‘Your Map Is Wrong’(p2p.ai)
p2p.ai
‘Your Map Is Wrong’
https://p2p.ai/2022/06/27/your-map-is-wrong/
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> We’re building value, not just taking it away from someone else.
Does Facebook still build anything? These days it seems like they mostly buy other companies that are still able to build and innovate.
Does Facebook still build anything? These days it seems like they mostly buy other companies that are still able to build and innovate.
Yes, they do, but they do it pretty quietly - think messenger, or their dating service, or their games section - these are all parts of Facebook, but they used to not be. Messenger and Games are the oldest ones. They're huge, they keep building stuff into what "Facebook" is, but it's really, *really* subtle.
Also, off topic, but I'm fairly certain you're a former co-worker of mine :)
Also, off topic, but I'm fairly certain you're a former co-worker of mine :)
> you're a former co-worker of mine
I am! Nice to virtually see you.
I am! Nice to virtually see you.
I really don't like Zuckerberg and expected to disagree with him (especially about maps, everyone gets maps wrong (especially especially on computers) but this isn't a map of the earth.) This sounds right to me. Every time someone says we've figured everything out they're always wrong. There's always more to understand.
I don't think Facebook legitimately adds value, I think it's entirely parasitic. But we haven't discovered everything there is to know about talking with each other.
I don't think Facebook legitimately adds value, I think it's entirely parasitic. But we haven't discovered everything there is to know about talking with each other.
Aye, this rings true... but the source...
Zuckerberg is fundamentally right [1], and I think it's a good observation that many people fail to make.
But I think it's companies other than Facebook/Meta that are creating the new value.
[1] https://clickhole.com/heartbreaking-the-worst-person-you-kno...
But I think it's companies other than Facebook/Meta that are creating the new value.
[1] https://clickhole.com/heartbreaking-the-worst-person-you-kno...
I agree with you however truly innovative things that are not making anyone poorer are way rarer than author of this post suggests. Even Steve jobs devices, given here as an example, was taking part of the cake from someone else. First thing that came to my mind is original VCS made in 1972 by Bell Labs. This was an invention that genuinely created profit from place where no one else was making any money.
He's not saying that new stuff will always not be zero sum, just that the space of potential non zero sum new things is bigger than the space of things that already exist.
profit is not the same as wealth
Inexplicably linked though. If you have a lot of one, the other is inevitable with even a modicum of effort.
I think Facebook/Meta are creating fantastic and mind-boggling value.
Just not for the end users, but for the advertisement and data broker industries.
Just not for the end users, but for the advertisement and data broker industries.
he is right in a way that makes it hard to see what facebook is turning into profit: the users attention.
sure they are creating a space without taking away volume for other people to build there, but nobody will care about the other things because a proper map of the internet is not concerned with what is there, but what a given user spends their attention on.
sure they are creating a space without taking away volume for other people to build there, but nobody will care about the other things because a proper map of the internet is not concerned with what is there, but what a given user spends their attention on.
>but what a given user spends their attention on
I want to point out, since I have not seen it elsewhere in this thread, that user's do not need to be on the internet at all. Does no one remember what it was like to be bored? With respect to living everyday lives, social media addiction is becoming an issue. Instagram specifically is a huge item.
So it would be contradictory to say Meta is responsible for manipulating its users and successfully furthering people's addiction to social media in general, while also claiming that people are using meta products with time and attention that would have been spent on the internet anyway (0-sum).
Are they or are they not incentivizing people to spend more time on social media than they otherwise would have?
I want to point out, since I have not seen it elsewhere in this thread, that user's do not need to be on the internet at all. Does no one remember what it was like to be bored? With respect to living everyday lives, social media addiction is becoming an issue. Instagram specifically is a huge item.
So it would be contradictory to say Meta is responsible for manipulating its users and successfully furthering people's addiction to social media in general, while also claiming that people are using meta products with time and attention that would have been spent on the internet anyway (0-sum).
Are they or are they not incentivizing people to spend more time on social media than they otherwise would have?
I might not need to be on social media but I do need to be on the internet.
- Vehicle and Public Transit Navigation
- Apartment shopping
- Amazon.com
- Determining visa rules for extended travel
- Obtaining medical records
All of these are possible without the internet but all of them are a massive waste of time without the internet. I’m okay with being bored but some things would be an enormous waste of my life.
- Vehicle and Public Transit Navigation
- Apartment shopping
- Amazon.com
- Determining visa rules for extended travel
- Obtaining medical records
All of these are possible without the internet but all of them are a massive waste of time without the internet. I’m okay with being bored but some things would be an enormous waste of my life.
Facebook created value out of nothing; peoples boredom in-between doing all of the above. I am just saying people are treating facebook like it is stealing attention from everything else on the internet and I dont buy it.
I think it is a stretch to say any of the things you listed are competing with social media for your attention. The "attention" social media is taking from its users was previously spent on being bored, not taking care of other pre-existing needs. Social media becoming mainstream has created new "needs" for people to stay in touch with their online network. These new needs spawned economic incentives. Facebook is arguably the reason social media is mainstream at all. They have certainly earned the right to claim they are not stealing economic activity from those other pre-existing needs. You previously could not create an economic model out of people who were checking in with friends because they were bored. They created that
I think it is a stretch to say any of the things you listed are competing with social media for your attention. The "attention" social media is taking from its users was previously spent on being bored, not taking care of other pre-existing needs. Social media becoming mainstream has created new "needs" for people to stay in touch with their online network. These new needs spawned economic incentives. Facebook is arguably the reason social media is mainstream at all. They have certainly earned the right to claim they are not stealing economic activity from those other pre-existing needs. You previously could not create an economic model out of people who were checking in with friends because they were bored. They created that
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I think the argument which is charitable to Facebook is that they make money by more efficiently matching advertisements to slots: advertisers are less willing to pay for generic slots in a newspaper than targeted slots because, in theory, a slot seen by someone more desirable. Facebook do advanced targeting to allow slots to be sold at closer to their fair value by making buyers better informed and they take a fee for improving the efficiency.
But it’s still reasonable to argue that the targeting is not as effective as claimed, the fee is too large, or that there are political reasons to dislike targeting and we should disallow it even if it makes the ad market more efficient.
But it’s still reasonable to argue that the targeting is not as effective as claimed, the fee is too large, or that there are political reasons to dislike targeting and we should disallow it even if it makes the ad market more efficient.
i mean, of course i want the best THINGS for my bucks, so advertising good wares is kind of desirable...
but perhaps that is not enough. perhaps the scope needs to include production of wares: i dont just want inferior wares to not be advertised, but rather not even made. time, effort and resources wasted on trash products are a shame we are going to feel painfuly in the coming decades if humanity ever wakes up from the capitalist dream
but perhaps that is not enough. perhaps the scope needs to include production of wares: i dont just want inferior wares to not be advertised, but rather not even made. time, effort and resources wasted on trash products are a shame we are going to feel painfuly in the coming decades if humanity ever wakes up from the capitalist dream
While I may not agree with your primary conjecture, your link is so good that I will simply slowly nod. Nice share!
Very strongly agree. If you work in tech in general you should probably be thinking about most decisions with this kind of positive sum mindset where one person’s gain is not another’s loss. For one thing, I think it feels better, but it is also very typically true.
I think you think that because you want to.
But it's simply not true. Internet classifieds destroyed newspaper ads. Apple destroyed Nokia. It is a zero sum game to a certain degree.
I'm not saying you should feel sorry because you improved things, but sometimes your success is someone else's downfall.
But it's simply not true. Internet classifieds destroyed newspaper ads. Apple destroyed Nokia. It is a zero sum game to a certain degree.
I'm not saying you should feel sorry because you improved things, but sometimes your success is someone else's downfall.
I don't think we should have a bunch guilt for destroying old technology, it's a major benefit of tech to not need as many physical objects, as much manual labor, or as much time fussing with DIP switches.
Facebook is different because it doesn't destroy anything, it purely adds to life and consumes time, with fairly minimal happiness involved. It acts more like an an obligation than a leisure activity even though it's purely voluntary.
The things that wind up getting displaced aren't technologies or jobs, which can often be replaced with a good riddance, they're things like "Having a conversation" or "learning a language" or "taking a walk" or anything else one might do in their spare time.
Facebook is different because it doesn't destroy anything, it purely adds to life and consumes time, with fairly minimal happiness involved. It acts more like an an obligation than a leisure activity even though it's purely voluntary.
The things that wind up getting displaced aren't technologies or jobs, which can often be replaced with a good riddance, they're things like "Having a conversation" or "learning a language" or "taking a walk" or anything else one might do in their spare time.
I think what I meant to write is that ‘one’s gain is not balanced out by an equal loss to another person’. And there are plenty of places where a zero-sum mindset might make sense, e.g. if you work for a small non-growing company the only real opportunity for career advancement may be replacing your boss, but most people who can work in tech can find somewhere to work where they can create value rather than just move it from somewhere else.
> There is this beauty of economics – you don’t have to make anyone poorer in order for you to become richer.
At any appreciable scale I disagree with this, or at least believe this ignores a whole lot of complexity.
Like, it totally ignores how profits are allocated within a company, for instance. Jeff Bezos got richer by making his employees poorer, for instance. He could have chosen to make his employees richer at the expense of making himself poorer.
It also seems to ignore the extractive elements of companies. Whether we are extracting raw minerals, agricultural products, or manufacturing capacity.
At any appreciable scale I disagree with this, or at least believe this ignores a whole lot of complexity.
Like, it totally ignores how profits are allocated within a company, for instance. Jeff Bezos got richer by making his employees poorer, for instance. He could have chosen to make his employees richer at the expense of making himself poorer.
It also seems to ignore the extractive elements of companies. Whether we are extracting raw minerals, agricultural products, or manufacturing capacity.
> Bezos got richer by making his employees poorer, for instance. He could have chosen to make his employees richer at the expense of making himself poorer.
No, they both got richer. Maybe Bezos had a chance to make his employees slightly more rich and himself less so, but ultimately no-one got poorer here.
No, they both got richer. Maybe Bezos had a chance to make his employees slightly more rich and himself less so, but ultimately no-one got poorer here.
No one? What about the brick and mortar stores that lost volume? Or even the other budding online marketplaces that were choked out of existence?
They aren’t his employees?
I think GP is wrong-as-intended, but is still somewhat correct-as-written, indirectly.
Amazon's growth has pushed various companies out of business, reducing employment opportunities at companies other than Amazon. So any employee who works at Amazon for lack of other opportunities, and if those other opportunities would have existed if Amazon hadn't put them out of business, then yes, that employee is poorer.
This scenario is somewhat contrived on an individual scale, but it seems obvious to me that corporate consolidation and monopoly-ish-ization should lead symmetrically to monopsony-ish-ization in the labor market. But I am not a professional economist and I would be interested to see any actual research on this topic.
Amazon's growth has pushed various companies out of business, reducing employment opportunities at companies other than Amazon. So any employee who works at Amazon for lack of other opportunities, and if those other opportunities would have existed if Amazon hadn't put them out of business, then yes, that employee is poorer.
This scenario is somewhat contrived on an individual scale, but it seems obvious to me that corporate consolidation and monopoly-ish-ization should lead symmetrically to monopsony-ish-ization in the labor market. But I am not a professional economist and I would be interested to see any actual research on this topic.
This is not just wrong, but profoundly wrong.
The reconstruction of the American retail landscape that consumers experience only as "buying I guess kind of a lot of my stuff from Amazon" (or Walmart, or a very few other entitities; and their lesser-known agricultural oligopoly peers),
is so total at the manufacturing/logistics/supply chain/fulfillment level, as to defy our comprehension.
The world that we live in has had the mechanisms of how it produces and delivers goods to its citizens changed in more far-reaching ways within the last two decades than since the industrial or agrarian revolutions.
AND,
this reorganization has meant millions of people worldwide have had their utility redefined, and "optimized," to their detriment in terms of opportunity, income, stability, benefits, etc. ad nauseum.
To pick one straw out of the tornado: https://www.goodreads.com/book/show/38212124-nomadland
But that is literally one of a thousand examples; the "gig economy" and its infinitely examined (and litigated) sharp edges provide as many more as you would like.
Fast-fashion and next-day fulfillment and fungible goods from Chinese "companies" with machine-generated meaningless names clogging Amazon results pages, do not come at no one's expense.
TANSTAAFL.
The reconstruction of the American retail landscape that consumers experience only as "buying I guess kind of a lot of my stuff from Amazon" (or Walmart, or a very few other entitities; and their lesser-known agricultural oligopoly peers),
is so total at the manufacturing/logistics/supply chain/fulfillment level, as to defy our comprehension.
The world that we live in has had the mechanisms of how it produces and delivers goods to its citizens changed in more far-reaching ways within the last two decades than since the industrial or agrarian revolutions.
AND,
this reorganization has meant millions of people worldwide have had their utility redefined, and "optimized," to their detriment in terms of opportunity, income, stability, benefits, etc. ad nauseum.
To pick one straw out of the tornado: https://www.goodreads.com/book/show/38212124-nomadland
But that is literally one of a thousand examples; the "gig economy" and its infinitely examined (and litigated) sharp edges provide as many more as you would like.
Fast-fashion and next-day fulfillment and fungible goods from Chinese "companies" with machine-generated meaningless names clogging Amazon results pages, do not come at no one's expense.
TANSTAAFL.
> There is this beauty of economics – you don’t have to make anyone poorer in order for you to become richer.
Actually, economics doesn't create wealth. Technology and industry creates wealth.
In the case of facebook, you'd have to make the argument that advertising budgets is creating more "wealth" in the hands of facebook than anywhere else. Advertising spending budgets are, in fact, zero-sum. Which form of advertising creates more "economic wellfare" is probably a normative debate, and we'd need someone motivated enough to have it.
But in the end, facebook's revenue comes at the expense of other companies' revenue.
Actually, economics doesn't create wealth. Technology and industry creates wealth.
In the case of facebook, you'd have to make the argument that advertising budgets is creating more "wealth" in the hands of facebook than anywhere else. Advertising spending budgets are, in fact, zero-sum. Which form of advertising creates more "economic wellfare" is probably a normative debate, and we'd need someone motivated enough to have it.
But in the end, facebook's revenue comes at the expense of other companies' revenue.
Advertising spend is not zero-sum. Budgets are determined by advertising efficiency; if a new platform comes along that significantly improves cost per conversion, then you'd allocate more money than before. The reason advertisers are flocking to Google and Facebook is because of their advertisement efficiency (through targeting), and this has lead to an increase in overall advertiser spending.
> Jeff Bezos got richer by making his employees poorer, for instance.
Poorer than what? Than being unemployed? I don't see how you can make someone poorer by employing them unless you forcefully ripped them out of a higher-paying job somehow.
Poorer than what? Than being unemployed? I don't see how you can make someone poorer by employing them unless you forcefully ripped them out of a higher-paying job somehow.
>> don't see how you can make someone poorer by employing them unless you forcefully ripped them out of a higher-paying job somehow.
How?
Destroy the companies that previously provided higher paying jobs and are one of the few remaining opportunities that are not the unemployment queue.
WalMart was astonishingly successful at this. Their strategy was to move into small towns, on the outskirts where land was cheap, and setup a superstore that competed with basically every small business in town. Within years, 'Main Street' was a row of empty storefronts. It becomes one of the only places in town to work. The jobs at WalMart consistently pay so little that WalMart holds seminars for it's employees on how to get government assistance to survive. You and I are literally subsidizing WalMart's profits by enabling them to pay a sub-living wage to so many people.
WalMart so consistently made poorer everyone in the targeted communities that organized opposition sprang up. I watched it happen when I lived in Vermont, and it delayed WalMart's entry into the state for many years; a quick look still shows only 7 stores in the state, and there's still not a single store in the southeast.
WalMart was easier to identify because it had such measurable local effects, and it still took decades for people to catch up to their strategy and start to oppose it. Amazon's effects are much more diffuse and will take longer to measure.
So, yes, scaled-up organizations can literally rip out the higher paying jobs from under people and leave them no options. They can literally make people poorer by employing them.
How?
Destroy the companies that previously provided higher paying jobs and are one of the few remaining opportunities that are not the unemployment queue.
WalMart was astonishingly successful at this. Their strategy was to move into small towns, on the outskirts where land was cheap, and setup a superstore that competed with basically every small business in town. Within years, 'Main Street' was a row of empty storefronts. It becomes one of the only places in town to work. The jobs at WalMart consistently pay so little that WalMart holds seminars for it's employees on how to get government assistance to survive. You and I are literally subsidizing WalMart's profits by enabling them to pay a sub-living wage to so many people.
WalMart so consistently made poorer everyone in the targeted communities that organized opposition sprang up. I watched it happen when I lived in Vermont, and it delayed WalMart's entry into the state for many years; a quick look still shows only 7 stores in the state, and there's still not a single store in the southeast.
WalMart was easier to identify because it had such measurable local effects, and it still took decades for people to catch up to their strategy and start to oppose it. Amazon's effects are much more diffuse and will take longer to measure.
So, yes, scaled-up organizations can literally rip out the higher paying jobs from under people and leave them no options. They can literally make people poorer by employing them.
> Jeff Bezos got richer by making his employees poorer, for instance.
How did he make them poorer? He took money from them?
How did he make them poorer? He took money from them?
He literally said exactly that after landing from his first space trip! And with the slightest smidge of understanding of economics, that conclusion is inevitable.
https://www.theverge.com/2021/7/20/22585470/jeff-bezos-blue-...
https://www.nbcnews.com/think/opinion/jeff-bezos-thanks-amaz...
https://www.businessinsider.com/amazon-workers-react-jeff-be...
https://www.theverge.com/2021/7/20/22585470/jeff-bezos-blue-...
https://www.nbcnews.com/think/opinion/jeff-bezos-thanks-amaz...
https://www.businessinsider.com/amazon-workers-react-jeff-be...
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"We’re building value" in the mouth of Zuckerberg has to be the joke of the day.
Destroying democracy isn't creating value.
Destroying democracy isn't creating value.
> Destroying democracy isn't creating value.
Peter Thiel begs to differ.
Peter Thiel begs to differ.
There's much confusion in this.
The map is about uncharted business opportunities, ie. introducing new competitors.
Yes, consumer products (in contrast to goods that enable buyers to generate income) are competing for buyers' budgets. This is actually quite literally a zero-sum game. (There's only a rather limited probability that your income will automatically increase as you buy a new TV set, in order to make up for it.) What these budgets are, is rather a matter of macroeconomics, which remain entirely untouched by the article.
Finally, Jobs' statement is about the validity of market research as the sole driving input for innovation and development. (Going back to the map, it's as if we would be mapping undiscovered species: gorilla – checked, found that, okapi – checked, tripedal swan – not found yet, monopod – not found yet, etc. This quite Borgesesque chart would be able to map any successes possible in advance. Therefor, we would know that it makes no sense to look into the seas, as there are no unchecked species left there. However, product development is neither a zero-sum game nor is there a finite pool of ideas, nor is it defined or limited by what we already know. Chances are, the optimum hasn't been reached yet, nor does everybody know what this may look like, otherwise, there'd be little incentive to innovate at all.)
I have a hard time even wondering how these things should be connected. At best, you could link the map to the "known unknowns", but, going with Jobs, you'd have to admit that this is not a map at all, but a rather weak metaphor. Meaning, as a map is all about navigating the known world, it is of little help for imagining what may be beyond it. (The known existence of uncharted territories is rather an invitation to go there and find what may be found there in order to increase that portion of the sum, which is accessible to me.) But, we'd have to admit also that this insight doesn't revolutionize macroeconomics, as these are on an entirely different level. In a sense, the map in the first example is more about a sweeping spotlight, highlighting those areas where budgets are momentarily spent.
The map is about uncharted business opportunities, ie. introducing new competitors.
Yes, consumer products (in contrast to goods that enable buyers to generate income) are competing for buyers' budgets. This is actually quite literally a zero-sum game. (There's only a rather limited probability that your income will automatically increase as you buy a new TV set, in order to make up for it.) What these budgets are, is rather a matter of macroeconomics, which remain entirely untouched by the article.
Finally, Jobs' statement is about the validity of market research as the sole driving input for innovation and development. (Going back to the map, it's as if we would be mapping undiscovered species: gorilla – checked, found that, okapi – checked, tripedal swan – not found yet, monopod – not found yet, etc. This quite Borgesesque chart would be able to map any successes possible in advance. Therefor, we would know that it makes no sense to look into the seas, as there are no unchecked species left there. However, product development is neither a zero-sum game nor is there a finite pool of ideas, nor is it defined or limited by what we already know. Chances are, the optimum hasn't been reached yet, nor does everybody know what this may look like, otherwise, there'd be little incentive to innovate at all.)
I have a hard time even wondering how these things should be connected. At best, you could link the map to the "known unknowns", but, going with Jobs, you'd have to admit that this is not a map at all, but a rather weak metaphor. Meaning, as a map is all about navigating the known world, it is of little help for imagining what may be beyond it. (The known existence of uncharted territories is rather an invitation to go there and find what may be found there in order to increase that portion of the sum, which is accessible to me.) But, we'd have to admit also that this insight doesn't revolutionize macroeconomics, as these are on an entirely different level. In a sense, the map in the first example is more about a sweeping spotlight, highlighting those areas where budgets are momentarily spent.
There are big opportunities in the blank parts of the map, but we only remember the very few survivors. People rarely know they need the new product (remember the apocryphal Henry Ford quote: "If I asked people what they want they'd say a faster horse").
A friend of mine who is a VC told me years ago, "I only get to meet crazy people: either they have a completely new product, and so will run out of runway before they manage to get the plane airborne, or they are going into an existing market, where the incumbents will crush the aircraft before it gets enough speed to leave the ground." Despite the amusing language it was a useful perspective.
A friend of mine who is a VC told me years ago, "I only get to meet crazy people: either they have a completely new product, and so will run out of runway before they manage to get the plane airborne, or they are going into an existing market, where the incumbents will crush the aircraft before it gets enough speed to leave the ground." Despite the amusing language it was a useful perspective.
It's interesting to apply Zuckerberg's views to his company 12 years later.
Meta's actions towards social media make it seem like it's now a zero-sum game. They copy features from Snapchat and TikTok, or buy companies like WhatsApp and Instagram, precisely because those companies are taking value away from Facebook.
The whole metaverse thing is a touch different. It does look like they're trying to build new value there -- of course, who knows if they'll pull it off.
Meta's actions towards social media make it seem like it's now a zero-sum game. They copy features from Snapchat and TikTok, or buy companies like WhatsApp and Instagram, precisely because those companies are taking value away from Facebook.
The whole metaverse thing is a touch different. It does look like they're trying to build new value there -- of course, who knows if they'll pull it off.
Build new value? It looks like they're building a new walled garden...
Let me repeat myself for the thousandth time, just because something is new it doesn't mean that it's useful or valuable. Charting new territories, experimenting inevitably gets you the wrong answer most of the time. Innovation implies both invention and commercialization.
Registering a domain called p2p.ai to lure venture capital trying to show up early for a new potentially lucrative Ponzi scheme is not innovation, unless pumping and dumping is a commercial activity.
Registering a domain called p2p.ai to lure venture capital trying to show up early for a new potentially lucrative Ponzi scheme is not innovation, unless pumping and dumping is a commercial activity.
”We’re building value, not just taking it away from someone else.”
Bullshit. Meta's whole business is predation on user's attention. If I am scrolling their stupid page, then I am not scrolling some other stupid page. This is as zero-sum as it gets.
Bullshit. Meta's whole business is predation on user's attention. If I am scrolling their stupid page, then I am not scrolling some other stupid page. This is as zero-sum as it gets.
This is not even contestable. Google and FB took the advertising money from everyone else. Businesses still pay (and always have) the same % in advertising, only it's 2 monopolies now instead of thousands of media.
I'm no fan of ads, but I would still contest that. The pre-Internet advertising arsenal was all remarkably blunt weapons (newspaper ads, TV, radio, direct mail) that made targeting very difficult and were out of reach or not economic for countless businesses. Now anybody can buy precisely targeted impressions for any keyword under the sun and very closely track their performance, opening up entirely new markets.
I'm not a fan of these new markets. We got by just fine with simple, static ads that weren't spying on everyone. It gave rise to local, niche publications that were a heck of a lot more interesting than today's one-size-fits-all social media junk.
And with that, millions and billions of users get profiled, their private information taken away and processed by those two companies, as ads get embedded into everything (even lockscreens it seems)
https://www.researchgate.net/profile/Rachel-Soloveichik/publ...
There is no such thing as 'blunt' or sharp weapon, the market shows that all advertising has some efficacy (around 1% but nobody knows how much precisely). Internet advertising did not increase overall consumption, thus it is not more effective than the sum of previous media.
Anyway the biggest trick BigTech played was not that it hypnotized the masses, but that they convinced advertisers that they are better than everyone
There is no such thing as 'blunt' or sharp weapon, the market shows that all advertising has some efficacy (around 1% but nobody knows how much precisely). Internet advertising did not increase overall consumption, thus it is not more effective than the sum of previous media.
Anyway the biggest trick BigTech played was not that it hypnotized the masses, but that they convinced advertisers that they are better than everyone
Internet advertising did not increase overall consumption...
Genuine questions: how do we know that? how do we measure that?
My own anecdotical evidence is that I consume different things. Anyway, would more effective advertising increase overall consumption? I would expect that it increases consumption of specific, tailored, targetted in detriment of generic.
Genuine questions: how do we know that? how do we measure that?
My own anecdotical evidence is that I consume different things. Anyway, would more effective advertising increase overall consumption? I would expect that it increases consumption of specific, tailored, targetted in detriment of generic.
My model is advertising is roughly zero sum - there’s only so much disposable income for advertisers to chase.
So it doesn’t seem contradictory that overall consumption stayed constant while the advertising arms race advanced significantly.
So it doesn’t seem contradictory that overall consumption stayed constant while the advertising arms race advanced significantly.
> opening up entirely new markets.
Before deciding if "opening up new markets" is necessarily good we'd need to ask what kinds of markets it opened up. Most of what I see are content farms flooding search engines with SEO garbage, scammy businesses that sell poor knock-off products, and predatory ad tech. I'd prefer it if those markets had never been opened.
Before deciding if "opening up new markets" is necessarily good we'd need to ask what kinds of markets it opened up. Most of what I see are content farms flooding search engines with SEO garbage, scammy businesses that sell poor knock-off products, and predatory ad tech. I'd prefer it if those markets had never been opened.
> Businesses still pay (and always have) the same % in advertising
That's completely false. A lot of small businesses (think housewifes selling cupcakes) were not viable before Google and especially Facebook/Instagram — they simply could not realistically find their consumers before internet advertising.
That's completely false. A lot of small businesses (think housewifes selling cupcakes) were not viable before Google and especially Facebook/Instagram — they simply could not realistically find their consumers before internet advertising.
There was a brief golden period where those housewives selling cupcakes had their moments in the sun. But at this point they're mostly outcompeted by AliExpress tier knock-offs of anything innovative they do or other VC backed would-be monopolists, like Grubhub and Yelp, outcompeting them for eyeballs with superior SEO and keyword targeting.
Almost none of the local restaurants near me even have their own websites anymore because they get no hits. Yelp, Google, and GrubHub/UberEats type sites have hollowed it all out.
Almost none of the local restaurants near me even have their own websites anymore because they get no hits. Yelp, Google, and GrubHub/UberEats type sites have hollowed it all out.
Many successful small internet businesses actually arose from the era before internet advertising.
They simply took their product expertise and brought it online and expanded their reach to more customers through advertising.
As for housewives selling cupcakes - that business is just as not viable offline as it is online. It simply doesn't scale and shipment/delivery will eat your entire profit margin. It might make some beer/fun money, but it's not a business, it's a hobby.
They simply took their product expertise and brought it online and expanded their reach to more customers through advertising.
As for housewives selling cupcakes - that business is just as not viable offline as it is online. It simply doesn't scale and shipment/delivery will eat your entire profit margin. It might make some beer/fun money, but it's not a business, it's a hobby.
Housewives never successfully sold cupcakes before Google, Facebook, and Instagram? Citation needed! I don't think that's obviously true.
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They could always post an ad in a local newspaper. Many people read those things before the proliferation of internet.
They could also use a lot of other advertisement methods, which were much less cost-effective and make their businesses unprofitable overall.
Most of those ads were free "back in my days" here.. you got a "postcard" in each of those magazines, and could post an ad (limited length, text only) for free... how do you thing people sold cars before the internet?
And yes, facebook is more cost effective, because people don't get paid for their data... if people got paid for viewing ads and having their data gathered (like they used to be, market research groups and all that), the cost would be a lot different.
And yes, facebook is more cost effective, because people don't get paid for their data... if people got paid for viewing ads and having their data gathered (like they used to be, market research groups and all that), the cost would be a lot different.
>how do you thing people sold cars before the internet?
You're not following the particular context of your subthread and inadvertently moving the goalposts.
The side conversation you're replying to was niche businesses with niche customers e.g. gp's example of "small businesses (think housewifes selling cupcakes)"
Buying ad space in a local newspaper is a waste of money for _small_ businesses like that because the subset of readers interested in paying for homemade cupcakes is too tiny. There's a threshold where it's just not financially feasible to pay $$$ targeted at a general audience in the hopes of converting the subset of that audience into customer revenue.
On the other hand, cars are purchased by everybody and the profit margins are also higher to get a return-on-investment when spending for ads in local newspapers.
Mabye a better example than housewife cupcakes is the niche video educational content on Youtube that's supported by advertising. The niche videos from Animagraffs, Practical Engineering, etc with micro-audiences wouldn't be economically viable on traditional network tv or even PBS. It required the long-tail of the internet matching the marketplace of viewers + creators + advertisers.
You're not following the particular context of your subthread and inadvertently moving the goalposts.
The side conversation you're replying to was niche businesses with niche customers e.g. gp's example of "small businesses (think housewifes selling cupcakes)"
Buying ad space in a local newspaper is a waste of money for _small_ businesses like that because the subset of readers interested in paying for homemade cupcakes is too tiny. There's a threshold where it's just not financially feasible to pay $$$ targeted at a general audience in the hopes of converting the subset of that audience into customer revenue.
On the other hand, cars are purchased by everybody and the profit margins are also higher to get a return-on-investment when spending for ads in local newspapers.
Mabye a better example than housewife cupcakes is the niche video educational content on Youtube that's supported by advertising. The niche videos from Animagraffs, Practical Engineering, etc with micro-audiences wouldn't be economically viable on traditional network tv or even PBS. It required the long-tail of the internet matching the marketplace of viewers + creators + advertisers.
Ah, but back in the day the local newspapers had "classified ads" section (still do, I imagine, but probably wildly useless these days) which many folks read religiously seeking out those small niche business things and local deals and such, and placing a short little text ad there was often literal "pocket change" to run for a day or three.
Since the article comes from a “crypto”-related site, perhaps I can make a metaphoric (& mildly schizophrenic) response without getting downvoted. Google is USD and Meta wants to be Gold. The % of businesses that accept mainstream currencies have always been the same. What’s left are businesses that people still find socially unacceptable.
I think Facebook consumed non-monetized life activities. So instead of doing free things IRL, people started browsing and scrolling. So it was zero sum for attention but not for economic value.
I think Zuckerberg was right in that Facebook didn’t take market away from others, they created a new market. At least 12 years ago.
I think Zuckerberg was right in that Facebook didn’t take market away from others, they created a new market. At least 12 years ago.
I share your distaste for Meta/FB; however, if their investment to advance the 'meta-verse' leads them to invent technologies that end up being used in different contexts by other companies/industries (charting more of the uncharted map), then all the better.
> This is as zero-sum as it gets.
Given the impact of FaceBook on political and media systems, I think that this a strongly negative sum game. Spreading "junk food news" and other lurid conspiratorial stories is a negative externality, like venting pollution.
Given the impact of FaceBook on political and media systems, I think that this a strongly negative sum game. Spreading "junk food news" and other lurid conspiratorial stories is a negative externality, like venting pollution.
I’m curious why anyone takes inspiration from Zuckerberg.
"An idea is good no matter where it comes from" shouldn't be true in reverse?
Because under religious capitalism, money = grace.
I find it funny, how social media created even more hate against the rich... especially movie stars.
Before social networks, the rich and famous (from large businessmen to moviestars) had tv interviews and large newspaper articles, where whole PR teams went over the questions, the answers, the article itself, and made things "look god" for the rich/famous person.
Now, with social media, you have (eg.) people suffering due to lockdowns, and Madonna posts a video in a milky bathtub complaining about crap, Gal Gadot does a really bad singing job and sings "imagine" ("...imagine no posessions...") while people are literally going broke an hungry, and Elon Musk posts a tweet and half of crypto goes up/down, depending on whats in the tweet.
Before social networks, the rich and famous (from large businessmen to moviestars) had tv interviews and large newspaper articles, where whole PR teams went over the questions, the answers, the article itself, and made things "look god" for the rich/famous person.
Now, with social media, you have (eg.) people suffering due to lockdowns, and Madonna posts a video in a milky bathtub complaining about crap, Gal Gadot does a really bad singing job and sings "imagine" ("...imagine no posessions...") while people are literally going broke an hungry, and Elon Musk posts a tweet and half of crypto goes up/down, depending on whats in the tweet.
> Wealth is not a fixed pie (PG).
I've read a fair bit of PG's writing but hadn't dug into The Pie Fallacy referenced here. Wow, what utter nonsense. I've certainly not agreed with everything PG comes out with but this is a new logical low. And it's not just the usual problem of an oversimplified analogy not accurately representing more complex systems, the analogy[0] isn't even internally consistent with itself.
[0] http://www.paulgraham.com/wealth.html#f4n
I've read a fair bit of PG's writing but hadn't dug into The Pie Fallacy referenced here. Wow, what utter nonsense. I've certainly not agreed with everything PG comes out with but this is a new logical low. And it's not just the usual problem of an oversimplified analogy not accurately representing more complex systems, the analogy[0] isn't even internally consistent with itself.
[0] http://www.paulgraham.com/wealth.html#f4n
I'm also curious to know where you think he goes wrong, it's pretty well acknowledged at this point that economics is generally not a zero-sum game
What is economics? Physical capital? Financial capital? Land? The human sphere of influence?
If you are generous and argue that humans help plants grow, then e.g. harvesting plants is beneficial for plants and humans and physical capital is not zero sum despite the fact that humans are intentionally killing plants and depriving them of their body.
Financial capital is zero sum, when you borrow money, you create money and debt simultaneously. Pay off all debt and you end up with zero money. Money is zero sum.
Land is zero sum. If one person owns all the land on the planet, everyone else must rent from that person or be homeless.
The human sphere of influence? I would argue that this is zero sum because a hypothetical tribe of neanderthals wouldn't be welcome in this modern world, we would never let them take over the planet, hence our domination over the planet comes at the expense of other species.
If you are generous and argue that humans help plants grow, then e.g. harvesting plants is beneficial for plants and humans and physical capital is not zero sum despite the fact that humans are intentionally killing plants and depriving them of their body.
Financial capital is zero sum, when you borrow money, you create money and debt simultaneously. Pay off all debt and you end up with zero money. Money is zero sum.
Land is zero sum. If one person owns all the land on the planet, everyone else must rent from that person or be homeless.
The human sphere of influence? I would argue that this is zero sum because a hypothetical tribe of neanderthals wouldn't be welcome in this modern world, we would never let them take over the planet, hence our domination over the planet comes at the expense of other species.
Where is all this extra money coming from, if not from someone else? Inflation - the one action that actually creates more money - accounts for a pretty small part of it.
Without creation of additional money, every dollar earned is someone else’s dollar spent.
And yes, I’ve heard theories that the commodities purchased with a dollar are worth more than that dollar, but if that were true, the item would be sold for more; a “rational” capitalist would sell it according to its actual worth.
Without creation of additional money, every dollar earned is someone else’s dollar spent.
And yes, I’ve heard theories that the commodities purchased with a dollar are worth more than that dollar, but if that were true, the item would be sold for more; a “rational” capitalist would sell it according to its actual worth.
What specifically is over simplified, inconsistent, or wrong?
Economics is too broad. For example Land and Real Estate is zero-sum, as is strictly Debt/Financial/Monetary exchange.
Some things, as with blue skies research, really do create more wealth as in overall some technological advancements make making some things cheaper, or available.
Creating debt to print capital now for making X cheaper to produce is generally good as that zero-sum is offset by the wealth/wellness created by that capital in the future (a company producing cheaper components for example).
Meta exists in a zero-sum market, as advertisers fight for the same limited resource: attention (an individual can view as much advertisement in 24H).
Some things, as with blue skies research, really do create more wealth as in overall some technological advancements make making some things cheaper, or available.
Creating debt to print capital now for making X cheaper to produce is generally good as that zero-sum is offset by the wealth/wellness created by that capital in the future (a company producing cheaper components for example).
Meta exists in a zero-sum market, as advertisers fight for the same limited resource: attention (an individual can view as much advertisement in 24H).
>None of us knew we needed Steve’s devices until they were given to us.
I have recently been given a $2500 toy by $EMPLOYER$ and I still don't need it.
Personal anecdote aside, is this post seriously advocating for creating needs from scratch?
I have recently been given a $2500 toy by $EMPLOYER$ and I still don't need it.
Personal anecdote aside, is this post seriously advocating for creating needs from scratch?
> is this post seriously advocating for creating needs from scratch?
What do you think the vast majority of marketing and advertisement is concerned with? Using psychological manipulation to trick people into believing that they're missing out on something and then selling them a solution to the fabricated need is par for the course. The perverse monetary incentives create an inevitable race to the bottom where human desire itself is manipulated in order to increase corporate profit.
What do you think the vast majority of marketing and advertisement is concerned with? Using psychological manipulation to trick people into believing that they're missing out on something and then selling them a solution to the fabricated need is par for the course. The perverse monetary incentives create an inevitable race to the bottom where human desire itself is manipulated in order to increase corporate profit.
I do wonder how "needing things" has changed personal finance. This is obviously alot more complicated then I'm going to describe here, but there's the common trope of "don't eat that Avacado toast and buy an iphone and maybe you could afford a house." And this is obviously laughable given the rise in home prices, but at the same time, I think it gets at a certain idea that there are so many more expenses today than you had in our grandparents day.
Also, I think it's more vogue in modern times to charge for things that used to be free. My friends just went camping and it was $40 a night. What was that cost in the 1920's and how has that changed as a percentage of income over time.
Also, I think it's more vogue in modern times to charge for things that used to be free. My friends just went camping and it was $40 a night. What was that cost in the 1920's and how has that changed as a percentage of income over time.
Meh, I don't buy it either. Why would anyone ask me what features a nuclear power plant should have?
The only frame of reference that I can speak to is I'd like cheap, safe, and clean electricity.
If I were a nuclear engineer I'd have more opinions about what could be done to make it cheaper, safer, and cleaner.
The only frame of reference that I can speak to is I'd like cheap, safe, and clean electricity.
If I were a nuclear engineer I'd have more opinions about what could be done to make it cheaper, safer, and cleaner.
“None of us knew that we needed sexual intimacy until we s-tumbled into porn.”
Let me translate that: "None of us knew that we needed privacy until it was taken away from us by Steve's devices, Facebook, Google and others."
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Sounds like an allusion to blue ocean strategy
“ BLUE OCEANS, in contrast, denote all the industries not in existence today – the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid.”
https://www.blueoceanstrategy.com/what-is-blue-ocean-strateg...
“ BLUE OCEANS, in contrast, denote all the industries not in existence today – the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid.”
https://www.blueoceanstrategy.com/what-is-blue-ocean-strateg...
What if the inverse is true? Someone (maybe Meta, maybe someone else) is playing a zero sum game and now you are forced to bake a bigger pie otherwise your slice gets smaller.
The product that lifted Apple out of mediocrity and into the public eye was the iPod. The iPod, especially in its initial release, had a feature list that was explicitly derived from the failings of competing products. The idea was to take and dominate the mobile music player market. All of the biggest power moves Steve Jobs made were about eating someone else's lunch.
This implies that the MP3 market was already sufficiently large or saturated by the time the iPod came on the scene, which is false. The MP3 market at the time was mostly an intersection of tech-savvy individuals and musicians. Everyone else was still using portable CD players or walkmans.
At the time, portable CD/MD players and walkmans were competing products to the iPod. mp3 players weren't a separate market. There were even portable CD players that could read mp3s off a CD.
anecdotally, I had CD player first then I moved to iPod and downloaded limewire
The iPod's initial release did correct some misfeatures of competitors but it was not a mass market success. It took Apple until the third generation iPod to hit mass market success. The first two generations of iPod only had FireWire connectivity, available on every Mac but very few PCs. With the third generation iPod USB 2.0 capability was added giving it compatibility with a huge portion of PCs.
Sales skyrocketed after the addition of USB support. After the addition of USB when the iPod took off it didn't outright kill the competition. It just sold so well and expanded the market so much that the PMP market became the iPod market and also-rans.
The iPod had a lot of competitors but no real competition in terms of sales. The PMP that killed the iPod mini (that was selling like gangbusters) was the iPod nano. I'd argue that the iPod was the opposite of a zero sum product because it expanded the PMP market far beyond its size at the iPod's inception.
Sales skyrocketed after the addition of USB support. After the addition of USB when the iPod took off it didn't outright kill the competition. It just sold so well and expanded the market so much that the PMP market became the iPod market and also-rans.
The iPod had a lot of competitors but no real competition in terms of sales. The PMP that killed the iPod mini (that was selling like gangbusters) was the iPod nano. I'd argue that the iPod was the opposite of a zero sum product because it expanded the PMP market far beyond its size at the iPod's inception.
The big difference was iTunes/store integration, which would have been impossible for any of the smaller companies.
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>there is no point in asking the customer what they need because they wouldn’t know until it is given to them.
Although I understand the sentiment, I have to disagree with it. The mindset that people are either: uninformed, misinformed, or unaware of what they need is a kind of idea that pushes one towards a sort of syndrome that assumes:
1) The public, as a whole, is too stupid to think for themselves
2) The public, as a whole, needs YOU to show them how "forward thinking" (smart) you are (and how stupid they are)
If we draw out that line of thinking a bit further, it also seems to hint at this tedious Western idea that, "If I don't do this, no one else will". In my view, that is not so much an entrepreneurial mindset, and moreso sheer, unrestrained arrogance. It is a roundabout way of saying, "No one else will ever do this, because only I CAN do this." It assumes that you are the defacto - the ONLY - creator of new things.
I dislike that because although there surely are stupid people in the world, however, we are also PART of that public. This mindset works more to separate us from "the horde" and throws us into this "put upon" position, that it is only by our own doing that any progress can possibly be made. This is illogical and irrational. There are surely thousands upon thousands of others who are willing, able, and trying to achieve the same goals. Of those many thousands, surely there are hundreds among them that could design and implement it far better than ourselves. The only differentiating factor then, is:
1) Marketing
2) Market dominance
3) Profitability
TL;DR people know what sucks in life. They know this instinctively because they live their life every single day. They know what could be done better. Thinking that "only I can show it to them" in a fancy little package leads to an overwhelming amount of arrogance. It ignores competitors. It ignores that we are a PART of the public. This kind of mindset is detrimental, if not outright counter to its own goals. The focus must instead be on improving implementation, design, and ease of use.
Although I understand the sentiment, I have to disagree with it. The mindset that people are either: uninformed, misinformed, or unaware of what they need is a kind of idea that pushes one towards a sort of syndrome that assumes:
1) The public, as a whole, is too stupid to think for themselves
2) The public, as a whole, needs YOU to show them how "forward thinking" (smart) you are (and how stupid they are)
If we draw out that line of thinking a bit further, it also seems to hint at this tedious Western idea that, "If I don't do this, no one else will". In my view, that is not so much an entrepreneurial mindset, and moreso sheer, unrestrained arrogance. It is a roundabout way of saying, "No one else will ever do this, because only I CAN do this." It assumes that you are the defacto - the ONLY - creator of new things.
I dislike that because although there surely are stupid people in the world, however, we are also PART of that public. This mindset works more to separate us from "the horde" and throws us into this "put upon" position, that it is only by our own doing that any progress can possibly be made. This is illogical and irrational. There are surely thousands upon thousands of others who are willing, able, and trying to achieve the same goals. Of those many thousands, surely there are hundreds among them that could design and implement it far better than ourselves. The only differentiating factor then, is:
1) Marketing
2) Market dominance
3) Profitability
TL;DR people know what sucks in life. They know this instinctively because they live their life every single day. They know what could be done better. Thinking that "only I can show it to them" in a fancy little package leads to an overwhelming amount of arrogance. It ignores competitors. It ignores that we are a PART of the public. This kind of mindset is detrimental, if not outright counter to its own goals. The focus must instead be on improving implementation, design, and ease of use.