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Growth, What is it Good For?

Growth, What is it Good For?
By Keith Teare • Issue #277 • View online
The Facebook whistleblower accused the company of putting growth and profit before everything. So, is growth bad? Is it incompatible with human good? Or is it the essence of progress?

Contents
Editorial
It’s obvious, right? This week we should focus on Facebook? Well, yes and no. We certainly should focus on the issues raised by the whistleblower Frances Haugen and her testimony to Congress. But that testimony is about a lot more than Facebook. It goes to the heart of ideas that have formed our views of civilization since the enlightenment. Is growth good? Does it serve humanity? Is it compatible with our deepest needs?
At the heart of the testimony was a concern that Facebook put “its own” interests ahead of those of “us”. From 60 Minutes:
“The thing I saw at Facebook over and over again was there were conflicts of interest between what was good for the public and what was good for Facebook,” Haugen told Pelley. “And Facebook, over and over again, chose to optimize for its own interests, like making more money.”
This idea — that a company’s self-interest should not form its modus operandi — is new and strange. Facebook is after all a corporation. Its success is measured in how many people use it, and how much revenue is made after taking all costs into account. That is a function of whether people like it and remain users, or whether they do not.
It seems that all companies are like that. The New York Times has a self-interest that guides its actions, so does Greenpeace and so does FedEx. Those interests, should they deviate from what people want, would lead to declining use.
Here are the numbers of users over time:
Monthly Active Users
Monthly Active Users
Revenue
Revenue
And here is how it compares to other social media giants
From The Economist(Statista) https://www.economist.com/graphic-detail/2021/10/07/tiktoks-rapid-growth-shows-the-potency-of-video
From The Economist(Statista) https://www.economist.com/graphic-detail/2021/10/07/tiktoks-rapid-growth-shows-the-potency-of-video
Clearly, 2.9 billion people do not feel Facebook is a problem. And advertisers seem confident that Facebook is a good place for them to connect with their potential audience.
So if Facebook is not alienating its users, then what is the fuss about?
The fuss is about success and growth. It seems that when a platform gets to 2.9 billion people. And when it gives them ways to connect. Then some people, some of the time, have bad experiences. I suspect the same is true in smaller settings like a bar or a school playground. People can be nasty. And people who are nasty can be hurtful. Other people have social or emotional issues and they can be reinforced through social contact with those who make you aware of them. This, it seems to me, is true in life. And Facebook is just that — life.
Frances Haugen seems well-intentioned. but she is asking Facebook to host “nice” content, and not to try to get us to engage with each other on its platform. She wants children who use it to only find positive or optimistic reflections of themself.
This is not the real world, and it cannot be real Facebook. The ugliness of life has as much of a place as its beauty. That would be like banning nasty mean people from a bar to help the goal of it being a “nice place”. Nice idea but entirely unworkable.
And what about profit as a motivator? Now, I am not a big fan of capitalism. It can certainly be improved upon. But until it is, the pursuit of growth and profit is at its very foundation. It is what determines success. It is the Darwinian mechanic that enables change — the death of the old and the birth of the new. Money is merely symbolic of that success and a way of capturing the value you bring to the world. So what is the recommendation Frances Haugen has that can replace seeking to engage us and make a profit?
“Haugen suggested, essentially, turning off the computer algorithms and making more of the internet gravitate toward designs like those of iMessage or past versions of Facebook and Instagram that showed posts in chronological order.”
This is from The New York Times and is a really good insight into the lack of any real alternative to an engagement algorithm. The idea that a linear chronological list would be better than Facebook’s attempts at relevance is quite laughable, to be honest.
So, after all of this, what is likely to happen? Not a lot. Facebook is not the cause of these societal issues. I suspect its efforts to mitigate bad experiences are as good as is practicable. But if not, it is no different than any social setting in which human beings are gathered in large numbers.
At the top of this week’s newsletter is the video made by Apple to celebrate the life and contribution of Steve Jobs on the 10th anniversary of his death. and Azeem Azhar’s book “Exponential”.
Steve’s commitment to innovation and excellence has produced the world’s most valuable company. We engage with its products and love them. Because they are good. And the 2 trillion dollar value placed on his company is proof that we love it.
And Azeem’s book focuses on the inevitability that change, driven by technology, will produce changes that question every aspect of our current societal structures, and more.
That spirit is one that should guide all discussions of Facebook too. How should a platform of 2.9 billion regular users and many more infrequent users, be leveraged as an asset for our collective connection and interaction. It is a testament to technology that it exists. It is not going away, and if it did something equally big and transformational would replace it. The fact that in humanity there are many imperfect people should not be blamed on technology or change. And it is unrealistic to think that those people should somehow be removed from the digital world. Let’s learn to connect, interact, agree, and disagree, just as we must in real life.
Video
Growth. What is it Good For?
Growth. What is it Good For?
Innovation and Growth
Celebrating Steve | October 5 | Apple
Celebrating Steve | October 5 | Apple
10 years later
Exponential by Azeem Azhar — tech’s dizzying acceleration | Financial Times
Hot Air
What Facebook should change, according to its whistleblower
Mark Zuckerberg Responds After Facebook Whistleblower Says Company Is 'Tearing Societies Apart'
Regulation Fallout
Whistleblower's SEC complaint: Facebook knew platform was used to "promote human trafficking and domestic servitude" - CBS News
Facebook Political Problems
The Internet and the Third Estate
YouTube removes R. Kelly’s official channels
In a win for the Internet, federal court rejects copyright infringement claim against Cloudflare
Venture Trends
State Of Venture Q3’21 Report
Global startups raise $158B in Q3, an all-time record
Henri Pierre-Jacques
We can just get rid of VC round letters (A, B, C) now right??

I’ve seen $20M+ Seed and $100M+ Series As…they truly have no meaning to me anymore. I just tell people we invest in $2-5M rounds, lmk what you’re calling that
SoftBank’s Prodigal Son Struggles in New Era
Family Offices Raise Bets on Startups in $418 Billion Market - Bloomberg
How Network Effects Rule the World (with James Currier)
VC Daily: NFX Adds to Seed Arms Race With $450 Million Fund - Morningstar.com
Innovation for Employees & Creators
Uber, Google, Stripe, Coinbase, and other tech firms are radically changing the way they pay employees in stock. It could mean the end of Silicon Valley's 'rest and vest.'
YouTube study: 'Creator economy' supports equivalent of 394,000 full-time US jobs
Africa Rises
Startup of the Week
Tweet of the Week
Ian Hogarth
"It wasn’t until the lockdown ended and Cala customers could visit the restaurant in person that the reason became clear. Instead of a team of chefs, the food is cooked and assembled by a robot" https://t.co/VWadhlHuQQ
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Keith Teare

That Was The Week is a editorialized and curated weekly look at developments in tech, startups and investing

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Keith Teare, Palo Alto, California