Every cool startup that people loved started by burning cash. This made Uber cheap, DoorDash cheap, Youtube helpful and creative, Facebook about connecting with classmates, Twitter a free public forum, Reddit a playground for forums of all possible varieties, Imgur an ad-free alternative to ad-laden image hosting sites, 0% loan available for purchasing anything, etc, etc.
But all of this was possible because all of these companies spent more than they made. In fact, most of these listed still do spend more than they make but they're going through contortions trying to change that and many might not survive it. For those that do their products will unquestionably be inferior to what we had in the 2010s.
There's this belief that technology can only go forward, only get better, but what I think we'll see as we move into the 2020s is a growing realization that things were substantially better in the 2010s... but only because we were putting everything on a credit card and not worrying about the bill that eventually had to be paid.
They fail because they need to become billion dollar behemoths to support the VC funding they've gotten. But plenty (not all though) of them could be profitable if they were ran as a "lifestyle" business.
With the debt that Elon has saddled them with I doubt they will ever be profitable again without declaring bankruptcy.
Without the $760M settlement, they'd have made about $270M in 2021[1].
[1] "2021 operating loss of $493 million, or an operating margin of -10%, includes a one-time litigation-related net charge of $766 million" - https://www.prnewswire.com/news-releases/twitter-announces-f...
Who on Reddit wanted chat or live streams. Why is Facebook spending so much money on videos. does Uber really make any money off hellocopters rides. These aren't what people came to these platforms for and are just costing them a huge amount of money.
Reddit was doing fine as a text-only forum supported by advertising and Reddit Gold. Then they went a billion dollars in debt building the redesign which is widely disliked by power users (who are responsible for most of Reddit’s actual activity thanks to volunteer moderation combined with the Pareto principle), and at the same time decided to add native image and video hosting and take on all the costs associated with that. Everything since then has really been chasing whatever’s popular. After Twitch got big, they added livestreams, which didn’t go anywhere. After Discord got big, they added chat, which didn’t go anywhere. During the NFT boom, they invested big in those, which wasted a lot of money and didn’t go anywhere. Now AI is the new hotness, and they’re following Elon’s lead by treating the site as a static text repository which more value being sold to people training AIs than any value that could be gained from just...running the site. This boom will end, either by way of hitting the peak of what’s currently possible, updates to copyright law or other regulations, or just by the AI companies remembering they can just download the Common Crawl database for free and get the exact same content without paying Twitter or Reddit (or even specific dumps of Twitter or Reddit content if that’s what they really want; those are widely available in places like the Internet Archive).
Imgur was never going to be sustainable on its own, since it’s basically impossible to monetize an image hotlinking service by definition. However, they brilliantly decided to pivot the site to being its own image sharing community (with all of the monetization opportunities that allows), while still supporting the original use case as a sort of “unintended” feature (while actually being the whole reason the site was originally made in the first place). Then they suddenly forgot that was the plan, probably after several managerial/executive swaps, and started shutting down everything that wasn’t part of the “community” system, even though the “community” was really created just to subsidize everything else.
Facebook’s adventures with video are probably the single most damaging thing to ever happen to the Internet. Basically, they saw that video ads were wildly more profitable than anything else they were doing, proceeded to inflate their video stats by counting anyone scrolling past an autoplaying video as a “view”, told the entire web that text was dead and video was the future (causing hundreds of major sites to shut down their writing departments in favor of mainly producing videos), used all of these manufactured stats to get massive investment in video ads, and then just kind of shrugged when everything eventually collapsed.
YouTube has been in a good place consistently since the mid-2010s, and just really likes pretending that they aren’t. Like I said with Facebook, video ads are really profitable when done right, and YouTube operates at a big enough scale that the bandwidth and storage costs of hosting all of humanity’s video content is offset by the number of people watching Mr. Beast eight seconds after he posts a new video. The problem is that they’re always trying to optimize for more revenue, leading to massive pushes for family-friendliness to keep advertisers happy, pushing whatever the latest “format” is (at the moment, Shorts) because that’s what advertisers are most interested in since it gets the most views, and just generally trying to hyper-optimize every aspect of the website to further improve their margins.
All of these sites could have simply continued with their original business models and maintained small but lean businesses, and they’d probably be able to even keep getting moderate growth thanks to network effects. But they wanted all the money and they wanted it right now, leading to extreme overextension into whatever else is currently popular, and it only ever leads to the core business collapsing because the people who were maintaining it are off selling NFTs or trying to build a video player.
I never heard of twitch as a non-streaming site and discord as a non-chat website.
Another is that it incentivized companies to try for the Uber strategy of burning investor cash to become a monopolist player rather than targeting a sustainable growth plan. Low-key this has led to long term consolidation to a greater level than otherwise would have occurred.
I am convinced that the overuse of cloud computing has largely been a byproduct of the money firehose of excessive funding. If money was tighter, massively overpaying for compute and bandwidth should be less attractive.
As someone who is deeply interested about performance, efficiency and scalability, I'm hoping there is a partial industry reversal to caring about these things again.
Twitters current issues are entirely the creation of Elon Musk.
And ironically enough, blue currently works as a crappy version of advertising thanks to the reply ranking. The promises of prioritizing "high-quality content" never came true; all we see are mid takes and, if you speak Mandarin, AI-powered sex scambots.
Well, worse for us plebs. Not sure if it's worse for the buyers.
I don't know, I think the hope is there. With these rate limits and some Fermi estimates, we can guess what Twitter's hoped-for revenue per user might be.
Suppose that this move is designed to move regular users over to Twitter Blue, and a regular user might ordinarily see 2000 tweets per day. Suppose further that Twitter would show 1 ad per 10 tweets, and ad sells for 3$CPM on average, and a Blue user sees 33% fewer ads.
An ordinary user would then expect to give Twitter 200 ad impressions per day, at $0.60/day of ad revenue or $18. By seeing 1/3 fewer ads, that ad revenue drops to $12, but Twitter picks up $8/month in Blue subscription fees, increasing the gross revenue to $20.
That feels about right, and the math gets better in the short term for Twitter if it's having a hard time filling its ad spots — a proportionally greater share of its revenue would then come from the pushed-for Blue.
Likewise, if Twitter is having a hard time filling its advertising spots, kicking non-Blue viewers off the platform is not a short-term revenue loss: the marginal eyeball is unmonetized. In the medium to long term, of course, Twitter is strangling the very content that attracts those eyeballs, and this is still a bone-headed business decision.
"Half ads: See approximately 50% fewer ads in the For You and Following timelines. As you scroll, you will see approximately twice as many organic or non-promoted Tweets placed in between promoted Tweets or ads. There may be times when there are more or fewer non-promoted Tweets between promoted Tweets. The half ads feature does not apply to promoted content elsewhere on Twitter, including but not limited to ads on profiles, ads in Tweet replies, promoted events in Explore, promoted trends, and promoted accounts to follow. Blue subscribers will have access to this feature after their account has been reviewed for eligibility and the blue checkmark has been applied."
Twitter has over 12 billion USD in debt though, and with rising interest rate the interest payments are going to be an absolute drag on financial performance. Those payments MUST be met, otherwise Musk will not own Twitter at all. Scaling down user numbers is unlikely to help. Even 3% interest rate on 10b is 300 million per year.
I hope you don't work in marketing. Why would a non-paying user watch Twitter arbitrarily limit the number of Tweets a _paying user_ can view per day, and think "yeah, I'll pay for that".
Hell no, but also don't mistake me for thinking that this was a good idea.
However, particularly when I don't understand a subject well, I try to take all reasonable-sounding claims seriously at first and give them some back-of-the-envelope analysis. It seemed to me that the original claim was that Blue sales couldn't replace ads, but it seems like the numbers are close under some reasonable approximation.
I do agree that this move is likely to drive many users away from Twitter entirely, but a short-sighted company could still think that an acceptable tradeoff if they're having trouble selling all available advertising space.
AirBnb was maybe the worst of the bunch, because it has such a dramatic negative externality on housing markets. Entire areas of Barcelona have essentially no real residents because even those who didn't sell to AirBnb investors found it unlivable with drunk tourists screaming around the apartment buildings at 3 am. I stopped using AirBnb because it was making it enjoyable to visit other cities, but destroying my own. It's also a lot more expensive for fewer amenities.
Spotify hasn't made any money yet. I wonder if they're going to start charging $30/month. Time for the return of CDs, vinyl, MP3s?
The graph of subscribers shows really no change in the rate of subscribers:
https://www.statista.com/statistics/244995/number-of-paying-...
Probably just more stock-pumping ZIRP big exit nonsense.
We (consumers) didn't put anything on a CC. VCs did.
And I count that for the blessing it was. I ordered tons of subsidized food on DoorDash, cheap rides on Uber, etc.
Now that golden era is over, and I will not be ordering any more of that stuff at the now exorbitant prices.
Thank you based VCs, for comping a bunch of stuff for me the last 10 years.
The only structures that were torn down were things that required capital and upkeep. So for example, once you starve the beast of the taxi industry, then the fleet decays and they can’t compete without new capital investment.
For a small restaurant delivery, they can at any point hire another person to run orders just as they always could, with no loss. The reason this is not viable is because the whole economy got disrupted by covid and now it’s not actually feasible for someone to earn a living just moving parcels of food around locally. Like literally the unit economics don’t resolve positively because CA minimum wage is $15 an hour and you need even more than that to have a decent life.
New reddit launched 5 years ago, and many people still prefer using old reddit. Twitter also did not add any feature in the past 5 years the majority of its users cared about losing. If most of your users are fine with giving up everything you’ve built in the past 5 years, and you have a large staff of engineers, then you’ve not been running the business effectively.
You can believe what you want. I choose to believe what I see with my eyes.
However, you mentioned that today is an admission that the bot problem is worse. However that not true, the restrictions are specifically on viewing data (scrapers) rather than creating data (bots).
I’m not inclined to take Elon’s words at face value, he has an incentive to pump any statistic that makes it seem Twitter is growing.
A famously trustworthy source.
In theory the goal would be to push people like me to register and get an account to at least view, and force me into their platform/ecosystem so I can be measure and monetized.
Unfortunately, much like ape pics, printscreen key exists and people will simply pivot to posting png’s of twitter instead of direct linking
By basing it on an open protocol they can be one of many trusted clients rather than a closed, proprietary service.
Frankly I feel Google would be more motivated to challenge Reddit. Since so many of Google’s search results go to Reddit, they might as well try to take over that part of the web rather than leaving it in the hands of mercurial leadership of Reddit.
The only problem is possible retaliation from Reddit and potential antitrust problems if other similar sites feel threatened.
Surprised they aren’t visibly scrambling to get it done anyway though
Hahahahahhhaha
Human generated content will become rare and more valuable, which is why the remaining non walled gardens (Reddit and Twitter) are quickly raising the drawbridge.
Video will be the last medium to fall to AI generated content pretending to be human generated, and by cloning tiktok across to YouTube shorts they remove the barriers to entry for humans.
Social media nowdays is not about friends, it’s about algorithms & creator monetization. YouTube is #1 on monetization by a huge margin.
Any text based social media network will be absolutely overrun with LLMs.
That's pretty damn sad. Limiting discussion to some video link is just not very social to me. Facebook was the best overall to me until they fucked it up. As a concept, it is the most diverse in allowing users to be social with the various types of posts. Sure, you can do videos, images, text only, but also the events, direct messaging, and other features that i don't really remember because i haven't been there in 10 years.
Does it? I mostly use YouTube on my Apple TV, and the few times I open it elsewhere, I barely check the comments other than to check the audience reception. There are no conversations there.
I’d theoretically trust Apple/Google/MS to own the data and governance, but I don’t think any are capable of executing.
Google had their foray into social media more than a decade ago and it failed miserably. Starting from that point they've produced a continuous stream of failed products that never received enough support to last long enough to see viability.
Only a few power users cared about it and no one cared about them.
Power mods suck, but power users are the backbone of the site. I predict information quality and density will continue to decrease rapidly on Reddit until it becomes no different from Instagram.
(I’m not personally a power user, I’ve just been on Reddit for a while)
Apollo finally went dark yesterday, I deleted it, and haven’t felt a single compulsion to check the mobile Reddit site. About the only Reddit related thing on my mind is whether I’m petulant enough to mass overwrite my posts - I’m only too familiar with the struggle of searching for something and finding dead blogs and forums a few years back.
I don’t think Reddit the company owes me anything, but I wonder how many other “high value” users (in terms of both content and value to marketers) simply drifted away once the iOS apps went dark.
On social network websites, the vast majority of people are only lurkers, a relatively few people commenting, even fewer people posting, and fewer people still who want to put in the effort to build up a community.
Reddit's soul sits in those handcrafted small communities, the big ones sure will stay around and be popular, but there's lots of other places where one can get 5 second cat videos, and memes.
This event eroded a lot of the remaining trust between moderators and the admins, and while that can feel like it's not relevant to normal users, over time this will cause fewer people to be interested in starting a community on Reddit.
So far it's been the attention of the users that has been monetized, primarily via advertising.
But now the content generated by the users has value as input into AI training sets. And AI companies are scrambling to gather as much as they can as rapidly as they can.
The data itself, not the attention of the users, is what is now being harvested.
The companies hosting the data are right to intervene, there's no reason to allow incredibly well-funded AI organizations hoover it all up for free.
Where it's going wrong is how the social companies are intervening. Their goal is correct, their methods are not.
You could only join by invitation, so as to make F2F social networks in self-hosted instances, or in a Discord-esque "server". I think the value here would be in exchanging opinions, information and new interests with an expanded social network (you woukd probably like and find interesting your friends' friends). Although I admit this model would be a closed community, if it's only one instance then it's not a problem because there are not a lot of people, and if it proves to be successful, it could span a renaissance of blogs or independent content-generation, i.e. these communities would be closed but reinforcing an open Web, instead of mega-silos with captive audience.
I think that a limit in size for each community would be essential, the first member/admin can invite, let's say, 80, people, each of those can invite 40 people, and the third "generation" just another 20 people. This way you get at most 64k people to interact with. There was a post here on HN a couple months [0] ago with a back of the envelope calulation of subreddits being hostile when reaching a 300k userbase.
[0] https://maximumeffort.substack.com/p/scaling-problems-in-soc...
Someones going to say Lemmy and Mastedon - they're wrong.
It is definitely time to rebuild. I don't know if that'll be ActivityPub and decentralization, but it needs to be something else.