Here is how #platforms die: first, they are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves. Then, they die.
If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2023/01/21/potemkin-ai/#hey-guys
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I call this #enshittification, and it is a seemingly inevitable consequence arising from the combination of the ease of changing how a platform allocates value, combined with the nature of a "two sided market," where a platform sits between buyers and sellers, hold each hostage to the other, raking off an ever-larger share of the value that passes between them.
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When a platform starts, it needs users, so it makes itself valuable to users. Think of #Amazon: for many years, it operated at a loss, using its access to the capital markets to subsidize everything you bought. It sold goods below cost *and* shipped them below cost. It operated a clean and useful search. If you searched for a product, Amazon tried its damndest to put it at the top of the search results.
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This was a hell of a good deal for Amazon's customers. Lots of us piled in, and lots of brick-and-mortar retailers withered and died, making it hard to go elsewhere. Amazon sold us ebooks and audiobooks that were permanently locked to its platform with DRM, so that every dollar we spent on media was a dollar we'd have to give up if we deleted Amazon and its apps.
4/
And Amazon sold us Prime, getting us to pre-pay for a year's worth of shipping. Prime customers start their shopping on Amazon, and 90% of the time, they don't search anywhere else.
That tempted in lots of business customers - Marketplace sellers who turned Amazon into the #EverythingStore it had promised from the beginning. As these sellers piled in, Amazon shifted to subsidizing suppliers. Kindle and Audible creators got generous packages.
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Marketplace sellers reached huge audiences and Amazon took low commissions from them.
This strategy meant that it became progressively harder for shoppers to find things anywhere except Amazon, which meant that they only searched on Amazon, which meant that sellers *had* to sell on Amazon.
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That's when Amazon started to harvest the surplus from its business customers and send it to Amazon's shareholders. Today, Marketplace sellers are handing 45%+ of the sale price to Amazon in junk fees. The company's $31b "advertising" program is really a payola scheme that pits sellers against each other, forcing them to bid on the chance to be at the top of your search.
7/
Searching Amazon doesn't produce a list of the products that most closely match your search, it brings up a list of products whose sellers have paid the most to be at the top of that search. Those fees are built into the cost you pay for the product, and Amazon's "Most Favored Nation" requirement sellers means that they can't sell more cheaply elsewhere, so Amazon has driven prices at *every* retailer.
8/
Search Amazon for "cat beds" and the entire first screen is ads, including ads for products Amazon cloned from its own sellers, putting them out of business (third parties have to pay 45% in #JunkFees to Amazon, but Amazon doesn't charge itself these fees). All told, the first five screens of results for "cat bed" are 50% ads.
https://pluralistic.net/2022/11/28/enshittification/#relentless-payola
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This is enshittification: surpluses are first directed to users; then, once they're locked in, surpluses go to suppliers; then once *they're* locked in, the surplus is handed to shareholders and the platform becomes a useless pile of shit. From mobile app stores to Steam, from Facebook to Twitter, this is the enshittification lifecycle.
10/
This is why - as @catvalente wrote in her magesterial pre-Christmas essay - platforms like #Prodigy transformed themselves overnight, from a place where you went for social connection to a place where you were expected to "stop talking to each other and start buying things":
https://catvalente.substack.com/p/stop-talking-to-each-other-and-start
This shell-game with surpluses is what happened to Facebook. First, Facebook was good to you: it showed you the things the people you loved and cared about had to say.
11/
This created a kind of mutual hostage-taking: once a critical mass of people you cared about were on Facebook, it became effectively impossible to leave, because you'd have to convince all of them to leave too, and agree on where to go. You may love your friends, but half the time you can't agree on what movie to see and where to go for dinner. Forget it.
12/
Then, it started to cram your feed full of posts from accounts you didn't follow. At first, it was media companies, who Facebook preferentially crammed down its users' throats so that they would click on articles and send traffic to newspapers, magazines and blogs.
Then, once those publications were dependent on Facebook for their traffic, it dialed down their traffic.
13/
First, it choked off traffic to publications that used Facebook to run excerpts with links to their own sites, as a way of driving publications into supplying fulltext feeds inside Facebook's walled garden.
This made publications truly dependent on Facebook - their readers no longer visited the publications' websites, they just tuned into them on Facebook. The publications were hostage to those readers, who were hostage to each other.
14/
Facebook stopped showing readers the articles publications ran, tuning #TheAlgorithm to suppress posts from publications unless they paid to "boost" their articles to the readers who had *explicitly subscribed to them and asked Facebook to put them in their feeds.*
Now, Facebook started to cram more ads into the feed, mixing payola from people you wanted to hear from with payola from strangers who wanted to commandeer your eyeballs.
15/
It gave those advertisers a great deal, charging a pittance to target ads based on the dossiers of nonconsensually harvested personal data they'd stolen from you.
Sellers became dependent on Facebook, too, unable to carry on business without access to those targeted pitches. That was Facebook's cue to jack up ad prices, stop worrying so much about ad fraud, and to collude with Google to rig the ad market through an illegal program called #JediBlue:
https://en.wikipedia.org/wiki/Jedi_Blue
16/
Today, Facebook is terminally enshittified, a terrible place to be whether you're a user, a media company, *or* an advertiser. It's a company that deliberately *demolished* a huge fraction of the publishers it relied on, defrauding them into a #PivotToVideo based on false claims of the popularity of video among Facebook users. Companies threw billions into the pivot, but the viewers never materialized, and media outlets folded in droves:
https://slate.com/technology/2018/10/facebook-online-video-pivot-metrics-false.html
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But Facebook has a new pitch. It claims to be called #Meta, and it has demanded that we live out the rest of our days as legless, sexless, heavily surveilled low-poly cartoon characters.
It has promised companies that make apps for this #metaverse that it won't rug them the way it did the publishers on the old Facebook. It remains to be seen whether they'll get any takers.
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As Mark Zuckerberg once candidly confessed to a peer, marvelling at all of his fellow Harvard students who sent their personal information to his new website "TheFacebook":
> I don’t know why.
> They "trust me"
> Dumb fucks.
https://doctorow.medium.com/metaverse-means-pivot-to-video-adbe09319038
Once you understand the enshittification pattern, a lot of the platform mysteries solve themselves.
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Think of the #SEO market, or the whole energetic world of online creators who spend endless hours engaged in useless #PlatformKremlinology, hoping to locate the algorithmic tripwires, which, if crossed, doom the creative works they pour their money, time and energy into:
https://pluralistic.net/2022/04/11/coercion-v-cooperation/#the-machine-is-listening
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Working for the platform can be like working for a boss who takes money out of every paycheck for all the rules you broke, but who won't tell you what those rules are because if he told you that, then you'd figure out how to break those rules without him noticing and docking your pay. #ContentModeration is the only domain where #SecurityThroughObscurity is considered a best practice:
https://doctorow.medium.com/como-is-infosec-307f87004563
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I was thinking long and hard about you including Steam on this list.
My first thought is that, from a user perspective, Steam feels like it has MOSTLY bucked the trend of enshittification. However upon further thought, it isn't 100% true.
While I feel it is not nearly as bad as most platforms for USERS, it does charge game developers a fairly sizable cut.
And since it is ubiquitous, a large number of developers feel they MUST put their games on Steam.
It is also true that developers do often play a guessing game on if their products will be accepted. Though Steam is generally very open, there are still some very nebulous grey areas when it comes to what type of content is acceptable.
(I have a friend who publishes games on Steam and some of the content of those games could be considered borderline "adult" content. This seems to be where a lot of the grey area lies.)
@pluralistic
But mainly , the user experience on steam is pretty decent. The DRM seems to be optional for developers to use, and is far less invasive than others. The platform is very mod friendly and I can usually find the games and content I want fairly easily, despite their being mountains of it.
Yes, there's a lot of utter crap content on the platform, but I'd rather have that than an Apple style store, personally.
@pluralistic
But, the fact remains that Steam is controlled by a dictator. Perhaps it really is the case that Gabe Newell is a far more benevolent dictator than your run of the mill platform owner, the fact remains that he's not getting any younger.
Gaben may be the Marcus Aurelius of gaming platforms, but eventually ownership/control of the platform will move to someone else. And there's a much greater chance the next emperor will be a Nero or Caligula.
@pluralistic
After reading a few excellent @pluralistic threads on enshittification, I feel like I have been using that word for decades.
Was it on my junior high school vocabulary test?
If not, why not?
Was it because @pluralistic hadn't been born yet?
@pluralistic As with "bullshit jobs", a name corporate interests happily filter out so people under their sway don't see mention of it. Prudery and tone policing in defense of the status quo, as always.
Half the reason for fosta/sesta is "camgirl" was a lucrative work-from-home job a young woman could do safely and anonymously on a flexible schedule without training or much up-front investment, so of course it had to be ruthlessly eliminated as an option to maintain patriarchy.
@pluralistic Has anyone correlated enshittification with changes in the management structure of platforms?
I've seen a bunch of tech companies started by technologists -- nerds -- who were passionate about what they made and who attracted equally passionate users. But as the company grew, the MBAs and professional CEOs were brought in, and everything changed.
Few companies probably begin with enshittification as a goal. But at a given point incentives, focus and management all start to shift.
@angusm @pluralistic Having been on the inside of (and co-founded) a few tech startups, a lot of this tends to coincide with death-marches to try to become profitable.
A whole lot of this suddenly becomes "acceptable" when accompanied by an implicit "or we'll run out of cash or our investors will fire us".
One of the reasons why I've gotten increasingly picky over the years, and a danger of taking VC money (I say, having spent the last 4+ years working at a VC...)
@foxxtrot @vidar @angusm @pluralistic "making a living" vs "making a killing"
Our society cultivates people with values that are destructive of society
@cuchaz @foxxtrot @angusm @pluralistic
I'm currently in a "regular" day job, but if I were to do another startup, that'd probably be what I'd aim for. The "go big or go home" frenetic stuff is fun the first couple of times, and when you don't have responsibilities.
But the extra stress and extra pressure to compromise integrity and the like is not worth it.
@vidar @cuchaz @foxxtrot @angusm @pluralistic
serious q from someone who made the choice 25ish years ago not to go to san jose etc (and stopped regretting the decision to go to university):
do any internet era vc fueled companies have founders that don’t turn out to be hardcore control freaks?
the frenetic pacing & overwork culture makes a lot more sense reframed as desperation by founders to maintain absolute control.
@Aphrodite @cuchaz @foxxtrot @angusm @pluralistic
I think quite a few original founders were ok at the outset, but the thing is the ones who don't want to play hardball often end up sidelined by at the first sight of trouble, and that acts as an additional lever to pressure people into either getting with the program or clocking out - either by leaving or finding some technical niche to hide behind.
@vidar @cuchaz @foxxtrot @angusm @pluralistic
i deeply appreciate the insight.
i do disagree with the premise some were ok then turn when interpreted through the framework i suggested in my allotted 500.
but you are right.
interestingly this helps clarify an awful lot in a situation i’m investigating that at a glance appears has nothing to do with the vc-tech intersection but on reflection likely does.
@beasts @foxxtrot @angusm @pluralistic
I co-founded a company near the peak of the dot-com boom where the VC's actively discouraged us from charging customers because valuation-per-user at the time was absolutely ludicrous even for companies with only free users.
I wish we'd had the experience at the time to stand our ground.
Two years later the company pivoted and sold off the original service to a company that started charging for the service like we should've done from the start.
@angusm @pluralistic I think “maximizing resource extraction efficiency” is both a) just what MBAs *do*, and b) probably the most characteristic mode of enshittification
I wonder if it’s possible to model an economic system that *isn’t* focused exclusively on efficient resource extraction.
That could be pretty neat, huh?
@cmdrmoto @angusm @pluralistic
Simple solution: executive stock grants must be post-dated 7 years
It's not complicated. It aligns long term thinking for everyone involved. But it won't be popular because that's way too much accountability for people involved.
@angusm @pluralistic I've never heard it described in exactly those terms, but yes there's a pretty good understanding in the US tech industry that when a startup transitions from being founder-led to outside-CEO-led, that it's a major transition and many don't thrive afterwards.
I don't think this is necessarily because the CEOs are incompetent, but because their priorities are not the founders' priorities. They generally are brought in by the company board (i.e. the investors) to ensure the investors get paid out, and to plan an "exit": typically either a sale to another company or an IPO.
Since cutting expenses is generally seen as the fastest way to profitability (this is practically doctrinal in US business schools), often the first thing they do is make cuts: to hiring, to workforce, to benefits. consolidating offices, etc. And that usually drives some of the better technologists (who can easily find other jobs) away for greener pastures, other startups, etc.
Regardless of whether they don’t set out to make something shitty to start with, every well meaning passionate nerd who take loads of venture capital is doomed to enshittify their apps trying to infinitely double their income and eventually become payday loan sharks.
@angusm @pluralistic Ya know, was just reading the Digital Strategy as well as Integrated Business Plan of a large, publicly funded university, and similar thoughts crept into mind. It's a cancer.
Also: holy motherforking shirtballs, has the corporate administration overhead of universities exploded, with little value add.
I say this as a former corporate practices person. There's no value add except plausible deniability.
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