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I think there's a fundamental conflict, in that these network effect businesses are terrible as for-profit businesses. They're of great value to those who use t

I think there's a fundamental conflict, in that these network effect businesses are terrible as for-profit businesses. They're of great value to those who use them, and indirectly to society as a whole. Yet there's no good way to monetize them (nor does there need to be monetization), and trying to do so damages the functionality of the network. Both Twitter and Reddit would likely be better off (from the POV of the users and the network as a whole) as something more along the lines of non-profit foundations.

civilitty 3y ago
Is Facebook not a network effect business? It’s not only wildly profitable but bigger than those two combined. Twitter and Reddit are just run by incompetents who can’t figure out how to advertise anything relevant.
- unreal37 3y ago
  Twitter and Reddit are messageboards. Like Hacker News. Every time they do something controversial, someone thinks Usenet needs to be reincarnated. Trying to monetize that at scale is hardddd. Facebook has got groups, yes. But they have instagram. Messenger. Whatsapp. They have my friends and family. They have my photos going back 10 years. Facebook is personal to many people. I don't see Twitter and Facebook being interchangeable.
  - Hary06 3y ago
    Agree.
  - hparadiz 3y ago
    It's not hard. Reddit has every niche community right there. I go to subreddits to find advice on product and there's no reason why reddit can't be selling it.
    - weaksauce 3y ago
      and i don't get why they can't sell ads in the third party apps. just send it down the feed and have a tos that you need to be feeding that to the users. cut the apps in on it if you think the apps won't game that(could tie the cut with something like clickthrough rate to successful conversion by whatever metric that is... might be impossible who knows).
  - mapt 3y ago
    What did Usenet cost to run? What does Reddit's core functionality cost? They have annual revenue of half a billion dollars. Tell me that you can't use that money to run a text distribution infrastructure. I doubt Slashdot in its day cost half a million dollars to run.
    - pjc50 3y ago
      Usenet cost was distributed to ISPs, which eventually sank it as they lost interest. And it never solved the moderator conundrum; at one point, a third of Usenet was spam, and another third was "spam cancels" deleting the spam.
    - halfbrite 3y ago
      I wish there was a Usenet client for iOS that matched the beauty and usability (and accessibility) of Apollo. I wish there was Usenet servers to back that up - which didn't carry the binaries or unsavory newsgroups.
  - drewrv 3y ago
    I feel like reddit could serve better ads than Facebook if they tried. Sure Facebook knows what college I went to and who my uncle is. Reddit knows my hobbies and interests. The fact that I subscribe to r/woodworking, r/diy, etc, is really useful for targeting but I never see relevant ads. I’ve literally given Reddit a big list of my interests and the asked to be served content, and the ads are almost completely unrelated.
    - realusername 3y ago
      You nailed it, Reddit ads feel very amateur, close to weekend projects. And I don't know why they complain about third party apps, they never allowed them to display said low quality ads anyways in the first place...
  - celdon25 3y ago
    > Trying to monetize that at scale is hardddd. Good thing nobody is asking for that.
    - unreal37 3y ago
      Elon Musk would love Twitter to be profitable and Steve Hoffman would love the same for Reddit.
foobarbecue 3y ago
Exactly. I'm headed back to wikipedia, where I found community as a teenager. I think you can draw a direct line from wikimedia's nonprofit status to 22 years of greatness and steady improvement.
- TylerE 3y ago
  Eh, the Foundation has a lot of bloat and solicits donations far above actual operating costs.
  - kaba0 3y ago
    Which makes sense in case of a nonprofit that relies on donations and can’t predict whether the next year will be a hard one for people, making their sole income drop.
    - deleted 3y ago
      [deleted]
  - pneumonic 3y ago
    True, but luckily they don't intrude on the community or impact the Wikipedia site too much beyond their ever more frequent "We desperately need donations" campaigns. As the Foundation has gotten richer, its desire for more milk from its Wikipedia cash cow has only grown.
  - foobarbecue 3y ago
    Sure, they're far from perfect. I don't mind if build a nice big contingency fund or even become personally wealthy -- but I think it makes a difference that greed isn't the central organizing principle.
    - ekianjo 3y ago
      Its closer to its a scam than its far from perfect
wpietri 3y ago
Yeah, the way I think of it, the modern dogmas of Increase Shareholder Value and The CEO is Always Right might work for some businesses, but fall down badly when applied to user-generated content. They treat broader stakeholders as both morally and economically irrelevant. We can argue about the "moral" part, but with Reddit it's especially obvious that the users are the heart of the operation, making them economically crucial.
dasil003 3y ago
Meh, Twitter and Reddit monetize just fine with ads. The problem comes in with VC expectations where everything must 1000x or die. These are not bad businesses, they're just small compared to Facebook or Google. What's needed is mature leadership that recognizes the value comes from the community, and following the private equity playbook of strip-mining the value is short-sighted.
- JumpCrisscross 3y ago
  > problem comes in with VC expectations where everything must 1000x or die Is "VC" tech's catch-all for capitalism? Reddit is pining to go public and Twitter just LBO'd. Neither is having its chain yanked by venture capital.
  - wpietri 3y ago
    Reddit took $1.3 billion in investor money. What makes you say they're not having their chain yanked? Going public solves an investor problem, but I don't see it solving anything for Reddit's community.
    - JumpCrisscross 3y ago
      > Reddit took $1.3 billion in investor money. What makes you say they're not having their chain yanked? Took. Past tense. Limited need to take more. Look at Reddit's Board: it's ten people, only one of whom (Mike Seibel) is a VC.
      - wpietri 3y ago
        Your implication is that if they don't need more money, they can just ignore all those investor-owned shares? That doesn't make a lot of sense to me. Reddit's an odd duck given their ownership history and their investors. But I don't think they're that odd. Nobody gives you that kind of money without expecting to be well paid and soon.
        3y ago
WalterBright 3y ago
Non-profits still need enough revenue to meet expenses.
chemmail 3y ago
There are huge conflicts of interests between profitability and good business. Just listen to the podcasts on how they started Gimlet. The second season they focused on dating sites and the ones that working amazing just did not make money so they had to kill it and just do the generic shit we have now. Saying money is the root of all evil is not too far off from reality.
firecall 3y ago
I'm not sure I agree with that, as it's hard to ignore Facebook. Facebook is astoundingly profitable, and is the canonical example of network effects. Almost everyone I've ever known is or was on Facebook. So I don't consider Network Effect Businesses to be terrible as for-profits in and of themselves. The issue perhaps is that there is an expectation that they can become Google or Facebook. Now we have a generation raised on social media that doesn't require your real name, maybe we will see a new platform reach Facebook levels. TikTok and YouTube are obviously huge, but slightly different again to Facebook. As an aside, people talk about how amazing Tik Tok is, but in the end, it's really just the creators uploading content that make it work. Facebook captured Advertising dollars, in part, by investing in Ad infrastructure and building tools that companies could use to create targeted Ads. Every other platform, apart from AdWords, felt unfinished, especially Twitter!
mapt 3y ago
These network effect businesses are WILDLY PROFITABLE for a good long while if you keep overhead low, keep the product stable, and don't try to Take Over The Internet by doing something novel, developer-intensive, and (usually) stupid. Unfortunately any platform that draws >10 million daily users will reliably have people calling and offering billions of dollars to adopt that strategy and chase after revenue growth. Eventually the owner breaks down and agrees to take a huge personal payoff in order for the company to adopt a "Double or nothing" policy. Over, and over again. There's too many enormous piles of money out there seeking a return for this to be a sensible self-regulating system with stable provision of goods & services. Holdouts are few and far between, like Craigslist.
scarface_74 3y ago
>I think there's a fundamental conflict, in that these network effect businesses are terrible as for-profit businesses. All of the BigTech companies are built on network effects and two sided markets
bawolff 3y ago
Its not like wikipedia has a perfect history of making features with good user fit . There are some successes,but also quite a few failures. You could say the same thing that most of the successes were supporting what users were already doing (e.g. flow vs DiscussionTools) I think doing feature development on big socio-technical systems with an entrenched user base, is fundamentally hard.
PaulHoule 3y ago
Depends on the platform. Facebook and Youtube monetize very well. Then there are platforms that lumber on marginally for years like Reddit and Twitter, or where the commercial pressures of advertising are particularly obnoxious. (I think of that band Jefferson Starship which never made up its mind if it wanted to be commercially successful or have artistic integrity.) On the other hand there are sites like Danbooru which seem to thrive without advertising probably because the nature of their content drives advertising away.
BizarroLand 3y ago
I wish we could somehow get the US government to make an alternative replacement. I know that is a minefield of issues regarding access and moderation and it would make it a frequent election day financial harassment target but it would be nice to have something that is publicly funded, ad free, and not vulnerable to deep pockets stealing the entire system from the people.

civilitty 3y ago

Is Facebook not a network effect business? It’s not only wildly profitable but bigger than those two combined. Twitter and Reddit are just run by incompetents who can’t figure out how to advertise anything relevant.

unreal37 3y ago
Twitter and Reddit are messageboards. Like Hacker News. Every time they do something controversial, someone thinks Usenet needs to be reincarnated. Trying to monetize that at scale is hardddd. Facebook has got groups, yes. But they have instagram. Messenger. Whatsapp. They have my friends and family. They have my photos going back 10 years. Facebook is personal to many people. I don't see Twitter and Facebook being interchangeable.
- Hary06 3y ago
  Agree.
- hparadiz 3y ago
  It's not hard. Reddit has every niche community right there. I go to subreddits to find advice on product and there's no reason why reddit can't be selling it.
  - weaksauce 3y ago
    and i don't get why they can't sell ads in the third party apps. just send it down the feed and have a tos that you need to be feeding that to the users. cut the apps in on it if you think the apps won't game that(could tie the cut with something like clickthrough rate to successful conversion by whatever metric that is... might be impossible who knows).
- mapt 3y ago
  What did Usenet cost to run? What does Reddit's core functionality cost? They have annual revenue of half a billion dollars. Tell me that you can't use that money to run a text distribution infrastructure. I doubt Slashdot in its day cost half a million dollars to run.
  - pjc50 3y ago
    Usenet cost was distributed to ISPs, which eventually sank it as they lost interest. And it never solved the moderator conundrum; at one point, a third of Usenet was spam, and another third was "spam cancels" deleting the spam.
  - halfbrite 3y ago
    I wish there was a Usenet client for iOS that matched the beauty and usability (and accessibility) of Apollo. I wish there was Usenet servers to back that up - which didn't carry the binaries or unsavory newsgroups.
- drewrv 3y ago
  I feel like reddit could serve better ads than Facebook if they tried. Sure Facebook knows what college I went to and who my uncle is. Reddit knows my hobbies and interests. The fact that I subscribe to r/woodworking, r/diy, etc, is really useful for targeting but I never see relevant ads. I’ve literally given Reddit a big list of my interests and the asked to be served content, and the ads are almost completely unrelated.
  - realusername 3y ago
    You nailed it, Reddit ads feel very amateur, close to weekend projects. And I don't know why they complain about third party apps, they never allowed them to display said low quality ads anyways in the first place...
- celdon25 3y ago
  > Trying to monetize that at scale is hardddd. Good thing nobody is asking for that.
  - unreal37 3y ago
    Elon Musk would love Twitter to be profitable and Steve Hoffman would love the same for Reddit.

foobarbecue 3y ago

Exactly. I'm headed back to wikipedia, where I found community as a teenager. I think you can draw a direct line from wikimedia's nonprofit status to 22 years of greatness and steady improvement.

TylerE 3y ago
Eh, the Foundation has a lot of bloat and solicits donations far above actual operating costs.
- kaba0 3y ago
  Which makes sense in case of a nonprofit that relies on donations and can’t predict whether the next year will be a hard one for people, making their sole income drop.
  - deleted 3y ago
    [deleted]
- pneumonic 3y ago
  True, but luckily they don't intrude on the community or impact the Wikipedia site too much beyond their ever more frequent "We desperately need donations" campaigns. As the Foundation has gotten richer, its desire for more milk from its Wikipedia cash cow has only grown.
- foobarbecue 3y ago
  Sure, they're far from perfect. I don't mind if build a nice big contingency fund or even become personally wealthy -- but I think it makes a difference that greed isn't the central organizing principle.
  - ekianjo 3y ago
    Its closer to its a scam than its far from perfect

wpietri 3y ago

Yeah, the way I think of it, the modern dogmas of Increase Shareholder Value and The CEO is Always Right might work for some businesses, but fall down badly when applied to user-generated content. They treat broader stakeholders as both morally and economically irrelevant. We can argue about the "moral" part, but with Reddit it's especially obvious that the users are the heart of the operation, making them economically crucial.

dasil003 3y ago

Meh, Twitter and Reddit monetize just fine with ads. The problem comes in with VC expectations where everything must 1000x or die. These are not bad businesses, they're just small compared to Facebook or Google. What's needed is mature leadership that recognizes the value comes from the community, and following the private equity playbook of strip-mining the value is short-sighted.

JumpCrisscross 3y ago
> problem comes in with VC expectations where everything must 1000x or die Is "VC" tech's catch-all for capitalism? Reddit is pining to go public and Twitter just LBO'd. Neither is having its chain yanked by venture capital.
- wpietri 3y ago
  Reddit took $1.3 billion in investor money. What makes you say they're not having their chain yanked? Going public solves an investor problem, but I don't see it solving anything for Reddit's community.
  - JumpCrisscross 3y ago
    > Reddit took $1.3 billion in investor money. What makes you say they're not having their chain yanked? Took. Past tense. Limited need to take more. Look at Reddit's Board: it's ten people, only one of whom (Mike Seibel) is a VC.
    - wpietri 3y ago
      Your implication is that if they don't need more money, they can just ignore all those investor-owned shares? That doesn't make a lot of sense to me. Reddit's an odd duck given their ownership history and their investors. But I don't think they're that odd. Nobody gives you that kind of money without expecting to be well paid and soon.
      - 3y ago

WalterBright 3y ago

Non-profits still need enough revenue to meet expenses.

chemmail 3y ago

There are huge conflicts of interests between profitability and good business. Just listen to the podcasts on how they started Gimlet. The second season they focused on dating sites and the ones that working amazing just did not make money so they had to kill it and just do the generic shit we have now. Saying money is the root of all evil is not too far off from reality.

firecall 3y ago

I'm not sure I agree with that, as it's hard to ignore Facebook. Facebook is astoundingly profitable, and is the canonical example of network effects. Almost everyone I've ever known is or was on Facebook. So I don't consider Network Effect Businesses to be terrible as for-profits in and of themselves. The issue perhaps is that there is an expectation that they can become Google or Facebook. Now we have a generation raised on social media that doesn't require your real name, maybe we will see a new platform reach Facebook levels. TikTok and YouTube are obviously huge, but slightly different again to Facebook. As an aside, people talk about how amazing Tik Tok is, but in the end, it's really just the creators uploading content that make it work. Facebook captured Advertising dollars, in part, by investing in Ad infrastructure and building tools that companies could use to create targeted Ads. Every other platform, apart from AdWords, felt unfinished, especially Twitter!

mapt 3y ago

These network effect businesses are WILDLY PROFITABLE for a good long while if you keep overhead low, keep the product stable, and don't try to Take Over The Internet by doing something novel, developer-intensive, and (usually) stupid. Unfortunately any platform that draws >10 million daily users will reliably have people calling and offering billions of dollars to adopt that strategy and chase after revenue growth. Eventually the owner breaks down and agrees to take a huge personal payoff in order for the company to adopt a "Double or nothing" policy. Over, and over again. There's too many enormous piles of money out there seeking a return for this to be a sensible self-regulating system with stable provision of goods & services. Holdouts are few and far between, like Craigslist.

scarface_74 3y ago

>I think there's a fundamental conflict, in that these network effect businesses are terrible as for-profit businesses. All of the BigTech companies are built on network effects and two sided markets

bawolff 3y ago

Its not like wikipedia has a perfect history of making features with good user fit . There are some successes,but also quite a few failures. You could say the same thing that most of the successes were supporting what users were already doing (e.g. flow vs DiscussionTools) I think doing feature development on big socio-technical systems with an entrenched user base, is fundamentally hard.

PaulHoule 3y ago

Depends on the platform. Facebook and Youtube monetize very well. Then there are platforms that lumber on marginally for years like Reddit and Twitter, or where the commercial pressures of advertising are particularly obnoxious. (I think of that band Jefferson Starship which never made up its mind if it wanted to be commercially successful or have artistic integrity.) On the other hand there are sites like Danbooru which seem to thrive without advertising probably because the nature of their content drives advertising away.

BizarroLand 3y ago

I wish we could somehow get the US government to make an alternative replacement. I know that is a minefield of issues regarding access and moderation and it would make it a frequent election day financial harassment target but it would be nice to have something that is publicly funded, ad free, and not vulnerable to deep pockets stealing the entire system from the people.