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Thoughtful Friday: Why Quora Will Die - There Is No Such Thing as a Stagnating Platform

Three Data Point Thursday
Thoughtful Friday: Why Quora Will Die - There Is No Such Thing as a Stagnating Platform
By Sven Balnojan  • Issue #43 • View online
In a platform business with network effects, if you’re stagnating, you’re already going under. Understand why I think quora will exponentially shrink in the next 7 years.
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Thoughtful Fridays are intended to get you to think about something. They are usually short, and possibly incomplete, and appear infrequently. 
This week I googled for “most successful software architects” and landed on an answer from Quora
But when I tried to read the answers, I only saw lots of stuff designed to get me away from what I actually wanted to read. Lots of “related questions”, ads, sponsoring, things that distract me from what Quora should really be about, connecting me with someone else’s answer.
Feels to me, Quora, the platform, is on the decline; And since it’s a platform, and network effects are in play, it’s a very interesting short story to dive into!

Svens Actionable Thoughts
If you only have 30 seconds to spare, here is what I would consider actionable insights for investors, data leaders, and data company founders. 
  • If a platform business is stagnating, it might be already dying
  • If you run a stagnating platform business, it’s time to do everything to reignite the network effects.
  • If your business starts to exponentially shrink, you’ll have to do fundamental shifts, usual linear layoffs & refocuses won’t stop exponential effects.
  • If you are in a network-effect-based market, and you start to shrink, you are shrinking exponentially, even if it feels very slow at the beginning.
Quoras Exponential Death
(Image by the author, based on a Google Trends search for “quora”)
(Image by the author, based on a Google Trends search for “quora”)
Objectively, Quora is doing just fine! The last valuation from the financing round in 2019 is 2 billion USD. They reported revenues of 20 million USD in 2018, which of course makes the valuation very interesting, but for some reason, more and more articles are appearing to tell us that quora are going under. 
I think there is a very simple dynamic in play here, which already mostly sealed Quoras future, an exponential decline, mirroring its growth, ending either in 7 years with zero users, or much more likely in 2-3 years with a sale and then a gradual wind down.
Platforms & Networks
Quora provides an external platform, connecting people over questions & content. These types of platforms exhibit network effects because only attract people who want to ask questions if lots of people also answer them. So the more, the merrier.
That means, the market Quora is operating in is a winner takes all market; People flock to the one thing that provides the best value proposition, and that will get 80-90%+ of the market. 
Until 2019, it looked like Quora was going to be this thing….
(What we see, and what we do not see)
(What we see, and what we do not see)
But since 2019 or late 2018, the growth & interest in Quora has been stagnant…
The thing is, in a winner-takes-all market, there is no such thing as stagnation!
No Such Thing as Stagnation
Quora is in reality losing users. Right now slowly, but soon it will be a very quick process. Fewer people with content, fewer questions, fewer answers will mean even more people will leave the platform, accelerating the decline until there is nothing left. 
What we don’t see in the stagnating graph is the other side of things. We don’t see that now that Quora isn’t growing like crazy, other platforms are very likely following an exponential growth pattern. They are in the first stages of exponential growth, the part where it looks mostly flat and thus Quora looks mostly stagnating, but in fact, they are growing exponentially, and Quora is shrinking exponentially.
It’s the same pattern you can see at MySpace & Facebook 10 years ago.
The Facebook Effect
In the summer of 2007, it looked like Myspace was still growing strong, maybe on a small plateau, and Facebook was still miles behind, basically flatlining. However, a year later, Myspace was still stagnating, whereas Facebook took up its explosive exponential growth. Source: Business Insider.
Source: Business Insider
Source: Business Insider
Suddenly, MySpace was shrinking exponentially and soon was history. 
The Danger
I don’t know what the places are that are growing exponentially on the Quora user base. What I do know is that it doesn’t have to be in one place.  
An aggregation of different exponentially growing platforms still grows exponentially, so it might just be that people are flocking towards Twitter, Medium et.al. for such things, maybe to the improved Google search. Whatever it is, Quora is going sideways, and with that, it is going down. 
And once a platform goes down in an exponentially shrinking way, it has in my opinion very little chance to recover, because we as humans are terribly equipped to deal with exponential phenomena, both exponential growth as well as exponential shrinking. Laying off people, cutting things, all of these are usually meant to be a linear reaction and usually come too late. 
To be totally fair, there are other options that explain stagnation, simple stagnation, or stagnation and growth of competitors into the market, because the market is growing. Something we currently see in the graph database engine market (I think). BUT that does not take away the danger, both mean others are growing or will grow exponentially, while you are not. Which inevitably will lead to exponential shrinking. Source: DB Engine.
I might be completely wrong, and there is no exponential growth hidden behind Quoras stagnation, but if this is right, it looks very much like MySpace 2.0.
Do you have any thoughts? I’d love to hear them! More examples of exponentially shrinking companies, other dying platforms? Hit reply!
And of course, leave feedback if you have a strong opinion about the newsletter! So? 
Did you enjoy this issue?
Sven Balnojan

Data; Business Intelligence; Machine Learning, Artificial Intelligence; Everything about what powers our future.

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