Fixing Facebook

The issues with social media are, in essence, alignment problems—that is, the goals of the site are at odds with the goals of its users. Even if Facebook's creators were motivated by the benign intention of presenting audiences with useful, entertaining, and informative content, that needed to be measured somehow in order to provide feedback for the recommendation algorithm to learn and improve. Engagement is a clear and relevant metric. And maybe it works well enough at first. Sure, people are spending more time watching cat videos than informing themselves, but that's their choice and who are we to judge? But with further optimization, the algorithm discovers that the best way to maximize engagement is to make people angry...no, scratch that, the best way to maximize engagement is to polarize people so they are more susceptible to anger so they are easier to engage.

Actually, the reality is even more sinister than this. Zuckerberg and co. saw what was happening and encouraged this process to continue. Engagement wasn't merely an insufficient metric of quality content, it was a great metric for maximizing ad revenue, which is what they actually cared about. But this profit maximization at the expense of society is itself an alignment problem. For-profit corporations are legally obligated to maximize financial returns for shareholders, optimizing any metric drives all unmeasured considerations to zero, so they are effectively required not to care about costs externalized onto society.

So that's the problem, but we all know this and yet Facebook continues to get our attention. This is because the bad stuff described above isn't the whole story; the site also offers services that people want. Whether Facebook is good or bad on the whole is complicated and not what I'm interested in here. My point is that it could be better—a lot better—in significant and obvious ways. So why hasn't some other social media company emerged, made a less evil product that people actually, unreservedly like, capture the audience, and put Facebook out of business?

It's not for a lack of trying. Remember Google+? And there were plenty of other, even less memorable examples. Most of them suffered the same fate: there was an initial splash of advertising ("Come join our new site, it's like Facebook, but not run by Facebook!") and some early adopters joined...only to find that many of their friends didn't follow along and now they had to maintain a presence on two social media platforms. Ugh, no thanks. So they left and anyone who joined late arrived to find a ghost town, prompting them to leave as well in a vicious cycle.

This dynamic is a result of Network Effects, in which the value of a communication network increases exponentially with the number of people who use it.  One implication is that the nature of social networks makes them extremely prone to becoming monopolies. Whoever establishes their network first gets the benefit of early users, which make them the best choice for new users, and anyone who shows up late has an impossibly steep barrier to competition—and they can't even rely on undercutting the incumbent on price because the service is free!

Now, there are some ways around Network Effects. The main one is, instead of competing directly, carve out a niche in an adjacent space that has usefulness that just doesn't exist in the incumbent, build your own a monopoly there, and then expand the scope of your services to compete, armed with the network of audiences who showed up for your original features. That's how Facebook ousted MySpace and what Google+ should have done to Facebook (and could have! Circles was an awesome innovation that could have appealed to niche groups like teachers who wanted a platform to interact with their students while keeping those interactions separated from their personal friend groups!)...except that they were stupid and just tried to throw money at the problem. But Facebook seems to have pre-emptively wised up to this strategy, as evidenced by their willingness to pay exorbitant amounts to buy out potential competitors like Instagram. Also, even if someone managed to compete successfully, competition in a market with exponential self-reinforcing feedback loops is unstable and we would have just ended up with another monopoly. Even if the competitor appeared to be following a different, less evil model, that would have changed once they secured their victory because the strategies that make the most profit when you are trying to grow and displace an incumbent are different from when you are the incumbent and trying to extract as much revenue as possible from your userbase.

This lack of competition is the key to why Facebook sucks. If you were to pick a social media platform to use, and the availability of your friends on any given platform wasn't an issue, what would you look for? Probably a mix of good, intuitive user interface and a reputation for having good content. The result would be a race to the top among social media sites for high quality and low cost—classic free market stuff. So the question is: how do we get competition in an industry that, by its nature, wants to be non-competitive?

In the old days, we dealt with this via anti-trust laws. Network Effects are fairly new, but self-reinforcing advantages creating monopolies are not. Companies would spend their profits to muscle out (or join up with) the competition, then squeeze the customers for every dime they could get. Governments stopped this by prohibiting certain activities as non-competitive, punished offenders by breaking them up into smaller companies, and all was right with the world. But social media breaks this model because they aren't actively doing anything non-competitive—they're just benefiting from the dynamics built in to the service they are selling. Anti-trust is good as a concept, but the application needs to be different because the situation is different.

We need to cut to the root of the problem. The source of suck is monopoly; the source of monopoly is userbase. So, somehow, there needs to be a way for every startup social media company to come right out of the gate with the full network of users that Facebook has.

Imagine if you were an early adopter for NewFace, a social media company you heard about on some tech magazine that had a really cool mission statement and slick user interface, but none of your friends have even heard about it yet. You join, set up your profile, and immediately have access to all of the contacts you have built up on Facebook over the years. You see in your notifications that one of your friends has invited them to an event and you mark "Going". They send you a message saying they look forward to seeing you, you reply thanking them for the invite and also suggesting that they check out NewFace, and they say they might give it a try when they have some free time on the weekend. Imagine every important social feature of Facebook having a seamless intergration with the new site. The UI is different, the recommendations are different, but it's like all your friends are there, even though they technically aren't.

How could this happen? There's a lot of technical challenges, but all of them become possible if users owned their data—which, frankly, we should anyways. Imagine you had a file that belonged to you, which contained every piece of content you uploaded to social media—your pictures, your posts, your contacts, your calendar, and so on—that you had the choice to curate and license out. The default format might be an ugly, disorganized jumble, but presentation is the job of social media companies and is the basis for why you pick one over another.

There are two general ways such a transfer in data ownership could occur. The cool way would be through a bottom-up process, such as some clever startup discovering a business model that simultaneously (1) is aligned with the best interest of the people, (2) outcompetes the existing incumbents, and (3) has stable incentives that don't totally reverse themselves once the new entity becomes dominant. Maybe by developing some open-source technology that enables the creation and access of user data through a common user interface, accompanied by a niche app that uses this tech to prove the concept, and a business-to-business marketing campaign encouraging other startups (and failed competitors like Google+ looking for another shot) in the social media space to use the system in return for contributing to it. Basically, create the logistics for an alliance in the domain of data accumulation between all of Facebook's competitors, while allowing them to compete in domains not subject to Network Effects such as user interface design. If such an alliance were to take off, then eventually even Facebook would have to join to avoid being left behind.

The boring—and probably more likely—way would be through a top-down process like government regulation. Both approaches have their challenges, both in terms of critical nuances to figure out in translating general ideas into technical details and also broader challenges of avoiding falling into traps of corruption, capture, or new forms of misalignment. They could also play off each other, such as a startup trying to just change things, failing miserably, and then using that experience to clarify the problems and advise the legislative process.

Regardless of how such a proposal is implemented, Facebook would fight it tooth and nail since it would destroy their entire business model. But if we are going to win our attention and democracy back, we can't just rely on our individual capacities to resist multi-billion dollar corporations maximizing on techniques to hijack our psychology. We need to change the nature of the game so that playing it well means companies aligning their business to our interests rather than aligning our interests to their business.