Greetings from Read Max HQ! Every month or so I solicit questions from subscribers and rifle through my molding brain for a vaguely entertaining answer. I got a larger-than-usual response for the most recent batch of mail, likely because of All The News, so I thought I would split the mailbag into two editions. Today’s covers the questions I got about FTX, Twitter and related subjects; tomorrow I’ll send out a more generalist and culture-oriented mailbag.
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Between Twitter, Meta, the broader crypto shambles, am I right in feeling like this is the end of the Long 2010s in tech? Probably exactly coinciding with the age of very low interest rates enabling things to just be kind of silly for longer than you’d think? — Zach E.
Lord knows I’m neurotic about making definitive predictions of the future, but I know my trend pieces, and from that perspective it’s hard to beat the narrative perfection of (1) Elon Musk taking over Twitter, (2) the “Red Wave” failing to materialize, and (3) the FTX empire collapsing all occurring across three successive weeks, huh? Like, to have the world’s richest man display, in public, on the social-network albatross he purchased and shackled around his neck to at the top of the market in a fit of spectacular glibness, that he has the managerial skills and psychological depth of a message board mod; while at nearly the same time Peter Thiel’s human-suit creeps (and other authoritarians beloved by Silicon Valley’s crime-paranoia clique) historically underperform in an election they were supposed to dominate; followed on by the guy who was supposed to be the respectable, responsible face of crypto essentially admitting that he did one of the funniest, stupidest kinds of fraud, in the process crashing the crypto market? [In voice that communicates I know how to use this slang] It’s giving … vibe shift!
So, yeah, I think you’re right: It’s hard not to look around and conclude that we’re exiting, or maybe have already exited, the easy-money, platform-business, cute-subway-ad era of tech. This era, understood crudely (which is the only way I understand anything), depended on both historically low interest rates (creating eager investors) and also weak labor markets (creating desperate workers). Now that interest rates are slightly higher, and unemployment is lower, it’s hard to imagine either investors or employees (or contractors, as the case usually is) giving entrepreneurs and managers the same kind of leeway to burn money and exploit workers that they were given over the last decade. RIP to the 2010s (2009-2022)!
What comes next? I don’t have any good guesses. I think anyone predicting the total death of crypto is probably fooling themselves: Most of the laser-eyes guys are so deeply committed to their ideology that the ecosystem can survive even very chilly down markets. And as I’ve written I still kind of doubt that Musk will really damage Twitter (or his reputation or fortune) to the point of total collapse, or, for that matter, that Facebook is doomed. Most of the biggest companies will survive into the new era, whatever it is, even if their eye-popping margins and insane projections don’t.
My guess is that, to the extent that tech has to change its economic structure, the losers in the new era will be the programmers, rather than the entrepreneurs or investors. I was convinced by this Dan Luu post that it’s not entirely clear why programmers make so much money, and I can imagine a new economic environment resetting the expectations for pay on the part of both tech employees and employers. Especially if those tech workers aren’t unionized. Anyway, I hope no one here depends for their livelihood on the disposable income of tech and tech-adjacent workers haha! 😅
We seem to be living through a cultural apex for the "Idiot CEO". (One hopes it's the apex!) They've been making messes at a rate that doesn't seem to be sustainable... something has to change, right? Is this a phase? Or (and this is the question) is the Idiot CEO an eternal character? If so, who were the Idiot CEOs of 50 years ago? 500 years ago? — Vaping Trauma Surgeon
I think this question is kind of related to the above question, actually? At least, I feel like one crude way of accounting for the Regime of the Idiot CEO is something like:
A long period of low interest rates meant investors had more money than they knew what to do with, really, and started seeking out speculative or risky investments.
A whole Silicon Valley investment ideology around getting in at the very beginning of a totally unforeseen, paradigm-shifting, future-monopoly technology or company develops to encourage a certain kind of speculative investment. (Peter Thiel’s Zero to One is probably the bible of this ideology.)
Since by definition it’s hard to identify paradigm-shifting technologies or companies, investors no longer trust basic heuristics of investment like “business plan,” “profitability,” “CEO is not a fucking idiot,” etc.
In fact, Idiot CEO might actually be the kind of super-genius who will turn the sector on its head!
Some combination of weak government regulators, weak labor market conditions, aggressive media campaigns, and the ability to burn cash to grab market share allows a few Idiot CEOs to succeed, strengthening the case for Idiot CEO Investment Strategy and propping up other, failing Idiot CEOs.
A chain of events beginning in a wet market in Wuhan pushes interest rates back up. Your money is suddenly more precious; rather than take a gamble on an Idiot CEO, why not invest it in something safe like a lithium mine?
Is that too obvious? I suppose I’m also wondering if we should differentiate between The Idiot CEO as a media character and business (especially tech) archetype, and idiot CEOs, in the sense of CEOs who are literally stupid. The former feels relatively new to me -- a product of a particular time and economic conjuncture and media ecosystem -- but the historical record is very clear that idiot CEOs in the latter sense have existed for decades, and indeed have been very successful despite or because of their idiocy. (Barbarians at the Gate is a great book about a CEO who was also an idiot.) Maybe one difference is that The Idiot CEO is always, publicly, an idiot, while idiot CEOs are successful in the same way that Michael Scott is a great salesman -- because they can connect well with their idiot peers.
What's your assessment of Mastodon and the other Twitter alternatives? Could a nonprofit, decentralized organization effectively moderate a massive, global social network? What would we want the next generation of social media to look like? — Ted
Will The Fediverse ever be a thing? Can something so complex actually take foothold in the zeitgeist? Follow up: Will people ever want to fuss with technology to get it to work again? I feel that once upon a time you HAD to know intricate software details just to participate. Host your own blog -> blogspot -> Twitter microblogging. But as people use technology more, they tinker less (way less I think?). What do you think? Is this good, bad, just the way technology goes? Twitter Power Users are grasping to understand a Mastodon Instance. Could they ever make the jump to...PeerTube instead of Youtube? Friendica instead of Facebook? Matrix instead of Discord? — Wintermute
I have to admit I haven’t really dabbled in Mastodon this time around. I made an account (I think?) whenever it was first introduced, or was first being suggested as a Twitter alternative, but it didn’t stick -- not because it was too complicated (I love to waste an afternoon learning a whole new platform protocol for no real reason) and not really because it was empty, but because it didn’t do what Twitter does, i.e., make me keep coming back. In general my thinking on the possibility that Mastodon might replace Twitter follows Rob Horning’s:
Platforms shape desire through the frustration that they deliver, the conflict and risk and misrecognition they generate, the commercial milieu that animates their stakes, the masochistic feelings of being dominated by them. Our attachments to platforms are not necessarily rational; what we get out of them isn’t all that connected to having or making unilateral choices, even as this is what the interfaces often foreground.
What alternative platforms like Mastodon may require to succeed is not just some critical mass of users or some broader fluency in how to navigate their interfaces. They may also need to facilitate some of the frustration and antagonism that their developers may have aspired precisely to forestall. They will need to seem more useful than they really are, to remind us of possibilities beyond usefulness. They will have to alienate us as much as ground us. They will have to seethe with the contradictions that define what it feels like to belong to a society.
I think Horning’s essay gets at the contradiction that always trips me up when I actually try to imagine an alternative social media platform -- is social media really social media if it’s not toxic? You might claim to hate that you keep encountering The World’s Dumbest Guys on Twitter, but what would a platform be without those guys, and your friends making fun of them? Isn’t the alternative to heroin just methodone?
(One intrusive thought I keep having, which I love my readers too much to elaborate beyond a parenthetical paragraph here, is that it would be funny [not really] to do a whole riff on Francis Fukuyama’s book End of History where I make the case that Twitter is to social media what liberal democracy is to governance in Fukuyama, by which I mean it’s a sort of least-worst option for balancing the drives and desires of the human soul, and that no matter how hollow and unsatisfying Twitter/liberal democracy is, we will never really transcend it, even if we might regress.)
I guess my point here is that as I spend more time reading and thinking about social media and the platform-era internet I feel like I move further away from any certainty about what a “better Twitter” might look or feel like, or even where you might start in trying to construct one. The current crop of platforms has by now so thoroughly shaped my sense of “the social” online that it’s hard for me to extract the “first principles” from which I would begin in designing a new one.
But, anyway, no, I don’t think that Mastodon or the fediverse really have a chance at being a thing. And I’m not sure it’s moderation that’s the problem precisely. I think Twitter being centralized is one of its great remaining strengths: not simply that there is a critical mass of people there, but, for some industries and interests, all the people are there, including those you hate and disagree with.
As for whether it’s too complicated … probably? I like to tinker and fuss (even though I’m quite bad at it), and I miss the days when the web was mostly tinkerers and fussers, but my guess is that we’ve only ever made up a minority portion of the population and were oversampled in the early days of the internet, for the obvious reasons. I have a sort of romantic-ideological attachment to the idea that people should be more curious about their technology (not just software!) and have better mastery over it, but it’s a hard sell when there are so many more convenient options available!
Let's say Twitter does crash and burn fully before the end of 2022 or very early 2023. What other industries/companies/media personalities will go with it? — Charlie V.
Great question. I actually think most journalists and pundits with significant followings have successfully exported their Twitter followings to newsletters or podcasts, so even if they lose out on the main platform they still have money-making opportunities. But I’m putting the following on death watch:
Galaxy light projector companies that can no longer advertise under viral tweets
Popular historians who can no longer try to sell books with elaborately vulgar threads about, like, Grover Cleveland
TV writers who for some depraved reason spend all their time on Twitter arguing about politics
Are Coinbase and FTX similar? Could what happened to FTX happen to Coinbase? — John S.
Every story about Coinbase since the FTX collapse has featured a paragraph or two patiently explaining why Coinbase won’t implode the way FTX did: it’s a U.S.-based company and so subject to stronger regulation; it’s public and has to publish its financials regularly; it has significant cash reserves. And these pieces are written by reporters and analysts who have a lot better understanding of, and a lot more experience in, financial and crypto markets than I do, and I can intellectually understand these arguments and be sympathetic to them.
But from my perspective as a guy who is pretty stupid about crypto and finance, applying my stupid-guy heuristic: These two businesses are similar, because they are both “big crypto things,” and what happened to FTX, which is “it blew up,” could definitely happen to Coinbase, because it’s a “big crypto thing” there is nothing more predictable in the world of crypto than “one of the big crypto things just absolutely explodes overnight for some complicated reason that somehow no one saw coming except one crank blogger somewhere.” This is not financial advice, and I am, remember, a stupid guy, but if I had any significant money in crypto I would get it out. Crypto things just blow up, no matter what! It’s what they do!
Max is right about the "big crypto thing" because you apply a similar heuristic to what happened in the streaming industry. Since Netflix peaked and reported declining membership, the downturn battered its competitors, too.
The Time Warner Discovery integration is like the Elon Musk era of Twitter for broadcast. Massive layoffs, project cancellations and unit consolidations that are creating a lot of bad blood. NBC is also finding Peacock to be a financial pain. Similarly, several planned streaming-only projects have been shelved.
It's not unfair to say FTX's implosion will have a big chill for crypto.
Totally agree with your take on the other big Crypto things. It feels so *fake*