🤖 Social network effects are not moats - the platforms fragment

“I think it continues to support the point that I've made a few times, which is I don't think that anyone has a monopoly in social media networks. We've seen every couple of years, competitors emerge, people proclaim monopoly, those monopolies get destroyed by the next thing, you know, from Friendster to MySpace to Facebook to Instagram to Snapchat to TikTok.”

“Here's the important thing to note, which is that if you look at the MAU growth of Snap, it's actually been extremely steady.”

“For all the things we say about Instagram, I mean, TikTok has had explosive growth, 30% growth each of the last three years. But even the incumbent platforms, really sticky usage, this is about how they're monetizing those users, and the real story is Apple.”

“Anybody who's thinking about going to some knockoff like Macedon or something is going to have to contend with the fact that it doesn't have nearly the distribution.”

“And by the way, all the social networks that people thought had massive lock-in effect turns out they don't, right?”

“But if you're a social network or if you're some deep machine-learned thing that basically generates great search results, that's much harder to copy because more and more of the product and what generates the product quality is underneath the waterline.”

“So I think it'll have a lasting effect in terms of investing in social network or social media type businesses where the users are generating so much of the value and have the ability to kind of communicate with one another and control where value ultimately falls.”

“In this current version of the Internet, the value is going to go and again, further, further, further erode away from the centralized apps and more towards the individual people”

“And the people who use Twitter are really addicted to using Twitter. It's where the conversation is. There is a strong network effect there, not just around the users and the social graph, but like the habit of daily usage.”

“And, you know, rage quitting Twitter because you're not a fan of the product right now or Elon isn't a successful long term use case, because all of those people will eventually come back.”