Albert Wenger of Union Square Ventures recently gave a talk at the 2017 Blockstack Summit about “Decentralization and the Knowledge Age.”

He starts by talking about motivation and coordination.

The state, he argues, is good at coordination, but not so good at motivation. The market, on the other hand, is good at motivation, but not so good at coordination. Money and self-interest are powerful incentives.

He then talks about how networks have improved the market, the firm, and the state. When the cost of sharing information drops, everything gets better.

But there are downsides to networks. For one, they form monopolies. Consider Facebook in social. Google in search. Amazon in ecommerce.

They also create environments ripe for censorship and “algorithmic abuse.” Everything you see in your feeds is optimized to make you respond and/or feel a certain way. The line between delivering you relevant content and deliberate manipulation is perhaps a fine one.

So what’s the solution? Decentralized blockchain networks are one exciting possibility. But they also have their own limits and drawbacks. Albert touches on those in his talk.

The video is about 24 minutes. If you can’t see it below, click here.

[youtube https://www.youtube.com/watch?v=LgQT874KHuw?rel=0&w=560&h=315]

Instagram has a company chart that shows: Days to Reach the Next 100 Million Users. It is only the chart where they want to see it decline. The first 100 million users took 28 months. And the last took only 4 months. Instagram now has 700 million active users.

Instagram is also saying that they have 200 million people using their Stories feature – you know, the feature they blatantly stole from Snapchat. This would mean that more people are using Instagram Stories than Snapchat has daily users (~158 million).

Anecdotally, I can tell you that I’ve almost completely stopped using Snapchat. (Snapchat battery usage over the last 7 days = <1%.) I still prefer Snapchat’s direct messaging functionality, but not enough to continue using the platform. Instagram now provides basically the same functionality – plus my photos – in a single app. 

But more importantly, Instagram’s network and my network are bigger there. And network effects are clearly the most important thing. In fact, by directly copying Snapchat, Instagram (Facebook) made sure that this competition was only about network size and not about features. Monopoly power.

In real estate, if you own a property in a great location, your position is pretty defensible. (Though you may not be completely immune.) But in tech, that is clearly not the case. Someone might copy everything you’ve done and beat you at your own game.

As someone who used to be very bullish on Snapchat, I am now wondering if I need to remove my Snapchat handle from the header of my blog emails. I mean, I’m not there very often anymore. But maybe, just maybe, Snapchat will find a way to compete outside of network effects at a game that Instagram/Facebook can’t play.

How would you or are you placing your bets?

Albert Wenger of Union Square Ventures recently gave a talk at the 2017 Blockstack Summit about “Decentralization and the Knowledge Age.”

He starts by talking about motivation and coordination.

The state, he argues, is good at coordination, but not so good at motivation. The market, on the other hand, is good at motivation, but not so good at coordination. Money and self-interest are powerful incentives.

He then talks about how networks have improved the market, the firm, and the state. When the cost of sharing information drops, everything gets better.

But there are downsides to networks. For one, they form monopolies. Consider Facebook in social. Google in search. Amazon in ecommerce.

They also create environments ripe for censorship and “algorithmic abuse.” Everything you see in your feeds is optimized to make you respond and/or feel a certain way. The line between delivering you relevant content and deliberate manipulation is perhaps a fine one.

So what’s the solution? Decentralized blockchain networks are one exciting possibility. But they also have their own limits and drawbacks. Albert touches on those in his talk.

The video is about 24 minutes. If you can’t see it below, click here.

[youtube https://www.youtube.com/watch?v=LgQT874KHuw?rel=0&w=560&h=315]

Instagram has a company chart that shows: Days to Reach the Next 100 Million Users. It is only the chart where they want to see it decline. The first 100 million users took 28 months. And the last took only 4 months. Instagram now has 700 million active users.

Instagram is also saying that they have 200 million people using their Stories feature – you know, the feature they blatantly stole from Snapchat. This would mean that more people are using Instagram Stories than Snapchat has daily users (~158 million).

Anecdotally, I can tell you that I’ve almost completely stopped using Snapchat. (Snapchat battery usage over the last 7 days = <1%.) I still prefer Snapchat’s direct messaging functionality, but not enough to continue using the platform. Instagram now provides basically the same functionality – plus my photos – in a single app. 

But more importantly, Instagram’s network and my network are bigger there. And network effects are clearly the most important thing. In fact, by directly copying Snapchat, Instagram (Facebook) made sure that this competition was only about network size and not about features. Monopoly power.

In real estate, if you own a property in a great location, your position is pretty defensible. (Though you may not be completely immune.) But in tech, that is clearly not the case. Someone might copy everything you’ve done and beat you at your own game.

As someone who used to be very bullish on Snapchat, I am now wondering if I need to remove my Snapchat handle from the header of my blog emails. I mean, I’m not there very often anymore. But maybe, just maybe, Snapchat will find a way to compete outside of network effects at a game that Instagram/Facebook can’t play.

How would you or are you placing your bets?