I came across three blog posts recently, all completely unrelated, and yet they tickled the same part of my brain:
- Jim Louderback’s Screw Viral Videos asks whether Viral Videos really have any value whatsoever?
- Michael Arrington’s Blogging and Mass Psychomanipulation: Michael’s typically (almost banal it is so consistent) provocative piece (complete with photo of adoring Nazis) on how bloggers learn to manipulate crowds. The subtext sure sounds like he’s tired of the tawdry behavior of those crowds, but Michael it may be that your tactics have attracted a certain kind of crowd that has self-selected for your content.
What can a post about Viral Videos, Economic Bubbles, and Mass Psychomanipulation possibly have to do with one another? Eventually, that tickling in my brain kicked out an answer: they are each about an Economy of Followers. The order I read these in really facilitated my understanding of the Economy of Followers. In fact, it woke up what had been a nascent, but snoring concept I’ve had on the tip of my tongue for a long time.
Let me walk through the articles in order to give a sense of how they fit, and perhaps of what I mean by an “Economy of Followers.”
First, the Viral Videos. Louderback takes the money shot right up front and scores with, “viral videos are, at their core, no better than a fluffernutter white-bread sandwich, delivering little or no value to anyone.” For a long time, listening to radio spots as I commute (I don’t watch much TV any more), I have had a dark suspicion that ad agencies write the ad first, and the product that will use that ad comes along second. Most of the ads involve a gimmick of some kind that has nothing whatsoever to do with what’s being sold. Old Spice, the Man Your Man Could Smell Like is a wonderful example. Fun to watch those videos on YouTube, but let’s face it, the Old Spice Guy could be selling almost anything. It could be the Man Your Man Could Dress Like, Listen to Songs Like, Buy a PC Like, or whatever.
What sort of products are so bereft of any kind of differentiating intrinsic value that they need to be sold like this? I tell you, it’s Madison Ave Mad Men all over again. In fact, they never stopped. Now ask yourself what sort of customers are so bereft of discriminating taste they would be swayed by an ad like this? Whoever they are, they must be Followers, and not Leaders. Old Spice is counting on tapping into an Economy of Followers.
Now take the Apocalypse and the Bubbles. Fred Wilson is fascinated by Thiel’s painfully long essay on why you must bet on Globalization. He stridently paints in black and white that Globalization yields a great outcome where all company values increase by 10x (never mind why or when), and the alternative is stark: a potentially Nuclear World War where nobody wins. Thiel tries to paint the picture that the Yin and Yang of Financial Bubbles has been driven by Globalization since the 1700’s and that (gasp) it’s a good thing because all those other Bubbles actually underestimated how good it could be.
“Aha!”, says I reading the article. The real constant of bubble economics is alive and well. Not only is it self-referential, but it has nothing to do with Globalization and World Wars. Financial bubbles occur when people become convinced there can only be one outcome, or at most, two where one is paradise and the other hell on earth, and they follow the logical conclusion of that outcome like proverbial lemmings off the cliff. This one is self-referential because Thiel uses Bubble Logic to argue that you’ve got to bet on the next bubble. Why? Because the alternative is all-out Global War and nobody survives.
Yet, nature is seldom as cooperative as we would like with these black and white scenarios. Hedge Funds of Nobel Prize winners can construct mathematical certainties, only to fail because they, like Thiel, forget an essential truth:
The world and it’s markets are not Open Systems that can continue on whatever trajectory that has been set. They are Closed Feedback Loops. Whatever the trajectory looks like today, it will change tomorrow, because the trajectory alters the fabric of the space it inhabits the faster it moves.
China may raise a larger group of people out of poverty faster than ever before, but in so doing, they destroy the cheap wages that enabled them to do it. Now they’re stuck competing like the rest of us. Technology may create limitless wealth forever based on Moore’s Law, or that law may slow over time or even fail to deliver a result that anyone cares about. In this case, we can add more cores that our software isn’t written to take advantage of, but we can’t make the clock speeds go up as fast as we once did.
If you choose to make these bets as Thiel does, at least be humble enough to realize you are pursuing the Greater Fool Theory, and that if you don’t change your own course before the trajectory you’ve bet on changes, you wind up just another Fool. And so, these Bubbles are also Follower Economies. To win in them, you have to understand Followers, be a Follower, and then quit Following at the right time. Or you lose when the Bubble crashes.
Last, we have Arrington’s Psychomanipulation of Crowds via blogs. Perfect. This post was the wake-up call that sewed up the Follower Economy for me. Not surprisingly, Arrington launches into his essay with some pretty ballsy stuff. He wants to, “talk about how perfect blogging is, with its constant feedback loop, as a training ground for mass psychology and manipulation.” And mentions that, “it’s become pretty clear to me that any blogger worth her salt could start, say, an extremely successful militant religious cult.” Hence the photo of the adoring Nazis. Nice, Michael. You are certainly winning friends and manipulating people.
But this is to be expected. Techcrunch has built a business on the Follower Economy. The tactics involved are pretty straightforward. I won’t go into them, but they’re almost strident in their obviousness. Though perhaps not for the Followers. Perhaps they don’t see the overt manipulations and stratagems that are to the blog as Old Spice Man is to the videos. Michael goes on to write, “the first rule of anonymous human behavior – it’s dark and brutal, and reminds me how thin the veil of civilized behavior really is.” This is written like it applies to all humans all the time. But it doesn’t. It specifies behavior in the Follower Economy by Followers. You see, some Follow to adore and some Follow to hate. That’s what Trolls are all about. Either way, the Follower is there because of something they’re missing, not because of something you have. Confusing? Of course, how can you help someone find something they’re missing unless it is because you’re giving them something you have? Well but the answer is you are giving them Louderback’s fluffernutter white-bread sandwich. You’re giving them Old Spice Man. You’re giving them something they can’t really touch or hold or keep. But it makes them happy, so they keep Following.
The larger the group of people, the more it will trend towards the Follower Economy. Small groups can keep enough individualists and starters that they escape the Follower Economy easily. That’s why startups can be so much fun and can get so much done. What’s interesting, is that the Follower Economy can be beaten. It is the lowest common denominator economy. But, in the end of the day, and in every field, while there are many Lady Gagas and few Beatles, the Follower Economy can be beaten. If you run a business, you have to decide whether your customers are Followers, or someone else. Real People, for example. People who want you to give them some real and authentic, because they don’t want to just be Followers. The easiest path is to bet on the Follower Economy. But, if you have the moxy and can deliver the goods, building a Real Company for Real Customers will beat the Follower Economy.
There is a growing chorus of voices out there that tell us how to do it. Seth Godin, one of my favorite bloggers, is not about the Follower Economy. The people he writes about who succeed, are real, authentic, and full of guts. When they smile, they mean it. Author Youngme Moon tells us how to market differently and escape the Follower Economy in her book, “Different: Escaping the Competitive Herd.”
Maybe the Follower Herd would like to escape too. After all, if your choice is investing your life’s savings in the next bubble to avoid Global Thermonuclear War or watching a Cirque du Soleil (they’ve escaped the Follower Herd), which would you rather do? See you under the Big Tent!