Smaller companies and regulation

Following Jeffrey Zeldman’s article about the open web, Ben Werdmuller has a great post about how we shouldn’t care so much about startup unicorns, using Micro.blog as an example of another type of business:

Zeldman looks to Micro.blog as a potential answer. It’s a great company that could point to what a more general solution could look like, but not specifically because it works with the indieweb. Instead, it’s worth examining how it’s financially structured. Rather than a unicorn, it’s a zebra.

It would be great to have more small- and medium-sized companies that can move the web forward. They can innovate while still being grounded in somewhat boring business models. It matches one of my points here that we need multiple social networks that interoperate via the web instead of just a couple of huge platforms.

There’s a difference between companies that are paid for directly by users and massive ad-based networks. Ben Thompson outlines this in an article about regulation, arguing that the super-aggregators like Facebook require government intervention, where other companies that are better aligned with users’ interests can be “regulated” by the market:

I think, though, that platform providers that primarily monetize through advertising should be in their own category: as I noted above, because these platform providers separate monetization from content supply and consumption, there is no price or payment mechanism to incentivize them to be concerned with problematic content; in fact, the incentives of an advertising business drive them to focus on engagement, i.e. giving users what they want, no matter how noxious.

I’ve been thinking about Ben Thompson’s essay a lot since he published it a couple weeks ago. Micro.blog is a small part of the puzzle — and it’s a puzzle piece of a different shape that doesn’t fit cleanly into Ben’s diagram around free services — but I think it’s an important part to focus on.

Manton Reece @manton
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