Good morning. Social networks are struggling. Their users are miserable, their advertising-based business models have unlocked a slew of problems. They’re under fire from lawmakers who think the First Amendment should apply to private companies, and from others who want more moderation of problematic content. The solution? Rethinking what it means to scale — and how to make money. I’m Nat Rubio-Licht and I spent my weekend trying (and failing at) gluten-free baking.
The future of social may be small
Facebook is constantly struggling to stem the spread of misinformation. Instagram is filled with influencers trying to sell things (and is also making teens feel terrible). Twitter is.....well, Twitter. And all the big social networks are under scrutiny again following the tragic Buffalo shooting, with New York Governor Kathy Hochul arguing that the companies must do more to prevent radicalization.
Two former WhatsApp executives think they know how to fix the problems that plague social networks. Neeraj Arora and Michael Donohue, who served as WhatsApp’s chief business officer and engineering director, respectively, started HalloApp in late 2019, dubbing it the “first real-relationship network.” Arora helped negotiate WhatsApp’s $22 billion sale to Meta in 2014, and he realized after joining the social giant that Facebook’s advertising-focused business model wasn’t serving its users. So he set out to create an alternative.
HalloApp only lets users interact with people in their contact list. The point is to connect users with people they actually know in real life, or at least care enough about to put into their address book, said Arora.
- The app doesn’t have an algorithmic social feed and doesn’t let users make group chats of more than 50 people.
- The goal is to prevent the spread of misinformation and other troublesome content, and to keep the app from becoming a digital shopping mall, “where you hang out with your friends sometimes,” said Arora.
The app is forgoing advertisements in favor of subscriptions. Sound familiar? It’s what Elon Musk wants to do with Twitter. Like Musk’s nebulous plans to grow Twitter Blue, HalloApp’s executives are also still trying to figure out how the model will work for them.
- Arora said the plan is to offer a free base product to all users, then charge for a set of premium features on top that will be rolled into one monthly fee. Arora said the idea of a subscription-based social media app appealed to him in the pre-Facebook days of WhatsApp, when they charged an annual fee of just $1.
- “I think we got pretty decent traction in terms of people converting from free to paid,” Arora said. “In users' mindset, they don't mind paying for products that they love if it is nominal and it serves the needs they have.”
- “If you talk to users today, what the expectations are from a social product are completely different,” Arora said. “And that's why I think all of (the legacy platforms) … are stuck with their way of doing things. Their business model is stuck to ads.”
It’s a good time to be a small social media app. While gaining traction in a crowded market will be a tough sell — especially once the app costs money to use — Texas law HB 20 has increased the stakes for social networking giants.
- Companies with more than 50 million monthly active users now face the threat of constant lawsuits if accused of “censoring” users for sharing their viewpoints (i.e. moderating their platforms).
- On Friday, tech industry groups asked the Supreme Court to stay the Fifth Circuit’s ruling that allowed the Texas law to go into effect. If the court doesn’t act, experts told Protocol the ramifications will be felt immediately.
Twitter and Facebook can’t exactly undo how big they’ve become and adopt new business models, though if Elon Musk gets his way, Twitter could possibly lose users who are opposed to the Tesla CEO’s laissez-faire approach to content moderation. And HalloApp may eventually face similar issues, if its founders’ grand vision is any indication.
“We're not doing this to serve a small set of users, or make it a boutique small startup. For us, scale matters,” Arora told Protocol. “Our vision is to have as many people as possible on this planet use this product.”
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People are talking
Jeff Bezos criticized Joe Biden over a tweet that said taxing wealthy corporations can fight inflation:
- “Raising corp taxes is fine to discuss. Taming inflation is critical to discuss. Mushing them together is just misdirection.”
- He took aim at Biden for his comments on the issue again yesterday: "Misdirection doesn’t help the country."
Snoop Dogg thinks he should step in and buy Twitter:
- “Everyone gets a blue checkmark. Even tha bots.”
Former Nintendo exec Reggie Fils-Aimé doesn’t see a place for VR in gaming:
- “I haven’t yet seen a great gaming experience in VR.”
COMING THIS WEEK
The All-In Summit started yesterday. Elon Musk is on the schedule to speak today.
Uber’s Go/Get 2022 takes place today. The company plans to focus on travel and sustainability this year.
Running Remote starts tomorrowwith speakers from Twitter, Zoom, Upwork and others.
The Safety Matters Summit begins Wednesday. It’ll include talks from Spectrum Labs, Mastercard and others on making the metaverse safe.
Meta’s Conversations event happens Thursday. It’s the company’s first-ever event focused on messaging.
In other news
The gunman in the mass shooting at a Buffalo supermarketbroadcast the attack on Twitch. The Amazon-owned platform took the channel offline within two minutes of the attack starting.
Tech groups are fighting Texas’ new social media law. NetChoice and CCIA filed an emergency application asking the Supreme Court to stay a ruling that let Texas’ law take effect.
Planning a mass layoff? Listen to these experts, who laid out how to approach it in the least hurtful way. TLDR: There’s lots of ways you can be better than Carvana.
The first crypto sanctions case is here. The Justice Department started a criminal complaint against an American citizen who tried using crypto to dodge U.S. economic sanctions.
Don’t work for us if you don’t like our content, Netflix wrote in a new section of its culture guidelines called “artistic expression.”
Apple’s move away from the Lightning port has begun. The company’s been testing iPhone models that use a USB-C port instead.
Uber Eats is trying out autonomous delivery in Los Angeles with Serve Robotics and Motional. And Uber said it's only getting started on self-driving partnerships.
Peloton does rowing machines now. The company will release the new hardware at an undetermined date in the future.
Netflix is looking into live-streaming unscripted shows and stand-up specials to attract subscribers, according to Deadline.All electric everything
If you think climate change is bringing us to the brink of disaster, you’re absolutely right. But Protocol’s Lisa Martine Jenkins looked at Google Trends over the past five years to show that people are thinking a lot greener these days. Here’s your glimmer of hope for the week:
- People are more interested in heat pumps, an alternative to traditional energy-intensive HVAC systems.
- Electricity prices are on everyone’s minds. Search interest for “electricity price” surged around the same time gas prices increased in March.
- People are thinking about electric bikes, too. Search interest jumped as the coronavirus pandemic began, and has continued to build since then.
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Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.