Brian Balfour: uncertainty

Transcript context

…Essentially, the incentives are pointing you in this direction. Capitalism, they say capitalism works, and so it'll pull everyone in this direction even if maybe they want to avoid it. Let's do a couple more examples. Yeah, we'll go through them quick. I think everybody's probably... Google's an interesting one because it played out over a much longer period of time. Facebook happened over the course of about in five-ish years, something like that. Google did it very slowly over years, but same thing, early massive competition against Yahoo, I don't know, AltaVista, Lycos, you name them all. That was even before my time. They were first to really identify these data moats and incentivizing essentially web developers, content folks to optimize for their search algorithms, create this great distribution mechanism. Everybody's building content and everything for them, but over time, slowly but surely they did two things. One is more and more that real estate became ads that they were monetizing, so they're suppressing organic distribution in order to push people towards the ads, as well as absorbing a bunch of the highest value first-party use cases, things like travel as an example, or even restaurant search and all those types of things. The former Yelp CEO and founder has been out there saying a lot of things about these practices. So, same exact cycle. Mobile went through the exact same cycle. iOS created a new distribution mechanism. They had a ton of competition among different phones when they first started on. They found the defensibility was more about the apps, the data and all the developers, created the App Store, all of these types of things, but over time, we've seen more and more restrictions there on that front. And then most recently, we've seen this happen in smaller places, too. LinkedIn, as an example, first went through this wave with company pages. They were like, "Ah, companies, come on, promote your company page. Bring in more users, all that type of stuff, and then get all these followers." And then of course you get almost no distribution now through your company page because they're pushing you towards ads. And then they recently just did this with personal profiles, too, which is they really boosted distribution for individuals to create content for that platform. They then introduced the thought leader ad format, a way to monetize those individual posts, and now you've seen them really pull back on that organic distribution. So this happens in big forms and it happens even in smaller use cases as well, but once again, the steps of the cycle are exactly the same. The key part about this, too, is that the broad trend is that the cycles seem to be getting shorter and shorter and shorter and shorter, so you actually have a smaller amount of time to play the game. Okay, and the big a-ha here is, yes, this will end maybe not great for you, but there's this magical period when they're open to customers and users where you can grow like crazy because they want everyone to come and they give you a distribution. What you're saying essentially is ChatGPT, potentially some other platform, maybe is about to enter this moat.…

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