Really too big to fail

This article can be read in German here.

Let’s have a look at the following list of common points of criticism, alleged weaknesses, (pr) scandals and public missteps that many of today’s leading internet and IT giants are well familiar with from the various parts of their life cycle.

  • “One trick pony” – a business and revenue model based on only one pillar, which eventually will collapse.
  • Costly “moonshots” – experimental projects completely unrelated to the current business model which won’t be contributing to the company result for a long time.
  • Overpriced, highly speculative acquisitions of companies that maybe one day might become a threat or revenue source.
  • Lack of profitability
  • Massive overvaluation.
  • Burning of investor money.
  • Unethical predatory competition.
  • Unfair exploitation of a leading market position / tendencies to become monopolies.
  • Violations of data protection and privacy needs of users/customers.
  • Lack of innovation regarding upcoming products.
  • Introduction of features and changes which, at least initially, are not welcomed by the users/customers and are not in their interests.
  • Blatant copying of functions or ideas from rivals.
  • Negative impact of certain functions or products on the general well-being and happiness of users.
  • Prevention of interoperability with other services and data portability through limitations of developer APIs.
  • Creation of “walled gardens”.
  • Changing user needs that will lead to people leaving a service in huge numbers.
  • Participation in governmental surveillance programs which undermine the trust of users/customers.
  • Editorial censorship based on questionable moral principles.
  • Data leaks and security issues.
  • Systematic violations of existing laws.
  • Interference with Presidential elections.

Continue Reading

The U.S. election & Facebook’s other problem

Facebook might just face its biggest crisis since the founding more than 12 years ago.

A lot of people think that the social network’s newsfeed impacted the US presidential election by fostering filter bubbles and by encouraging (and benefiting from) the politically motivated creation and distribution of fake news. The allegations have been surfacing more frequently over the past months. Ater the surprising victory of Donald Trump, the pressure on the company to fix flaws is mounting. Facebook CEO Mark Zuckerberg just published his thoughts on the issue, emphasizing the “extreme” unlikelihood that hoaxes changed the outcome of the election in one direction or the other. However, he promises improvements and further research into the matter nonetheless.

We’ll see what the company comes up with. But while many eyes are focusing on the factual issue of the newsfeed algorithm’s impact, the crisis includes a second dimension of trouble for the social networking giant, and it’s a significant one: The allegations pose a huge threat to Facebook’s internal unity and employer brand. Continue Reading

The distraction economy

Distraction

For many years, ever since the publication of Eli Pariser’s book that coined the term, there has been an ongoing debate about the digital “filter bubble”. With the increasing polarization of recent times and the rise of Donald Trump, the filter bubble once again is receiving major attention.

But it is probable that the discussion about the phenomenon of filter bubbles is just a distraction. And distractions are a much more significant problem. We humans have a tendency to constantly focus our attention on things that don’t really matter. Why? Because it allows us to pick the debates and fights that we understand, neglecting everything that appears to be too complicated to deal with. Continue Reading

13 facts about work in the age of automation

In the 21st century human labor and, as a consequence, the foundation of the society will be changing dramatically due to the rapid progress of information technology. The shift will likely be similarly wide-reaching as the industrialization. Unfortunately, debates about the opportunities, threats and necessary steps often turn into arguments about ideology and world views, instead of objectively acknowledging the facts and proposing constructive, unbiased actions.

But what are those objective facts by the way, that apply no matter one’s view of the world and of the economic system? I’ll try to collect a few of them which, from my point of view, should represent the basis for a consensus. Continue Reading

Turns out, the Internet is no big “world improvement machine”

Data Center

This year the World Wide Web celebrated its 25th anniversary. The Internet as underlying technological platform is about twice as old. Compared to a human life that’s a significant amount. But compared to the historic existence of humanity and to other groundbreaking inventions of the past, the Internet (and the web) are still green behind the ears.

In consequence, any prediction and analysis about the Internet’s short, mid and long term impact on life and people is flawed and inevitably incomplete. The insane complexity that is being added to the world through global connectivity requires a level of systems thinking which no one is capable of. Generally, it’s only in hindsight that a technology’s importance and implications can objectively be assessed. Today, we know very well how the printing press, electricity and the railway have changed the world. When it comes to the Internet, there cannot be any hindsight yet, since it is still so young. Basically, everyone is totally clueless.

However, with each year that passes, the number of data points and information bits about the Internet’s effects on society and humanity is growing. While no one has the full picture yet, this year something is getting more obvious than ever before: The Internet is increasingly being utilized for goals contrary to what its proponents initially hoped for, which would be a more open, more democratic, more prosperous, more knowledgeable, more equal world. Continue Reading

The deeper meaning of Spotify’s Discover Weekly

Discover Weekly

Streaming services have changed how people listen to music. But they have not changed the fundamentals of the music business: Labels sign artists, invest lots of money into turning them into sought-after superstars, and collect royalties from third parties who want to use or redistribute the music. Since most listeners would not be willing to commit to a digital music streaming service that lacks releases of the big label artists, Spotify & Co have to enter into expensive licensing agreements with the major labels. These licensing fees usually have to be paid per user and month, which makes it challenging for streaming services to ever achieve economies of scale. That explains why a service such as Spotify still isn’t profitable, despite 40 million paying subcribers: The more users it has, the more royalties have to be paid to the license owners, who then in turn pay the artists signed with them based on how popular their tunes are on the service. Here is Spotify’s own explanation of how it pays royalties.

For streaming services, the most desirable change in market dynamics would be if subscribers stopped seeing the availability of major label releases as a requirement for agreeing to pay the monthly subscription fee. So far, such an approach has not been successful for any serious contender in the streaming race. In fact, SoundCloud tried to grow without costly label deals and official licensing, focusing on independents instead, but didnt’ manage to turn this strategy into a working business model. The Berlin-based company is now adopting the conventional paid subscription model.

However, a seemingly trivial innovation introduced by Spotify last year, could lead to a paradigm shift in the streaming business: Continue Reading

Apple AirPods vs Google Glass

You can read a German version of this article here

AirPods vs Glass

I am currently in a mood between anticipation and disappointment about a new gadget: Apple’s upcoming new wireless headphones AirPods. I see a significant potential in the new headphone device that is said to hit the stores in the end of October, and I’d love to try integrating it into my digital life. However, the AirPods’ shape is nearly identical to the one of the default iPhone headphones “EarPods”, and those just do not stay in my ears longer than a few seconds. Any pair of dirt-cheap no-name headphones are fitting better for me. As long as Apple won’t release a second version with a different shape, I won’t shell out the €179 for a pair of AirPods.

That’s a shame of course, because as a concept, I see much more in those little gadgets than just a wireless version of standard in-ear headphones. This Slate article and this one on TechCrunch do a good job explaining the product and the big picture behind. In regards to the strategical meaning for Apple and the implications for the users and the digital landscape, I actually see some major similarities to Google’s (failed) Augmented Reality headset Glass. Let’s have a closer look at that comparison. Continue Reading

Weekly Links & Thoughts #86

Here is this week’s edition of meshedsociety.com weekly, loaded with thoughtful opinion pieces, interesting analyses and significant yet under-reported information bits from the digital and technology world. Published and annotated every Thursday (CET), just in time so you have something good to read over the weekend.

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Length indicator: 1 = short, 2 = medium, 3 = long

  • Yuval Noah Harari on big data, Google and the end of free will (3)
    A brilliant analysis of our age of “dataism”, put into an historical context, by the author of Sapiens, Yuval Noah Harari.
  • Robots Can Restore Our Humanity (2)
    And here we have an optimistic take on how robots and automation will force our society to give up on the scalable efficiency model which is increasingly disfunctional anyway, and to find ways to evolve human work. One of many smart pharagraphs from the piece: “Go check out a children’s playground and show me a child that doesn’t have creativity and imagination. We all have that potential and a strong desire to express that potential. The challenge is that we have been processed by a series of institutions, starting with our school systems, that were designed to squeeze out these attributes in the name of scalable efficiency.”
  • Which Country Would Win in the Programming Olympics? (2)
    In part surprising and generally very insightful rankings about where the world’s best programmers come from. Switzerland is among the leading countries, whereas the U.S. and India didn’t make it into the top 20.
  • Other People’s Money: The Apple Story (1)
    A brief, knowledgeable commentary on the various aspects of the EU commission’s billion dollar tax decisions regarding Apple.
  • Nations Can Be Startups, Too (1)
    The metaphor of a nation as startup is useful because it can totally change one’s thinking of what’s possible.
  • No Filter: DJ Khaled and the FTC’s Snapchat Problem (2)
    With the rise of Snapchat’s and Instagram’s stories feature, ephemeral user-generated content is becoming widespread. That causes headache for regulators such as the U.S. Federal Trade Commission (FTC): One of its tasks is to ensure that advertisements and paid-for product endorsements are clearly marked as such. However, the investigation of violations is difficult if celebrities and influencers such as DJ Khaled get paid for saying things in a Snapchat or Instagram Story that vanishes 24 hours later.
  • How Uber’s Failure in Japan Can Help Startups Everywhere (3)
    A smart analysis of Uber’s failed attempt to apply the “U.S. playbook” everywhere in the world.
  • How Nextdoor reduced racist posts by 75% (2)
    Intelligent user design and dialogues can help to build a less hostile online environment, as the experiments of leading U.S. neighborhood network Nextdoor have proven.
  • Qwant: The encrypted search engine that really could challenge Google (2)
    Informative profile of Qwant, an ambitious search engine founded and based in France, highlighting among other things the challenges that competitors of Google are facing.
  • Alexa, give me the news: How outlets are tailoring their coverage for Amazon’s new platform (3)
    There is a chance that Amazon’s smart home speaker Echo and the corresponding software-based personal assistant Alexa will emerge as an important platform for news distribution. This report details the early trials and experimental approaches by media outlets.
  • How I Used & Abused My Tesla (3)
    The ultimate hype article, featuring a Tesla that has been used as an Uber car as well as the “world’s fastest hotel” on Airbnb. However, apart from the evangelism, the post also provides plenty of interesting insights.
  • Volvo is quietly becoming a tech superpower (2)
    While Tesla is the tech community’s favorite car, most incumbents from the automotive industry are scaling up their tech ambitions as well. Another frontrunner is Volvo, according to this piece.
  • Facebook recommended that this psychiatrist’s patients friend each other (2)
    The strange thing with Facebook is that it is uncomfortably “aware” in moments when users don’t appreciate it, but it fails to be intelligent when it actually would be useful: Like when I am adding a person who stands next to me by typing his/her name, and Facebook doesn’t seem to leverage our (approximate) location to make a quick suggestion.
  • The Difference Between “Remote” and “Remote-First” (2)
    My favorite way of working is remotely, so no one needs to convince me of the appeal of a “remote first” company culture.
  • Rethinking Retail: When Location Is a Liability (2)
    Giant retail chains are struggling in an environment in which their cost-intense portfolio of local stores and the attached old-school mindset is becoming a burden.
  • Indian ISPs Speed Up BitTorrent by ‘Peering’ with a Torrent Site (1)
    Fantastic example of how the torrent technology can be used for innovation.
  • Using the Blockchain to Fuel a P2P Solar Revolution (2)
    One of the sheer unlimited possible use cases of the Blockchain.
  • Victory for Net Neutrality in Europe (1)
    I am putting this link at the end of the list, despite its huge importance. But hopefully everyone has heard the good news already. Thanks to all the activists who relentlessly fought for this over so many years.

Recently on meshedsociety.com

  • The one big question about today’s groundbreaking emerging technologies
    Will Artificial Intelligence (AI), Virtual Reality, autonomous vehicles, electric vehicles, automation & robots, drones, Blockchains and 3D printing reach mass-market adoption all at once, or will a few of these emerging technologies go through more years or even decades of maturing? The answer will shape the next years and decades.

Video of the week

  • Flow of People
    A video showing how long time it takes for 200 people to cross a starting line, depending on their means of transportation. Not sure what to conclude, but obviously, cars take much more space, which causes delays.

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The one big question about today’s groundbreaking emerging technologies

A German version of this article can be found here.

We are living in an extraordinary time, characterized by a continuous acceleration of (digital) progress. The emergence of various groundbreaking technological innovations overlaps. The time period within which their impact unfolds is shorter than ever in history.

The following trends are widely considered the most relevant and the closest to large-scale breakthrough:

  • Artificial Intelligence (AI)
  • Virtual Reality, Augmented Reality, Mixed Reality
  • Autonomous vehicles
  • Electric vehicles
  • Automation & robots
  • Drones (especially for shipping and logistics, but also in military context)
  • Blockchain
  • 3D print

This list is not complete, but it contains the areas which currently receive most public attention, which constantly produce news and which could quickly push economies and societies into a period of much more radical changes than what we have seen so far.

However, the big question is this: Which of these technologies are really ready for prime time? The laws of hypes ensure that no large expectations, prominent backers, public attention and successful pilots can guarantee that a new technology or innovative approach won’t turn out to be unfinished and in need of several more years or even decades of tinkering. Continue Reading

Stories is to Instagram what Streaming was to Netflix

Instagram Stories

Here is a German version of this text.

In less than 2 years, Netflix will celebrate the 20th anniversary since its public launch. Over the period of those 2 decades, the face and business model of the company has changed completely. What started as an US-only DVD-by-mail service became a global platform for on-demand streaming of shows and movies.

At some point after the millennium shift, the company’s CEO Reed Hastings realized that physical media has no future. In order to survive, he had to “pivot” his company and switch to streaming video. But he could not do it from one day to another. He didn’t want to damage the brand and upset its millions of subscribers. Furthermore, he needed the splendid revenue from the DVD business to finance the new initiative. So he introduced streaming as an additional service and turned it into the company’s core only very slowly, over a couple of years. Today, the DVD-by-mail still exists, but has lost 75 % of its members since the peak in 2010. At one point in the future, it will vanish.

The history of Netflix as analogy for Instagram

The Netflix case is one of the rather rare examples where a company managed to radically transform itself before technical advancements and changing customer desires would make it obsolete. What Netflix pulled of can help to understand recent news coming from Instagram.

Instagram just introduced its “Stories” feature, which lets people share ephemeral photos and videos that disappear after 24 hours. As has been widely reported and acknowledged by Instagram’s CEO Kevin Systrom, Stories is almost identical to a Snapchat feature with the same name (“Stories”). Whether one likes it or not doesn’t matter: Instagram Stories is the new thing, and it plays a critical strategic role for the Facebook-owned company: There is a chance that Instagram’s iconic stream of carefully crafted, heavily filtered shots is the equivalent of Netflix’ DVD-by-mail offering and is poised to become outdated and neglected over time. Applying this analogy, Snapchat Stories won’t just be an additional feature within Instagram. It would eventually become the core and heart of the app; what Instagram stands for.

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Certainly, it’s much harder to predict the future of the classical Instagram feed than it was for the Netflix CEO to forecast the decline of the DVD. However, there is a case to be made for seeing Instagram’s scrollable photo & video feed as threatened in the mid- to long term:

Instagram’s feed was built for the early smartphone years

When Instagram launched back in 2010, smartphones just experienced their grand breakthrough. Suddenly, millions carried fairly good cameras in their pockets, and Instagram as well as a couple of copycats leveraged these cameras and people’s excitement about the new ability to share everything they see with the world, instantly and edited for beauty.

In 2016, the novelty of smartphone cameras and Instagram’s filters has worn off. As has the excitement and enthusiasm about fine-tuned photos of coffee art, sunsets, beaches and colorful food compositions. Of course millions still publish these kind of things on the service every day. Once something becomes a habit, it sticks. Nevertheless, over time and with new, more innovative and more creative services, an existing app concept can start to feel antiquated. This is exactly what Snapchat Stories did to Instagram: It made Instagram and its endless scrolling look and feel a bit dated. The seamless sharing and consumption of videos (and photos) on Snapchat is just a more modern, contemporary and fun experience (the clunky, not intuitive user interface aside). Also, after years of edited Instagram photos showing the happy, pretty and sometimes artificial sides of life, authenticity is in great demand. Snapchat Stories’ ephemeral character – meaning that photos and videos can only be watched for 24 hours – totally hit a nerve.

Usage patterns of long-term users matter

Again, it is hard to predict the future of the Instagram feed. The app keeps growing and it just crossed the 500 million active user milestone. However, what’s more interesting is whether early users are still as much into Instagram as before. At least in the US, the user numbers seem to have stalled. Among US teens, Snapchat has risen to become the “most important social network”. Also in the US, Snapchat has overtaken Instagram regarding the amount of time users spend in the app.

These statistics don’t tell too much about usage patterns of long-term Instagram users. But considering these statistics and factoring in the general excitement about video and services specifically built for video as well as the common human tendency to seek new experiences, I’d say chances are bigger that Instagram’s feed won’t exist anymore in 5 years than that it still will exist. However, the only entity that might be able to make an accurate prediction right now based on actual user data is Instagram itself. And the fact that it launched Stories the way it did and basically forced it into everyone’s field of attention – even though Stories must be considered a completely different product than Instagram’s scrollable feed – is an indicator for that the company could be witnessing, on average, decreasing user activity of certain user groups.

What happens next

In the end, there are 2 ways to understand the launch of Instagram Stories: Either CEO Kevin Systrom and his boss, Facebook CEO Mark Zuckerberg, think that Instagram should accommodate two or even more different types of services within one app in order to compete with Snapchat (in fact, Snapchat pretty much also consists of multiple different products). Or they indeed see Snapchat Stories as something comparable to Netflix’s early streaming ambitions: A new service which eventually could replace the original one. That of course would require Stories to become a hit. At the moment, even Systrom and Zuckerberg probably don’t have enough internal data to know for sure that Stories will catch on – probably. So obviously they won’t have decided yet about a roadmap for abandoning the feed. But their reasoning might go like this: If user adoption for Stories looks good and reaches certain set Key Performance Indicators (KPA), it will be pushed hard and given an increasing amount of attention and room within the Instagram app. If that happens, the importance of and activity within the classical Instagram feed will naturally drop. And that would be its death*.

Instagram Stories has the potential to be a pivot akin to the one Netflix did. But it all depends on whether users like it, of course.

*There is bonus scenario: If user adoption goes well, Instagram could eventually launch a second app and force people who started to enjoy the Stories feature into that one, similarly to how Facebook proceeded with spinning off Messenger. But that would preserve Instagram the way it is and thus only makes sense if Instagram’s internal numbers do NOT indicate, on average, a decreasing activity among long-term users.

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