How Web3 Can Help Fix Social Media and Consumer Apps

Transcript

foreign [Music] doing having a good time BCC okay all right so question how many of you want to see uh an application built on crypto reach hundreds of millions or billions of people okay okay see if this is a safe audience to go ask that question so over the next 10 minutes I'm here to tell you like why this is the right moment to do so and hopefully give you some ideas on how to do so so first off I'm sriram Krishnan I'm a partner at Anderson Harvard's on

the the crypto team but for the last close to a decade I was on the dark side I was inside the belly of the Beast I worked in all the webto companies I was at meta I was at Twitter I was at Snapchat so I'm a Defector from the forces of Darkness to the uh the forces of light is what I like to say and I bought a little over a year ago uh vitalik did this talk called things that matter I would say to D5 and I remember watching this talk and there's a bit in here about why social media and crypto are meant for each other and there's a lot of amazing stuff that I'll take from the talk he talks about sensitive resistance he talks about credible utility but I remember watching this talk and as

somebody who spent close to a decade working on large consumer applications I remember thinking okay all these are amazing crypto Primitives that I know the people here and the crypto Community can build but the world of social media is stuck in a different era and things need to change well what I want to do over the next 10 11 minutes if you remember nothing else from this morning here in Paris you should try and convince you that now is the moment to go build large-scale crypto consumer social media Marketplace applications and if you know nothing else if you just remember this I considered myself like job well done and

goal accomplished so you know when people think of large consumer platforms and I'm going to say consumer platform social media marketplaces interchangeably but think Instagram meta Tick Tock YouTube they think of these as large companies but I think there's something different I think these are complex systems that exist in sort of an uneasy equilibrium because there are multiple people at play there are the executives and the company themselves uh then there are the hundreds of millions of people or the billions of people that use these platforms and obviously you know they have hopes and needs and wants uh then they exist in competition with each other they have to compete with each

other and for those of you and I know that some of you and see Sam over there I think some of you who are really into Game Theory and how coordination Works you're probably familiar with the idea of a shelling point it's a fancy way of saying sometimes when you're a bunch of complex systems a complicated System Dynamics you just arrive at a certain set of decisions that everybody agrees on not because they're Optimum just because the way history has played out everyone agrees this is the way we're going to go do things and that's what happened in social media for the last say decade every major company has sort of agreed this is the way we do things now this will be a surprise but let me quickly walk through them the first is

your graph and by that I mean your friends your followers your subscribers whatever you want to call it it's locked into these companies that never that didn't always just be the case but right now you know there's probably some weird Json export that you can get uh if you really want to but your your friends your Instagram followers you're going to be Instagram followers your Tick Tock algorithm and who you like on tick tocks let me stuck with Tick Tock YouTube something stuck with YouTube you can't take them with you when you leave there's no right to exit second over the last decade the API support for third-party clients has dwindled or in some cases non-existent uh some of you are a bit older I'm really old and you

might remember the time over 10 years ago when you could build a full-fledged third-party Facebook client or a full flexible product Twitter client no longer the case it's company sector don't even have third party clients for a bunch of reasons and mostly because they were ad-based companies and if you if your business model is you want to show ads to people you want to control the playways you in which you can show things to people simple third no surprise to all of us they were limited to no economics uh for creators that the agreement with U.N social media company was you give me content I give you attention and that's it the idea that I give you a revenue share that I give you some of the money I'm making didn't even enter the college Central very recently and there are some small steps but it's

still not clinically done and finally it um it is interesting because my previous speaker was talking about uh governance that topic doesn't even enter into webto companies you don't have a seat at the table you're not in San Francisco or Palo Alto you're not influencing any tradition obviously you're not a surprise and what I want to talk about next is something quite straightforward which is heist movies and the reason I bring this up is I love heist movies everyone loves me everyone loves ocean 11 yeah and the reason I love them is they all have a similar construct you know put the team together there's one more task you have to do Etc as a reversal but you know if you think about it why is it that you know all these casinos always have like some ridiculously weird well this is underground Vault and this is super

complicated AI program and there's all these complicated things that they have somehow all decided on together right so that's one where it also makes a movie interesting but the second part of it that you see is that not one it takes more than just one element to go rob a casino in Ocean's Eleven or to go get that safe out in Fast Five or pick your example it takes multiple things and it is almost always like there is a factor where it's at the right moment in time Ocean 13 that's when the casino is actually opening it's the only time you could do it so all these factors have to come together to reverse the shelling point or to find a new equilibrium and I'm here to tell you that things have

changed in the social media world and now the selling point is gone and we cannot go to something else and I'm going to walk through this thing very quickly there's no surprise I think uh people here the first is uh for about our CA decade we lived in the bull market cost of capital was low uh advertising spend kept going up so if you are a large tech company the pressure was not on to say A reduced head count or to grow Revenue things were just happening things were just going up and to the right so that changed right I think pretty much all of us are aware for the last year and a half interest rates have come down uh uh and uh so now uh sorry interests have gone up rather and so now every tech company is like well how do we cut head

count how do we make more Revenue things are much tougher you can't get away with the things that you used to that's number one number two is what I call the AI protest how many of you see in the recent Reddit blackouts okay there's a few of you very simple Reddit and a bunch of companies are are saying that hey you can't use our apis for free you can't use your data for free especially because some of the folks are using it free tend to be these large llm companies who in turn are not giving any money back to Reddit or Twitter or the case may be of course there are a couple of interesting things one is there's the pressure to make revenue and the pressure to now make AI API programs expensive and paid for which is now happening the second interesting thing is you had the

communities of these social media companies in this case Reddit some cases Twitter speak up protest try and really find ways to express their voice in ways they hadn't really done so before again something has never really happened before also happening now and third I mean it was dramatically is Elon Musk so full disclaimer I was slightly involved with Elon at Twitter and I'm a big fan of him but I think it's safe to say that Elon really changed the way social media companies were on and a lot of people are fans a lot of people are not fans but I think what everyone agrees on is that when he took over Twitter he started doing things that change how social media's around social media companies around either be it content moderation or reducing headcount and because of that you got a bunch of different kind of companies and projects

trying to build different versions of Twitter and I'm not talking about just Mark Zuckerberg threads I'm talking about the federals companies I'm talking about companies like forecaster which you know uh I'm an investor in uh um a bunch of different players who are all like hey maybe I don't agree with how uh I want to kind of have my own say I want to have a very different experience so all of these together has completely changed the landscape of social media or and marketplaces also I think and I think now is absolutely the right time for projects and companies built on top of crypto Primitives to really find ways to reach broad market adoption okay so if you don't nothing else I was like at one point I was going to stop with this

slide because I was going to be like this is going to be a call to action where I just want to tell people like go out and go forth and build but then I would say okay well what are some ways we can try approaching this now I don't know uh for sure what the you know the billion user project built on crypto with social media is going to look like but I have some ideas and so these kind of like avenues for exploration based based on my experience on social media companies so the first one is uh and is that if you look at every successful social media company they've always had a very similar pattern they've always gone after people who have no followers or no audience in an existing platform but for high social status so for example uh

with Snapchat it was high school teenagers with uh Tick Tock it was people like Charlie demilio and if you look at all of these none of them had existing Superstars or celebrities so uh and one of my friends Eugene way has a great post called status of service which talks about how every social media company falls into this construct which is you go after people who are underserved on an existing platform but have high status so in some ways this is the opposite of a vampire attack where you go after whales because you're not going after rails you're not going after high status people you're not going after people with large audiences or huge product Market fit you're going after people who are underserved but are interesting and interesting is in the eyes of a Beholder interesting because a lot of people follow a lot of people

have value them a lot of people want to memetically follow them whatever with their High status so I think this is one very interesting path I think uh some companies have struggle because what they've tried to do is to try and go after the most popular people on say an existing platform I think it's way more challenging because we already have huge product Market fit on the existing platform the reason for you to move is much more limited so path a find people high status low product uh underserved on the existing mechanism the second and this might be somewhat controversial in this venue is I think that uh Financial mechanisms uh are should play a little to almost no role in these projects and it's going to almost like maybe Blasphemous to say uh you know talk about ECC and the reason why I say that

is I I've seen a lot of projects struggle because when you financialize something so quickly out of the gate I think it has a couple of issues the first is that social media Dynamics are weird and complicated why does someone post something is it to get cloud is to be popular these are complex human dynamics and when you introduce just a rationalizing everything says money I think it becomes very challenging to kind of map those Dynamics onto just one monetary component the second part of it is I think it brings a lot of people who are monitor who are motivated by the monetary element as opposed to hey I'm just going to post some fun content and I'm going to bring my community over so my theory and again I could be wrong about all of this is that the things

which wind up succeeding are things which really focus on community and you know interesting content and interesting experiences and the financial side of things is actually a minor to a non-existent mechanism the third part and this is probably you know with not controversial at all is I think creators are highly underserved by existing platforms you don't get financial economics yeah uh I mean you sort of are starting to see some companies do it uh and you definitely don't get a seat at the table and you know and there and one thing I think crypto and the folks here are really good at is building incidental mechanisms where you can fix both of that so I think bringing creators making sure they get a fair share of the value they bring to the table making sure they

have a say in how these communities are run now these projects are run is going to be very very interesting part the fourth part of it is composability if you need to build an interesting experience on top of say Facebook today or Tick Tock today you can't you probably have to go maybe get an API key or maybe befriend a VP at Facebook it's probably impossible uh crypto obviously that is crazy um and I think the name of the game here is just permissionless Innovation and composibility the idea that anybody with a laptop can crank it open write some code and build an Innovative experience on top without ever talking to somebody so and I think the idea of building these composable social media applications is going to be really interesting for example imagine is if you could bring your own algorithm to

the social media platforms you use or you could have a pick of algorithms imagine you could have your own pick of desktop clients that you could use in Mobile clients you could use or any number of different things so I think the permissionless nature of composibility is going to be really powerful and perform and the second part of it I think is that it's going to make these projects really hard to care how many of you have run Linux on a desktop machine anytime recently okay again Sam again okay so and you okay so I I probably the first time I did this was when I was a kid back in the 90s uh I actually did again like a few weeks ago and over the last 30 years every single time I always had to go type out something in x.org uh uh xbox.com conf rather it's a little

config file that has existed for 30 years despite everyone's attempts to kill it and the reason is is because over the last 30 years there's been the entire ecosystem of applications and tool sets so even now if you want to get your traffic start working on a desktop Linux ecosystem you probably have to go type in and change this file and I was thinking about that where if you become a primitive on a social media primitive or Marketplace primitive on which other people go build applications and top off you're going to become impossible kill and I think that's a very good thing so this is the last scene from Ocean's 11 for those of you seen the movie there's in front of the Bellagio they all got enriched and they're like go forth and live your lives and that scene always kind of brings you so much hope and

optimism uh the sequels have been made in and I guess it's kind of what I want to leave you with because I think we live in a very interesting time definitely time for social media has not existed for the last 10 years and I work in a lot of these companies and I think it's on all of us to go build something amazing uh they can reach hundreds of millions of people so I hope somebody here or somebody watching this goes and does so if you do send me a DM or no damn stream K on Twitter uh on farcaster SRI MK racings.com but go forth and build that's all I had thank you [Applause] [Music] [Music]