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The Greatest Social Capital Creation Event
Facebook feed effectively made people compete with everyone in their network.
# of likes —> feedback loop, A/B testing of Instagram posts. Trial and error.
Inflection point: too many posts to view (scarcity of attention) —> algorithms to the rescue.
Interests shift, so it’s wise to edit/remove old posts that can be picked up to haunt you.
Even if you are not successful now, the hope for fame is still alive.
Luck Favours the Young
In many countries older folks have more than one source of social capital: job, family, house, car, etc.
Have more efficient means to accumulate even more status without resorting to online activities. Maintenance of existing social capital is a better use of time, especially for risk averse people.
Many older folks don’t want to learn new status games and are hesitant to start something new (conflicting responsibilities or just “why bother”).
For younger population it’s faster to build status on social networks and games while they’re [maybe] working towards more “adult” accomplishments.
Social capital in the form of likes and followers is as real for them as the shiny car for their parents.
Have a surplus of time (which adults have too little), can afford to be early adopter of new things and get tired of them by the time their parents discover them.
Younger people choose services (Instagram, Snapchat) allowing them to have almost non-overlapping multiple identities (school, home, work, friends, etc.) vs a single public identity (Facebook, LinkedIn).
Utility and Social Capital
Come for utility, stay for capital. Most social networks.
Come for social capital, stay for utility. IMDb, Reddit, Foursquare, Quora.
Come for utility, no social capital. Messengers, Diallers, etc. No need to bother.
Only social capital, no utility. For many this will be the endgame for Facebook.
Both social capital AND utility. Superapps (ex: WeChat).
Proof of work – every network has a ceiling on the number of content creators. [MK: Increased demands on quality, too, leading to creator attrition] Also: WSJ, 2020-07-27 Facebook Offers Money to Reel In TikTok Creators
Volatility of Status – SMNs aim to keep the signal-to-noise ratio (incl. engagement) high, so no all posts make to others’ feeds. Value to content consumer is more important that to a producer. Attention is increasingly scarce.
Network effects can get reversed – what brought you up can easily throw you down with a vengeance. While there almost can be no too much utility, social capital relies on scarcity determining its value. And this is volatile for the business.
Change of Winds
Status hierarchy requires lower status people to join and reinforce the feeling.
Past the tipping point of popularity is not an S-curve, it’s a bell curve.
If the “cool kids” start leaving the platform, they take audience with them —> churn.
If the “uncool adults” join the platform, they spook off the audience —> churn.
Proactively devaluing something (“crop rotation”) may reintroduce scarcity into the cycle.
Fervent early adopters may shape the positioning of the SMN; shift in positioning – loss of audience.
Lengthening the Half-life of Status Games
With proof of work over time those who could mine status the most would’ve done it eventually.
If at that point there’s no new/increased utility —> the network goes stale.
Introducing new forms of proof of work (and hurdles) reintroduces potential energy reserves.
Risk: overdoing it by misjudging the size of the target audience.
to be concluded…