Burning platforms

I find it strange to hear people on the internet describing their ownership of an audience, or sometimes a platform. Those words aren't necessarily incorrect, but the way they're used comes off pretty creepy. "I've built a large audience that I'm figuring out how to monetise", or "I have a large platform that I use to bring attention to important issues". It gives the impression that the people who are interested in your work are best represented as inert goods, like a field full of turnips that you've carefully grown and are now ready to pull out of the ground and take to the market.

The current wave of big-growth internet businesses all have the same strategy: build and leverage some piece of infrastructure like a messaging system, a social network, or a two-sided marketplace. In phase 1, you concentrate exclusively on growth, just getting more people in the door at any cost. You keep that up until you've hit some crucial network effect point or until you start running out of investor money. Then comes phase 2: exploitation. You've done the hard work to build your platform, now you can direct that resource to whatever ends you need. Usually, but not always, that means restructuring your platform to be friendlier for advertising.

Many of these sites struggle in the second phase. Twitter, for example, has been struggling for many years to balance its identity as a piece of internet infrastructure with its goals as a user monetisation engine. They famously came down on third-party clients, and have recently been struggling to get users to accept a non-chronological timeline. These changes, like those made at Facebook and Youtube, are designed to give the service more control over what you see so that they can more effectively turn your attention into money.

Reddit has had the opposite problem; to some extent, they seem pot-committed to being a government-like utility. While this is attractive from a user perspective, it puts them in a tricky situation as far as commercialisation. For example, they'd love to commecialise AMAs, except that some of them go hilariously wrong, largely because the behaviour of the users can't be controlled, and changing the scoring algorithm so that inconvenient questions are hidden would be against Reddit's ethos. Similar problems prevent corporate-run subreddits, Facebook-style ranking changes, and targeted advertising (though the recent link tracking changes indicate some movement on that front).

Perhaps most interesting is the progression of the image host Imgur, which started as a Reddit user's homegrown alternative to sites like Imageshack. The problem with sites like Imageshack is that they tried so hard to monetise their users that they became really user-hostile and everyone hated them. Imgur was the opposite; it just wanted to host images, and thus became enormously popular. Inevitably, the question came: how do we leverage this? How do we go from being a piece of dumb infrastructure to a platform where we can direct and monetise our audience? And now Imgur is aggressively trying to move people onto its mobile app and social network. You either die a hero, or live long enough to see yourself become Imageshack.

To some extent, the issue is that, well, what would you do differently? Would you rather be 2010 Imgur or 2016 Imgur? It's hard to argue that Reddit is doing better by any commercial metric than Facebook, Youtube or even Twitter. The build-and-leverage system exists because it works. And, bringing it back to an individual audience, it works there too. Kim Kardashian can build an audience of people who care about her Instagram pics and use them to sell gummy vitamins. Maybe I too can grow an audience of people who like one thing I'm doing and, when the time is ripe, use them to drive sales of my ebook, get attention for a new project, or direct them to some cause I find worthy (or get paid to find worthy).

I'm not saying it wouldn't work – it certainly seems to. I just feel that with time the ownership metaphor breaks down. People aren't turnips, even if they act like them in large groups. It's not your audience that you own, but a small slice of their attention that they've chosen to give to you in exchange for the things you do. Just as quickly, they could decide that what you're offering is no longer worth it and walk away. Their attention is a resource you have to continually earn, not something you can buy once and take for granted. A platform, yes, but one that's easy to burn if you try too hard to exploit it.

And as for the big growth internet platform leverage bonanza? I don't think it can last forever. Internet companies are offering value in exchange for what they extract from the platform, but these exchanges are happening at monopoly prices, not competitive ones. What happens when there are plenty of other infrastructure-for-attention trades available? Unlike a personal audience, the people on these platforms are locked in by various means, but they can and will walk, however slowly, for a better deal.

I suspect the eventual stabilisation point looks more like 2010 Imgur, 2016 Reddit, or 2018 Twitter than it does 2016 Facebook. Infrastructure has bad margins, and as much as today's internet giants would like to pretend they're doing something transcendental, that's all a platform is: leveraged infrastructure. But time and competition wears down that leverage, and I can't think of many infrastructure companies worth 350 billion dollars.