In business, design and life you gotta give to get. Sometimes the choices are hard.
Welcome to People vs Algorithms #38.
I look for patterns in media, business and culture. My POV is informed by 30 years of leadership in media and advertising businesses, most recently as global President of Hearst Magazines, one of the largest publishers in the world.
I will resist mocking Instagram head Adam Mosseri and his spoof-worthy community outreach videos. It's not easy being the explainer in chief for a social network in transition. Rationalizing product design decisions in a "casual" first person video is not something I would recommend. It's like explaining art. You have your reasons. Issue a statement. Do not attempt to justify. Products are not designed by committee. Design, listen, evolve. The world is not going to be sympathetic. People do not care about your trade-offs.
Design trade-offs in social networks are complicated because users build businesses on top of them. Understandably, they care deeply about their earned media positions. Apple may change the corner radius on the iPhone. A designer's prerogative. No one really cares if you redesign your website. They'll use it or they won't. Redesigning Gmail might take some getting used to but it doesn't fuck with your follower count. Here it's a bit thornier. People are invested in the platform. On some level they are co-owners. When you change with the product, it annoys with an invested community who’s hard work used to pay off in semi-reliable distribution.
Things change. What do you want for nothing…
Adam has me thinking about the hard trade-offs. Trade-offs are the essence of all design, I suppose, digital design in particular. This is profoundly true with media products. In the digital world everything is tightly connected — content and ads, text and video, distribution and content strategy, media and commerce, free and paid. You can do pretty much anything you want — the experience is entirely malleable. But attention is scarce. Which means product and business leadership is all about figuring out the things you should do at the expense of other things. It's trade-offs. And balance.
It's too easy to run at Adam. You may be slightly more sympathetic if you’ve managed complex trade-offs as a senior executive in a large organization. Let’s briefly consider the trade-offs at the heart of Adam's world.
You lead a business that’s being existentially challenged by a fast growing video-driven model and fueled by an eager global community of creators. Yes, TikTok. Young and old like it a lot. It’s sucking time and engagment from your platform. It's starting to grab material advertising dollars. This is not Vine. This time it’s real.
If there’s an upside, perhaps it's that the monopolistic scrutiny is misguided. Just when you think a social network has crossed the threshold to invincibility, something new comes along to challenge the status quo.
You sit on top of an enormous expense structure, legions of mouths to feed and intimidating public company expectations. Sadly, you cannot just buy your competitor. You have to compete. Beyond the full embrace of video, the model challenges the entire distribution model on which your business is built and in which your community is highly invested. Difficult trade-offs.
You became famous on a foundation of photos and followers. The business may be “yours” but followers are “mine.” Or at least this is how the community perceives the relationship. This was great for a while. Those follower-hungry users gave you non-linear growth. They put you in power.
Now video changes everything. Because with video you can just show the best content to people through the logic of an algorithm. If you have enough users, you have signal. The math is pretty easy: Measure how much they watch. Segment. Categorize. Refine. Repeat a billion times a day.
This new algorithmic-driven model might be preferable because you can more easily control how content flows through the system versus a model that is built around contributors sharing content with their network. This requires legions of expensive moderators and supporting technology. And of course endless headaches with people that want you to tightly control the content that moves through your platform.
Remember, video is fundamentally different that photos for a few important reasons. With photos success usually equals relevance to a group of people, mostly your friends. Video is about entertainment. Entertainment transcends friendship. Unlike photos, video doesn't need text to accompany it. It's self-contained. It should take up the entire screen. Importantly, video doesn't need a like button. If you watched it, you probably liked it.
So you're feeling the video heat and you need to work through the trade-offs. Do you risk short term community alienation for long term viability? Do you start another app and attempt to compete anew when your competitor is off to a roaring start? Or do you try to find the middle ground that edges your experience toward a new video reality and go to the community and try to explain your rationale, opening yourself up to criticism from all sides. You end up saying things like "I love photos and and I know you love photos too." People don't believe you. Better to just make the changes and move on. Trade-offs.
All of which offers us a couple of rules to consider when thinking about trade-offs:
1. The larger and more complex the existing business, the harder it is to make trade-offs that risk undermining your core business. This is the territory of classic disruption — introduce a product or service that is hard for an incumbent to imitate because doing so will compromise the legacy franchise.
2. Trade-offs are more difficult to execute when the user base is heavily invested in the existing solution, as is the case above.
At the heart of most trade-offs in digital media are complexities of monetization — balancing the needs of users and the needs of advertisers. In hyper-vertical media they align better. Most of the time you have to find a balance. The web typically forces sub-optimal decision making between short term monetization and quality of experience / long-term loyalty.
Revenue is immediate. The user is invisible. Most web sites trade on a search-to-site distribution model that advances a 'hit and run" mentality. In short, it is easy to trade revenue for experience. That why most web media experiences suck. Further, once you get a taste of that nasty revenue, say floating video players or scammy recommendation links, it's hard to give back.
3. Immediate cash is trade-off crack, once it touches your lips it's hard to put down. Center your decision on what you want to be long term. Pure audience arb is fine if that's your game, but it never lasts. Good media trade-off decisions require vision and patience.
Of course trade-off math is much easier when you have a singular true north. Optimizing a subscription media business demands a singular focus on the needs of the buyer. Trade-offs that advantage acquisition, reduce churn and increase satisfaction are pretty easy to make and measure.
4. Trade-offs are much more difficult in multivariate scenarios. Like the advertising / consumer example above. Things are much easier when you have one constituency to please.
Let's call the next one the Swiss Army fallacy. Generally speaking, the utility of a thing decreases as you add more non-symbiotic functionality. If someone says "You are amazing... you're a total Swiss Army Knife," take it as a compliment and thank the person. They probably mean you are a utility player with a brain and you are very useful in diverse and unpredictable situations. Being a Swiss Army Knife if you are, say, a chess champion, probably means you are not a chess champion. Bad example. "Sporks" have not caught on because they are bad spoons and bad forks. Swiss Army Knives suck. They are bad knives and bad bottle openers and bad pliers. They save space. Ok, I'll give them that. Hopefully you get the point. Trade-offs are precisely that, give something up to make something else more pure, more powerful or more valuable.
5. If you really understand the value you offer a customer or audience, you can make good trade-offs. "Lets do both" is probably an abdication of your responsibility. You may never be great at anything.
There's a difference between a thing that is a platform for many things and a thing designed for a specific purpose. An iPhone is an example of the former, it needs to be a vessel for many applications. In China, the most popular apps are essentially virtual desktops. These are referred to as "super apps", WeChat the best example. Their foundation is payments and communication. Many other applications like delivery services, shopping, and games are built on top of these core functional services. Neither of these should compromise our rule. Instagram is still an application, not a platform. Its virtue is, or was, mostly singular.
But there's a phenomenon that is worth noting here. The "application economy" unlike the web is filled with friction. Building an app users base requires two steps, one to download the app, a second to start using it. This changes our trade-off math. Adding functionality to an existing application may be a more desirable trade-off than embarking on building a second, more focused app on account of the effort to build a new application base. Had the web been architected with native accommodations for identity, payments and advanced device control, things might be different and the movement between applications might have been as easy as a hyperlink. Sadly this is not the case. Adam might like to build a separate photo app and TikTok competitor, but app ecosystem logic discourages it.
6. Your trade-off logic is only as good at the behavioral mechanics that inform it. You are but a pebble in the sea.
I stumbled upon a book on trade-offs. You don't need to read it because it’s one of those business books that makes a simple point in 200 pages. In “Trade-off: What Some Things Catch On, and Others Don’t,” the author argues that business must optimize to either “fidelity” (quality, exclusivity) or “convenience” (accessibility, convenience, affordability). The argument is, focus on one, when you try to do both you will lose to a company who is better at one or the other. Mass-lux is a fallacy. It’s a little like my Swiss Army rule. Or the old product management fav, ”good, fast, cheap… pick two.”
Sadly the world is more complicated than this. Trade-offs are, by their nature, complex decisions that require giving something up to get something in exchange. The only way to get good at it is to ruthlessly question what you are optimizing to. Unfortunately the status quo is not an option for Adam. There are forces at play bigger than Instagram, ones that strike to the heart of why people loved the app in the first place. Finding the next equilibrium will take more vision than plagiarizing competitors, feature by feature.
These lessons are not unique. We are well served to look beneath the headlines and sniping and understand the hard choices underneath. Trade-offs underpin everything we do. At some point you will face the same complex math in your own life.
Have a great weekend…/ Troy
8 more trades:
1. Coal and gas » Nuclear
Modular, pre-fab designs pave wave for nuclear energy expansion.
This Tiny Modular Nuclear Reactor Just Got the Green Light From U.S. Regulators / Pop Mech.
In a major step forward for the burgeoning modular nuclear reactor movement, the U.S. Nuclear Regulatory Commission (NRC) approved all but the final formalities on a tiny reactor design put forth by industry leader NuScale. The July 29 announcement comes after six years of steady work toward regulatory approval.
2. Fast fashion » Real-time ecommerce
The future of ecommerce is taking shape in hyper-fast-fashion targeting young female shoppers. The level of sophistication is breathtaking. Much has been said about Shein’s hyper-growth. A16 funded Cider is the next to watch.
A16z-backed Shein challenger Cider is growing rapidly / TechCrunch
Shein has shown the world how combining social media marketing, data analytics and China’s well-oiled supply chain has created a $100 billion fast-fashion behemoth.
Its success naturally spawns imitators and challengers. Among its fastest-growing challengers is Cider, which, like Shein, relies on China’s responsive clothing manufacturers to sell affordable, trend-led pieces to customers around the world.
Cider has racked up roughly 7.4 million installs across the world to date, according to data provided by market intelligence firm Sensor Tower. That number is dwarfed by Shein, which gained more than 170 million downloads worldwide in 2021 and surpassed Amazon as the top shopping app in the U.S. last year.
3. Urban sprawl » Urban utopia
An wild plan from the Saudi’s to reimage the future city. 180 KM long, 9 million people.
Saudi Arabia plans 100-mile-long mirrored skyscraper megacity / The Guardian
According to the Saudis, artificial intelligence will be central to how people live in the 500-metre-high, 200-metre-wide structure, a car-free, carbon neutral bubble that will boast near total sustainability and a temperate, regulated microclimate. Past environmental pledges by the kingdom, such as a vow to achieve net zero carbon emissions by 2060, have prompted scepticism from environmentalists.
4. Hard work, micro-management » Laughs
A brief interview with Jerry Seinfeld at HBR. Funny is hard work. Funny is genetic.
Life’s Work: An Interview with Jerry Seinfeld / HBR
Then I don’t need them. If you’re efficient, you’re doing it the wrong way. The right way is the hard way. The show was successful because I micromanaged it—every word, every line, every take, every edit, every casting. That’s my way of life.
5. Same old » Design thinking
A long but good list.
101 design rules / Brian Collins
9. Put this over your desk: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” Buckminster Fuller knew stuff.
6. Bland abundance » Luxury strawberries
Oishi is bringing Japanese food thinking to the US.
The Luxury Strawberry Edition / Why Is This Interesting
The strawberries that Oishii makes have a slightly paler pallor (different from the mortal strawberries you are used to), and lack any disfigurations and bumps like the Driscoll’s at your local supermarket. They are characterized by their sweetness, noted as 2 or 3 times of a normal strawberry. But the actual product is a stalking horse for a larger farming process that could revolutionize other types of agriculture.
7. Minimalist » Maximalist
Is Gen Z bored with minimal / modern?
Make Way for Maximalism: Gen Z Says Less is a Bore / Arch Daily
With the onset of the 2020s, Gen Z is noticeably claiming their place in the world with bold perspectives and even bolder aesthetics. Gen Z proudly experiments with their identities, having grown up on an opinionated internet and through confusing lockdowns. They're bringing in a culture shift with organic shapes, colorful elements, and clashing patterns dominating art, media, fashion, and interior design. The trend is pushing away once-reigning minimalism, shouting Venturi's Less is a Bore.
8. Bobby Hebb » Boney M.
“Sunny” is a gem either way. You choose…