Why The End Is Near For Facebook | Deep Questions with Cal Newport

00:00:00.000 | Uh, but first I want to do a quick news reaction because it's a, I find this

00:00:06.360 | article to be a, uh, confirmation of something I've been talking about on

00:00:10.880 | the show, something that I have been predicting, and now we see experts who

00:00:14.300 | are confirming what I've been talking about.

00:00:17.920 | So here's the article.

00:00:19.400 | This came to me in my interesting account, newport.com email address.

00:00:23.760 | Uh, it's from June 16th.

00:00:26.000 | So it's a week or two ago and it's TikTok.

00:00:30.560 | An executive from TikTok that is to some degree dunking on Facebook.

00:00:36.720 | And I want to get into details what they're saying here.

00:00:38.280 | And if you're watching this on YouTube, you'll be able to see the article.

00:00:40.720 | If you're listening, I'll tell you what I'll tell you what's on the screen.

00:00:43.480 | All right.

00:00:44.760 | So they're quoting in this article, a executive from TikTok, their president

00:00:51.600 | of global business solutions, and he's making a clear distinction between

00:00:57.360 | TikTok and Facebook that I have made before.

00:00:59.720 | So this executive named Blake Chanley says, Facebook is a social platform.

00:01:04.600 | They built all their algorithms based on the social graph.

00:01:08.080 | That is their core competency.

00:01:10.200 | Ours is not.

00:01:11.880 | All right.

00:01:14.000 | He goes on to clarify what is TikTok.

00:01:15.800 | We are an entertainment platform.

00:01:18.240 | The difference is significant.

00:01:20.760 | It's a massive difference.

00:01:24.840 | Now, this is something I've talked about multiple times before on the show, this

00:01:28.200 | idea that TikTok and its popularity actually represents an important transition

00:01:33.840 | in the landscape of these attention economy apps, and I actually think

00:01:37.880 | it is a positive transition.

00:01:39.160 | So it's easy instinctually, if you're a social media skeptic, to look at TikTok

00:01:44.560 | and everyone looking at this and the 600 million users and be like, oh man, we're

00:01:47.440 | going down the same road, but I actually think it's positive.

00:01:49.440 | And this is why, what this executive is saying.

00:01:51.720 | TikTok is not playing the same game as Facebook.

00:01:55.680 | It is not a social company.

00:01:56.960 | Their revenue stream is not based off of monetizing a social graph.

00:02:02.320 | It provides entertainment straight to the brainstem entertainment.

00:02:07.000 | If you are bored, if you are trying to escape a moment of existential despair,

00:02:12.880 | whatever the circumstance that wants you to get out of your current moment, you

00:02:16.520 | pull up TikTok's app, it's these short videos, algorithmically optimized and

00:02:20.440 | selected, boom, boom, boom.

00:02:21.880 | One after another, they hit these buttons in your brainstem.

00:02:24.560 | Slack jaw, drool coming out of the side of your mouth, just locked in, distracted.

00:02:29.640 | They are just optimizing, distracting entertainment.

00:02:33.320 | No attempt to say, here's what your friend is up to.

00:02:36.720 | Here's an article that was shared by your cousin.

00:02:38.800 | Forget all that, just straight to the brainstem entertainment.

00:02:41.920 | What the executive is saying is that Facebook, that's not what they were,

00:02:46.000 | but they're trying to do this.

00:02:47.680 | This is the, the premise of this article is that Facebook is trying to, as I

00:02:54.280 | previewed, they were increasingly shift over towards this TikTok model.

00:02:59.680 | Let me just put a quote here from the article.

00:03:01.720 | Facebook plans to modify its primary feed to look more like TikTok by

00:03:06.000 | recommending more content, regardless of whether it's shared by friends.

00:03:09.840 | And of course, why are they doing this?

00:03:12.520 | It's because they are struggling.

00:03:13.920 | Here's the numbers from the article.

00:03:15.240 | The parent company of Facebook, Meta's stock price is down 52% this year,

00:03:19.480 | underperforming the Nasdaq, which only dropped 32%.

00:03:23.960 | In April, they said revenue in the second quarter could

00:03:26.240 | drop from a year earlier.

00:03:27.320 | That'd be the first time that's ever happened.

00:03:28.680 | So Facebook is struggling.

00:03:29.840 | They see TikTok being successful.

00:03:31.160 | Like, let's be more like TikTok.

00:03:32.320 | I think, as I've said before, that is the beginning of the end for the

00:03:38.200 | social media platform monopolies.

00:03:40.440 | The one thing, 2010 Facebook, when it was really starting to get humming, the one

00:03:47.440 | thing it had going for it was network effects.

00:03:49.680 | The people you know are on here.

00:03:54.040 | If the primary use of this network is to connect with and see what people you know

00:03:58.080 | are up to, you have to come to our network and no one can compete with us because no

00:04:02.240 | one is going to be able to get everyone you know onto their network.

00:04:04.600 | That is very hard.

00:04:05.440 | Once we've locked in with our first mover advantage, your cousin, your roommate,

00:04:09.840 | your brother, your sister, they're all on here.

00:04:12.200 | We have this first mover advantage.

00:04:14.280 | You have to use our network because that's where the people you know are.

00:04:17.320 | As soon as you move out of the game of connecting the people you know, facilitating

00:04:23.160 | the sharing of information between people who already know each other.

00:04:25.560 | Once you move out of that game and move to the alternative game of brain stem

00:04:29.840 | manipulation, pure distraction, maximizing time on screen, we are the thing you want

00:04:37.160 | to look at when you're trying to escape the current moment, you lose that advantage.

00:04:40.520 | It no longer matters that my cousin, my roommates, my brother, my sister on your

00:04:46.960 | platform, if all I'm doing on that, as it says right here in this article is seeing

00:04:52.400 | content recommended by an algorithm that has nothing to do with what's going on with my

00:04:56.880 | friends.

00:04:57.240 | So yes, maybe in the short term, it'll help Facebook stave off some of its numbers

00:05:01.520 | drops because they'll get more time on screen.

00:05:03.680 | But as I've said before, and I want to emphasize again, the biggest conclusion of

00:05:07.680 | this shift among these players is that you are now in a competitive pool where you don't

00:05:12.040 | have the powerful network effects of people I specifically know need to be on there.

00:05:15.760 | And you are competing with anyone else who's trying to provide entertainment and

00:05:19.360 | distraction.

00:05:20.440 | That is a very competitive pool.

00:05:22.760 | And it is a pool in which I think it is going to be impossible for any one company to

00:05:26.880 | dominate in the way that let's say a Facebook or an Instagram or a Twitter dominated our

00:05:31.480 | attention five, six years ago.

00:05:32.920 | If you are just an app on my phone that can distract me, that app is next to my podcast

00:05:38.880 | player.

00:05:39.240 | That app is next to YouTube videos, that app is next to video streamers investing

00:05:46.480 | billions of dollars in high end entertainment that can come at me and be like any, unlike

00:05:52.320 | anything else that we have seen before.

00:05:55.200 | Two hundred million dollar episodic series is competing with that is competing with

00:06:00.880 | video games.

00:06:01.640 | It's competing with books and audio books.

00:06:04.800 | It's competing with other activities you might do in the analog world.

00:06:09.280 | That is a much more competitive space.

00:06:11.040 | And I think once you're in that pool where all we're offering is.

00:06:15.040 | Distraction entertainment, all we're trying to do is to get eyes on screen.

00:06:18.080 | Necessarily, people's digital interactions are going to fragment and go more niche.

00:06:24.040 | There is no reason for there to be a dominant player.

00:06:26.560 | TikTok is having a moment, but there's no reason for it to have to be something that

00:06:30.680 | everyone uses.

00:06:31.480 | Most people don't.

00:06:32.280 | It's popular, but there's no big issue if you don't.

00:06:35.560 | In a world of just distraction, people are going to fragment or segment towards

00:06:39.240 | distractions that they like in particular.

00:06:41.960 | You're really into a certain type of sports.

00:06:44.840 | Well, you're listening to that type of sports radio and podcasts by athletes in

00:06:48.640 | that sports.

00:06:49.320 | Maybe you're a political conservative and you're over in like the Ben Shapiro

00:06:54.560 | ecosystem, which has its own videos and its own shows all about stuff that you're

00:06:58.560 | interested in.

00:06:59.160 | Maybe you're a board game enthusiast.

00:07:01.880 | There's a place for that.

00:07:03.040 | Maybe you're a Cal Newport type.

00:07:05.640 | You're interested in deep life and getting away from the more distracted living.

00:07:08.760 | So we have my videos, my podcast, my books.

00:07:11.160 | It necessarily fragments once you no longer have the binding glue of the

00:07:15.600 | activity you're doing requires people, you know, to be here.

00:07:17.840 | So I've been saying this, this article confirms it.

00:07:20.800 | Here it is.

00:07:21.320 | The head of tech talk saying, I'm not the head, but an executive at tech talk saying

00:07:24.720 | Facebook is trying to become more like us because they want their views to go up.

00:07:29.600 | But good luck.

00:07:32.280 | And I think he's right.

00:07:33.800 | You know, good luck.

00:07:34.800 | If you try to become an entertainment company, you compete with everyone else.

00:07:37.400 | So I see that as positive.

00:07:38.640 | I'm, I like tech talk, not actually using it.

00:07:41.480 | But I like what it's doing.

00:07:42.560 | Tick tock is causing these other platforms that so had us captured and had such a

00:07:48.640 | capture on our culture is causing them to accidentally knock the legs out of their

00:07:52.400 | own proverbial table that get a short-term gain at the.

00:07:56.640 | In exchange for their, their long-term downfall, which I think is good.

00:08:00.080 | Social media universalism.

00:08:02.440 | When there was three platforms, everyone had to use.

00:08:04.400 | I think we've seen for now it was bad for our civic culture.

00:08:07.080 | It was bad for our mental health.

00:08:08.600 | It was bad for our ability to do anything else.

00:08:10.720 | I don't like that moment where we all had to use three platforms, too much control,

00:08:14.840 | too much power, too much negative externalities.

00:08:17.960 | So this is good.

00:08:19.360 | Beginning of the end for that era of monopolies.

00:08:24.600 | So we shall see.

00:08:27.720 | You know what they said in this article, Jesse, that was a good analogy.

00:08:33.600 | They said, Facebook, tick-tock was saying Facebook will never succeed at being

00:08:37.160 | tick-tock because you can't shift core competencies.

00:08:40.600 | And the analogy they gave is when Google tried to compete with Facebook.

00:08:44.600 | So remember Google plus vaguely now that you say that, yeah, they put Google

00:08:49.520 | spent millions and millions.

00:08:51.120 | And this was during Facebook's rise.

00:08:53.720 | Like we want to do that.

00:08:55.040 | They spent all this money and they had a huge advantage to Google had a huge

00:08:57.760 | advantage.

00:08:58.160 | If we can just make Google plus native to all of these Google apps that everyone's

00:09:02.920 | already using Gmail, the calendars, and they did.

00:09:06.280 | And it still failed.

00:09:07.240 | And the reason why it failed is because Facebook had been built from the ground

00:09:11.080 | up to be a social graph company.

00:09:12.520 | And they just did it really well.

00:09:13.640 | Google had not, and they could never get over there.

00:09:15.440 | And so in this article, the tick-tock executive is saying, good luck.

00:09:18.640 | You're going to be the Google plus of these short videos.

00:09:20.960 | We know how to do it.

00:09:21.960 | Our whole company's built around it.

00:09:23.240 | You don't, it'll never be as good.

00:09:25.080 | You're not going to peel people off.

00:09:26.400 | But I like the fact that they're going to batter up their ship against the shore

00:09:30.640 | here, trying to do it because.

00:09:32.160 | Man, we need to get past this moment of.

00:09:35.520 | Two platforms.

00:09:36.720 | Did you listen to Zuckerberg's interviews with your buddy Lex and Tim?

00:09:41.600 | Yes.

00:09:42.920 | I listened to the Lex one.

00:09:44.480 | He's on with Tim too.

00:09:45.960 | Yeah.

00:09:46.680 | I think whichever one came out first, I listened to the Lex one.

00:09:49.120 | Lex came out first.

00:09:49.680 | It's the problem with doing a tour like this for someone like that.

00:09:52.120 | And then I was thinking, I don't know if I need to listen to.

00:09:54.880 | It's like a book tour.

00:09:56.920 | Yeah.

00:09:57.120 | I don't need to listen to him again on another show though.

00:09:58.880 | I'm sure Tim's interview was good as well.

00:10:00.520 | Yeah.

00:10:00.920 | Um, yeah, it was interesting.

00:10:03.600 | He'll want to be on your show soon.

00:10:04.800 | See, I'm not of this school of thought, this like Zuckerberg.

00:10:09.040 | I think I'm, I'm with Lex on this.

00:10:11.080 | Zuckerberg is not the devil, you know?

00:10:13.880 | And, uh, I don't like the narrative.

00:10:16.800 | So I've, I've been a big opponent of some of these services.

00:10:21.600 | It's not because I think they're nefarious, right?

00:10:26.080 | I don't think Zuckerberg is the devil.

00:10:28.200 | I, I think it's too simplistic when we have to try to contrive these plotlines.

00:10:32.400 | Of like, they're purposefully ignoring all this harm they're doing because

00:10:35.760 | they're so evil or this or that I don't think that's the case.

00:10:38.640 | I just think social media universalism, which I can't blame them.

00:10:42.720 | I mean, Hey, if everyone's using this, we want to grow as big as possible.

00:10:45.000 | I just think it was bad for our culture.

00:10:46.280 | This moment of universalism where everyone felt like they had to use the platforms.

00:10:50.880 | I think that is a problem.

00:10:52.680 | I think if you have a platform, everyone is using, there's nothing you can do.

00:10:55.520 | That's going to prevent that from probably having lots of negative externalities.

00:10:58.360 | I don't think a lot of those are planned.

00:11:00.040 | I mean, I think Facebook, they try to solve these problems.

00:11:02.840 | They spend a lot of money on it.

00:11:03.960 | Like we'll do anything you say we should do.

00:11:05.720 | It's a losing battle because if you have 600 million daily active users from all

00:11:12.480 | sorts of walks of life all over the world, it's like an impossible challenge

00:11:15.160 | to make that into some sort of interesting.

00:11:16.840 | The only solution that is segmentation.

00:11:18.880 | No problem having small groups of people figuring out how they want to interact,

00:11:23.440 | what their standards are, what their norms that works out fine.

00:11:26.720 | 600 million people.

00:11:27.840 | It's not natural.

00:11:30.240 | Yeah.

00:11:31.040 | Do you think he wants to work for the rest of his life?

00:11:33.320 | I don't know.

00:11:34.520 | I mean, don't bet against them long-term.

00:11:37.160 | All I say is he's one of the only CEOs from that boom in that second internet

00:11:42.880 | boom period who's still CEO, but he's young.

00:11:46.680 | Yeah.

00:11:47.440 | I mean, you gotta be a bit of a killer.

00:11:50.160 | Yeah.

00:11:50.760 | Right.

00:11:51.200 | The, the, the, the, the, the running that company at 22, how do you survive that?

00:11:55.360 | With the investor pressure to stay in charge.

00:11:57.760 | I mean, this guy, he's gotta be a ruthless guy.

00:12:00.600 | That is a hard game of Thrones style challenge.

00:12:04.520 | The Google guys didn't last.

00:12:06.480 | Uh, the Instagram guys didn't last.

00:12:09.240 | The Twitter founders didn't last or she was out of there.

00:12:12.680 | It's very difficult.

00:12:14.400 | The run a company, start a company in your young twenties, have it become a $500

00:12:19.760 | billion company and still be the CEO.

00:12:21.640 | That means you're cracking skulls and stabbing people in the back.

00:12:24.520 | Skulls and stabbing people in the ribs as they're like in the back

00:12:27.400 | room of the castle throne room.

00:12:28.520 | Like that's not just, you're a nice guy working hard.

00:12:31.000 | I think you have a business.

00:12:32.000 | There's some sort of business instinct there.

00:12:33.440 | That's very difficult to do.

00:12:34.520 | Steve jobs got kicked out.

00:12:35.880 | No one makes it.

00:12:36.720 | Gates is the only other person I can think of.

00:12:38.320 | Bill Gates is the only person I can think.

00:12:40.800 | Well, maybe Larry Ellison.

00:12:42.880 | There's other examples, but Gates is who comes to mind.

00:12:45.440 | Gates started Microsoft as a kid.

00:12:47.360 | And it almost identical situation is Zuckerberg dropping out of

00:12:51.840 | Harvard after his sophomore year.

00:12:54.360 | It's like exactly the same as Zuckerberg.

00:12:56.040 | And he held onto that company until he was ready to leave,

00:13:00.800 | you know, 30 years later.

00:13:02.240 | So like Gates and Zuckerberg Zuckerberg is Gatesian Amazon.

00:13:05.480 | Yeah.

00:13:07.000 | Bezos was older when he, you know, he was youngish, but, but he was at

00:13:10.720 | D E Shaw sort of analyzing the industry and was trying to figure out, got it.

00:13:16.880 | How do we make a play for e-commerce and the internet?

00:13:19.840 | And he had no connection to books other than he just, so D E Shaw is

00:13:22.640 | this kind of weird, cool, quantitative investment fund.

00:13:25.880 | Um, it's, they give people free reign and they hire only the smartest people,

00:13:30.920 | but he was like very systematically.

00:13:32.600 | What, how do we make e-commerce a thing?

00:13:35.640 | And he worked all the numbers.

00:13:37.080 | It was like books, books, the way it works and that's the

00:13:40.760 | warehouses and the shipping.

00:13:42.200 | Like we can make books work, but you're right.

00:13:44.040 | Bezos was another example of, of he, he held on.

00:13:49.000 | It kind of goes along with Mark and him working all the time.

00:13:51.680 | It's kind of like what you're talking about when you answered that question

00:13:54.200 | in an earlier episode about just people always wanting to work and be doing stuff.

00:14:01.280 | It's kind of like that.

00:14:02.720 | Yeah.

00:14:03.280 | Yeah.

00:14:03.640 | They're driven guys.

00:14:04.560 | I mean, Zuckerberg does all these challenges.

00:14:06.840 | Yeah.

00:14:07.480 | You know, the personal challenges.

00:14:08.840 | Like I'm going to learn a language or master this skill or

00:14:13.960 | only, you know, not eat meat for a year.

00:14:16.720 | It's like on top of his work, he's constantly giving himself

00:14:19.920 | other types of personal challenges.

00:14:21.160 | I mean, don't that's, that's rare again, to stay in charge of a company like that,

00:14:25.120 | to have the extra energy to, to do, do what you do though.

00:14:29.880 | I don't think Facebook is long for this world, but what can you do?

00:14:34.760 | I mean, they rode that moment as well as you could.

00:14:39.720 | And I, they did not successfully evolve beyond that.

00:14:45.280 | I think Google was better at that.

00:14:46.680 | Amazon was better at that.

00:14:47.720 | They evolved very aggressively.

00:14:49.200 | I think Facebook kind of doubled down on just being a social

00:14:53.280 | media platform monopoly.

00:14:55.320 | And we want to do that well.

00:14:57.160 | I don't know how long that'll last.

00:14:59.520 | [MUSIC PLAYING]

00:15:02.880 | (upbeat music)

Why The End Is Near For Facebook | Deep Questions with Cal Newport

Chapters