Surveillance capitalism is the future. As we spend more time online, there’s no escape from it.
Netflix’s latest docudrama, the Social Dilemma, has been on fire 🔥
For those of you that haven’t watched it, the Social Dilemma is about…..
- how the Internet’s most popular products (e.g. Google, Facebook, Instagram etc.) track users’ behavior, sell targeted ads and induce addictive user behaviour
- a lot of interviews with former employees of Silicon Valley giants (especially former Product Managers/execs at Facebook/Instagram/Google/Pinterest)
- how tech companies have influenced elections, ethnic violence and rates of depression and suicide
- a dramatic overarching plotline involving teenagers who are addicted to sending Snaps and saving streaks 🔥
- Surveillance Capitalism (big words I know right)
To my delight, the show also features a few outside critics such as the Harvard professor and The Age of Surveillance Capitalism author Shoshana Zuboff. What a healthy mix of people on the show besides the usual tech bros!
At the end of the show, it recommends us not to watch what the recommendation algorithms suggest. But I watched this show precisely because the Netflix algorithm recommended this to me. Very ironic.
This article is not a review nor a criticism of the docudrama. If you want to know if the docudrama has accurately pointed out social media’s flaw, check out Will Oremus’s review here:
Instead, I argue that surveillance capitalism is inevitable. And we have a bigger problem than the Social Dilemma. We have the Metaverse Dilemma.
The Metaverse Dilemma
As we spend more time online and digitalize our daily lives:
1) Either we succumb our privacy to the “Surveillance” nature of the Metaverse
2) Or become the products of the “Capitalism” nature of the Metaverse
And no solutions can ever solve the two simultaneously.
This article will cover:
👉🏻 What is the Metaverse?
👉🏻 Recommendation Algorithm and Surveillance
👉🏻 The Capitalist Addictive Business Model (CABM)
👉🏻 Is there anything we can do?
What is the Metaverse?
The term was first introduced by sci-fi author Neal Stevenson in his 1992 Snow Crash, making the idea sound silly and game-like. Reminiscent of the World Wide Web back in the early 90s? That’s right. Nobody back at the 90s could have predicted power and impact of the Web. Multi-multi-trillion industries and companies were created. Similarly, nobody now knows what the Metaverse can do and in what form it will look like.
Matthew Ball, a famous early-stage VC and a thought-leader on Disney’s future, popularised “Metaverse” in The Metaverse:
the Metaverse will be an always-on, real-time world in which an unlimited number of people can participate at the same time.
It will have a fully functioning economy and span the physical and digital worlds. Data, digital items, content, and intellectual property (“IP”) will work across the Metaverse, and many people and companies will create the content, stores, and experiences that populate it.
In addition, Epic Games CEO Tim Sweeney commented that “it will be a massively participatory medium of a type that we really haven’t seen yet,” with “ a fair economy in which all creators can participate, make money and be rewarded.”
At the moment, the Metaverse sounds like the Matrix and Ready Player One. But I believe that in the future, it will converge towards being an exact replica of the real world.
It will look a lot like the real world with the help of VR and AR technologies. It will have huge impacts on the real world with the help of remote collaboration tools. And it will be as important as the real world since we spend more of our time online and move our offline activities online.
Obviously within this Metaverse, it will have different layers and different degrees of “digital penetration” — perhaps in some layers the use of digital space is not as prevalent/in high proportion in others.
As seen in the diagram above, Metaverse requires several catalysts. First, virtual worlds and spatial softwares (especially AR glasses and VR tools) are going mainstream. Second, Social media increasingly tend to replace real-life communications. Third, suites of productivity tool make 100% remote-work possible (alongside the digital nomad lifestyle + WFH culture for many knowlege-based workers). Fourth, e-Commerce makes running a business far easier than ever. Stripe handles payment while shopify handles all other aspects for you.
Recommendation Algorithm and Surveillance
We are spending more and more time online.
We are even moving our offline activities online thanks to COVID. Education and healthcare — two of the world’s most bureaucratic, traditional and resilient to technological disruption trillion-dollar industries — have bowed down to the pandemic. Notice the shift from face-to-face education to Zoom to MOOCs to online teaching platforms. Also notice the rise of tele-health and telemedicine platforms. They now offer patients far more than just virtual consultations.
As we spend more time online, these platforms and the Metaverse as a whole collect more data about us.
✅ Personal info collected as we create accounts on different platforms
✅ In-app behavioural data tracked as we spend more time messaging, interacting and making decisions on the Metaverse
✅ Our responses to app’s notifications are collected too as different platforms fight for our limited attention span. For example, Tinder nudges you with notifications that make you want to spend more and more time on the platform (amazing UX analysis here)
And all these data is used to power recommendation algorithms.
Including the very recommendation algorithm that recommended me to watch the Social Dilemma on Netflix:
Recommendation algorithms are two-edged swords. One the one hand, you get efficiency and better UX because the machine really seems to feed you what you like and what you want to see. On the other hand, you give up your privacy voluntarily the moment you click “Agree” on the Terms and Conditions.
For my personal use case, recommendation algorithms are quite useful: when I am learning coding or computer science on Youtube; when I am reading on Medium about Product Management; when I am reading on Substack about strategy/startup.
As Metaverse looms as a reality, a higher and higher % of data about our lives will be collected. This is simply inevitable.
The more important question is: how is that data used?
Unfortunately, recommendation algorithm is used because of companies’ profit-motives.
They want to get you addicted to the platform.
The Capitalist Addictive Business Model (CABM)
If you get the product for free, you are the product
Many social media applications nowadays are free for users. And unfortunately, that means that users themselves are products to be monetized by the platform, sold off to customers (who are often advertising agencies/businesses etc.)
The product is free. So the user of the product is the product.
How capitalist is that!
The Metaverse will almost certainly adopt the same business model. This is because advertising-based business model works for high traffic scalable platforms. And unfortunately, the Metaverse will soon be populated by these platforms.
Effectively, ads-based businesses are selling the opportunity to change their users’ behavior. Their users’ attention and actions are, quite literally, their product.
If you own a social network, or a platform on the Metaverse that your users are spending more and more of their time on, how do you make money 💰?
- You grow your monetizable user base (e.g. higher DAUs)
- You increase user ad load (show more ads to users!)
- You induce higher usage (fight for users’ attention span so that they spend more time on your platform)
1. Grow your monetizable user base
Utilize FOMO, the Fear of Missing Out. Tell your users to engage with new people (“import your contact list!”), notify them of actions they may be interested in (“you’ve been tagged in a photo!”), and manipulate your users’ need for social recognition (“Sally and 5 others liked your post!”).
Andreessen Horowitz (A16z) and NFX like to call this the Network Effect.
I’d like to call this:
Scale your business so that it becomes to big to fail
2. Increase user ad load
Sounds easy but also easily passes a tipping point. Most people have a strong distaste for seeing too many ads in too short of a timeframe.
3. Induce higher usage
Aka, make you addicted to the platform so that you always come back to it.
Recommendation algorithms and Facebook’s “organic” newsfeed materialize proper social media addiction.
The Capitalist Addictive Business Model (CABM) is insidious, inescapable, and structural.
The Metaverse cannot escape the CABM because the Metaverse has to contain in some way or another: 1) advertising, 2) user-generated content, and 3) machine learning for inducing addictive behaviour.
Remember: the Metaverse wants to be the substitute of reality. The higher fidelity it has, the more likely you are to go back to it.
NO exceptions. Just inevitable.
Is there anything we can do?
Towards the end of the show, the Social Dilemma suggested that government control/regulation is necessary to remedy the negative effects of social media.
I can see a similar argument to be made for regulating the Metaverse.
Does government regulation help? It helps in terms of privacy and data ownership. It helps with Metaverse getting less “Surveillance”. But a line has to be drawn.
As Peter Thiel said, “Crypto is libertarian. AI is communist”, imagine if an authoritarian state gains control of the cyber-space and the Metaverse.
The Metaverse should liberate users from the authoritarian realities and should not be used as a repression tool for the authoritarians.
What about the “Capitalism” part of the Surveillance Capitalism reality in Metaverse?
I do see some alternative business models that are worth testing. The key is to align user incentives with the company’s incentives.
One promising business model is to charge users if they have actually spent less time on the product. Superhuman, an email productivity suite, offers a similar value proposition. You pay to use the product because you want to spend less time on mundane email tasks.
The Metaverse Singularity will be Doomsday for us if machines can manipulate our weaknesses and drive us away from reality.
Think about Ready Player One.
Planet Earth is in ruins. Instead of solving the problems at hand, we seek escapism by playing a meaningless multiplayer game on OASIS.
We have plenty of good businesses. What we need now are good stakeholders.
If you are an aspiring entrepreneur, I hope that this article has inspired you to think deeply about the social implications of technology, especially as we move towards the Metaverse.