Opinion: Social media is not just for hustlers anymore

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Opinion: Social media is not just for hustlers anymore
Social 1.0 vs Social 2.0Photo by dole777 on Unsplash
The World Wide Web, as we know it, has been evolving at a breakneck speed over the years. Yet, it hit the mainstream just 25 years back, and within that period, it has already undergone multiple transformations.
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What is Web 3.0?

The early period of the Internet, or Web 1.0, was when we accessed it through our desktop browsers — laptops were a luxury, Wi-Fi just about getting started, and mobile data non-existent — and visited portals like Yahoo and MSN. The internet was in a ‘Read’ mode and we had limited ability to interact with it.

Opinion: Social media is not just for hustlers anymore
The evolution of web over the years.Business Insider India

That changed in 2005, the period of Web 2.0 when we could start interacting with the Internet. Suddenly blogging, writing reviews on Yelp and commenting on articles became a way of life. And Web 2.0 saw the rise of an exciting new breed of ‘Social’ companies like Orkut, Facebook, Twitter, Insta — I call them Social 1.0 — as well as other platform companies such as Airbnb and Uber. Today, we are in the midst of the evolution of Web 2.0 and many experts believe that it still has a long way to go.

So, what’s Web 3.0? Well, depending upon who you ask and the time of the day, you will get answers like Blockchain, Crypto, DeFi, dApps, DAO, NFTs and so on! Fundamentally, it is an obsession around the themes of trust-less computing, decentralisation and, in a very utopian way, deregulation. But was is it really all about?

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I believe that underlying these technology trends, Web 3.0 is really about assertion for greater control by the two important stakeholders of the Internet — the creators and the consumers — in terms of how they earn $$ on various Social platforms and their data privacy. And not so much about the technological building blocks like NFT and blockchain – that is more of a religious debate within the technology community, while the larger issue is about how can we hand back control to the stakeholders.

So, what played out in Social 1.0?

The primary currency that you earned in Social 1.0 was your social influence. It was measured in terms of likes, retweets and followers. And there were limited opportunities to monetise on-platform. So, creators focused on building a large social influence and marketing their content or courses to their followers via links to other adjacent platforms like Gumroad. In time, affiliate marketing also caught on and soon the ‘influencers’ started plugging Brands to their followers, earning money for promotion or earning a commission as a percentage of the sales. All this led to a scenario where influencers created “shrill” and “clickbait” content to get more followers, more clicks and more revenue.

For us consumers, who were getting a firehose of content, it seemed like a good deal as it was for free. Or was it? We soon realised that we had been paying for the services with our data! Our interests, our social graphs, our preferences weren’t private after all - they were sold to the advertisers with the highest bid. Worse, there was no incentive for the Social 1.0 companies to discourage fake news, trolling, bullying and shaming on their platform — that only meant more visits, more engagement and thereby more opportunity to serve ads to the users!

Social 2.0

Social 2.0 is a term that I use for companies that are trying to change the status quo, and are putting the interests of the creators and the consumers front and center. Their focus is on having a flexible and transparent business model for creators to earn, with a huge emphasis on data privacy. It is about companies willing to give the control back to the stakeholders, doesn’t matter whether the company is built on top of Web 2.0 or Web 3.0 technologies.

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The torchbearer of this revolution is Patreon; it was born when its co-founder, Jack Conte, a musician, had an epiphany: Instead of spending his time, effort and $$ on promoting music videos on YouTube (and earning a measly $180 if he was lucky enough to get a million views), what if he simply focused his energies on identifying his 18 super-fans who would be willing to donate $10 each month to support him? This concept of micro-tipping caught on and today there are more than 250,000 creators on this platform! No wonder then that Patreon, in its latest funding round of $155M, was valued at $4Bn.

Similarly, Substack is a Social 2.0 company (built on top of Web 1.0 technologies), which enables writers to start email newsletters and earn via subscriptions. Today, some of the top writers earn close to $500K annually, and seasoned journalists have quit their cushy jobs with institutions like NYT and Buzzfeed to focus on writing on Substack.

Subscription is King

The subscription-led models of Social 2.0 companies like Patreon, Substack, Twitch and others enable creators to focus on building a steady annuity income and start thinking of Social as a serious business with predictable income-flows. Kevin Kelly, a respected editor of Wired, had predicted in 2008 that a creator needs just a thousand true-fans to earn a living. Today, the power of distribution of the Internet and the proliferation of Social 2.0 companies ensure that any creator can find his true fans from across the globe.

More importantly, the focus on narrow-casting, instead of trying to build a fan-base of millions, gives the creators more creative freedom — as long as there are 1000 fans who see value in their creations and are willing to support them, they are free to create what they want and don’t have to worry about conforming to popular taste or the constraints of ad-based, dopamine-led monetisation models.

This freedom from AI algorithms, which identify and promote the most “engaging” content is liberating. Creators are in more control of the content, how they wish to price it and, in some cases, about who finally owns the customer. For example, platforms like Substack allow the writer to take his mailing list with him, in case he decides to move his business to another platform.
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Data Privacy

The subscription-led model, where the platforms take a % of the earnings, ensures that they don’t need to store user data and monetise it via ads, leading to better data privacy. Further, not having to rely upon dopamine-based ad models means that platforms are not incentivised anymore to promote sensationalism or fake news just to drive up engagement on the platform, leading to a better overall user experience.

Unbundling

One of the biggest impacts of Social 2.0 is the unbundling of the Big-Tech — instead of users aggregating to a handful of Social 1.0 companies, creators and their fans are flocking to a multitude of platforms that offers their niche or community the best solution. From game-streaming moving to Twitch, writers to Substack and unbundling of Facebook Groups to paid communities on Slack and Discord channels, we will see Social 2.0 companies proliferating in various forms and shapes that it might be difficult for us to even recognise some of them as ‘Social’.

Hustle vs Creating Value

Thus, we can see that Social 2.0 is going to create a class of creators who, instead of constantly worrying about having to grow their follower-base, create “clickbait” and “shrill” content, can now focus on creating meaningful content, which they and their fans enjoy, and build a sound business around it. Hustling in front of a million fans is going to give way to creating value for a thousand true fans. And that is going to fundamentally alter the landscape of the Creator Economy.

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SEE ALSO:
Facebook, Microsoft and others look towards the $1 trillion dollar ‘metaverse’ opportunity — but that contradicts the base philosophy behind Web 3.0
Bitcoin, Ethereum, and others are half-way down from their record highs, but investors are still better off than they were a year ago
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