is free to use in its full form) give money. this isn't ZFS. this isn't Rust. this isn't using some blue-green deployment. this isn't spending hours toiling away at which sysctl to set to squeeze every last cycle out of each box. this isn't behind some massive CDN with "internet scale" boxen or even (for the video serving part) behind any anti-DDoS service.
it's just a matter of doing actual engineering and being willing to actually build the things you want to build.
So I totally agree with your approach.
i think the big thing though is that it's a community and so people are actually willing to support that even if it means the amount of 9s of availability is slightly fewer (although in practice, many providers bust right through their "9s" SLAs without a care in the world) and given a migration from a VM provider to the dedi occurred, migrations obviously can happen if failure presents itself.
Perhaps for you (in the US, I assume). The price is the same everywhere in the world, wages aren't. If you've the choice between paying for food and ad-blocking YouTube, or paying YouTube but having no money for food, the choice is obvious. Just like people here claiming Photoshop is an affordable piece of software...
But people are cheap as fuck. Even here we post links to archive.is to get around paywalls (which rubs me the wrong way). Every time YouTube Premium come up the comments are full of people saying they won't pay up.
People bemoan “nobody’s willing to pay for an online newspaper” and that’s true: they won’t pay for them in their current user-monetizing form. Same with YouTube: I’m not going to pay for an ad-free YouTube in its current form: with auto-playing next videos, algorithmic recommendations, Shorts, and sponsored content embedded in some creators’ videos. Give me a different, better product that does not try to monetize me, and I might pay for it.
As a fun fact this existed circa 2002 in a big way in the UK. The site was friendsreunited. I'd love to have that back (along with associated hype a 5 quid a year pricing)