I hated Facebook from the start and couldn’t wait for it to die. That was a pretty reasonable thing to expect. After all, I’d watched social networks from Sixdegrees on crash and burn as the network effects that drove their growth also drove their precipitous collapse.
A system enjoys “network effects” if it increases in value as it adds users. Social networks are all about these effects: you join Facebook because your friends are there, and once you join, others sign up because you are there.
But there’s a hard corollary: systems driven by network effects lose value when users leave. Your blender doesn’t get better when someone else gets a blender of their own, but it also doesn’t get worse when someone else throws theirs away.
Social networks are prone to sudden collapses, in part because of the double-edged sword of network effects – but also because of the intrinsic dynamics of social networking. Social networks insist that we articulate our relations to one another, pinning down the way we feel about the people in our lives.
The problem here is that the most important part of our relationships are hard to pin down. The opposite of “love” isn’t “hate” – it’s indifference. It’s surprisingly common to feel a mixture of emotions towards the people who matter the most in your life. Pinning down an emotion that fluctuates from moment to moment is difficult.
Actually, it’s worse than difficult. It’s anti-social. Your partner or your bestie knows when you’re pissed off at them, but that doesn’t mean you should create a world-readable sign that says “I hate this person (right now).” That’s a recipe for staying mad.
And those are the easy cases. Because at least who love you care about your happiness. There’s a whole universe of people – like your boss, or a creepy co-worker – who seem to sincerely think they’re your pal, even though you loathe them. When those people friend you, you have to friend them back.
This dynamic is so common that I wrote an article about it in 2007, entitled “How Your Creepy Ex-Co-Workers Will Kill Facebook.”
It describes how, over time, the coziness and connection of a friend-list populated by people you genuinely like becomes an exhausting morass of people you don’t really like, but can’t kick off the list, and how you are almost certainly oblivious to the fact that you’re someone else‘s exhausting not-really-a-friend.
Back in 2007, I thought we’d soon be free of the scourge of Facebook. I was wrong. Facebook used a mix of tactics to extend its shelf-life and increase its influence, and its network effect advantage let it grow, and grow, and grow.
Facebook owes its longevity in part to its anticompetitive conduct. By 2012, young users were fleeing Facebook, which was being colonized by their parents and teachers. They flocked to Instagram, so Facebook just bought Instagram, ensuring that its disgruntled users could not escape its grasp.
Having captured Instagram, Facebook ruthlessly strangled potential competitors. It tricked millions of users into installing a fake battery monitor called Onavo, which spied on their mobile usage, giving Facebook the strategic intelligence it needed to keep rivals like Snap at bay.
But capturing or killing rivals was only half the story. The other half was Facebook’s ruthless campaign directed against its own users, whom Facebook sought to impose “switching costs” on. A “switching cost” is the value of everything you give up when you switch out a product or service for a rival. Facebook did everything it could to increase the switching costs of leaving for a competitor, including plotting to hold your family photos hostage.
That’s important, because low switching costs are kryptonite for network effects. If you could leave Facebook and still talk to your Facebook friends (the way you can leave your cellular carrier without leaving behind the people you talk to on your phone), then the first time Facebook really pissed you off, you could just quit.
In other words, network effects are how companies like Facebook get big, but high switching costs are how they stay big.
Facebook used both technology (breaking interoperability) and law (suing companies that interoperated anyway) to fend off switching costs. It built a walled garden with really high walls.
But not even sky-high switching costs could keep Facebook users locked in forever. At a certain point, the number of truly awful people in your Facebook feed made leaving worth the price. Growth slowed. Halted. Reversed. Last quarter, Facebook lost US daily users for the first time. Investors pounded the company, wiping more than $230b off its market cap, the largest single drop in value ever experienced by any company, ever.
Those investors understood that when the toxic creeps push the most delicate normies off of Facebook, that leaves the rest of the nontoxic users mired in forums where the creep:normie ratio is worse. More normies leave. The ratio declines some more. Soon, it’s just a cesspool. We’ve all experienced online communities where this happened.
Today in his Garbage Day newsletter, Ryan Broderick revisits the last days of Myspace and the way this dynamic created a precipitous slide from the world’s largest-ever online service to a husk in the blink of an eye.
Myspace started out as a fun place to hang out with friends and meet new ones. But it filled up with scammers and harassers. Creepy grownups arrived and creeped on teenagers, who were creeped out. Users left (for Facebook!) in droves. Myspace lost 10 million users in a single month.
What’s interesting is what Myspace did next. They tried to pivot to “safety,” stepped up their moderation, tried to target teens. When that didn’t work, they embarked on “a bizarre redesign, a dumb logo change, and a shifting of their corporate strategy.”
Dumb logo change? Bizarre redesign? Radical shift of corporate strategy?
Oh, by the way, Facebook is now called Meta. It has a new logo that is just…wow. Also, it’s not a social network anymore. It’s a VR company, except it’s not called VR anymore, it’s called “metaverse.” No one likes their metaverse. Possibly because it doesn’t work.
They’ve got a a doozy of a new slogan: “Meta, metamates, me.” (No, really).
The misbegotten “pivots” are everywhere. As Broderick writes, “Reels, the video feed on Meta’s once-cool photo app, is filling up with silent auto-playing one-second video memes everyone hates.”
Facebook’s demographic is aging. It has become synonymous with toxic debate, conspiratorialism, harassment, and creeps.
Switching costs or no, people are leaving. And the nature of network effects is that every person who leaves makes Facebook less valuable to the people who stay behind. What’s more, as the bad drive out the good, the people who make Facebook most worth staying for are the ones leaving.
The company lost $230b in market-cap last month. Seen through this lens, the investors who hung in are looking like optimists.
I recognize optimism when I see it. I’ve been waiting for Facebook to die for 15 years now. The market can stay irrational for longer than I can stay solvent, which is why I’m glad I didn’t short the stock. But I never lost hope. Today, I’m more hopeful than ever.
Cory Doctorow (craphound.com) is a science fiction author, activist and journalist. He is the author of many books, most recently RADICALIZED and WALKAWAY, science fiction for adults; HOW TO DESTROY SURVEILLANCE CAPITALISM, nonfiction about monopoly and conspiracy; IN REAL LIFE, a graphic novel; and the picture book POESY THE MONSTER SLAYER. His latest book is ATTACK SURFACE, a standalone adult sequel to LITTLE BROTHER; his next nonfiction book is CHOKEPOINT CAPITALISM, with Rebecca Giblin, about monopoly and fairness in the creative arts labor market, (Beacon Press, 2022). In 2020, he was inducted into the Canadian Science Fiction and Fantasy Hall of Fame.