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Demand Curve: How to get social proof that grows your startup
When people are uncertain, they look to others for behavioral guidance. This is called social proof, which is a physiological effect that influences your decisions every day, whether you know it or not.
At Demand Curve and through our agency Bell Curve, we’ve helped over 1,000 startups improve their ability to convert cold traffic into repeat customers. We’ve found that effectively using social proof can lead to up to 400% improvement in conversion.
This post shares exactly how to collect and use social proof to help grow your SaaS, e-commerce, or B2B startup.
Surprisingly, we’ve actually seen negative reviews help improve conversion rates. Why? Because they help set customer expectations.
How businesses use social proof
Have you ever stopped to check out a restaurant because it had a large line of people out front? That wasn’t by chance.
It’s common for restaurants to limit the size of their reception area. This forces people to wait outside, and the line signals to people walking past that the restaurant is so good it’s worth waiting for.
But for Internet-based businesses, social proof looks a bit different. Instead of people lining up outside your storefront, you’re going to need to create social proof that resonates with your target customers — they’ll be looking for different clues to signal whether doing business with your company is “normal” or “acceptable” behavior.
Social proof for B2B
People love to compare themselves to others, and this is especially true when it comes to the customers of B2B businesses. If your competitor is able to get a contract with a company that you’ve been nurturing for months, you’d be upset (and want to know how they did it).
Therefore, B2B social proof is most effective when you display the logos of companies you do business with. This signals to people checking out your website that other businesses trust you to deliver on your offer. The more noteworthy or respected the logos on your site, the stronger the influence will be.
Social proof for SaaS
Depending on the type of SaaS product or service you’re selling, you’ll either be selling to an individual or to a business. The strategy remains the same, but the channels will vary slightly.
The most effective way to generate social proof for SaaS products is through positive reviews from trusted sources. For consumer SaaS, that will be through influential bloggers and YouTubers speaking highly of your product. For B2B SaaS, it will be through positive ratings on review sites like G2 or Capterra. Proudly display these testimonials on your site.
Social proof for e-commerce brands
E-commerce brands will typically sell directly to an individual through ads, but because anyone can purchase an ad, you’re going to need to signal trust in other ways. The most common way we see e-commerce brands building social proof is by nurturing an organic social media following on Instagram or TikTok.
This signals to new customers that you’ve gotten the seal of approval from others like them. Having an audience also allows you to showcase user-generated content from your existing customers.
How to collect social proof
There are five avenues startups can tap to collect social proof:
- Product reviews
- Testimonials
- Public relations and earned media
- Influencers
- Social media and community
Here are a few tactics we’ve used to help startups build social proof.
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Glassdoor acquires Fishbowl, a semi-anonymous social network and job board, to square up to LinkedIn
While LinkedIn doubles down on creators to bring a more human, less manicured element to its networking platform for professionals, a company that has built a reputation for publishing primarily the more messy and human impressions of work life has made an acquisition that might help it compete better with LinkedIn.
Glassdoor, the platform that lets people post anonymous and candid feedback about the organizations they work for, has acquired Fishbowl — an app that gives users an anonymous option also to provide frank employee feedback, as well as join interest-based conversation groups to chat about work, and search for jobs. Glassdoor, which has 55 million monthly users, is already integrating Fishbowl content into its main platform, although Fishbowl, with its 1 million users, will also continue for now to operate as a standalone app, too.
Christian Sutherland-Wong, the CEO of Glassdoor, said that he sees Fishbowl as the logical evolution of how Glassdoor is already being used. Similarly, since people are already seeking out feedback on prospective employers, it makes sense to bring recruitment and reviews closer together.
“We’ve always been about workplace transparency,” he said in an interview. “We expect in the future that jobseekers will use Glassdoor reviews, and also look to existing professionals in their fields to get answers from each other.” Fishbowl has seen a lot of traction during the Covid-19 pandemic, growing its user base threefold in the last year.
The acquisition is technically being made by Recruit Holdings, the Japanese employment listings and tech giant that acquired Glassdoor for $1.2 billion in 2018, and the companies are not disclosing any financial terms. San Francisco-based Fishbowl — founded in 2016 by Matt Sunbulli and Loren Appin — had raised less than $8 million, according to PitchBook data, from a pretty impressive set of investors, including Binary Capital, GGV, Lerer Hippeau Ventures, and Scott Belsky.
Microsoft-owned LinkedIn towers over the likes of Glassdoor in terms of size. It now has more than 774 million users, making it by far the biggest social media platform targeting professionals and their work-related content. But for many, even some of those who use it, the platform leaves something to be desired.
LinkedIn is a reliable go-to for putting out a profile of yourself, for the public, for those in your professional life, or for recruiters, to find. But what LinkedIn largely lacks are normal people talking about work in an honest way. To read about other’s often self-congratulatory professional developments, or to see motivational words on professional development from already hugely successful personalities, or to browse developments relative to your industry that probably have already seen elsewhere is not everyone’s cup of tea. It’s anodyne. Sometimes people just want tea to be spilled.
That’s where something like Glassdoor comes into the picture: the format of making comments anonymous on there turns it into something of the anti-LinkedIn. It is caustic, perhaps sometimes bitter, talk about the workplace, balanced out with positive words seem to get periodically suspected of being seeded by the companies themselves. Motivational, inspirational and aspirational are generally not part of the Glassdoor lexicon; honest, illuminating, and sobering perhaps are.
Fishbowl will be used to augment this and give Glassdoor another set of tools now to see how it might build out its platform beyond workplace reviews. The idea is to target people who come to Glassdoor to read about what people think of a company, or to put in their own comments: they can now also jump into conversations with others; and if they are coming to complain about their employer, now they can also look for a new one!
In the meantime, it feels like the swing to more authenticity is also a result of the shift we’ve seen in the world of work.
Covid-19 mandated office closures and social distancing have meant that many professionals have been working at home for the majority of the last year and a half (and many continue to do so). That has changed how we “come to work”, with many of our traditional divides between work and non-work personas and time management blurring. That has had an inevitable impact on how we see ourselves at work, and what we seek to get out of that engagement. And it also has led many people to feel isolated and in need of more ways to connect with colleagues.
Glassdoor’s acquisition, it said, was in part to meet this demand. A Harris Poll commissioned by Glassdoor found that 48% of employees felt isolated from coworkers during the COVID-19 pandemic; 42% of employees felt their career stall due to the lack of in-person connection; and 45% of employees expect to work hybrid or full-time remotely going forward — all areas that Glassdoor believes can be addressed with better tools (like Fishbowl) for people to communicate.
Of course, it will remain to be seen whether Glassdoor can convert its visitors to use the new Fishbowl-powered tools, but if there really is a population of users out there looking for a new kind of LinkedIn — there certainly are enough who love to complain about it — then maybe this cold be one version of that.
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LinkedIn launches a $25M fund for creators, will test Clubhouse-style audio feature in coming weeks
When LinkedIn first launched Stories format, and later expanded its tools for creators earlier this year, one noticeable detail was that the Microsoft-owned network for professionals hadn’t built any kind of obvious monetization into the program — noticeable, given that creators earn a living on other platforms like Instagram, YouTube and TikTok, and those apps had lured creators, their content and their audiences in part by paying out.
“As we continue to listen to feedback from our members as we consider future opportunities, we’ll also continue to evolve how we create more value for our creators,” is how LinkedIn explained its holding pattern on payouts to me at the time. But that strategy may have backfired for the company — or at least may have played a role in what came next: last month, LinkedIn announced it would be scrapping its Stories format and going back to the proverbial drawing board to work on other short-form video content for the platform.
Now comes the latest iteration in that effort. To bring more creators to the platform, the company today announced that it would be launching a new $25 million creator fund, which initially will be focused around a new Creator Accelerator Program.
It’s coming on the heels of LinkedIn also continuing to work on one of its other new-content experiments: a Clubhouse-style live conversation platform. As we previously reported, LinkedIn began working on this back in March of this year. Now, we are hearing that the feature will make an appearance as part of a broader events strategy for the company very soon.
“We’ll be starting to test audio with a small pilot group in the coming weeks,” said Chris Szeto, senior director of product at LinkedIn, who heads up its audio efforts. “Given the trends in virtual, hybrid events we are also working on making audio part of our overall event strategy rather than a standalone offering, so that we can give people more choice about how they want to run and engage with their audiences.”
Notably, in a blog post announcing the creator fund, LinkedIn also listed a number of creator events coming up. Will the Clubhouse-style feature pop up there? Watch this space. Or maybe… listen up.
In any case, the creator accelerator that LinkedIn is announcing today is part of a bigger effort it’s been making to build out a platform for creating content. That has included building new tools and acquiring companies like Jumprope (a platform devised to make “how-to” videos) earlier this year. Together with the accelerator, the idea that LinkedIn wants to encourage more dynamic and lively set of voices to get more people talking and spending time on LinkedIn.
Andrei Santalo, global head of community at LinkedIn, noted in the blog post that the accelerator/incubator will be focused on the many ways that one can engage on LinkedIn.
“Creating content on LinkedIn is about creating opportunity, for yourselves and others,” he writes. “How can your words, videos and conversations make 774+ million professionals better at what they do or help them see the world in new ways?”
The incubator will last for 10 weeks and will take on 100 creators in the U.S. to coach them on building content for LinkedIn. It will also give them chances to network with like-minded individuals (naturally… it is LinkedIn), as well as a $15,000 grant to do their work. The deadline for applying (which you do here) is October 12.
The idea of starting a fund to incentivize creators to build video for a particular platform is definitely not new — and that is one reason why it was overdue for LinkedIn to think about its own approach.
Leading social media platforms like TikTok, Snapchat, Instagram and Facebook and YouTube all have announced hundreds of millions of dollars in payouts in the form of creator funds to bring more original content to their platforms.
You could argue that for mass-market social media sites, it’s important to pay creators because competition is so fierce among them for consumer attention.
But on the other hand, those platforms have appeal for creators because of the potential audience size. At 774 million users, LinkedIn isn’t exactly small, but the kind of content that tends to live on there is so different, and maybe drier — it’s focused on professional development, work and “serious” topics — that perhaps it might need the most financial incentive of all to get creators to bite.
LinkedIn’s bread and butter up to now has been around professional development: people use it to look for work, to get better jobs, to hire people, and to connect with people who might help them get ahead in their professional lives.
But it’s done so in a very prescribed set of formats that do not leave much room for exploring “authenticity” — not in the modern sense of “authentic self”, and not in the more old-school sense of just letting down your guard and being yourself. (Even relatively newer initiatives like its education focus directly play into this bigger framework.)
With authenticity becoming an increasing priority for people — and maybe more so as we have started to blur the lines between work and home because of COVID-19 and the changes that it has forced on us — I can’t help but wonder whether LinkedIn will use this opportunity to rethink, or at least expand the concept of, what it means to spend time on its platform.
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Spotify’s Clubhouse clone adds six new weekly shows, some that tie to Spotify playlists
This summer, Spotify launched its live audio app and Clubhouse rival, Spotify Greenroom, with the promises of more programming to come in the months ahead to augment its then primarily user-generated live content. Today, the company is making good on that earlier commitment, with the launch of six new shows on Spotify Greenroom focused on pop culture and music, in addition to what Spotify calls “playlist-inspired shows” — meaning those that are inspired by Spotify’s own playlists.
This includes a new show based on the popular playlist Lorem, which launched in 2019, showcasing an eclectic mix of music that has included indie pop, R&B, garage rock, hip-hop and more, focused on a younger, Gen Z audience. That playlist today has over 884,000 “likes” on Spotify and has risen to become one of the places new artists are able to break through on the platform. Now, Lorem listeners will be connected to “Lorem Life,” a Spotify Greenroom show that will feature a mix of culture and discussions about music, the environment, sustainability, fashion, and space, Spotify says. The show is hosted by Gen Z influencers and TikTok stars Dev Lemons and Max Motley, who will engage with other artists and influencers. It begins airing on Wednesday, September 15, at 9 PM ET.
Another new “playlist-inspired” show is “The Get Up LIVE.” If the name sounds familiar, it’s because “The Get Up” was introduced last fall as Spotify’s own take on a daily morning show by mixing music with talk radio-style content led by hosts who discuss the news, pop culture, entertainment and other topics. To date, that content has not been provided as a live program, however. Instead, the show has been pre-recorded then made available as a playlist that gives listeners the feel of a daily FM radio show. Now, “The Get Up’s” co-hosts Kat Lazo and Xavier “X” Jernigan will record their show live on Greenroom. The program was originally planning to launch Wednesday, Septtember 15 at 11 AM ET but has been delayed.*
This odd time seems to contradict Spotify’s original intention of providing a show for those who commute to the office. But with the rise of remote work in the face of the unending pandemic, addressing the commuter audience may be of less interest, with the new program. However, Spotify tells us “The Get up LIVE” will be complementary to the daily show, which will still run as normal — that’s why it has a later airing.
Other new Greenroom shows include “A Gay in the Life,” hosted by the married couple actor Garrett Clayton and writer and educator Blake Knight, who will discuss LGBTQIA+ news and issues (weekly, 8 PM ET, starting today); “Take a Seat,” hosted by Ben Mandelker and Ronnie Karam of the “Watch What Crappens” podcast, who will recap reality shows and dive into other pop culture fascinations (weekly, 10 PM ET, starting today); “The Movie Buff,” hosted by film buff and comedian Jon Gabrus, who will review and break down the latest hot movies (weekly, 11 PM ET, starting today); and “The Most Necessary: Live,” a complement to Spotify’s “Most Necessary” playlist, where host B.Dot will discuss up-and-comers in hip-hop (weekly, 9 PM ET, starting Tuesday).
In addition to the new programs, Deuxmoi’s show “Deux Me After Dark” will also air this evening (September 13) at 9 PM ET to recap the red carpet looks and gossip from this year’s Met Gala alongside guest Hillary Kerr, co-founder of Who What Wear.
Image Credits: Spotify
Greenrom is now available to listeners in more than 135 global markets and has been quietly expanding with live audio from sports site and podcast network “The Ringer” as well as from artists like Pop Smoke, the company says. Other programs added include Men In Blazers, Deaux Me After Dark, True Crime Rewind and Ask The Tarot. Many of the shows are also being published on-demand after the live show ends.
The app had gotten off to a slower start this year, given its roots had been in sports talk live programming, which didn’t necessarily connect with Spotify’s music fans. Plus, it has faced growing competition from not only Clubhouse, which inspired its creation, but also other top social networks like Facebook, Twitter, Reddit, Discord and more. Without dedicated programs to garner user interest in yet another live audio app, the company had only seen 141,000 new downloads for Greenroom on iOS a little over a month after its launch, and fewer on Google Play. But Spotify’s long-term vision for the service was to more closely tie Greenroom to the music, artists, programs and podcasts that were already available on its flagship music streaming app — and these new shows are an example of that plan in action.
*Update, 9/13/21, 2:18 PM ET: Following its announcement, Spotify reached out to let TechCrunch know it has decided to delay the launch of “The Get Up LIVE.” According to a company representative: “due to a scheduling change, The Get Up LIVE’s launch has been postponed and a new premiere date will be announced soon.”
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Instagram will require users to provide their birthday
Instagram will begin prodding users to share their birthday with the service, if they haven’t already done so. The company today announced it will now start popping up a notification that asks you to add your birthday to “personalize your experience.” But the prompt can only be dismissed a handful of times before becoming a requirement. The move is a part of Instagram’s larger goal to create new safety features aimed at younger users, the company explains. This includes the teen privacy protections introduced earlier this year, as well as Instagram’s longer-term plan to launch a version of its service aimed at users under the age of 13.
This March, Instagram rolled out new features that made it more difficult for adults to contact teens through its app. Then in July, the company announced a larger series of changes to the default settings for new users under the age of 16. It will now default these users’ accounts to “private” and limit their accounts from being suggested elsewhere in the app. It also now restricts adults whose accounts are flagged as “potentially suspicious” from being able to reach out to other minors or interact with their posts.
Starting this week, Instagram says users who have not yet shared their birthday will begin to see pop-up notifications when they open the Instagram app.
These notifications will appear a handful of times, but at some point, users will no longer be able to dismiss the message by tapping “Not Now.” Instead, everyone will ultimately be required to share their birthday to continue to use Instagram.
The company will also now request you to share your birthday information when you come across a post with a warning screen. These screens, which hide content that’s flagged as sensitive or graphic, are not new. But Instagram has never before asked for a user’s birthday before displaying the hidden content.
Image Credits: Instagram
The birthday entry form itself is not complex. You simply scroll to choose the month, day and year of your birthday.
Of course, kids are commonly known to lie on these entry forms in order to bypass restrictions when signing up for apps. On this front, Instagram has developed AI technology to help it identify accounts were kids may have lied. For instance, it may be able to infer someone’s birthday based on comments left on “Happy Birthday” posts, where the user’s age may be referenced. The company also hints at further plans in this area, noting how it will later require users to verify their age when Facebook’s technology determines a mismatch between the age the user submitted and what appears to be their real age, based on other signals.
That technology is still in the “early stages,” says Instagram, but will involve a menu of options that will allow someone to verify their age.
The need to have users’ birthdays on hand isn’t only meant to power the recently launched teen protection features. Instagram is also working to bring its app to younger users — a decision that’s been met with a hostile response from legislators and consumer advocacy groups alike. In addition, age remains an important data point for ad targeting. Even as Instagram pulled back on the ability for marketers to target teens using interest data or their activity on other apps, it will continue to allow ad targeting based on age, gender and location across age groups.
The company is now one of several to have rolled out added protections for younger teen users, ahead of regulations that would force them to do so. Over the course of this year, TikTok, YouTube and Google have also announced changes to how younger teens can use their services and how they can be targeted by ads, in anticipation of a regulatory crackdown. While each has crafted its own set of teen safety features independently, the changes have largely addressed making the default settings for new teenage users more restrictive.
Instagram says the new birthday pop-up notifications will begin to appear this week on the mobile app and will continue to roll out over the weeks ahead to reach more users.
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Today’s real story: The Facebook monopoly
Facebook is a monopoly. Right?
Mark Zuckerberg appeared on national TV today to make a “special announcement.” The timing could not be more curious: Today is the day Lina Khan’s FTC refiled its case to dismantle Facebook’s monopoly.
To the average person, Facebook’s monopoly seems obvious. “After all,” as James E. Boasberg of the U.S. District Court for the District of Columbia put it in his recent decision, “No one who hears the title of the 2010 film ‘The Social Network’ wonders which company it is about.” But obviousness is not an antitrust standard. Monopoly has a clear legal meaning, and thus far Lina Khan’s FTC has failed to meet it. Today’s refiling is much more substantive than the FTC’s first foray. But it’s still lacking some critical arguments. Here are some ideas from the front lines.
To the average person, Facebook’s monopoly seems obvious. But obviousness is not an antitrust standard.
First, the FTC must define the market correctly: personal social networking, which includes messaging. Second, the FTC must establish that Facebook controls over 60% of the market — the correct metric to establish this is revenue.
Though consumer harm is a well-known test of monopoly determination, our courts do not require the FTC to prove that Facebook harms consumers to win the case. As an alternative pleading, though, the government can present a compelling case that Facebook harms consumers by suppressing wages in the creator economy. If the creator economy is real, then the value of ads on Facebook’s services is generated through the fruits of creators’ labor; no one would watch the ads before videos or in between posts if the user-generated content was not there. Facebook has harmed consumers by suppressing creator wages.
A note: This is the first of a series on the Facebook monopoly. I am inspired by Cloudflare’s recent post explaining the impact of Amazon’s monopoly in their industry. Perhaps it was a competitive tactic, but I genuinely believe it more a patriotic duty: guideposts for legislators and regulators on a complex issue. My generation has watched with a combination of sadness and trepidation as legislators who barely use email question the leading technologists of our time about products that have long pervaded our lives in ways we don’t yet understand. I, personally, and my company both stand to gain little from this — but as a participant in the latest generation of social media upstarts, and as an American concerned for the future of our democracy, I feel a duty to try.
The problem
According to the court, the FTC must meet a two-part test: First, the FTC must define the market in which Facebook has monopoly power, established by the D.C. Circuit in Neumann v. Reinforced Earth Co. (1986). This is the market for personal social networking services, which includes messaging.
Second, the FTC must establish that Facebook controls a dominant share of that market, which courts have defined as 60% or above, established by the 3rd U.S. Circuit Court of Appeals in FTC v. AbbVie (2020). The right metric for this market share analysis is unequivocally revenue — daily active users (DAU) x average revenue per user (ARPU). And Facebook controls over 90%.
The answer to the FTC’s problem is hiding in plain sight: Snapchat’s investor presentations:
Snapchat July 2021 investor presentation: Significant DAU and ARPU Opportunity. Image Credits: Snapchat
This is a chart of Facebook’s monopoly — 91% of the personal social networking market. The gray blob looks awfully like a vast oil deposit, successfully drilled by Facebook’s Standard Oil operations. Snapchat and Twitter are the small wildcatters, nearly irrelevant compared to Facebook’s scale. It should not be lost on any market observers that Facebook once tried to acquire both companies.
The market Includes messaging
The FTC initially claimed that Facebook has a monopoly of the “personal social networking services” market. The complaint excluded “mobile messaging” from Facebook’s market “because [messaging apps] (i) lack a ‘shared social space’ for interaction and (ii) do not employ a social graph to facilitate users’ finding and ‘friending’ other users they may know.”
This is incorrect because messaging is inextricable from Facebook’s power. Facebook demonstrated this with its WhatsApp acquisition, promotion of Messenger and prior attempts to buy Snapchat and Twitter. Any personal social networking service can expand its features — and Facebook’s moat is contingent on its control of messaging.
The more time in an ecosystem the more valuable it becomes. Value in social networks is calculated, depending on whom you ask, algorithmically (Metcalfe’s law) or logarithmically (Zipf’s law). Either way, in social networks, 1+1 is much more than 2.
Social networks become valuable based on the ever-increasing number of nodes, upon which companies can build more features. Zuckerberg coined the “social graph” to describe this relationship. The monopolies of Line, Kakao and WeChat in Japan, Korea and China prove this clearly. They began with messaging and expanded outward to become dominant personal social networking behemoths.
In today’s refiling, the FTC explains that Facebook, Instagram and Snapchat are all personal social networking services built on three key features:
- “First, personal social networking services are built on a social graph that maps the connections between users and their friends, family, and other personal connections.”
- “Second, personal social networking services include features that many users regularly employ to interact with personal connections and share their personal experiences in a shared social space, including in a one-to-many ‘broadcast’ format.”
- “Third, personal social networking services include features that allow users to find and connect with other users, to make it easier for each user to build and expand their set of personal connections.”
Unfortunately, this is only partially right. In social media’s treacherous waters, as the FTC has struggled to articulate, feature sets are routinely copied and cross-promoted. How can we forget Instagram’s copying of Snapchat’s stories? Facebook has ruthlessly copied features from the most successful apps on the market from inception. Its launch of a Clubhouse competitor called Live Audio Rooms is only the most recent example. Twitter and Snapchat are absolutely competitors to Facebook.
Messaging must be included to demonstrate Facebook’s breadth and voracious appetite to copy and destroy. WhatsApp and Messenger have over 2 billion and 1.3 billion users respectively. Given the ease of feature copying, a messaging service of WhatsApp’s scale could become a full-scale social network in a matter of months. This is precisely why Facebook acquired the company. Facebook’s breadth in social media services is remarkable. But the FTC needs to understand that messaging is a part of the market. And this acknowledgement would not hurt their case.
The metric: Revenue shows Facebook’s monopoly
Boasberg believes revenue is not an apt metric to calculate personal networking: “The overall revenues earned by PSN services cannot be the right metric for measuring market share here, as those revenues are all earned in a separate market — viz., the market for advertising.” He is confusing business model with market. Not all advertising is cut from the same cloth. In today’s refiling, the FTC correctly identifies “social advertising” as distinct from the “display advertising.”
But it goes off the deep end trying to avoid naming revenue as the distinguishing market share metric. Instead the FTC cites “time spent, daily active users (DAU), and monthly active users (MAU).” In a world where Facebook Blue and Instagram compete only with Snapchat, these metrics might bring Facebook Blue and Instagram combined over the 60% monopoly hurdle. But the FTC does not make a sufficiently convincing market definition argument to justify the choice of these metrics. Facebook should be compared to other personal social networking services such as Discord and Twitter — and their correct inclusion in the market would undermine the FTC’s choice of time spent or DAU/MAU.
Ultimately, cash is king. Revenue is what counts and what the FTC should emphasize. As Snapchat shows above, revenue in the personal social media industry is calculated by ARPU x DAU. The personal social media market is a different market from the entertainment social media market (where Facebook competes with YouTube, TikTok and Pinterest, among others). And this too is a separate market from the display search advertising market (Google). Not all advertising-based consumer technology is built the same. Again, advertising is a business model, not a market.
In the media world, for example, Netflix’s subscription revenue clearly competes in the same market as CBS’ advertising model. News Corp.’s acquisition of Facebook’s early competitor MySpace spoke volumes on the internet’s potential to disrupt and destroy traditional media advertising markets. Snapchat has chosen to pursue advertising, but incipient competitors like Discord are successfully growing using subscriptions. But their market share remains a pittance compared to Facebook.
An alternative pleading: Facebook’s market power suppresses wages in the creator economy
The FTC has correctly argued for the smallest possible market for their monopoly definition. Personal social networking, of which Facebook controls at least 80%, should not (in their strongest argument) include entertainment. This is the narrowest argument to make with the highest chance of success.
But they could choose to make a broader argument in the alternative, one that takes a bigger swing. As Lina Khan famously noted about Amazon in her 2017 note that began the New Brandeis movement, the traditional economic consumer harm test does not adequately address the harms posed by Big Tech. The harms are too abstract. As White House advisor Tim Wu argues in “The Curse of Bigness,” and Judge Boasberg acknowledges in his opinion, antitrust law does not hinge solely upon price effects. Facebook can be broken up without proving the negative impact of price effects.
However, Facebook has hurt consumers. Consumers are the workers whose labor constitutes Facebook’s value, and they’ve been underpaid. If you define personal networking to include entertainment, then YouTube is an instructive example. On both YouTube and Facebook properties, influencers can capture value by charging brands directly. That’s not what we’re talking about here; what matters is the percent of advertising revenue that is paid out to creators.
YouTube’s traditional percentage is 55%. YouTube announced it has paid $30 billion to creators and rights holders over the last three years. Let’s conservatively say that half of the money goes to rights holders; that means creators on average have earned $15 billion, which would mean $5 billion annually, a meaningful slice of YouTube’s $46 billion in revenue over that time. So in other words, YouTube paid creators a third of its revenue (this admittedly ignores YouTube’s non-advertising revenue).
Facebook, by comparison, announced just weeks ago a paltry $1 billion program over a year and change. Sure, creators may make some money from interstitial ads, but Facebook does not announce the percentage of revenue they hand to creators because it would be insulting. Over the equivalent three-year period of YouTube’s declaration, Facebook has generated $210 billion in revenue. one-third of this revenue paid to creators would represent $70 billion, or $23 billion a year.
Why hasn’t Facebook paid creators before? Because it hasn’t needed to do so. Facebook’s social graph is so large that creators must post there anyway — the scale afforded by success on Facebook Blue and Instagram allows creators to monetize through directly selling to brands. Facebooks ads have value because of creators’ labor; if the users did not generate content, the social graph would not exist. Creators deserve more than the scraps they generate on their own. Facebook suppresses creators’ wages because it can. This is what monopolies do.
Facebook’s Standard Oil ethos
Facebook has long been the Standard Oil of social media, using its core monopoly to begin its march upstream and down. Zuckerberg announced in July and renewed his focus today on the metaverse, a market Roblox has pioneered. After achieving a monopoly in personal social media and competing ably in entertainment social media and virtual reality, Facebook’s drilling continues. Yes, Facebook may be free, but its monopoly harms Americans by stifling creator wages. The antitrust laws dictate that consumer harm is not a necessary condition for proving a monopoly under the Sherman Act; monopolies in and of themselves are illegal. By refiling the correct market definition and marketshare, the FTC stands more than a chance. It should win.
A prior version of this article originally appeared on Substack.
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Spotify’s Clubhouse rival, Greenroom, tops 140K installs on iOS, 100K on Android
Spotify’s recently launched live audio app and Clubhouse rival, Spotify Greenroom, has a long road ahead of it if it wants to take on top social audio platforms like Clubhouse, Airtime, Spoon and others, not to mention those from top social networks, like Twitter and Facebook. To date, the new Greenroom app has only been downloaded a total of 141,000 times on iOS, according to data from app intelligence firm Sensor Tower. This includes downloads from its earlier iteration, Locker Room — an app Spotify acquired to make its move into live audio.
On Android, Google Play data indicates the app has been installed over 100,000 times, but Sensor Tower cannot yet confirm this figure.
For comparison, Clubhouse today has 30.2 million total installs, 18.7 million of which are on iOS, Sensor Tower says.
Other top audio apps include Airtime, with 11.4 million iOS installs, out of a total of 14.3 million (including Android); and Spoon, with 7.6 million iOS installs, out of a total of 27.3 million.
International apps like UAE’s Yalla and China’s Lizhi are massive, as well, with the former sporting 48.1 total installs, 3.8 million of which are on iOS. The latter has 29.5+ million total installs, but only a handful on iOS.
There are other newcomers that have managed to stake smaller claims in the social audio space, too, including Fishbowl (759,000 total installs), Cappuccino (497,000 installs), Riff (339,000 installs) and Sonar (154,000 installs.)
Image Credits: Sensor Tower. The firm analyzed 34 social audio apps. The chart shows those with the most installs.
Spotify Greenroom’s launch last month, meanwhile, seems to have attracted only a small fraction of Spotify’s larger user base, which has now grown to 365 million monthly active users.
The majority of Greenroom’s installs — around 106,000 — took place after Greenroom’s official launch on July 16, 2021 through July 25, 2021, Sensor Tower says. Counting only its Greenroom installs, the app is ranked at No. 12 among social audio apps. It follows Tin Can, which gained 127,000 installs since launching in early March.
Because Greenroom took over Locker Room’s install base, some portion of Greenroom’s total iOS installs (141K) included downloads that occurred when the app was still Locker Room. But that number is fairly small. Sensor Tower estimates Locker Room saw only around 35,000 total iOS installs to date. That includes the time frame of October 26, 2020 — the month when the sports chat app launched to the public — up until the day before Greenroom’s debut (July 15, 2021).
We should also point out that downloads are not the same thing as registered users, and are far short of active users. Many people download a new app to try it, but then abandon it shortly after downloading it, or never remember to open it at all.
That means the number of people actively using Greenroom at this time, is likely much smaller that these figures indicate.
Spotify declined to comment on third-party estimates.
While Sensor Tower looked at competition across social audio apps on the app stores, Spotify’s competition in the live audio market won’t be limited to standalone apps, of course.
Other large tech platforms have more recently integrated social audio into their apps, too, including Facebook (Live Audio Rooms), Twitter (Spaces), Discord (Stage Channels) and trading app Public. A comparison with Greenroom here is not possible, as these companies would have to disclose how many of their active users are engaging with live audio, and they have not yet done so.
Despite what may be a slower uptake, Greenroom shouldn’t be counted out yet. The app is brand-new, and has time to catch up if all goes well. (And if the market for live audio, in general, continues to grow — even though the height of Covid lockdowns, which prompted all this live audio socializing in the first place, seems to have passed.)
Spotify’s success or failure with live audio will be particularly interesting to watch given the potential for the company to cross-promote live audio shows, events, and artist-produced content through its flagship streaming music application. What sort of programming Greenroom may later include is still unknown, however.
Following Spotify’s acquisition of Locker Room maker Betty Labs, the company said it would roll out programmed content related to music, culture, and entertainment, in addition to sports. It also launched a Creator Fund to help fuel the app with new content.
But so far, Spotify hasn’t given its users a huge incentive to visit Greenroom.
The company, during its Q2 2021 earnings, explained why. It said it first needed to get Greenroom stabilized for a “Spotify-sized audience,” which it why it only soft-launched the app in June. Going forward, Spotify says there will be “more tie-ins” with the main Spotify app, but didn’t offer any specifics.
“Obviously we’ll leverage our existing distribution on Spotify,” noted Spotify CEO Daniel Ek. “But this feels like a great way to learn, experiment and iterate, much faster than if we had to wait for a full on integration into the main app,” he added.
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Twitter launches US e-commerce pilot that lets users shop from profiles
Twitter this morning will launch a pilot in the U.S. aimed at testing the potential for e-commerce on its platform. The company is introducing a new “Shop Module” that offers brands, businesses and other retailers the ability to showcase their products to Twitter users directly on the business’ profile. Users will then be able to scroll through a carousel of product images in the module and tap through on a product they’re interested in purchasing. This opens up the business’s website inside the Twitter app itself, where the customer can learn more about the product in question and opt to make a purchase.
The Shop Module will appear in a new, dedicated space at the top of a supported Twitter profile, which can be seen by U.S. users in English on iOS devices.
The company told TechCrunch that only businesses with a Professional Profile will be able to use the feature at this time.
Professional Profiles, which began testing in April, give businesses, nonprofits, publishers and creators the ability to display specific information about their business directly on their profile, including things like their address, phone number, operating hours and more. Essentially, it’s the Twitter equivalent to something like a Facebook Page for a business.
At launch, the new Shop Module will be made available to only a small group of pilot testers. In addition to gaming retailer @GameStop and travel brand @ArdenCove, Twitter says there will only be approximately 10 other brands across the lifestyle, traditional retail, gaming, media and entertainment, tech and telco industries who will gain access to the new feature.
At present, Twitter isn’t offering a way for interested businesses to sign up for the pilot because the company is only in the initial phases of testing this feature, it said.
Image Credits: Twitter
While Twitter users often discuss products on the app and even reach out to companies directly for help with purchases, it’s unclear whether users will come to view Twitter as a shopping platform.
With the pilot, Twitter aims to better understand what could help it make that shift by tracking which types of products drive traffic to online retailers. For example, it wants to determine whether people are inspired by online conversations in the heat of the moment — like sports fans buying team apparel — or whether Twitter users could be encouraged to make purchases of a more lasting impact, like products for a new skincare routine. Having a diverse lineup of early pilot testers will help the company to compare data across verticals to learn what works best.
Twitter says it will also work directly with businesses to better understand their needs through the creation of a new Merchant Advisory Board, which will consist of “best-in-class examples” of merchants on Twitter.
The company earlier this year mentioned its plans to expand into e-commerce. At Twitter’s Analyst Day presentation in February, where it first announced its Super Follow platform for creators, the company also briefly spoke about its e-commerce investments.
“We’re … starting to explore ways to better support commerce on Twitter,” Twitter revenue lead Bruce Falck said during the event. “We know people come to Twitter to interact with brands and discuss their favorite products. In fact, you may have even noticed some businesses already developing creative ways to enable sales on our platform.
“This demand gives us confidence in the power of combining real-time conversation with an engaged and intentional audience. Imagine easily discovering, and quickly purchasing, a new skincare product or trendy sneaker from a brand you follow with only a few clicks,” Falck added.
Since then, Twitter has tested a new e-commerce feature for tweets, which allowed businesses to link out to online product pages — like those on a Shopify store, for instance.
Twitter CFO Ned Segal also touted the potential to shop on Twitter when speaking to investors at the J.P. Morgan Technology, Media and Communications conference in May, noting that people “do a lot of research on Twitter before they buy something.”
Twitter’s entry into online shopping comes at a time when major tech companies and social platforms are ramping up their investments in e-commerce. Facebook has made significant moves into e-commerce with shopping features across Facebook, Instagram and WhatsApp, including with initiatives like online storefronts, integrated checkout, product drops, video shopping and more.
Shopify has also partnered with a number of tech platforms, including Facebook, TikTok and Google, to make it easier for consumers to connect with products sold by its merchants.
It’s worth noting that Twitter previously attempted to run a commerce operation and failed. In 2017, the company began to wind down its “Buy” button product, which had allowed Twitter users to click to make purchases, and the retailer partnerships associated with that effort due to lack of traction. Clearly, the company believes the time is now right to try again.
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Pinterest introduces Idea Pins, a video-first feature aimed at creators
Pinterest is expanding further into the creator community with today’s launch of a video-first feature called “Idea Pins,” aimed at creators who want to tell their stories using video, music, creative editing tools and more. The feature feels a lot like Pinterest’s own take on TikTok, mixed with Stories, as the new Pins allow creators to record and edit creative videos with up to 20 pages of content, using tools like voiceover recording, background music, transitions and other interactive elements.
The company says Idea Pins evolved out of its tests with Story Pins, launched into beta in September 2020, after various stages of development beginning the year prior. At the time, Pinterest explained that Story Pins were different from the Stories you’d find on other social networks, like Snapchat or Instagram, because they focused on what people were doing — like trying new ideas or new products, not giving you snapshots of a creator’s personal life.
Another notable differentiator was that Story Pins weren’t ephemeral. That is, they didn’t disappear after a certain amount of time, but rather could be surfaced through search and other discovery mechanisms.
Over the past eight months since their debut, Pinterest has worked with Story Pin creators on the experience. That’s led to the new concept of the Idea Pin — essentially a rebranded Story Pin, which now offers a broader suite of editing tools than what was previously available.
Video is a key element in Idea Pins, as the Pins target the increased consumer demand for short-form video content of a creative nature — like what’s being delivered through TikTok, Instagram Reels, YouTube Shorts and elsewhere. The videos in the Pins can be up to 60 seconds on iOS, Android and web for each page, with up to 20 total pages per Pin.
Image Credits: Pinterest
Creators can edit their videos by adding their own voiceover or using a “ghost mode” transition tool to better showcase their before-and-afters by overlaying one part of a video on another. And they can save drafts of their work in progress.
But Idea Pins still include a number of features common to Stories, like adding stickers or tagging other creators with an @username, for instance. Pinterest says it will start with over 100 stickers featuring hand-drawn illustrations focused on top categories and behaviors it expects to see, like food-themed illustrations, stickers for before-and-afters, seasonal moments, and more.
Pinterest is also working with the royalty-free music database Epidemic Sound to offer a catalog of free tracks for use in Idea Pins.
And because many creators will use Idea Pins to inspire people to try a recipe or project of some sort, they can include “detail pages” where viewers can find the ingredient list or instructions, which is handy.
Image Credits: Pinterest
Pins are shared to Pinterest, where the company says they help the creator build an audience by being distributed in several places across its platform, including in some markets, by locating Pins for creators you follow right at the top of the home page.
Creators can also apply topic tags when publishing to ensure they’re surfaced when people are seeking that sort of content. Each Idea Pin can have up to 10 topic tags, which help to distribute the content in a targeted way to users via the home feed and search, the company says.
While Pins can help creators build an audience on Pinterest, they can use Idea Pins to grow their audience on other platforms, too. The company says it will offer export options that let people share their Pins across the web and social media. To do so, they download their Pin as a video, which includes a Pinterest watermark and profile name — a trick learned from TikTok. This can then be reshared elsewhere.
Image Credits: Pinterest
Pinterest users, meanwhile, can save Idea Pins like any other Pin on the platform.
“We believe the best inspiration comes from people who are fueled by their passions and want to bring positivity and creativity into the world,” said Pinterest co-founder and Chief Design and Creative Officer Evan Sharp, in a statement about the launch. “On Pinterest, anyone can inspire. From creators to hobbyists to publishers, Pinterest is a place where anyone can publish great ideas and discover inspiring content. We have creators with extraordinary ideas on Pinterest, and with Idea Pins, creators are empowered to share their passions and inspire their audiences,” he added.
The new Idea Pin format is rolling out today to all creators (users with a business account) in the U.S., U.K., Australia, Canada, France, Germany, Austria and Switzerland.
Image Credits: Pinterest
Pinterest says, during tests, it found that Idea Pins were more engaging than standard Pins, with 9x the average comment rate. The number of Idea Pins (previously known as Story Pins) has also grown by 4x since January, as more creators adopted the format.
To help creators track how well Pins are performing, Pinterest is expanding its Analytics feature to include a new followers and profile-visits-driven metric to show creators how their Idea Pins have driven deeper engagement with their account.
The company says the next step is to make Idea Pins more shoppable, which it’s doing now with tests of product tagging underway.
Pinterest has been increasing its investment in the creator community in recent months, with the launch of its first-ever Creator Fund last month, and this month’s test of livestreamed events with 21 creators. It’s also now testing creator and brand collaborations with a select number of creators, including Domonique Panton, Peter Som and GrossyPelosi, it says.
Image Credits: Pinterest
While Idea Pins seem like a natural pivot from Pinterest’s founding as an inspiration and idea board, it will face serious competition when it comes to wooing the professional creator community to its platform. Other Big Tech companies are outspending Pinterest, whose new Creator Fund of $500,000 falls short of the $1 million per day Snap paid creators or the $100 million fund for YouTube Shorts creators, TikTok’s $200 million fund or the deals Instagram has been making to lure Reels creators. These platforms, as well as a host of startups, are also giving creators a way to directly monetize their efforts through features like tips, donations, subscriptions and more.
What Pinterest may have in its favor, though, is its reach. The company claims 475 million users, which makes it a destination some creators may not want to overlook in their bid for growth, and later, e-commerce.
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TikTok launches a Green Screen Duet feature, tests dedicated ‘Topics’ feeds
As competition with tech giants heats up, TikTok is rolling out a series of new features to help keep its short-form video app ahead of rivals. The company today announced the launch of a new Green Screen Duet feature, which combines two of TikTok’s most popular editing tools to allow creators to use another video from TikTok as the background in their new video. It also confirmed the test of a new way to discover videos. Called “Topics,” these are dedicated interest-based feeds featuring the top, trending videos in a given category.
Green Screen Duet joins an existing set of Duet tools that let creators lay out two videos side-by-side. Today, Duet layouts include “Left & Right,” “React” and “Top & Bottom.” Creators currently use Duets to sing, dance, joke or act alongside another user’s video, react to a video’s content or even just watch a video from another, sometimes smaller, creator to raise awareness or call attention to its content.
Editing tools like Duet and Stitch are key to what makes TikTok not just a passive video viewing app but, rather, a new type of video-first social network. It’s also proven so popular, it has since been adopted by Facebook’s TikTok clone, Instagram Reels, where it’s known as Remix. Snapchat has been developing a Remix feature of its own, too.
Image Credits: TikTok
TikTok’s new Green Screen Duet will now appear as another option alongside the existing layouts, offering users a way to more easily use another video in the background as they record their own video overlaid on top.
This sort of video experience is something TikTok creators already do in a variety of ways. For example, they may capture images or screen recordings, then use other editing tools to create a green screen effect like this. Or they may react to a video using a Stitch instead, as that can be easier. A built-in Green Screen Duet feature simply offers another way to record new videos that include existing videos.
When the feature is used, the Duetted video plays in the background over the new video being recorded. TikTok believes the launch will inspire new formats for creativity and expression, as a result.
TikTok has been busy upgrading its interface to improve recording and discovering new video content in its app in recent weeks, as Facebook, YouTube and Snapchat have tried to reproduce TikTok’s feature set in their own apps. For instance, TikTok just launched interactive music features last month in an effort to get ahead.
In another leap, TikTok is also now testing a new Discover page in the app, where instead of only featuring the current trends, as before, it now organizes videos into categories.
Image Credits: TikTok
These categories represent the many areas of interest on TikTok, like gaming, beauty, dance, TV & movies, sports, family, learning and much more. When you tap into any given category, you’re taken to a feed that includes the community’s top, trending content. The feeds will be affected by factors like relevance, timeliness and interest, and can help users find new content and creators outside of what their personalized For You page shows.
TikTok confirmed the test has been rolling out in the U.S. over the past few weeks.
The company also is currently testing e-commerce shopping features, where some brands like Hype and Walmart have been given a new “Shopping” tab on their TikTok profile where users can shop items, add to cart and then check out without leaving the app. (Walmart enabled its tab during its livestream event in December, and it’s been there ever since.)
Image Credits: TikTok
The integration is less elegant than Instagram’s Shops, as there’s not a native, universal cart or integrated payment mechanism. Instead, users are visiting the retailer’s website directly.
The advances TikTok is making, however, has been paying off in terms of capturing a large Gen Z user base.
According to eMarketer, more Gen Z users in the U.S. now use TikTok than Instagram, or 37.3 million monthly active users compared with 33.3 million users, respectively. And by 2023, the firm predicts TikTok will surpass Snapchat in terms of total U.S. users, as well.
But TikTok’s global ambitions are impacted not only by its ban in India but also the possibility that creators will find more monetization opportunities on established platforms.
Yesterday, for example, YouTube announced a $100 million fund for top YouTube Shorts creators, and said it will soon be testing ads on Shorts. That could help creators generate revenue from short-form content, while also converting casual viewers to channel subscribers where there are even more opportunities to monetize. Snapchat and Instagram have also been wooing creators with cash, and ultimately, if creators find they can make more money elsewhere they could shift some of their attention away from TikTok, no matter how many creative new features it adds.
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