Uh, but first I want to do a quick news reaction because it's a, I find this article to be a, uh, confirmation of something I've been talking about on the show, something that I have been predicting, and now we see experts who are confirming what I've been talking about.

So here's the article. This came to me in my interesting account, newport.com email address. Uh, it's from June 16th. So it's a week or two ago and it's TikTok. An executive from TikTok that is to some degree dunking on Facebook. And I want to get into details what they're saying here.

And if you're watching this on YouTube, you'll be able to see the article. If you're listening, I'll tell you what I'll tell you what's on the screen. All right. So they're quoting in this article, a executive from TikTok, their president of global business solutions, and he's making a clear distinction between TikTok and Facebook that I have made before.

So this executive named Blake Chanley says, Facebook is a social platform. They built all their algorithms based on the social graph. That is their core competency. Ours is not. All right. He goes on to clarify what is TikTok. We are an entertainment platform. The difference is significant. It's a massive difference.

Now, this is something I've talked about multiple times before on the show, this idea that TikTok and its popularity actually represents an important transition in the landscape of these attention economy apps, and I actually think it is a positive transition. So it's easy instinctually, if you're a social media skeptic, to look at TikTok and everyone looking at this and the 600 million users and be like, oh man, we're going down the same road, but I actually think it's positive.

And this is why, what this executive is saying. TikTok is not playing the same game as Facebook. It is not a social company. Their revenue stream is not based off of monetizing a social graph. It provides entertainment straight to the brainstem entertainment. If you are bored, if you are trying to escape a moment of existential despair, whatever the circumstance that wants you to get out of your current moment, you pull up TikTok's app, it's these short videos, algorithmically optimized and selected, boom, boom, boom.

One after another, they hit these buttons in your brainstem. Slack jaw, drool coming out of the side of your mouth, just locked in, distracted. They are just optimizing, distracting entertainment. No attempt to say, here's what your friend is up to. Here's an article that was shared by your cousin.

Forget all that, just straight to the brainstem entertainment. What the executive is saying is that Facebook, that's not what they were, but they're trying to do this. This is the, the premise of this article is that Facebook is trying to, as I previewed, they were increasingly shift over towards this TikTok model.

Let me just put a quote here from the article. Facebook plans to modify its primary feed to look more like TikTok by recommending more content, regardless of whether it's shared by friends. And of course, why are they doing this? It's because they are struggling. Here's the numbers from the article.

The parent company of Facebook, Meta's stock price is down 52% this year, underperforming the Nasdaq, which only dropped 32%. In April, they said revenue in the second quarter could drop from a year earlier. That'd be the first time that's ever happened. So Facebook is struggling. They see TikTok being successful.

Like, let's be more like TikTok. I think, as I've said before, that is the beginning of the end for the social media platform monopolies. The one thing, 2010 Facebook, when it was really starting to get humming, the one thing it had going for it was network effects. The people you know are on here.

If the primary use of this network is to connect with and see what people you know are up to, you have to come to our network and no one can compete with us because no one is going to be able to get everyone you know onto their network. That is very hard.

Once we've locked in with our first mover advantage, your cousin, your roommate, your brother, your sister, they're all on here. We have this first mover advantage. You have to use our network because that's where the people you know are. As soon as you move out of the game of connecting the people you know, facilitating the sharing of information between people who already know each other.

Once you move out of that game and move to the alternative game of brain stem manipulation, pure distraction, maximizing time on screen, we are the thing you want to look at when you're trying to escape the current moment, you lose that advantage. It no longer matters that my cousin, my roommates, my brother, my sister on your platform, if all I'm doing on that, as it says right here in this article is seeing content recommended by an algorithm that has nothing to do with what's going on with my friends.

So yes, maybe in the short term, it'll help Facebook stave off some of its numbers drops because they'll get more time on screen. But as I've said before, and I want to emphasize again, the biggest conclusion of this shift among these players is that you are now in a competitive pool where you don't have the powerful network effects of people I specifically know need to be on there.

And you are competing with anyone else who's trying to provide entertainment and distraction. That is a very competitive pool. And it is a pool in which I think it is going to be impossible for any one company to dominate in the way that let's say a Facebook or an Instagram or a Twitter dominated our attention five, six years ago.

If you are just an app on my phone that can distract me, that app is next to my podcast player. That app is next to YouTube videos, that app is next to video streamers investing billions of dollars in high end entertainment that can come at me and be like any, unlike anything else that we have seen before.

Two hundred million dollar episodic series is competing with that is competing with video games. It's competing with books and audio books. It's competing with other activities you might do in the analog world. That is a much more competitive space. And I think once you're in that pool where all we're offering is.

Distraction entertainment, all we're trying to do is to get eyes on screen. Necessarily, people's digital interactions are going to fragment and go more niche. There is no reason for there to be a dominant player. TikTok is having a moment, but there's no reason for it to have to be something that everyone uses.

Most people don't. It's popular, but there's no big issue if you don't. In a world of just distraction, people are going to fragment or segment towards distractions that they like in particular. You're really into a certain type of sports. Well, you're listening to that type of sports radio and podcasts by athletes in that sports.

Maybe you're a political conservative and you're over in like the Ben Shapiro ecosystem, which has its own videos and its own shows all about stuff that you're interested in. Maybe you're a board game enthusiast. There's a place for that. Maybe you're a Cal Newport type. You're interested in deep life and getting away from the more distracted living.

So we have my videos, my podcast, my books. It necessarily fragments once you no longer have the binding glue of the activity you're doing requires people, you know, to be here. So I've been saying this, this article confirms it. Here it is. The head of tech talk saying, I'm not the head, but an executive at tech talk saying Facebook is trying to become more like us because they want their views to go up.

But good luck. And I think he's right. You know, good luck. If you try to become an entertainment company, you compete with everyone else. So I see that as positive. I'm, I like tech talk, not actually using it. But I like what it's doing. Tick tock is causing these other platforms that so had us captured and had such a capture on our culture is causing them to accidentally knock the legs out of their own proverbial table that get a short-term gain at the.

In exchange for their, their long-term downfall, which I think is good. Social media universalism. When there was three platforms, everyone had to use. I think we've seen for now it was bad for our civic culture. It was bad for our mental health. It was bad for our ability to do anything else.

I don't like that moment where we all had to use three platforms, too much control, too much power, too much negative externalities. So this is good. Beginning of the end for that era of monopolies. So we shall see. You know what they said in this article, Jesse, that was a good analogy.

They said, Facebook, tick-tock was saying Facebook will never succeed at being tick-tock because you can't shift core competencies. And the analogy they gave is when Google tried to compete with Facebook. So remember Google plus vaguely now that you say that, yeah, they put Google spent millions and millions. And this was during Facebook's rise.

Like we want to do that. They spent all this money and they had a huge advantage to Google had a huge advantage. If we can just make Google plus native to all of these Google apps that everyone's already using Gmail, the calendars, and they did. And it still failed.

And the reason why it failed is because Facebook had been built from the ground up to be a social graph company. And they just did it really well. Google had not, and they could never get over there. And so in this article, the tick-tock executive is saying, good luck.

You're going to be the Google plus of these short videos. We know how to do it. Our whole company's built around it. You don't, it'll never be as good. You're not going to peel people off. But I like the fact that they're going to batter up their ship against the shore here, trying to do it because.

Man, we need to get past this moment of. Two platforms. Did you listen to Zuckerberg's interviews with your buddy Lex and Tim? Yes. I listened to the Lex one. He's on with Tim too. Yeah. I think whichever one came out first, I listened to the Lex one. Lex came out first.

It's the problem with doing a tour like this for someone like that. And then I was thinking, I don't know if I need to listen to. It's like a book tour. Yeah. I don't need to listen to him again on another show though. I'm sure Tim's interview was good as well.

Yeah. Um, yeah, it was interesting. He'll want to be on your show soon. See, I'm not of this school of thought, this like Zuckerberg. I think I'm, I'm with Lex on this. Zuckerberg is not the devil, you know? And, uh, I don't like the narrative. So I've, I've been a big opponent of some of these services.

It's not because I think they're nefarious, right? I don't think Zuckerberg is the devil. I, I think it's too simplistic when we have to try to contrive these plotlines. Of like, they're purposefully ignoring all this harm they're doing because they're so evil or this or that I don't think that's the case.

I just think social media universalism, which I can't blame them. I mean, Hey, if everyone's using this, we want to grow as big as possible. I just think it was bad for our culture. This moment of universalism where everyone felt like they had to use the platforms. I think that is a problem.

I think if you have a platform, everyone is using, there's nothing you can do. That's going to prevent that from probably having lots of negative externalities. I don't think a lot of those are planned. I mean, I think Facebook, they try to solve these problems. They spend a lot of money on it.

Like we'll do anything you say we should do. It's a losing battle because if you have 600 million daily active users from all sorts of walks of life all over the world, it's like an impossible challenge to make that into some sort of interesting. The only solution that is segmentation.

No problem having small groups of people figuring out how they want to interact, what their standards are, what their norms that works out fine. 600 million people. It's not natural. Yeah. Do you think he wants to work for the rest of his life? I don't know. I mean, don't bet against them long-term.

All I say is he's one of the only CEOs from that boom in that second internet boom period who's still CEO, but he's young. Yeah. I mean, you gotta be a bit of a killer. Yeah. Right. The, the, the, the, the, the running that company at 22, how do you survive that?

With the investor pressure to stay in charge. I mean, this guy, he's gotta be a ruthless guy. That is a hard game of Thrones style challenge. The Google guys didn't last. Uh, the Instagram guys didn't last. The Twitter founders didn't last or she was out of there. It's very difficult.

The run a company, start a company in your young twenties, have it become a $500 billion company and still be the CEO. That means you're cracking skulls and stabbing people in the back. Skulls and stabbing people in the ribs as they're like in the back room of the castle throne room.

Like that's not just, you're a nice guy working hard. I think you have a business. There's some sort of business instinct there. That's very difficult to do. Steve jobs got kicked out. No one makes it. Gates is the only other person I can think of. Bill Gates is the only person I can think.

Well, maybe Larry Ellison. There's other examples, but Gates is who comes to mind. Gates started Microsoft as a kid. And it almost identical situation is Zuckerberg dropping out of Harvard after his sophomore year. It's like exactly the same as Zuckerberg. And he held onto that company until he was ready to leave, you know, 30 years later.

So like Gates and Zuckerberg Zuckerberg is Gatesian Amazon. Yeah. Bezos was older when he, you know, he was youngish, but, but he was at D E Shaw sort of analyzing the industry and was trying to figure out, got it. How do we make a play for e-commerce and the internet?

And he had no connection to books other than he just, so D E Shaw is this kind of weird, cool, quantitative investment fund. Um, it's, they give people free reign and they hire only the smartest people, but he was like very systematically. What, how do we make e-commerce a thing?

And he worked all the numbers. It was like books, books, the way it works and that's the warehouses and the shipping. Like we can make books work, but you're right. Bezos was another example of, of he, he held on. It kind of goes along with Mark and him working all the time.

It's kind of like what you're talking about when you answered that question in an earlier episode about just people always wanting to work and be doing stuff. It's kind of like that. Yeah. Yeah. They're driven guys. I mean, Zuckerberg does all these challenges. Yeah. You know, the personal challenges.

Like I'm going to learn a language or master this skill or only, you know, not eat meat for a year. It's like on top of his work, he's constantly giving himself other types of personal challenges. I mean, don't that's, that's rare again, to stay in charge of a company like that, to have the extra energy to, to do, do what you do though.

I don't think Facebook is long for this world, but what can you do? I mean, they rode that moment as well as you could. And I, they did not successfully evolve beyond that. I think Google was better at that. Amazon was better at that. They evolved very aggressively. I think Facebook kind of doubled down on just being a social media platform monopoly.

And we want to do that well. I don't know how long that'll last. (upbeat music)