The Knowledge Project with Shane Parrish
#40 Ben Thompson: Thriving in a Digital World
Episode guests
Podcast summary created with Snipd AI
Quick takeaways
- Facebook's role in the election and the shift from media gatekeepers to platform subservience.
- The decline of gatekeepers in media and politics.
- The shift in power from controlling supply to controlling demand.
- The virtuous cycle created by controlling demand.
Deep dives
The Power Shift: From Gatekeepers to Demand Controllers
Facebook's role in the election and the shift from media gatekeepers to platform subservience. The loss of gatekeeper status led to parties losing control as well. Facebook became the mechanism through which media lost its power, resulting in a shift of control to the demand side.
The Impact of Lack of Gatekeepers on Politics
The decline of gatekeepers in media and politics. The role of media in past elections and how the internet changed the game. Obama and Trump as examples of candidates who were not supported by the party but still gained popularity among the voters. The rise of grass-roots movements and the diminished influence of parties in the nomination and election process.
The Rise of Controlling Demand
The shift in power from controlling supply to controlling demand. The importance of controlling the audience and user base in today's digital landscape. The case of Google as an aggregator and the impact of having control over demand in the market. The advantages and network effects of being the platform that attracts both users and suppliers.
The Virtuous Cycle of Demand Control
The virtuous cycle created by controlling demand. The interplay between user experience, supplier attractiveness, and platform growth. The network effects and advantages that arise from having a large user base. The scalability of digital platforms and their ability to serve a global audience at minimal marginal costs.
The speed of growth and the value of social media
Over the past five years, the speaker has experienced rapid growth in their business due to the internet and social media. They highlight the incredible speed with which a business can grow and reach a large audience through platforms like Twitter. They also emphasize the importance of the social media landscape, despite its potential negative impact on society. They acknowledge that while social media may not be healthy for individuals, it provides immense value in terms of reach and audience engagement. They believe that businesses need to adapt and provide valuable content to capture a percentage of the value they create.
The future landscape of industries and the importance of adaptability
The speaker discusses the ongoing disruption in various industries and the need for businesses to adapt to new paradigms and assumptions. They highlight the importance of consistently questioning and examining industry assumptions to identify the controlling factors and potentials for change. They provide examples from various sectors, such as consumer package goods companies and hotels, to demonstrate how changing assumptions can completely transform businesses. The speaker emphasizes the need to consistently train oneself to think beyond surface-level assumptions and consider the implications of changing assumptions for businesses.
The influence of technology and consolidation on the business landscape
The speaker acknowledges the ongoing consolidation happening in the business world, particularly in the media and technology sectors. They discuss how technology has enabled companies to integrate and consolidate, leading to shifts in the value chain and the emergence of dominant players. They explain the challenges faced by traditional media and the rise of new giants in the digital space. The speaker also explores the impact of venture capital funding and growth investing on the startup ecosystem, noting the changing dynamics and the importance of understanding these investment models.
Regulatory challenges and the opportunities of new business models
The speaker examines the regulatory challenges faced by companies like Facebook and Google, which are often met with calls for extensive regulation. They note that such regulation tends to favor the incumbents, locking in their dominance. They discuss the need to strike a balance by fostering stable platforms and enabling fair competition while creating conditions for new types of businesses to thrive. The speaker emphasizes the importance of continuing to raise a voice for new and innovative business models that are uniquely enabled by the internet, ensuring room for future entrepreneurs and industries.
Today’s guest is Stratechery author and founder Ben Thompson. If you’re an investor in Silicon Valley, work at a tech start-up, or just love to geek out on technology and business analysis, odds are good that Stratechery is on your short list of must-read blogs.
What started as a side project, quickly ballooned into one of the most influential tech blogs on the web. The New York Times called Stratechery, “one of the most interesting sources of analysis on any subject.”
I agree.
In this interview, Ben and I cover a lot of ground. Here are a few of the things we discuss:
- Learn once and for all how to pronounce Stratechery. :)
- How Ben’s business model was developed and how he massaged it over the years to become what it is today
- The one metric Ben looks at each day to gauge the health of his business
- How Ben deals with people who rip off his work and pass it off as their own
- Ben’s thoughts on pricing, free trials, content and other important aspects of online membership sites
- How Ben structures his day to churn out such incredible content so consistently
- How Ben handles being wrong on his site, and his process for screening his work for confirmation bias
- How the internet has changed the traditional view of supply and demand, and what companies should do about it
- What Ben would teach an MBA class about internet strategy (if you do any business online, you need to hear this)
- What it would take for a start-up to overtake Google or Apple, and the vulnerabilities that all companies share, no matter how big or profitable
- The new era of technology and how companies like Netflix, Airbnb, and Amazon are doing it right (and what you can do in your own business to take full advantage)
This is one of the most jam-packed interviews I’ve done on the Knowledge Project. Ben’s answers are so thoughtful and informative that you’re going to want to have a notebook handy.
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