Unbundling Consumer Social = Entertainment + Connection + Community
The unbundling and tradeoffs of consumer social
As an ex-consumer social founder, I’m always thinking about how people meet, connect, and communicate. I think about how people create, consume, discover, and share information. The desire for connection is at an all-time high, propelled by remote work, smaller families, and rising mental health issues. GenZ and GenA grew up on the internet, and crave authentic connection online more than any previous generation. They are about authenticity and anonymity, and prefer video to other content formats. But incumbent social media networks are no longer meeting this need. If anything, their size is exactly what’s chipping away at the connection and community piece that young people crave. I think of three tradeoffs that these incumbents face -
Entertainment vs. social - Instagram was considered “intimate” till ~4 years ago. Now it’s largely an entertainment platform, competing with TikTok - via reels, its algorithmic explore page, and commerce. The intimacy, authenticity and social connection of Instagram is gone. Same with WhatsApp - it is used for friends, family, coworkers, vendors, suppliers, acquaintances, roommates, and virtually anyone you talk to.
Commerce vs. social - Beyond ads, both TikTok and Meta have made a big push on commerce. Social commerce is a compelling use case for monetization, but further detracts from the connection, community and authenticity that we desire from social experiences. Social commerce is a lot more about commerce and feels a lot less social.
Authenticity (small group) vs. social graph - For networks that have retained more social elements vs. entertainment or commerce (e.g. Snap, BeReal, Dispo), the tradeoff is authentic and “real” connections with usually a small group of people vs. expanding the social graph (and risk becoming entertainment plays). Preserving authenticity via small groups has come at the cost of ads-based monetization which needs massive social graphs. Snap may be the only large player to have figured out this tradeoff - preserving authenticity while building a massive business.
Today, people’s entertainment and social needs are distinct - this creates unbundling opportunities in social, albeit with more monetization questions with every unbundling. I think of unbundling in three categories - entertainment, connection, and community.
Part I: Entertainment
This category is largely media - social only to the extent that having favorite actors/ creators/ streamers/ gamers/ YouTubers is social. Instagram, TikTok, LinkedIn, and Twitter have largely become entertainment companies today. AI-powered content recommendations and algorithmic feeds have made them content companies, not social platforms. They compete with media publishers (Netflix, HBO), media platforms (YouTube), and even gaming (Roblox, Fortnite, Minecraft) for consumers’ entertainment time.
I go to Instagram less to see what my close friends are up to (unsure where to find that anymore, since we all left BeReal), but more to laugh at stuff on my Explore page. It meets my entertainment need - not my connection and community needs. In fact, it meets my entertainment need *very* well, *because* of the large network and algorithmic recommendations - startups will find it hard to disrupt this.
In this category, I’m excited about two themes - the unbundling of TikTok and Creator Economy 3.0.
Unbundling of TikTok - we’ve seen an explosion in vertical social networks/ utility tools for the travel, food, beauty and fashion categories - attempting what Twitch or Discord did for gaming. The two questions I think about here are -
Building a content network + community - when TikTok knows me so well and basically only serves up food or fitness recs, I don’t need a vertical app for content. The reason I want one is community. Bundling entertainment (content) and community would be ideal, but hard to do. TikTok has shown that the best content recs don’t necessarily come from your social graph, but from algorithms. Reddit is probably the only successful content + community bundler we’ve seen. Artifact, the news app started by IG founders, is starting with an algorithmic recommendation feed (text-based TikTok for news), but the founders want to build a social layer on top - a vision I’m excited about.
Monetization - social networks monetize in one of three ways a) ads b) freemium model c) commerce. A vertical content-based social network limits the pool of advertisers who may be interested - e.g. would only restaurants want to advertise on a food-based social network? Re commerce - categories like beauty and fashion would make sense because content x commerce go together, but what would commerce look like, for food and travel based social networks? Will they be able to go beyond the Yelp/ Opentable/ booking.com model?
Creator Economy 3.0 - The creator economy movement of 2020-22 was about helping creators go DTC - to help them capture more of the value they were creating. Part 1 of this movement was led by web2 companies like Substack, Ghost, Descript helping creators capture value from their most loyal fans. Part 2 was led by NFTs and the promise of creators tokenizing themselves, to give fans a share in the creators’ wealth. Part 3, happening now, is about exponentially democratizing the creation experience - potentially bringing millions of new creators into the fold, and turbocharging existing creators. Tools are helping creators write, create and edit videos, convert text to audio/ video, generate and edit music, add animations etc.
With creation exploding, I’m curious to see how The Curation Economy develops beyond algorithmic recommendations - do human curators (i.e. your friends/ social graph/ experts) play any role? Are there social opportunities from combining the algorithmic and human curation element?
Part II: Connection
Connection revolves around intimacy and authenticity.
Intimacy implies our closest connections, our family and closest friends - the way we connect with them hasn’t changed in 10 years. Largely text-based, asynchronous communication - iMessage and WhatsApp. GenZ uses Instagram DM (text) to chat and flirt, and Snap for photos-based communication. Every few months, a new texting/ chat app makes it to the top 50 in the App Store, but all have fizzled. What they’re usually innovating on (privacy, new groups organization, new UI) are not things people care “enough” about, to switch. A horizontal text-based chat app is not differentiated enough to uproot iPhone’s and Facebook’s entrenched network effects.
Authenticity, one of GenZ’s key values, relates to small, connected groups. Social apps of the last few years have tried to foster this authenticity online - BeReal, Dispo, Poparazzi, largely by building less performative versions of Instagram.
Recently, mental health apps are attempting to meet this need for connection, replicating the authenticity and intimacy of human connection by being your friend/ guide/ confidante - Replika, Character.AI, Kajiwoto and others.
Challenges for social companies fostering connection have been:
Smaller social graphs - To preserve intimacy/ authenticity, they have, by definition, limited every user’s social graph. For instance, when my BeReal started becoming more than just my close friends, I stopped using it because I couldn’t really “be real” anymore. Snap has preserved intimacy and connection for a long time despite expanding every user’s social graph largely because of its 1:1 nature (vs. 1:many) - it’s a hard tradeoff.
Distribution - intimate social apps, by definition, have fewer viral distribution channels because nobody wants their entire friend’s list on these apps. These apps are also usually horizontal vs. vertical, which makes it harder to seed among a niche category/ type of user. Growing virally and exponentially against incumbents’ network effects has continued to be a big challenge
Despite the intimacy vs. social graphs conundrum, I’m excited about reimagining the asynchronous communication experience. While “entertainment” apps moved to video, “connection” apps have largely remained text or pictures (IG DM, Snap). Gen Z much prefers video and I’m curious to see experimentation with hybrid synchronous/ asynchronous + audio/ video/ text communication. For instance, Roze is building a messaging app for your closest connections only (<10 people), integrating text, audio and video.
While mental health AI is not necessarily social, it’s a space I’m excited about, from a connection pov. Instant Message (IM) changed connection when the world was still largely offline - mental health AI has the potential to do the same when the world is largely human to human connection.
Part III - Community
Connection and community are intrinsically related. When I think about connection, I think about several 1:1 chats or very small/ intimate group chats (iMessage, BeReal, Instagram DMs, FB Messenger). Authenticity is key here. When I think about community, I think 1: many or many: many - a group of people coming together based on some uniting characteristic, sometimes even anonymously. For instance, a community based on college (e.g., FB’s earliest days, Fizz, Snackpass’ early days), age (Saturn, Gas Saturday for high schoolers, gethank for elderly), neighbourhood (Nextdoor, OneRoof) or interest (SubReddits - beauty, food, travel, fitness, anime, skiing, gaming).
What does Fizz become?
I love Fizz and am a power user (i.e., lurker) at Stanford. It has recreated the YikYak-like notice board experience with better moderation/ safety policies - I use Fizz both for awareness (of what’s going on, on campus) and entertainment (the undergrads are funny and keep it real). The question is - what does Fizz become? Or in the case of high school students, what does Saturn become? Can Fizz become Discord 2.0 - a place where you have separate walled communities for all your identities/ affinities/ interest groups? How does it monetize? Their engagement at Stanford is enough to keep me excited (my partner says I love Fizz more than IG)..
More SubReddit, less TikTok
I talked about verticalized/ unbundled TikTok in the first section on Entertainment. Building vertical communities, i.e., more Subreddit-like, less TikTok, has been challenging. TikTok doesn’t currently necessitate a vertical product, Reddit does. I’m excited about vertical travel, beauty, food, anime communities, that layer on the commerce/ freemium layer on top of the community. But it’s really hard to build community without an offering to begin with - that offering is usually content or commerce, which takes away from the “community” feel that Reddit has preserved. Social commerce is an interesting model that has the potential to replicate the community aspect, but too often, platforms over-index on the commerce side early on.
I’m excited about going back to consumer social’s roots - more connection, authenticity and community.