How Social Media Platforms Went Wrong
The word corporation is derived from the Latin word corpus for body, representing a body of people who are authorised by the State to act as an individual. The Romans were the first to create corporations, based on the idea of them doing social good. They used them to move goods around the empire. From there, corporations have evolved, a core part of capitalism. Famed management thinker, Peter F. Drucker even said, the primary purpose of a corporation, a business, is to do social good. This is where social media platforms have failed.
What happened with the major social media platforms is reflective of what has broadly happened to capitalism as a whole. Not all, but a huge swatch, the majority, of corporations, especially public and private equity companies. They’ve stopped doing social good. It’s why we have terms such as greenwashing.
Social media platforms like Facebook, Twitter, Snap, started out with good intentions. They were connecting people, creating an opportunity for cultures to connect, collaborate and ideate unlike ever before in history. They did this, without any particularly clear business model. Like other Silicon Valley techies, they’d figure it out as they went along. Everything would be fine. Until it wasn’t.
While an entire book could, and probably will, be written on this topic by far smarter people than I, here’s the short-take on where social media platforms went wrong.
Eyeballs for Growth: In the early days of Facebook when it started to really grow and dropped the .edu email requirement for sign-up, they had a growth department. And what they said, everyone had to do. And they did and Facebook grew. But that department had no ethical bounds. It was growth. Through advertising, buying out potential competitors or using legal means to shut down startups that weren’t worth acquiring. They did nothing illegal. Ethically and morally though?
Entanglement: The growth department quickly figured out the best way to grow and also retain all those eyeballs was to make it very hard to move to another platform taking all your contacts with you. They did this exceptionally well. Others, like LinkedIn, have done similar. The higher a person’s switching cost, the less likely they are to switch.
Addiction: In the industrial food sector, they use salt, fat and sugar to get people hooked on their food processed foods. In the social media sector, they use dopamine. That FOMO thing (Fear of Missing Out), is a powerful chemical reaction in our brains. Notifications, bells and other icons all contribute. The more time on the platform, the more ads can be served and thus, the more money. Psychologists were well paid to advise social media platforms on these tactics.
Lazy Business Model: Which brings us to advertising. It’s easy and lazy. People want to be connected, but consumers didn’t value that connection at a monthly subscription. They would if the social media platforms had put some effort into making the experience valuable. They didn’t. Advertising was easy, fast dollars. From a profit first perspective, it worked. They needed to pay dividends and ensure an ROI for investors.
The Real Customer: This leads into who the real customer is. After all, as the saying came to be in the tech world, the consumer is the product. The real customer is the shareholder. They bought shares and the return is dividends. The social media platforms stopped caring about consumers beyond the point of monetising them for the shareholders. This is another point where capitalism has gone wrong in other sectors. Social media platforms simply followed a trend.
The Ignoring of Critical Thinking: Technology startups, especially software companies, through the approach of engineering, is to solve for a problem. Thus problem solving became the methodology to always be used. Problem solving approaches are good, necessary, one tool in the tool box of mental models. But when it comes to social media platforms, that are highly complex and require an understanding of complex sociocultural systems, problem solving is like using a screw driver to hammer a nail in. Instead, critical thinking and complex systems thinking are needed. But this is harder and threatens the lazy advertising model.
Technology Over Humans: As we began to see hostile State actors deploy misinformation and disinformation tactics into civil societies in their own and democratic nations and the trolls got to work, the first approach of major social media platforms was to thro technology at it. Namely, Artificial Intelligence. It failed. Eventually, they began to employ the social sciences, but in limited forms. They also hired masses of outsourced companies who hire moderators, who spent their days looking at all the depravities of humanity. Many have ended up with severe mental health issues. The response of the social media platforms? Not my circus, not my monkeys. When Musk bought Twitter, one of the first departments to be gutted? Those dealing with the humanities, the soft sciences. That will fail. An engineer taking a problem solving approach instead of using critical thinking.
Privacy: This one issue is certainly well known. The social media platforms, like other tech companies, found surveillance of users was incredibly valuable. Marketers have always longed for precise targeting data and ways to prove their value within the corporation. Marketers were complicit in this surveillance capitalism model, so we cannot only lay blame at the fetid feet of social media platforms. Privacy laws are getting tighter. This is good. Businesses made lots of money without invading our privacy. They can do it again. They just have to work a little harder for our hard-earned dollars. They should.
It is a series of failures and like any sycophant, following the path of the other leaders. An abject failure of what corporations originally did (and some still do) to deliver a social good. This past week, Jeff Bezos said he’d be giving away almost all of his fortune. Not really. That money will be funnelled mostly into his own foundations, which he will control and obtain significant tax benefits from.
Capitalism, when it does what it is supposed to do, deliver social good, is powerful and has done more to uplift humanity than any previous model. It works on a global scale. It failed when in the 1970’s, capitalism took on the mantra of profit first. That’s when capitalism went wrong. And social media platforms fell under that twisted spell.
Lest it seem all doom and gloom, it isn’t. Platforms like Pinterest have managed to deliver on the social good. But they’re often ignored and misunderstood because they don’t practice the profit-first approach.
The next generation of social media platforms will be the ones that work in the way corporations and capitalism were intended. If they do so, they will be very successful as consumers are tired of the profit-first model. It isn’t working, that’s why these major social media platforms are beginning to fizzle out.