Status as a Service, Part 1

Eugene Wei, 2019-02-19

This is a monumental work, which I’ll publish in several parts (even the course notes for it will be huge).

Part 1 Part 2 Part 3

Two Major Principles

  1. People are status-seeking monkeys.

  2. People seek out the most efficient path to maximizing social capital.

Social Capital

  • Social media networks (SMN) generate more social capital than financial capital, especially in their early stages.

  • Social capital is a leading indicator of financial capital.

  • The output of SMNs is the status.

  • Status is the reason people come and stay in SMNs, especially early on, when there are limited network effects.

  • Traditional competition on raw utility is clear and ruthless; enabling status competition is far from straightforward with seemingly unpredictable value of items.

Social Networks are Like ICOs

  • Every new social network issues a new form of social capital (a token).

  • You much show proof of work to earn a token. Status is not valuable if it’s easy to achieve (or it becomes participation trophy). Requires skills, of course.

  • Built-in scarcity: over time getting tokens becomes harder. Initially it’s much easier to build following. Later competition for attention intensifies.

  • Many people don’t “get them” :)

Earned and Pre-Existing Social Capital

  • One earns social capital from exposure (views), interactions (likes, reposts, comments) and longevity.

  • Existing celebrities bring their exogenous social capital from real life, and their social capital is transferable between platforms if they have general fame.

  • Thirst for status is potential energy.

Social Capital ROI

  • Many people put a lot of effort into learning how to maximize exposure / get retweets, etc.

  • Visual mediums work better for a younger audience.

  • Different SMNs put different weights to social ROI.

  • Pure graph-based social capital allocation mechanisms may backfire when accounts with large following become even larger creating a disincentive for smaller accounts to invest into content / engagement with the platform.

  • SMNs must always prioritize the “best” content to avoid stagnation and create “social lifts”.

  • Also, new accounts’ content needs to be analyzed for engagement, velocity (time to X followers) and distributed fairly for them to feel sufficient return on their work.


  • Copycat networks (with minor twists) make it equally hard to earn status on the existing proof of work —> why bother with putting effort into the same game?

  • Better if the status game is better, or the status is more valuable —> leads to another dimension of pure utility.

  • Copycats are not protected from incumbents copying their key features and deploying those features to their extensive and dominant graph. Copy and throttle.

  • Copying a feature doesn’t mean the graph is also being copied (not!). Competitive advantage requires both.

to be continued…