Social/UGC products are uniquely difficult marketplaces

Social/user-generated content (UGC) products like Instagram, Twitter, or TikTok are a type of marketplace: creators are suppliers of content for consumers. In most marketplaces, suppliers are trying to maximize revenue, but in social/UGC suppliers have many different motivations: some want to maximize audience, while others simply want to share with their family or friends. Different motivations require different incentives, some of which compete or conflict with each other. This makes social/UGC a uniquely hard type of marketplace to build.

Marketplaces work by aggregating suppliers and consumers into the same space. Suppliers have incentive to use the marketplace because the consumers are there and vice versa. Marketplaces typically grow by incentivizing suppliers or consumers to use the marketplace more. Increased usage from one side of the market often leads to increased usage from the other side as well. Incentive design is thus a major activity taken on by organizations that run marketplaces; it’s one of the most effective ways to grow.

In most marketplaces, suppliers share a core motivation: maximize revenue. There’s usually some diversity within that core motivation – some hosts on Airbnb prefer longer stays because it’s less of a hassle; some Uber drivers are willing to drive at odd hours if there’s a bonus – but by and large, they are trying to earn as much as possible. This makes incentive design relatively straightforward: Airbnb can allow hosts to offer week/month-long discounts, and Uber can give drivers bonuses to drive graveyard shifts. Crucially, these incentives don’t conflict: Airbnb letting hosts offer long-stay discounts doesn’t hurt hosts who don’t have a preference; they’ll just end up with shorter bookings at the margin.

Social/UGC products are different; suppliers have a much wider range of motivations: maximize audience, maximize revenue (not the same!), reach a specific/niche audience, share with friends or family, express themselves, just to name a few. Incentives aimed at these different motivations are often incompatible with each other, e.g. tweaking distribution to help increase creator viewership might harm folks who are trying to engage with a specific audience, or defaulting to public-sharing (as many UGC products do) hampers those who just want to share with their loved ones. Two examples come to mind:

  • On Quora, some answer writers want their answers distributed as widely as possible, while others are just trying to help the person with the question, they don’t want their answers being distributed or even showing up on their profile. Settings and options may seem like a way out, but users will satisfice and mostly ignore them – defaults matter.
  • On Twitter, many users have lamented how much worse the tweeting experience gets once you surpass 5-10k followers – harassment, spam, and misunderstanding all rise. Those users may have been motivated to grow their audience in a certain field, but didn’t want it to grow past a certain point. What could Twitter change to improve the experience for these users without hampering the experience for those that want 100k or 1m followers? There aren’t easy answers.

These challenges are part of what makes working on social/UGC products so interesting: there aren’t easy answers to these questions, especially at the enormous scale that most of these products operate it. I think a lot of the answers lie at the intersection of ML-driven personalization and user-defined boundaries around interest and tastes, but that’s a subject for another post.