Telegram is a secretive social media platform with 900 million users. Their employees aren’t allowed to talk about their jobs. It only has one product manager in its founder. And they got to 900 million users without turning into Facebook but also aren’t earning as much.

Telegram is not really a secure messenger app. It’s one of the largest social media platforms. But certain product choices and the location of its audiences make it almost invisible to people based in the United States or Western Europe.

When you first open it, Telegram looks similar to WhatsApp. WhatsApp’s founders famously focused on keeping it simple and clean. For them this meant not adding anything else: “no ads, no games, no gimmicks”. So they added nothing to the app, even years after Meta bought it. About a year or two ago I noticed WhatsApp started adding very specific features that were obviously lifted from Telegram, like channels. But still much slower.

Telegram can get incredibly complex. On top of DMs and group chats, it can host super groups of up 200,000 people. Anyone can create a channel, a publicly-facing broadcast similar to a Facebook page. The largest one now has 55 million followers. You can save anything in your own personal space, and you can organize chats by folders. In addition to channels, Telegram pioneered other UI paradigms, like video circles, which are vastly superior to voice notes (lifted by WhatsApp again).

But despite all this complexity, Telegram hasn’t turned into the infamous Facebook main page. All these features are carefully hidden. Pavel Durov says that he is the only product manager and personally oversees how the app looks. It certainly looks like it. Despite being a social platform, there’s no unified feed, even though it’d provide the best possible ad space.

Compared to Signal or any Meta’s messaging app Telegram provides the most seamless and polished experience. You can instantly switch between conversations. You can quickly find anything shared inside these conversations, including images, files and links. And there are specific searches for all of these categories. Back in 2017, I often had to look up some old files and images in Facebook Messenger, and it was atrocious. Most importantly, you can easily use it on multiple devices with great desktop apps (there are two, for some reason), and everything is synced through the cloud.

Meta provides you with half-baked web-based apps. And with WhatsApp, you have to relink it to the phone constantly. But Telegram can only do this because the messages aren’t encrypted end-to-end. Telegram started as a “secure messaging app” (they launched quite a bit before Signal). But they aren’t using this tagline anymore since it’s not a differentiator, and it’s not true. With Telegram, you have to trust the team not to peek and keep their servers safe and secure. You can create dedicated E2E chats, but only manually, and their functionality is as limited as you’d expect; they’re tied to a particular device and don’t sync at all.

But most users don’t care. This trade-off makes Telegram easy to use, and the team focuses much more on social features anyway. In regions where Telegram is popular, channels replaced newsletters as a form of revolt against algorithmic feeds. They’ve recently revamped user profiles to make them more public-facing and let you pin your channel right there. You can write long texts, share images, and not worry about links being suppressed. On the other hand, you will never get any algorithmic boost. You must proactively look for these channels or get a link elsewhere. In a world where social platforms demand specific content and try to commoditize all content, Telegram feels like a remnant of the old web.

Telegram did add Stories, and I think that was one of the rare misses by the team. Having someone as your Telegram contact is a weaker signal than following on Instagram. Imagine discussing your upcoming partnerships while your stories show how you left the bar at 4 am. Considering the “messaging” part with groups and DMs, they should have made stories visible to “Close Friends” only and asked you to choose the list manually. Then, it could have worked.

Telegram has a notoriously lenient approach to moderation, so you can see accounts from both sides of the Russia-Ukraine war. But unlike modern Twitter, Telegram doesn’t shove it in your face, so even Zelenskiy is happy to use it. While each channel has a URL, the reading interface on the web is extremely basic, and aggressively pushes you to go to the app instead. They definitely could have improved it but chose not to. Telegram is its own kingdom. That’s one of the reasons you rarely see links to its content. Social media apps often use built-in browsers to keep you there, but Telegram goes beyond and provides reader views for most websites, especially news media. No reason to leave the app. Last month they even added its own multi-tasking to Telegram, where you can collapse the browser and continue talking to people or reading channels.

Telegram is the app people use for everything. Talk to their partner. Set up a dinner party. Discuss work projects. And read the news, of course. You can create a group with dedicated threads that look like a Discord/Slack server. I know companies with a few thousand employees that use Telegram as their internal comms tool. It has downsides, of course, as you don’t control your employee’s accounts, and they can mix and match their personal conversation or easily forward messages. Companies write bots to accommodate (like deleting the person from all chats, but it’s still clunky).

With Telegram, you need a phone to set up your account, but you don’t have to share it. Instead of giving out your phone with iMessage, Signal or WhatsApp or sharing your personal Instagram page, you can send a nickname. This made Telegram especially popular among crypto people who prefer to stay semi-anonymous. It is the default communication app for crypto projects, both for their internal ops, connecting to other businesses and community management. They could use no other single service for all of these things instead.

How does Telegram make money? It’s complicated. I’ve seen Durov’s previous project, VK, and have used Telegram since its early days. I think this team is opposed to ads and what it takes to make them work on some philosophical level, and they don’t want to learn. That’s part of the reason Telegram feels nice. There are ads, but they’re pretty unobtrusive since there’s no global feed, and they operate mostly by context with minimal targeting. Telegram also doesn’t have much data on you, so I can’t imagine that CPM is too high. You see these ads in channels, and most of them are for other Telegram channels.

Telegram also has a Premium subscription at $5/month. The subscription removes ads and raises some artificial limits in the interface (the number of chats in a folder); it also gives you a unique check mark and animated emojis. Some people buy it because they like it, and people who use Telegram heavily in their work buy it because it’s just easier than fighting the app. Back in January, Pavel reported 5 million paid subscribers. If we don’t take churn into account, that’s an annual runrate of $300 million. Very impressive, but I’m not sure if it still covers the expenses alone.

Running Telegram takes a lot of money. Partly because they store everything in the cloud, so your mother potentially doesn’t have to figure out how to move her WhatsApp messages from her Android phone to a new iPhone (saying from a personal experience). In 2017, Telegram raised $1.7 billion from investors and announced they would launch their own blockchain TON. The SEC considered their tokens to be unregistered security, so Telegram backed off. They spun off TON, made it open-source, and integrated with it later.

Crypto is a big part of Telegram right now (but you might never see it like other complications). Both Twitter and Instagram canceled their NFT avatars. But in Telegram there’s a crypto wallet, there are web-based mini-apps, and a very basic appstore. The Hamster Kombat game was launched on this platform and gathered 300 million users.

There aren’t too many useful apps yet, but it’s interesting to watch it develop. For years, people were looking for the WeChat of the West. I don’t believe there will be such an app, for many reasons, but Telegram is the closest thing, and it’s curious both use the web stack for these mini-apps.

We don’t know much about the team. Telegram says they have only a few dozen employees working on the core app. The fact that they were able to get to 1/4th of Meta’s userbase is incredibly impressive. Still, we can only rely on their words, as nobody else can share anything about their work. And if you read any stories about Elon’s dreams for X, Telegram might be much further along this path. Telegram Premium probably has more paid users than X Premium. But that’s not all.

Pavel Durov is obviously unhappy with Apple and Google. He’s been at them for years. iOS and Android are critical platforms for Telegram, as the app completely depends on their rules and whims, from content moderation to limitations on what and how they can sell inside the app. You can buy Stars to pay for goods and services inside the Telegram ecosystem, but Apple takes 30%.

But inside this crypto wallet (which isn’t available in the US as many crypto things), you can store USDT, which is the next best thing to a digital dollar. And it’d take a flick of a switch to let users pay for content and services with USDT that they can buy anywhere. This would simultaneously solve Telegram’s problem and push its audience toward crypto.

Telegram is in an unstable equilibrium. They need to perform a careful balancing app with SEC, which already destroyed their original plan and forced them to return most funds, and with Apple, which can destroy their app as they did with Fortnite on iOS. I believe they’re betting they can do this, and their lives will be made easier with the rising pressure on Apple from regulators and the growing adoption of crypto itself. And Telegram might have the best chance to ride both waves.

We’ve all seen these posts about how Twitter fired 80% of its employees, and then nothing happened. Seems it ultimately did affect their revenue:

Internal documents obtained by The New York Times show that, in the second quarter of this year, X earned $114 million in revenue in the United States, a 25 percent decline from the first quarter and a 53 percent decline from the previous year. The company aims to reach $190 million in U.S. revenue during the third quarter, bolstered by advertising associated with the Olympics, football and political campaigns, the documents said — but that target would still set the company’s quarterly earnings at 25 percent less than they were last year.

These people might argue that these two items aren’t correlated but I doubt it. Twitter didn’t have a great advertising engine, so most of its revenue came from generic brand advertising, and companies have brand safety teams for a reason. Elon, a “libertarian capitalist”, still seems to have a problem with the free market when it’s against him.

I think you can believe that Twitter was grossly over-staffed, badly managed and dysfunctional before Elon bought it and ALSO believe that he fired far too many people in the wrong way without fixing anything much. Benedict Evans

I really loved Twitter. I think it changed a lot, mostly for the worse. But because Elon has the worst fans and the worst critics, it’s extremely difficult to find non-polarized opinions on this. Being an eternal centric, I wanted to gather all the details. So stay with me if you’re interested.

The Good

Let’s start with good changes. Twitter was an anemic company. It always seemed like they were terrified to change anything in their product. Probably, because they didn’t understand why it worked and were too terrified to break it (well). And even when they came up with something new, like the predecessor of Twitter Articles, they’d make it available to ten people they knew in San Francisco for two years.

Elon came in and made them ship all those things to the point where the audience largely attributes Community Notes to him. And this is almost reasonable. Community Notes is a fascinating tech product for the social media era. The main problem with fake content is that it spreads much more easily than any rebuttal. Community Notes effectively chase down and clarify the original posts and even notify the users who interacted with them earlier.

There were all these stupid ideas about marking and signing AI content. It’s not like people want to verify if something they’re seeing is true. It’s confirmation bias: they seek something that confirms their pre-existing beliefs. You don’t need AI to create an engaging fake, like that photo of Kamala Harris with Epstein. And the problem with forcing OpenAI or Midjourney to stamp their content is that the next day there will be a Github repo for removing that signature. In addition to a dozen open-source alternative image generators, you can download from anywhere.

Community Notes solve this problem and allow citizens to keep corporations and politicians in check. You can’t just post obvious falsehoods on large accounts anymore (well, it’s still as complicated as everything in this world).

Under Elon, Twitter rolled out a reasonable paid subscription (although I think three tiers are too complicated). They released a bunch of things they built before and even some completely new ones, like X Hiring. Even little things, like finally putting your pinned lists at the top of the feed on the desktop.

After losing most of its advertisers, Twitter has seemingly revamped its ads team. One representative even reached out to my company. However, most ads I see are still from Twitter natives, like content creators promoting their accounts and newsletters. I’m not sure if there’s a lot of money in this.

Twitter now has a powerful and engaging algorithm that should excel at onboarding new users, something they ultimately struggled with before. Many of my friends tried Twitter but didn’t understand the point of it. Twitter would only work if you follow the right people. Now it’s basically automatic and on par with Meta’s tools.

Their goal was obviously to keep users on the website, and in this context, shutting down Revue and suggesting authors use Twitter Articles instead makes sense. The feed on the mobile app also changed; now, if you open a video, you can just swipe to the next one, bringing it closer to TikTok.

This is also why they prohibited alternative clients. I know many hate them for this, but purely from the business perspective, this change made sense. The old Twitter knew they had to do this but preferred the tactic of boiling the frog. The new Twitter comms on this were far from ideal, but they pulled through.

Finally, monetization created obvious incentives to set up and run accounts that posted various content on Twitter. Some of them good, some of them… well, there’s the next section.

The Bad

Twitter botched down their update to the blue check program. Look, this thing was flawed. Twitter employees would sell you a blue check for a couple of grand if you knew where to ask. At the same time, I met companies that struggled with impersonators but couldn’t get verified. The blue check was supposed to mean you’re who you are, but it became a power status symbol instead. Sometimes, when people abuse your product’s limitations, it’s a sign that you need to change it.

However, the logical solution would have been to keep the existing accounts and then offer all who are willing to get a blue check if they subscribe to Twitter and provide their ID for verification. There are KYC-as-a-service companies that do this for fintech startups, so it’s pretty easy. Don’t want to show your documents? Nobody has to have a blue check.

Instead, we got the current mess. Through several iterations, Twitter still got to the point where they awarded the blue check to notable accounts. But the important change is that it can be a DogTurd69, a famous “thought leader”. At first, blue check became coded pro-Elon and even right-wing. Now they don’t mean anything, except that your replies are boosted to the top.

You probably have seen all these companies with gold checks. Don’t believe they paid $12 000 for a year. Twitter gave these to the most notable companies, probably with the expectation that they would start paying next year. We’ll see how many do (or if Twitter itself changes course). Proving the affiliation of specific people (like writers or media reporters) with a badge sounds like a great idea. However, most marketers I talked to believe it’s just too expensive for the little value it provides now.

In addition to losing third-party clients, Twitter has become more closed overall. You can’t browse it without logging in. Often, you can’t even reliably link to it on other platforms, and there are services like vxtwitter whose entire goal is to provide rich previews. In the process, they closed down the API and killed even some of their own tools, like the Card Validator, provided by all social platforms. Finally, outside links are getting suppressed to a degree you shouldn’t even bother posting them. I’m pretty sure they now even track links in the first reply from the author, at least based on my own tests. They did this before Elon, but now doubled down.

Surprisingly, all of this didn’t help beat the bots, which was one of Elon’s key goals as he was getting into it. Just try tweeting the word “metamask,” and you will see a bunch of blue-check accounts trying to scam anyone reading it. It is becoming increasingly difficult to distinguish these bots from regular users since they look just the same, and LLMs are getting very good.

Old Twitter’s algorithm focused on ranking the people you follow with an occasional mixin. The new algorithm is much closer to TikTok. Even if your account is empty, it will create a pretty engaging feed. The problem is this engagement often comes from the worst aspects of human behavior. I’ve never been keen on the idea that social media thrives on this alone, but this particular algorithm might. The Twitter of today is toxic.

Since firing their entire trust and safety team, Twitter has been far more hands-off in moderation. People flocking to Mastodon would refer to the app as “filled with Nazis”, and at first might have been an exaggeration. But now I constantly see racists, incels, and right in my feed, even though I try to have zero interaction with them or their tweets. They hate minorities and ask if women are sentient. I don’t want to be around these people and don’t think free speech is the panacea in this case. The problem is not they’re not banned, but they’re clearly getting amplified, since I don’t follow them.

Everyone who has moderated a forum knows you must do this very diligently if you have even a small audience. If you don’t set the standard and have new people coming all the time, it’ll fall to the lowest common denominator. Is it possible at the scale of hundreds of millions? Well, Twitter could do this before, and not because it banned all conversations. But it certainly wasn’t promoting fringe ideas to everyone’s feeds. Easy to see why brands might not be happy with it.

The new algorithm is very polarized. It gathers the most engaging feeds and leaves everything else to rot. If you’re not getting into the For You feed, 90% of your followers are unlikely to ever see your content. Elon made it very obvious by putting the view counts up. So, authors are incentivized to go to the extremes.

Let’s get to the original thought. Is Twitter operating smoothly? Certain minor things have been broken for months for me. For instance, if I click on any tweet in my bookmark, the page jumps to the top. There are many places across the product that work like this now.

The Ugly

I spent the last weekend without my phone, avoiding all the feeds. When I opened Twitter afterward, it just felt so unnecessary.

There were several reasons I liked the old Twitter. It was the most open social network where you could actually post links and easily copy text. There was an ecosystem of services and bots built on top of it. And it also was the most real-time network for news junkies like myself.

I don’t think I’ve ever befriended someone in real life after following them on Instagram, but with Twitter, it did happen. I think it’s because you can get acquainted with someone much more easily by reading their thoughts instead of looking at their sunset photos.

Well, Twitter was actually a great platform to share photos as well! People were always stingy on likes, but the engagement was comparable to or better than Instagram. And the resolution and quality were much higher. I’d rather share updates about my trip on Twitter than try to jam it into a short description under a gallery of 10 photos that nobody will scroll through.

As for being real-time, I think it still holds this role, and alternatives haven’t caught up (and some probably don’t even want this).

That text-centric nature has always limited Twitter’s appeal to most people. It was never a truly big platform. However, it also self-selected the users who were interested in this—the people I wanted to follow, read, interact with, and potentially learn from.

Twitter is basically a large forum where you own all of your replies. I was an active user of many thematic forums that just died, and every time, it was almost like I lost a part of my identity. Twitter allowed you to keep this identity between “forums” and discussions. But this aspect is only as important as the network itself.

Now, most people who were on Twitter are still there, but many have left, scattering to Mastodon, Threads, BlueSky, and others. Of these, only Threads seem like a reliable alternative for me. Mastodon by itself still feels like something made by geeks and for geeks, and the lack of any algorithms and recommendations really limits your community. I’m not talking about “growing your followers”, it’s hard to simply find interesting people to follow. But, if Meta makes Threads fully federated, there will be a unified community where you can follow people from celebrities and your friends to geeky developers.

We will see what happens to Twitter, but I doubt it will have a big turnaround.

I guess growing up means watching the things you love die.

The internet is probably my favorite invention in the whole world.

It’s hard to compare it with penicillin or electricity, of course, but I still remember the awe I experienced when I realized I could talk to some strangers right on my computer or look up anything I wanted. Well, mostly texts since music and videos weren’t exactly available on my 45.2 kbps dial-up connection.

This was around 2005. The internet was paid by the hour. One month my parents got such a huge bill they realized I spent around 100 hours online, and believe me, it was expensive.

They didn’t think much of this new toy but believed it’d change everything. I was reading the news, learning how to code and design, and how to shoot better photos and edit them.

I didn’t have any money, but thankfully, after you got online, everything was practically free back then, supported either by volunteers or online advertising (and piracy, yes). Everyone was on the same Internet, especially if you knew any really popular languages, such as English, Spanish, or Russian. There were no borders, and if any laws were applied at all, they’d be American, so quite liberal regarding what you can and can’t write or say (but click a checkbox that you’re over 13).

Since then, the internet has reshaped economies and enabled entirely new ways of work. My entire career was built through the Internet. I learned everything I needed to land my first job and have worked remotely since then. I work in communications and the internet is where most people consume the news, without even thinking about it. It’s just there.

The internet was only allowed to emerge and develop as it did because nobody was paying attention to this silly little thing. Societies are slow to react, so when they did, it was already too late. If you think about it, many aspects are truly crazy. Anyone can publish anything, Google copies content from all websites, and entire industries have been decimated by the shift online.

As the government woke up, it all started crumbling. First came the authoritarians, who saw a direct threat to their rule since the internet (especially mobile) allowed opposition leaders and protesters to organize or spread alternative views. Because it was a new medium, they would often decide to create a new watchdog or set up innocuous laws they could leverage to erase the content they didn’t want.

Then, to my enormous surprise, the developed countries started slowly adopting practically the same laws as China or Russia (which is rarely a good thing).

First was the economic regulation, as they saw the giant digital economy growing in front of their eyes and adopted things like the “digital” VAT that must collected from online platforms even for cross-border sales (which seems to conflict with the very concept of VAT but OK). I call this digital protectionism.

Then they came for content. Certain governments granted themselves the ability to quickly block websites without ever going to court. Required tech platforms to “land” in their country or region, set up local subsidiaries, and hire people (who, in certain cases, would be just hostages to the regime). Demanded “data retention, so ISPs and online platforms store copies of their customs data.

For some reason, the UK and Australia were at the forefront of offensive laws leading to wide-scale government surveillance (under a veil of protecting children, of course), as both tried to ban end-to-end encryption. Now the entire European Union is trying to do the same, the decision has been delayed but the possibility is out there. In 2023, Signal confirmed they’d leave the UK if they passed this law.

Australia (again), Canada, Spain and France introduced the link tax, a weirdly worded subsidy/tax combo that takes money from Google and Meta and gives it to the largest local news organizations (but not any other organization or small newsrooms). Benedict Evans has a great post explaining why it’s a terrible idea.

But if you do accept the novel theory that links being free for 25 years is a market failure, there’s a further breach of basic logic: if all links have value, why should only newspapers be paid? If all links were paid, then newspapers’ share would be a pittance.

Of course, the European Union is famous for its initiatives, starting with GDPR and now going all-in with DMA. GDPR created a requirement to store “personal data” for EU residents, which led to a noticeable number of websites blocking access from the Union.

Sidenote: Apple and the EU are fighting each other but turned out to be surprising allies against targeted advertising, which funds the free internet for hundreds of million people

Digital Markets Act (DMA) was the latest huge milestone. We still don’t know where it will ultimately lead, but Meta and Apple have already had to adjust their products specifically for the EU. Threads blocked access to all accounts created from the EU for many months. Now, we have learned that Apple won’t release its Apple Intelligence features in the EU.

All these regulations bring us closer to a fragmented internet that will be nothing but a shadow of what we had.

China famously has its own intranet cut off from the rest of the world by the Great Firewall. Russia is building similar capabilities after being sanctioned and ostracized to the point most companies leave its market voluntarily.

The United Internet of America is collapsing. We’re driving head-on into a world where every major country and major economic block carved out its own fragment of the internet with different rules, regulations, and local champions. You might say this is the natural order of things that works in all other industries, and big tech companies will adapt. And you’d be right. But the Internet didn’t work like this, and I believe it was better for the users.

***

What does it mean for us, exactly?

There’s a good chance that, with time, you won’t have access to that popular app or website people are raving about. Both as a consumer or a business, you’d have to use local tools that aren’t necessarily better (most likely worse), especially if the regulations prevent them from having to compete on the world stage.

It’s likely you will find it extremely challenging to break the laws here. Threads’s ban of Europeans from accessing the app was quite bulletproof, and even the VPN couldn’t help. This is just like in the physical world, where a ban or tariffs on certain goods can make it extremely challenging to buy them.

Arc is an alternative Chrome-based browser with a unique interface. It’s become so popular that The Verge reports on pretty minor updates. I switched to it quite early and haven’t looked back.

Browsers are the most important apps we have on our computers right now. Whether you like it or not, the application layer has shifted to the web. But as I wrote back in 2020, browsers haven’t caught up.

Look at Google Chrome right now. It’s essentially the same browser that launched in 2008. The only recent major update was Tab Groups, which happened in 2020 and they are still subpar. For one, groups aren’t persistent and I can’t understand the logic behind this. You create a “Work” group, open a bunch of tabs, close them… and the group disappears. Want to “work” again? Create it, name it, and choose the color. Every time.

Google Chrome was invented for web surfing: it lets you open a bunch of almost static web pages and read their content. Now, we have entire apps like Figma, Linear, and Spotify running in web browsers, and Chrome’s interface hasn’t been adapted at all. All Chrome can offer is pinning them as tabs. No considerations have been made to help people manage their tabs.

The development of Chrome’s interface was also remarkably slow and inconsistent. Chrome on Android would get Reading List, iOS wouldn’t, and it’d then take them years to bring this to the desktop and set up syncing. I’ve just tried Chrome’s current Read Mode on desktop, and it can only show you text side-by-side with a page for some reason.

You can also turn PWAs into “desktop” apps. But this option is a bit hidden, and most of Google’s own apps, except Photos and Maps, don’t support it. Where are PWAs for Gmail, Calendar, and Docs? I suppose Google would prefer you to use Chrome, where you’re always a click away from Google Search and its ads.

Now, Chrome isn’t the only browser. But Firefox’s UI is not too different. Safari has its own issues, but at least it offers a cohesive experience. You get a complete browser out of the box, with a fantastic Reading Mode (still best in class), a synced Reading List, and much better Tab Groups. Now, because Apple isn’t great at cloud, the two previous features just stopped working properly for me for a few major MacOS versions, but right now, they do work. Plus, browser extensions are quite important to me, and even though Safari adopted the same standard as Chrome and Firefox, developers still need to do separate work to distribute them.

But at its core, Safari can only offer pinned tabs (which are incredibly small squares). It can also suddenly kill your Google Meet tab with an active call because it “consumes too many resources” (this happened to me).

I often hear the claim that companies don’t need to invest in their iOS browsers because they still have to use Safari’s Webkit. I don’t buy it at all. For one, Brave has been pretty good at creating a nice experience across all platforms, as I outlined in a different post.

What Makes Arc Different

Arc became the first credible and ambitious attempt to reinvent web browsing that was actually able to get traction. It wasn’t the only one or the first one. I listed some options here. Some of them died, some dragged on.

Arc’s most important part is its sidebar. And vertical tabs! At first, you might feel like you’re losing too much space. But most websites right now don’t take as much width anyway, except for the likes of Webflow or Figma. Everything else looks fine, even on a 13’ MacBook. In return, you can keep lots of tabs open and still see most of the titles. Out of major browsers, only Edge and Brave offer vertical tabs now.

In the sidebar, you get three distinctive groups of tabs.

The first is for the favorites, but I mostly use it for applications: email, calendar, Spotify, Notion, Readwise Reader, Google Docs, and anything I use constantly. When you close such a tab, its instance is terminated, but the icon stays there in the same position as a bookmark. Mouse targets are generous and don’t take up too much space.

Next go the bookmarks. Anything you’d like to have handy, but now you get the titles. And you can put them in folders. One of the adoption hurdles for Arc is that it doesn’t get traditional separate Bookmarks, so I put mine right here. The persistence is also there.

Only then do you get traditional tabs that you lose when you close them. Arc treats them so harshly that they are automatically closed after some time, which can’t be more than a month (a bit excessive if you ask me).

On top of this, Arc offers Spaces, which are essentially tab groups. You can create multiple spaces that would share your Favorites but have dedicated Bookmarks and Tabs. I have one for primary browsing, one for sales, one for reading the media and one for software development.

There’s a joke that there are two groups of people. The first has no more than 5 tabs, the second has no less than two hundred. Arc is perfect for both, but especially for tab hoarders.

On top of this, Arc offers multiple quality-of-life improvements:

1. You can switch between tabs in a loop with a quick preview, just like you switch between apps with Cmd-Tab (Alt-Tab).
2. The autocomplete in the new tab popover prioritizes currently opened tabs, so you can switch by typing part of their name.
3. There’s a shortcut to copy the current URL, which I probably use 20 times a day.
4. You can click a button and sort all of your opened tabs by categories, creating order out of chaos.
5. You get little custom benefits, like picture-in-picture for Google Meet, always available media controls, countdowns to your next meeting with Google or Notion Calendar, etc.

One criticism I sometimes hear about Arc is that it’s based on Chromium. Nobody cares. Chromium is the most advanced browsing engine, powering most apps people use. And it’s definitely not IE6, especially not the one I remember. IE6 was a bad browser that held the entire web development industry hostage. Chrome was the first to implement many standards. It won. Give up.

Then, we have the obvious challenge of monetization. Safari has Apple, Chrome has Google, Mozilla has… erm, Google, and Brave has their own ads on the blockchain. Arc is built by the Browsing Company, a venture-backed startup that needs to grow and either IPO (seems ambitious) or sell. The only way I see this happening is a subscription for advanced features, probably with a team collaboration angle.

But I’ve worked with a company utilizing this exact path and can say it’s not easy. Arc indeed got a great PMF score from me, but I’m wondering if they will be able to offer such compelling features enough that people would pay.

I have to say, I don't know what I'd use if @arcinternet disappeared tomorrow

Would be extremely disappointed

— Yury Molodtsov ⚡️ (@y_molodtsov) October 24, 2023

***

I haven’t been this excited about the browser in a long time. But at the end of the day, we have just one outlier, and I wish Arc all the best.

People arguing about regulation tend to favor one side of the argument and believe that either the government or the market has the capabilities and the desire to standardize and solve consumer problems. Theoretically, both approaches are valid, even if they lead to different outcomes. I wanted to tell you about two particular examples I like the most. And yes, basically I will compare the United States and the European Union.

First is credit card cashback. But we need to take a few steps back first. When you buy something for $100 with a VISA or MasterCard, the seller doesn’t get $100. There are interchange fees charged by the card processing network that are shared between them, the bank operating the card terminal, and your own bank.

This creates a few challenges. The seller gets less money, but in theory, you’re more likely to spend more at their establishment if you can pay with a card. Still, they most likely keep their prices a tiny bit higher to account for this loss. The interchange fees also aren’t totally linear. The advertised Stripe US rate is a good example: 2.9% + 30¢ for each successful card charge. A brick-and-mortar business is more likely to use something like Square, which offers 2.6% + 10¢. But there’s always this fixed part, which makes fees on a small purchase much larger.

If you buy something for $100 with Stripe, the seller will receive around $96.8 (or lose 3.2%). But if the charge is just $5, the seller will get $4.55 (or lose 9%). This makes small amounts very inconvenient and potentially outright unprofitable for the seller. This is also one of the reasons Twitch sells its ‘Bits’ in huge chunks and Apple combines AppStore purchases to charge you once when it can.

Interchange fees are essentially a tax on most consumer transactions in a cashless economy, inflating prices and making certain transactions financially impractical. How do we solve this?

The competition between banks in the US (and some other countries) led them to invent cashback. Instead of pocketing their share of interchange fees as revenue, they give it back to their users to attract and retain their customers. Preferably high-value customers. The kind who will generate revenue for these banks through other products. US banks could pay between 1.5-3% in cashback, depending on a particular card program and purchase category. Technically, they might even overpay and lose money on certain benefits, but the cashback is the key source here.

Cashback addresses the inflated prices, but not ideally, and this is only one of two problems introduced by interchange fees. A policy study conducted by the Federal Reserve concluded that back-reward programs result in a monetary transfer from low-income to high-income people. This makes sense since the best terms of cashback and rewards are available on premium cards.

The Durbin Amendment in 2010 limited transaction fees to 21 cents plus 0.05% of the transaction value for banks with $10 billion or more in assets—but only for debit cards. This is also why many American challenger banks and fintech startups, like Evolve Bank, meticulously chose the partners who’d provide them with this source of revenue.

To clarify, there’s nothing unique about credit cards, as debit cards with cashback are quite common in other countries.

The European Union chose another route. Regulation (EU) 2015/751 limited interchange fees for card-based payment to 0.2% of the transaction’s value for debit cards and 0.30% for credit transactions. Effectively, the EU told Visa and MasterCard: “Look, you guys have won. You can enjoy a profitable business with an extreme moat, but we want to limit the negative externalities.”

Before 2015, it was common to see signs allowing card payments for purchases over €10 in European stores. Almost 10 years later, however, these are much rarer (Germany still loves cash, though). European cards basically have no meaningful cashback programs simply because banks don’t have this revenue source. This seems a reasonable trade-off since the prices are also cheaper.

EV Chargers

Charging ports for electric vehicles are another example. The US and Europe have effectively settled on a particular standard—but different ones. The EU uses CCS2, an extension of the old Type2 port with fast charging, and practically all automakers are committed to switching to NACS (Tesla’s port) in the US.

The former is a case of regulation. In 2014, the European Union adopted CCS2 as a requirement for EV charging networks. The latter is a case of Tesla building the largest charging network in the US to the point that other automakers found it easier to switch (without anybody forcing them).

From the user perspective, NACS looks better as it’s much smaller and lighter. From a technical perspective, CCS2 might actually be better, at least for Europe, with its supposedly superior electric grid with 240V and 3 phases.

We’re still a little bit away from all cars having the same ports. In Europe, cars and stations with outdated ports like CHAdeMO still exist, while older Teslas use their proprietary CCS extension. Automakers will only start shipping NACS-enabled cars in the US by 2025, so everyone with an older vehicle like a Rivian R1S/R1T will likely have to upgrade or start using an adapter for Tesla’s Superchargers or new public chargers.

These two approaches have two drastically different outcomes, yet both solve the enormous problem of multiple incompatible ports and chargers.

***

Markets tend to solve consumer problems with the means available, but the outcome is often quite different from a potential government intervention. Both options could also just fail, resulting in a dysfunctional market or an incapable government monopoly.

What’s common between them is the reliance on the pre-existing situation. Anything dominant tends to have a moat. What’s different is the focus on negative externalities. It seems that in the cases of markets regulating themselves, these externalities persist unless some actors are both incentivized to eliminate them and have the capacity to do so.

Most people tend to overvalue ideas and undervalue execution. In my experience, that holds even for many people in the tech industry. In general, this couldn’t have been further from the truth.

Now, there are some rare moments in history when getting the right idea at the right time could dramatically affect your outcome. Facebook would have issues coming up either 10 years earlier or later despite their famous ruthless execution. But it should still be true for most cases.

Thomas Edison didn’t develop an idea for an electric light bulb. On the contrary, he entered a race to invent one pretty late in the game. Many people thought of using electricity to produce light, yet nobody figured out how to do this reasonably. There were multiple attempts before him in the 1800s. Edison tried out hundreds and thousands of different combinations of construction and material until he could build a relatively affordable light bulb that could work for many hours.

Around 2014-2015, before I had my stint in venture capital, I worked in comms. We were building lots of spreadsheets that we were effectively using as databases (but with no added functionality or guard rails). Google Sheets were Excel for the web, but they didn’t copy and simplify Microsoft Access. So, I went to look for something that would allow me to create very simple databases. Effectively, a spreadsheet where you can’t just paste arbitrary data in the middle of the sheet.

I found Fieldbook. It was almost exactly what I was looking for. I explored using it for our coverage trackers, media lists, and other use cases. Even back then, it was already miles ahead of Sheets in some specific areas that I needed, but a few things felt a bit suboptimal. I tried looking again and suddenly discovered Airtable. It was an extremely similar product on the surface, but a few key details were different enough to convince me to shift to it.

Even though Day One Ventures didn’t exist yet, we were already doing angel investments. Imagine getting on that opportunity! But back then, I convinced myself that I was a clear outlier and nobody would geek out in databases for some reason. Turned out it was an enormous industry and we got the likes of Notion and Coda. Many industry SaaS solutions are just specialized databases with a couple of custom fields and integrations bolted on. The smaller the industry, the more expensive they often are. So many businesses find it easier to create something on Airtable instead of paying $250 per seat (e.g. Tesla used them to run their inventory).

There wasn’t even a better A/B test for startup outcomes. Airtable was once eyeing $10Bn valuation and downgraded to $5Bn after the pandemic and the financial crisis. Still, it is an extremely impressive result for any business. Fieldbook was only able to raise $2.9M and got acquhired by Flexport. And thankfully, its founder Jason Crawford wrote two good post-mortems (1,2). Companies went after slightly different markets, and Airtable was able to leverage its resources better. But at its core, it was the same idea.

In contrast to the utter simplicity of Slack (chat rooms), Trello (a board of cards) or Dropbox (literally just a folder), Fieldbook required people to learn a new paradigm in order to fulfill the promise that had hooked them in. We worked on this long and hard, and the team did a great job at digging through many layers of incidental complexity, but in the end we hit a bedrock of essential complexity that we didn’t have the resources to drill through.

In contrast, our closest competitor, Airtable, seems to be getting more traction. Early on, their product focus was subtly different, with more emphasis on mobile experience and collaboration features than on data modeling or formulas. These aren’t the features that were most important to the users we talked to, but they’re easier to understand, and I suspect they made both marketing and onboarding easier for Airtable—maybe just enough to make all the difference.

Because it’s the execution that truly matters. If you or I got teleported to 2004 with an idea for Facebook, I doubt we’d be able to create it.

Balaji started a discussion on Twitter that finally pushed me to put down my thoughts on the matter.

Some time ago, around the early 2010s, a tectonic shift happened in the media industry. Before this, it was a darling. Small and quirky companies improving our lives. Blogs like TechCrunch emerged to cover it exclusively and grew in tandem with tech. TechCrunch is now a prominent media outlet that is visited by 10 million unique people each month.

But something changed. The tech industry was taking over everything, and its champions started becoming more and more prominent in our lives. With scale came scrutiny. Journalism is the fourth power, a system of checks and balances that is supposed to question everything by design. This is a handy property. Financial Times was the one that uncovered all the fraud behind Wirecard, Germany’s favorite unicorn. Coindesk published the materials that triggered the collapse of FTX so we could learn the other side of Sam Bankam-Fried.

When tech became a celebrity itself, it joined a circle of politics and big businesses. Small startups don’t affect the world much at first. Then, they grow into big corporations, and sometimes, their road ahead is filled with unintended consequences. Although, sometimes, they know perfectly well what they were doing.

Journalists don’t hate tech people. They talk to them and write stories all the time. They are definitely more critical than they were, though. But only because the industry itself has grown.

A good interviewer isn’t supposed to be your friend. People read the press, and people work to appear in the press with one specific goal: to get exposure and credibility for themselves and their businesses. There would be no value in this if reporters weren’t diligent. And often we want them to be diligent and uncover people who attack their employees, fraud their partners, and commit unspeakable things. The media is the only neutral party incentivized to spend resources investigating such things and bringing them to light.

That doesn’t mean all interviews and press interactions should be a battleground. Nobody needs a confrontational interview when an actor goes on either a late-night show or “Hot Ones”. But two close people interview each other, and most often, it leads to a very dull puff piece that nobody reads.

There’s a particular movement of people who believe you should go direct, produce content, and go on your friends’ podcasts instead of working with the media. I actually agree that you should do those things, they’re extremely helpful. But too often, they come from people who already have tens of thousands of followers (if not millions). Their advice isn’t exactly actionable for most founders.

Of course, you don’t need to do PR in the traditional sense when you’re Elon Musk or Garry Tan. But even they use the media, they just don’t need to send out pitches because of their mass of followers. Recently, for the first time, Tesla started doing traditional press tours in Europe for the updated Model 3.

Not all coverage is good coverage, of course. I personally helped some of our clients defend against negative pieces that had no basis in reality. Sometimes this happens, just like sometimes a tech company fumbles to the point where people suffer. But it’s important not to let yourself get in a bubble when confirmation bias kicks in. Most people are good.

The European Union and Apple are locked in a fight nobody wants to cede. First was the Digital Markets Act (DMA), which made Apple create an entirely new subset of rules for iOS and the AppStore. And yesterday, Apple was fined almost $2 billion for their anti-steering provision affecting companies like Spotify and Amazon’s Kindle.

All digital purchases on the iPhone must go through In-App Purchases, which involve a 30% commission to Apple (goes down to 15% for long-term subscriptions). While certain services like Netflix and Spotify (classified as “reader apps”) can ditch IAP, the resulting user experience gets weird. You cannot sign up if you download such an app as a new user. And the AppStore rules prohibit developers from even suggesting to their users that they should go to the website instead and start their subscription there.

This is probably one of the most egregious examples of how Apple’s strategy leads to suboptimal experiences on their devices. Apple feels entitled to this tax, which you can clearly see in their statement.

Despite that success, and the App Store’s role in making it possible, Spotify pays Apple nothing. That’s because Spotify — like many developers on the App Store — made a choice. Instead of selling subscriptions in their app, they sell them on their website. And Apple doesn’t collect a commission on those purchases.

Spotify didn’t really make a choice because they didn’t have one. Some companies, like mobile game development studios, can shed 30% of their income because their marginal costs are more or less zero. This isn’t the case for Spotify since they have to give back most of their revenue (which amounts to 74%) to copyright owners (i.e. labels and artists). The same is happening with Books. You can’t buy books on Kindle or Audible on your iPhone because then Amazon would have to pay 30% to Apple. And for any book, there’s already a pre-defined distribution between the publisher, the author, and the seller. Amazon would be losing money on every book then.

One of the main problems with the AppStore fees is the rules don’t differentiate between goods with marginal costs and those without them.

What makes Apple look particularly bad and should have motivated this case is the fact they operate competing services in the face of Apple Music and Books. And Apple doesn’t have to pay themselves 30%. So, they enjoy better economics and a better user experience since you can sign up right away. One could build a legal case that Apple is extending its monopoly power from one industry to another, which is prohibited in most major jurisdictions.

The Digital Markets Act has many provisions. Apple carefully crafted such a response that most developers would not even dare to use the updated EU regime. They did open certain things, like access to the NFC chip, and later, they removed some of the limitations. However, they still want to control the overall experience and charge money.

In my opinion, this is indeed a case of an unstoppable force facing an immovable object. And it gets ugly. The European Union shouldn’t make tech product decisions. What is even worse is that most EU regulations are written in a particular way. Like with the infamous GDPR, businesses have to guess what exactly they need to do for the government and regulators to assess whether it’s compliant. It’s also noticeable that the EU’s fines are getting arbitrary by this point. Writing a big number because Apple is a wealthy company and simply saying “the tech giant’s terms were “unfair trading conditions” without providing clear guidance on what exactly you want them to change isn’t a great way to regulate.

And Apple should see a writing on the wall by now. The longer they hold on so profoundly to their entrenched position, the worse the outcome will be for themselves and their users. The company had an easy way out: let all developers share a link to their website instead (or in addition to) using an IAP. Lots of developers would have likely stayed with the IAP just for the sake of conversions alone. Most (over 70%) of AppStore revenue is coming from games. A mobile game likely won’t suddenly ask you to go online, set up an account and buy some gems there because it will be afraid of losing a potential sale.

Of course, some companies might prefer this approach anyway, especially if they have the brand power to pull it off. Epic Games’s Fortnite is probably the best example (if it was allowed back in the AppStore). Tinder would also use this, and dating apps surely drive a significant part of AppStore revenue as well. But most games and apps aren’t like that. Such an approach would make things easy for businesses selling goods with notable marginal costs. And most importantly, it’d provide a better user experience for the users.

Apple can talk a lot about how their system provides safety, but they have no problem with you giving your credit card to Uber right in the app. And what’s actually the difference?

The current system creates perverse incentives for Apple and forces the company known for building great products to provide subpar experience. Even Apple might be better if they get off the needle of AppStore fees. When Tim Cook provides an update on the “Services” revenue growth, he wants you to think about AppleTV+ and Apple Music. Yet most of this revenue category is provided by just two things: AppStore fees and Google’s default search payment. And none of this makes things better for actual customers.

I support sideloading, and I don’t believe Apple should ultimately decide what software I can run on my own device. This limits innovation and puts them in a position where they can be forced to run censorships for authoritarian governments, just like they had to remove VPN apps from the Chinese AppStore.

But I also understand that one of the reasons iOS has a thriving app ecosystem is the lack of alternatives. If you have an Android device, there are countless websites and forums filled with cracked apps you can install immediately.

Instead, Apple might see governments worldwide legislating their product experience, and the result will likely be far worse.

There’s a widespread notion that Uber is getting more and more expensive. You can find multiple series of articles produced on this topic each year and entire SEO-optimized webpages for this particular query.

Some people even believe that Uber is worse than conventional taxis right now. Uber’s only advantage to them was the price, and since those prices have soared, they see no value. In fact, these people believe Uber could only grow because of its initial low prices, artificially attracting customers and taking market share, only to leverage its semi-monopoly position later.

I think they completely misunderstand what Uber actually is and what makes it an excellent service.

Uber isn’t the only ride-sharing company even though it was the first. Depending on the country, you could switch its name with Lyft, Bolt, Grab or something else. I’d keep using “Uber” throughout this story.

***

While Uber and its clones dominate most markets, some have been left out due to insufficient volume (imagine a remote island) or government intervention. Bulgaria prohibited global ride-sharing apps. Barcelona (Spain) instituted an artificial 15-minute limit to force you to hail a conventional taxi on the street.

Every time I visit such a place, I realize what Uber is and how difficult it was before.

First, you have to find a cab. You likely need to be in a popular city area to do this, or you will have to wait a long time (or walk to a busier street). Maybe you can order via phone, although you’d need to know the language and have roaming enabled on your carrier plan.

Sometimes, there are entire lines of yellow cabs. When I went to Madeira, I saw a stereotypical line of two-decade-old Mercedes. They spend most of the day waiting, so when you take one, your fare also includes this empty time. You don’t know if they’ll have a terminal to pay with a card. The A/C might be busted, the car can reek of cigarettes or something similar, and if there’s a line, all the drivers expect you to take the first car, regardless of its quality.

A conventional taxi operates very similarly to a tourist-trap restaurant. There’s no expectation you will visit again. They probably don’t want to be completely terrible, but they also have zero desire to make it comfortable for you or invest in this beat-up Mercedes they bought for some unknown reason.

Uber changes this equation by becoming the arbiter. By leveraging their power as an aggregator, they can assign ratings to drivers and riders and execute control over them. Each particular passenger is no more likely to end up in the same car. But each passenger is a rider provided by Uber, something they could give or take back if a particular car isn’t great for their business.

And suddenly, fares go down a bit because Uber cares a lot about supply utilization. Drivers rush to buy a hybrid Toyota Prius with its great mileage (it also has lots of space in the back). And they never just stand in a line waiting for the next customer to walk to them.

The taxi experience before Uber and its clones was miserable. Did they subsidize the rides initially? Yes, probably. But its critics should at least stick to their line of reasoning. Because for many years, they were sure Uber would never be profitable until it suddenly was.

I don’t use Uber because it’s cheap. I’m OK if they raise prices to ensure drivers and the company make enough money. I use Uber because the experience is generally better, and if something happens, I have the company to deal with it.

***

Is Uber perfect? Probably not, as any big company. But we must accept reality and deal with externalities while considering consumer benefit. Do you seriously think a corrupt system artificially limiting taxi licenses to the point that they cost a million dollars in New York City is great? I find it laughable.

It seems that we’re finally getting out of this weird period of collective gaslighting where people tried to convince everyone Zoom was the best conference app out there.

I prefer Google Meet. It’s just better. I understand it was terrible pre-COVID as if Googlers never used it themselves. But they’ve caught up in a major way since then. Now it’s a very competent web app that gets out of your way and lets you talk to people. You open the link, and you’re right in the call. Meet doesn’t ask you to update anything.

Look, I’ve been working remotely since 2014. We used to have calls with the US, and most of the time, people would suggest calling their cell (despite the terrible voice quality). Then I started noticing Uber Conference and GoToMeeting, which were a bit clunky but at least used VoIP to provide clear voices.

When Zoom appeared, it made things simpler, in large part by simply becoming a common standard first for the tech industry and then for everyone else. As long as you had the app installed, you could quickly join the call, and most importantly, it was reasonable to expect your invitees wouldn’t freak out because of this link.

But Zoom was never great. It still has a very clunky and ugly interface for scheduling and calls. Try quickly figuring out how to share the invite link when you’re already on the call. And the best option to schedule a call was using Zoom add-ons in Google Calendar or another app. Try doing it from the web or in the app, it’s like a flight control system.

The worst part about Zoom is its nature as a native app. I have no idea who decided it’d be a good idea to check for updates when you open it 30 seconds before the meeting and then block you from joining the call until it’s done. Zoom does have a web app, but it doesn’t want you to use it and hides the very possibility (most people don’t even know it exists). Why does a simple app need blocking updates so often? Oh wait, it’s no longer as simple as it was.

Zoom is worth $20Bn now and was over $160Bn at its peak. Between its annoying install prompts, forgetting you’re logged in, and the add-ons nobody asked for, there’s a simple truth that Zoom’s functionality is a commodity. If you run a company, you already pay for Google Workspace or Microsoft 365, which provide your employees with email, calendars, and video calls. So Zoom is desperately trying to justify its valuation and its entire existence by introducing things you don’t really need from it. I had to get Zoom Premium a few days ago, and it was almost $15 per user. That’s a lot of money for basic functionality you can find practically everywhere. And I’m not talking about their advanced features for webinars and such, most users don’t need this.

Zoom is going down the road of Dropbox. A company that once packaged known tech in a nice way and grew on it only to realize their product has become a commodity and every tech giant has a better-integrated version. So Dropbox decided to build features that would help justify companies paying for it and, in the process, ruined the experience for regular people (I pay for OneDrive now).

Right now, Zoom is very far from that old idea of an app that lets you simply join calls in one click. And despite all Google’s fumbles in messaging, Meet is just that. I know people have problems with Microsoft Teams, but I visited meetings that used Teams and it was fine. Again, no need to install anything, just open the link in your browser and click “Join”.

We also haven’t seen too much innovation in the space. Personally, I don’t like video calls too much (especially because I like to pace when I think). The only innovation we’ve seen is switching from big rectangles to smaller circles, which might be quite nice since it removes a little bit of anxiety and you don’t feel glued to the camera as much. SpatialChat is a good example, they’ve also tried putting everyone on a virtual plane so you can move between discussions as if you were in a room.

It seems to be quite difficult to build a successful startup in this space. I’ve seen Whereby that since shifted into offering whitelabel calls to other products. And there’s Around, which was acquired by Miro, and focuses on remote and hybrid teams that have to collaborate a lot while also supporting conventional calls.

But don’t tell me Zoom is the best, please.

Too often, we see two distant sides of the spectrum and nothing in between.

Some people (often with blue checks on Twitter) believe he is the most successful businessman on Earth, and we’re literally months away from using Twitter (sorry, X.com) to run our financial lives. That he will finally build the WeChat of the West.

Others believe he’s a rich trust fund kid who stumbled into founding many successful companies changing their industries. These people tell you that he merely invested in Tesla and not found it (which is true, but Tesla didn’t really have much except a great brand and a complicated captable), that SpaceX engineers are the actual heroes lifting all the weight (which is a useless statement since it can be applied to any organization).

Trying to project him into a single dimension is useless since it doesn’t have predictive power. You might believe he’s a fraudster, but many Tesla short sellers also believed this and lost.

It does seem to me the truth is somewhere in between. But reasonable takes don’t get too much engagement.

There is a considerable possibility space between “Elon Musk is a moron who just lucked into building a successful car company, payments company, and satellite company, along with the world’s largest EV charging network” and “Musk is an unparalleled genius who never makes errors”

— Megan McArdle (@asymmetricinfo) July 25, 2023

Elon has done so many stupid things at Twitter. And while trying to revitalize the platform while making it financially successful is an enormous challenge, I thought there were some more obvious things he could have done instead.

Then, Ben Thompson comes out today with a great explanation on Dithering and Stratechery.

I have made the case, including on today’s episodes of Dithering and Sharp Tech, that the same qualities that make Musk a remarkable CEO in physical space — the willingness to push to the limits of what is possible, with physics as a natural governor — make him a terrible software CEO, because there are no limits. But the reality is that for Musk personally it doesn’t matter much.

And this seems to be it. In the physical world, Elon’s fantasy is limited by science, and if he wants to run the next Falcon on palm oil, it just won’t work. The software has limitations but is more subtle – you can still build almost any interface you want. Of course, all of his actions affect Twitter as a platform and nibble at its network effects while also incentivizing many competitors, including Threads, Mastodon, and BlueSky.

If you want to predict the actions of certain people, avoid painting them stupid or blatantly evil right away, as this is likely to be an emotional response that won’t improve your hand.

***

Esther Crawford wrote on her experience working at Twitter before and after Elon took over. You might know her from some terrible coverage attacking her personally. She’s a great founder who joined Twitter after selling them her company.

The key part seems to be this:

Elon has an exceptional talent for tackling hard physics-based problems but products that facilitate human connection and communication require a different type of social-emotional intelligence.

The launch of Threads, Meta’s alternative to Twitter, has reinvigorated discussions about privacy and data ownership. A number of smaller Mastodon instances have preemptively defederated Threads, people have concerns about Meta launching yet another social app and getting even more data, etc.

Personally, I believe that we’re in the midst of a moral panic our grandkids will be laughing about.

A moral panic is a widespread fear, most often an irrational one, that someone or something is a threat to the values, safety, and interests of a community or society at large.

I often see people confusing different privacy-related things and using weaponized language to convince you something is bad. Just look at the terms thrown around. You need to protect your privacy and fight the surveillance as if these people are living under Stasi or trying to fight the statewide network of spies—the words we choose matter. By framing the problem in the right context, you can position yourself as the winner without even making a move.

‘Facebook sells your data’ sounds bad. ‘Surveillance’ sounds bad. But it doesn’t sell your data, and it’s not surveillance. If you can only articulate why you dislike sometime with rhetoric that isn’t actually true, that tells us something in itself. Benedict Evans

Meta isn’t selling your data. Meta is selling an ability to show precisely-targeted ads to relevant audiences. Some companies want to sell you their product. This list includes everyone from Unilever to a local car shop that needs people who drive Chevrolet and live nearby.

Show Me The Harm

Most of the time, privacy proponents cannot provide evidence of harm experienced by anybody involved. You could come up with some examples. After several US states made abortions nearly illegal, people realized the government could demand Google to share its search and location data to prosecute women using those clinics. It’s true that if Google, Meta, and others didn’t keep this data, this “attack vector” wouldn’t exist. While this situation is extremely unfortunate, we must agree that the actual bad actors here are state governments, not Google. It’s very reasonable for services to keep the history of your searches and location data to provide better recommendations (even if this allows them to target ads better), and they have to follow the local laws (even if they’re barbaric). The reason people blame Google is twofold. Some dislike them, while others trust Google more than their government, which is why they put pressure on the former.

Other than this, all you can likely find is the old anecdote about a parent learning their daughter is pregnant because of targeted ads. This story doesn’t seem to have any solid foundation, though.

Finally, there was Cambridge Analytica. In 2018 everyone was raving about the dataset scientists gathered from Facebook and shared with third parties that basically “allowed either Trump or Russia to change the outcome of the US elections”. Except it didn’t. Because the U.K. Information Commissioner’s Office released a lengthy report that found Cambridge Analytica’s work didn’t affect either of the elections. Marketers can promise you a lot, doesn’t necessarily makes it true. Cambridge Analytica used the fact Facebook had a more open API at the time and couldn’t enforce what users would do with the data. Yet when they closed it down, a lot of people were unhappy.

Instagram Isn’t Listening To You

Some have even been convinced Meta’s apps are listening to everything you say via your smartphone’s microphone! How else would they know to show me an ad for a thing I discussed with my friends but never searched for?!

They don’t listen to you, because:

• It’s technically-challenging
• It’d be trivial to detect
• They don’t need to

Because if you talked to your friend offline, you likely were at the same place, which allowed Meta or Google to put you in the same lookalike audience and try showing you the same ad. This is why you might see something your partner is looking for online – because you spent a lot of time at the same location (be careful with your gift research). The modern adtech stack is simultaneously complex and much simpler than you imagine.

Some could say even this concept is creepy. I get that. There’s a difference between an intelligence officer watching my every move and a soulless black-box algorithm that doesn’t care about me and is only trying to optimize ROI for a certain creative. What makes me worried is exactly the governments collecting data they have no legitimate use for from their citizens.

You Aren’t the Product, You Use The Product

You’re not just losing privacy because you sinned. In return, you get access to enormous free services. I’ve long advocated for advertising-funded services because of how egalitarian they are. It’s easy for a middle-aged person born in the US to claim they’d rather pay for everything than watch ads. The only reason I got into tech is that as long as my parents paid for the Internet access (dial-up at first), I had access to all the content out there.

There’s value in targeted advertising. It’s one of the best vehicles for businesses to reach their customers. There’s a reason Apple uses two very different warnings for ATT and its own advertising engine. They try to make it sound like what they’re doing is fundamentally different, but it’s not. Apple believes that anything you do on your iOS device is their “first-party” for them but “third-party” data for Facebook.

It’s “Personalized Ads” for Apple, but scary “Tracking” for everyone else, and Apple turns their option on by default.

Sometimes I myself prefer the ad-free experience. I pay for the ad-free tier on Netflix. But there are services, like social networks, that only truly work if everyone can use them for free at all times. And you likely underestimate how much services like Instagram or Gmail would cost you in their ad-free version. In 2022, Facebook’s (the “Blue App”) ARPU worldwide was around $39.65 (per annum), but in the US & Canada, some of the most profitable regions for them, it was $206.44. Are you ready to pay $17 per month for Facebook?

But if they make so much money on us, they should pay us!

I’ve seen countless attempts to build startups aiming to do this, both for the conventional web and in crypto. All have failed. Your information doesn’t cost that much by itself (if you don’t believe me, try finding a buyer). It becomes valuable when ingested into black-box algorithms at Google and Meta that operate petabytes of data and know how to extract value from it. Oil isn’t the best metaphor for this, the closer one would be sand when it’s turned into advanced microprocessors by TSMC.

Confusing Private Things and Behavioral Data

To make things even more confusing, people conflate some very different concepts under the same umbrella. Personally, I’m OK with targeted advertising, and I understand what it requires. I’ve bought many things off Instagram ads and specifically permitted it to track my activity.

There are cases where I care much more about the security of my data. I wouldn’t want my home address to be shared with strangers. I don’t want my medical or financial records to be publicly available. Sometimes I get notifications from 1Password about yet another hack of some services that potentially includes basic details on me, such as my name, email, and my password. These rarely include credit card details because not every website keeps them, and the ones that do have to care much more about this due to reason and regulation.

I don’t like such events because they could very easily lead to harm. It’s not about algorithms reviewing my “data” to generate revenue, it’s about humans using it against me to their advantage. Nobody can just bribe Facebook to get your data out. All big platforms care a lot about their data, this is one of the things that actually improved since Google and Facebook started dominating the online advertising market.

Some things are almost borderline. They usually happen because of incidents or miscommunication. In 2010, Google admitted that the cars used by Google Street View projects collected 600Gbs of data from open WiFi networks in Germany. The cars were fitted with antennas that look for WiFi networks and use the data for their location services. I doubt they could have used that payload data, but they should have been more careful.

Another thing that comes to mind is tech companies storing voice command recordings to assess and improve the quality of speech recognition. I’d expect something like this to happen, but they should warn about it in advance and give you an opt-out if you want it.

***

I’m not against privacy, and I understand why people might not want someone to track web pages or apps they use. But it’s important to remember that there’s a trade-off and be prepared for the outcome. While I don’t like most of the GDPR applications, which just make many reasonable things illegal and solidify the monopoly of the largest tech advertising companies, allowing users to export their data or demand their account to be deleted is a good development. Creating a framework that incentivizes companies to safeguard users’ data and punishes them for leaks is also important, although I think we should be reasonable. In their desire to punish the American tech companies, the EU is too trigger-happy to issue fines exceeding what oil companies paid for the largest spills.

I’ve been working remotely for nine years now. I wouldn’t say it’s everyone’s future. There are pros and cons. For me personally, the advantages far outweigh the problems. If you ended up in a remote work arrangement, you might find these tips helpful.

Choose the Right Company

Some people dislike remote work altogether. Others have never tried it properly. First of all, you need to be in the right environment. In a team that actually understands how to work remotely and what this entails: shift to async operations, focus on written communication, etc. The worst scenario is when a company just moves everything they did at an office online, and everyone is stuck in endless Zoom meetings. This is what many experienced in 2020 when businesses had to shift towards remote work rapidly. This isn’t how it’s supposed to look like.

Build a routine

When you work at an office, your life has boundaries. You must get dressed, leave at a certain time, commute, etc. Remote work might have fewer of these boundaries. Use the time freed from commuting wisely. We create habits by building a routine and sticking with it for some time until it becomes ingrained. Every morning I go to shower, train, drink coffee, walk my dog, and cook breakfast. And then, I open email, Slack, Notion, and other tools to catch up on what’s been going on and start working. Someone who works in their pajamas at 2 pm without leaving the bed is either playing a joke or in a pretty bad condition.

Meet friends proactively

People are social creatures. Even introverts tend to feel better when they’re meeting other people on a regular basis. Use some of the time you freed from the commute, especially in the evening, to set up meetings with your friends. Have dinner, go to a bar, or maybe just drink coffee in the morning. It will be good for you.

Have a workplace but be flexible

Everyone keeps telling remote workers to build an office. Something with a standing desk, a giant monitor, and a mechanical keyboard to look great as an Instagram photo. I usually have a dedicated workplace, but I tend to move around my home throughout the day. I work at a bar counter in the kitchen, on the couch, in a comfortable chair – basically everywhere. Moving and changing the environment actually helps me stay focused. I guess this is the reason I’m not buying a giant monitor, as I want to keep the same experience everywhere. A dedicated workplace could be used to signal to people you live with that you’re working right now and shouldn’t be disturbed unless it’s urgent. This is actually quite helpful.

Coworking not cafe

If you are working at a remote company but still want to have an office-like experience or simply to separate your work self, go to a coworking space. Maybe your company even has some allowance for this. Don’t work at a coffee shop. Now, it’s OK to take a coffee and work while you drink it, but don’t imagine this is a good work environment. It’s probably loud, the tables are a bit too low, the chairs aren’t great, and if you suddenly need to take a call, you either going to abuse people around you or leave your things and go outside (where it also might be loud). This principle is even bigger. Don’t work in weird environments, like being half-immersed in a pool or sitting on a bench under direct sunlight in a park. This isn’t going to be comfortable or productive. Also, while it’s OK to switch cities, it’s certainly not ideal to mix work and travel as they will inevitably clash with each other. Take a vacation.

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This is how I choose to work remotely. You might have different needs and habits. I just hope it’d be useful for people who are still struggling with it. Some might read this with horror on their face, not understanding why anyone would go to all these lengths just to avoid the office. To me, the advantages are clear. I was able to work at fantastic companies and live exactly where I wanted at any time without compromises. And visit other places without breaking a single habit or process.

Reading all those discussions about the updates to Instagram and how people are turning disillusioned with the app, I began thinking: what would an ideal anti-Instagram service look like?

Let’s look at the most common complaints and try to find an alternative. Some of them are specific to the way Instagram works right now, some are true about any social network.

At last, we will try to figure out a potential business model that might work for this product and still onboard all of your friends.

Why Instagram?

However popular TikTok is becoming, I still think that Instagram is the primary social network for most regions in the world. This is where people keep their online profiles, this is what you ask if you meet a new friend (unless you go directly to messengers). Nobody is using Facebook to proactively meet and befriend people. Instagram offered a very simple way to produce content through photos and this is what most people can actually do. Especially compared to elaborate TikTok videos or endless snarky tweets.

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The Feed

The thing people vocally hate about the updates to Instagram is the changes to your feed. Instagram is pushing more and more content from people you don’t follow into your timeline because their data shows people tend to watch it.

The solution would be to only include content from people you’re following. There can be a dedicated discovery tab if you want to expand but it should never intersect with the feed.

It goes further. The OG Instagram was indeed about your friends. There were no influencers. The square photo format and filters were added for many reasons, but one od them was probably to disincentivize professional-grade content.

Is there a way to build a social network with no influencers? That’s a difficult question. You could copy Path and limit the number of follows or you could build it on top of phone numbers. Still, I could easily imagine services providing burner phone numbers so celebrities wouldn’t have to give up theirs.

Influencers are the power users of any network. They produce the most content per capita, likely the best content and generate the most engagement. Removing them might harmstring your growth but that would an interesting development.

Content

I don’t think people have problems with video per se. Except for the fact Instagram is favoring it algorithmically – which we “solved” in the previous paragraph.

Even more, get us more content types: text, entire galleries of photos, map locations, etc. There are apps like Dispo that experiment with the way you create content but I feel it’s just a gimmick. There’s no reason to make low-quality photos with your latest iPhone.

Photos are the easiest way to document your life and each of us now has a pretty good camera in our pocket. Let’s not limit it artificially.

When people are performing weird hacks to overcome the limitations of your platform it’s a sign that there might be something wrong. Instagram used to be quite good at noticing such trends and adapting to them. I remember how people started uploading vertical and horizontal photos by adding white bars. Eventually, Instagram submitted and let us upload freeform images.

When people on your platform are posting long texts as screenshots of Apple Notes in a gallery then something is wrong. When I’m making a screenshot just to use Apple Photos OCR to extract a link or a phone number then something is wrong. Such use cases should be assessed and processed. It’s weird that Instagram is worse than WordPress for a travel blog – it should be 10x better.

Engagement

There was a short period of time when it looked like Instagram cared about your screen time. You’d get a prompt that you have looked through all the new posts. But very quickly they started showing suggested posts instead of the previous ones.

This is a common claim towards any social network – they want to take over your time.

There’s an option to solve this I dream about.

Abolish the feed as it is.

Either use an RSS reader-style list of posts with read status explicitly shown or switch to a daily digest instead of a time-sucking endless feed.

Let’s say the user can choose the time of day and get their digest. Change it not too often.

BeReal found something similar but I don’t think it’s the content creation moment that matters. Most of the time I’m literally doing nothing spectacular. But if I only can catch up once a day it’ll be a much healthier experience.

The Walled Garden

Instagram is a walled garden. At least we now have a web version, which you can use on the iPad in the absence of a native app. You can’t select and copy text. You can’t add links to posts, only stories. You can’t reliably read all comments, especially on the web.

I’m following all kinds of volunteers and while Instagram is a good place for them to build their audience, it’s terribly difficult to raise funds or even leave a CTA.

So let’s open it. And that might allow us to solve the chicken and the egg problem of any emerging social network.

Users have no incentive to start a new social network if it doesn’t have their friends already. So they should be able to easily share their content outside. And if we’re adopting the digests model, we can use email to distribute it. We still have to acquire and onboard the user who creates the content, at first their followers could sign up via email or third-party messaging apps.

Position it as a life journal so there’s an incentive to post at least for yourself while the network is trying to grow.

The app would provide a more complete experience, comments, DMs and all other things so people interested in it might join eventually.

Monetization

The most important part. We can come up with the ideal app, but if it doesn’t have a scalable and inclusive business model it will fail and lose ground to Meta or anything that comes after them.

Glass is an interesting example. It’s also a photos app. But because of their chosen style and a $5 subscription only photographers are using it. It’s unreasonable to expect everyone to pay a comparable fee, especially since the world has other countries in addition to the US and Europe. Micro.blog is similar. It is very close in terms of its ethos. But most of my friends will not be paying $60 a year for it.

WhatsApp experimented a bit with a $1 annual subscription in select regions. On paper, it might work. Build an app that has almost everyone and you will have at least over a billion dollars. Still much less compared to Meta. And in the early stages, this will likely be unsustainable.

In fact, I don’t even have a problem with ads. Ads made Internet free and available to millions of kids, including myself. But all the ideas introduced here, from daily digests to focusing on real friends, clash directly with the advertising monetization model and the engagement and data it requires.

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I would call this the Social Network Dilemma. A social network is only good if it actually has at least most of your friends. To do so it has to be free for the end user and have a viable business model that powers its growth flywheel. But then we end up with an app that has dramatically different interests and doesn’t really serve us. And subscription access limits the numbers of people who’d onboard further decreasing the value of such a network.

I do believe that with a sort of a distinction between content creators and content viewers we can accommodate some of these downsides. If the content is spread beyond the network and people have multiple ways to follow without being active participants it is still viable. But who knows?

The only option we seem to have is some kind of a premium tier for people who might want a bit more in terms of features. Similar to what Telegram is doing (with an unknown level of success). If you want more photos per post, unique visuals and appearance, and other power user features – you pay. Only by letting people join for free and still earning money through subscriptions the network I described is likely to be viable. Still, the subscription by itself doesn’t solve all the underlying problem. You still want more users, you want them to be engaged, so you might end up in an eerily similar place. Or let business users in and charge them for their accounts. But you need to be able to generate value for them.

Building a social network is probably one of the hardest problems in consumer tech world and I’m not going to pretend I know anything about this. But as a user I do often feel that the apps we use let us down and don’t offer an experience designed specifically for our goals.