Thread by @gauravsabnis

Saving this thread to use in my Social Media Marketing lectures and also my "woke marketing" lectures.

As someone who remembers that brief idealistic world, this resonates.

A lot of our current problems online are cos we want 25 year olds to grow taller iykwim.

https://twitter.com/AshleyLatke/status/1634705459008401413

I love this thread cos I've said so much of this in class!

I use this completely made up Steph Curry story to illustrate what went wrong with social media and how it's an endemic problem with our capitalist system. That my students should know.

https://twitter.com/AshleyLatke/status/1634706326021390336?t=S6O433zHHDn5m-BoO3_iEg&s=19

Completely made up story.

Steph Curry goes to McBostonDerson Consulting with a problem. Steph says, I want to remembered as a better player than LeBron. We both have 4 rings. We both carry our teams most seasons. We are both nice guys. But yet people rate Lebron higher!

The consultants as well as the investment bankers from an attached firm do a lot of research and analysis that they bill Steph for.

And they come back with their recommendations.

Steph needs to be at least 6 inches taller.

The logic is flawless.

They present their plans. If Steph Curry were just 6 inches taller, our data science team projections and AI/ML algorithms suggest that he would rate way way higher than LeBron!

Steph is like, let's do it. Bankers say, we can make money from this!

How?

A special financial vehicle is formed and presented at a fancy trade show with lasers and tiny lapel mics, built around the business model of the bet that Steph Curry will be a bigger name than LeBron once our visionary high tech AI friendly firm makes him 6 inches taller.

You can go long or short on this vehicle, of course.

Elon Musk buys the company and promises everyone that Steph Curry can be made 6 inches taller and that woke LeBron will be put in his place and everyone just #HODL while he goes to sell off more stock.

The market goes long on the idea cos it is an obvious winner, right?

If Steph Curry were 6 inches taller, he could totally overshadow lebron! If anyone can make Steph Curry 6 inches taller, it is Elon musk. Haven't you heard? He is a genius!

I tell this story and ask students, would you invest in a company whose business model is that Elon musk will make Steph curry 6 inches taller?

No, they say.

Why not?

Cos you can't make a grown person taller.

Not even Musk?

Not even Musk.

Phew.

The mid 2000s social media is no different from 80s newspapers or 90s cable TV or today's Netflix.

Working perfectly fine.

But can't grow naturally beyond a point.

It's like asking Steph Curry to grow 6 inches taller.

Netflix was doing pretty well at $200 a share. They didn't care about shared passwords.

When they were $50 a share, they didn't even care about VPNs!

They are currently at about $300, having once been $600.

Watch Netflix cos it is like a live action corporate wildlife documentary.

It isn't going away anytime soon.

But watch as the extra returns chasers turn what has been a nice distribution system into something predatory.

For shareholder value.

https://twitter.com/AshleyLatke/status/1634706326021390336?t=cfM3FqhHqKq9X28Gi0eKpw&s=19

Netflix did everything right. It became a victim of its own success. That always happens in this system.

If you start growing, you must grow forever or just morph or die. Our system will first make Steph curry say he can grow taller, then punish him when he doesn't

I remember this time.

So nice!

But the growth monsters eventually devours everything nice at mid level profit and turns it into nasty at high level profits. Until it is all commoditized into a mediocre equilibrium.

Social Media was infected by it.

https://twitter.com/AshleyLatke/status/1634707823694082054?t=cfM3FqhHqKq9X28Gi0eKpw&s=19

Just like @AshleyLatke wrote a thread about rss feeds and the open free easy comfort of the original web 2.0, someone will one day write thread t about how Netflix was so much nicer and YouTube was so much nicer and so on and so forth.

The growt machine made Netflix get ads.

Netflix resisted adding ads for sooooo long, even through the pandemic! But finally Netflix has a cheap subscription with ads.

That's not cos Netflix execs suddenly got stingy. It's because Netflix is a 25 year old being asked to grow taller. When it is a perfectly healthy adult

When you don't have extra revenue cos extra spending, you cut costs. Netflix kinda reached as many customers it could. It can just be a slow growing safe blue chip stock.

But people who bought it at $300 want it to go to $600 and above.

If there aren't new customers, cut costs

I don't have any answers or solutions for all this. Even if it sounds a tad nihilistic.

My job is to teach my students how this business and marketing world works, how it used to work in the past, how it will most likely work in the future..

Netflix has grown spectacularly for 25 years. But it or its investors or board or executives don't have the luxury to stop growing.

Why the password sharing ended. Why rss feeds went extinct. Why the blogosphere was killed.

All of this has happened before. All of this will happen again.

"VCs are finally feeling the heat and we get squeezed" will be a quote used to future historians to describe the 2020s.

Funnily enough, 1920s were the same. VCs finally started feeling the pinch. Squeezed too hard, brought the whole thing crashing down.

https://twitter.com/AshleyLatke/status/1634709447695106048?t=LNGtNkXO7iq_rTr4ouakbw&s=19