Status as a Service. Part 3

Eugene Wei, 2019-02-19

Part 1 Part 2 Part 3

Status Games are Here to Stay

  • Most people are competing for status in various contexts. They may think/claim to be above this all, but it’s statistically doubtful.

  • Most tech companies are always going to be weak at social. The more technical they are, the less they can deal with despised status games. Focus on utility instead.

  • Amazon was able to turn the status (“top 100 reviewer”) into a badge of honour —> increase sales.

Head in the Sand

  • It’s possible to A/B the feed algorithm to increase engagement, but do SMNs know if engagements are positive or negative? Any cultural bias between regional algorithms?

  • SMN dashboards are averaging things without digging deeper into the health.

  • SMN managers are very disconnected from users and have very different needs.

How to Spot Social Capital?

  • If you can ask your neighbour for milk or to babysit – that’s social capital.

  • Right now the ability to monetize the social capital (exchange for financial capital) is a good way to spot it. Tangible value. Influencers, anyone?

  • And the opposite: buying followers hoping for an arbitrage: buy cheap, monetize for more.

  • In Asia SMNs help with monetizing content without leaving the platform (ex: digital gifts).

  • Another way is introducing your own product based on the social brand.

  • Managing influencers is also a business.

Social Capital Accumulation and Storage

  • Ability to accumulate and store social capital is essential, otherwise value leaks to other SMNs.

  • If the service is free, the best alternative to direct monetization is creating a marketplace for realizing and exchanging value.


  • Global scoring: followers get more valuable over time (friends of friends).

  • Local scoring: some sort of likes (accumulate faster than followers), comments and shares. Continuous short-term capital injections.

  • Anonymous networks: social capital can’t be accumulated due to lack of attribution and often hateful content.

  • For SMNs allowing exporting users’ social graphs is silly (diminishes value); for users – huge inconvenience; —> forces SMNs to focus more on utility and entertainment.

  • Since social capital is generally non-transferable between SMNs, users abandon networks where their status diminishes.


  • Celebrity apps do nothing to increase users’ social capital.

  • One-to-many communication, no feedback. Just a distribution channel.

Social Capital Arbitrage

  • Copying/stealing others’ content from other SMNs and passing as yours may work for a while, but often results in backlash.

  • Attempt to build status off someone else’s work. [MK: honestly, with my course notes I don’t.]

Social Capital Games as Temporary Energy Sources

  • Curation of good content is always needed —> offer rewards for surfacing it.

  • Reviews (up to a certain number) are always needed, hence rewarded.

  • Individual status as a “top reviewer” is now devalued by the total number of reviews (no need to use authority anymore).

  • Many achievements (“top seller”, etc.) are gamed, so they stop being valuable.

  • IMDb and Wikipedia also rely on altruism.

Other notes

  • Twitter killed traditional humour, now it’s memes and punchlines. Often the joke setup is common knowledge/culture.

  • Prisma vs Instagram: Prisma made photos too good, almost independent on the photographer —> the main actor is the filter, not the person.

  • Facebook’s proof of work initially was the email, a strong status filter to sift out others.

  • Always on in search of social capital —> FOMO —> people feel miserable regardless of their $ net worth.