Sharp Tech with Ben Thompson - Mailbag: Adobe and Antitrust, Engagement Quality vs. Quantity, The Cult of Musk, Porcupine Lore

Episode Date: September 22, 2022

Adobe-Figma antitrust questions, the pluses and minuses of ignoring user complaints, how Twitter hype led to real infrastructure at Tesla, a word about porcupines.

Hello and welcome to Sharp Tech. I'm Andrew Sharp, and this is a free preview of today's episode. Figma emphasizes and doubles down on the incentive to take a wild launch, take on Adobe, which has been dominant in 20 years, completely eat their lunch. And yes, at the end of the day, you still end up with just Adobe, but you end up with this phenomenal new product that Adobe wouldn't have created themselves. That's going to be available to everyone. and Adobe had to pay the price, 10% of their market cap and more, once you consider how much it's gone down, they took their pound of flesh, and now you have a whole host of people, whether there are people in Figma, whether you have the venture capitalist that backed it, that now have a whole bunch of money,

a whole bunch of incentive, and a whole bunch of experience to go and do it again. And one thing I worry about this focus on banning acquisitions is you're messing with an incentive structure that has for 30 years continually, like the pace of innovation and new features, even if it's not necessarily producing tons of public companies, although there are a lot of them, to be fair, particularly in the enterprise space, you're messing with that. If you get in a world where no, the only, you either have to go public or not, like, that's a, I think that that's a very dangerous world for long-term innovation. Yeah, I think that's equally dangerous to the world where you, you're,

either have to merge or face existential risks. Right. But no, the reality is these big companies, they suck at competing with small companies, right? Like Adobe failed to compete with Figma. They were stuck in a desktop paradigm.

Like, this happens all the time. I think this idea, the, you know, money or lead, I think that's overstated. The lead rarely works.

Like, like, the companies are good at competing with each other. Like, how often does a big company, like, how did Facebook do building a snap alternative? How are they doing building a TikTok alternative? How did

Adobe do building a Figma alternative? We're going to get to the reels in a moment here. Yeah, I hear you, but imagine the potential competitor to Photoshop a couple years from now. What's the incentive to even try if Adobe controls the entire vertical stack for design and then can preference its own apps? And they're going to have to be really careful about that, because I'm sure the scrutiny will continue over the next four or five years if the merger goes through. No, no. To be clear, I'm arguing the other point. I think your point has a lot of validity.

Another example here is the Microsoft ecosystem. Microsoft's lock in and control because of what they pulled off with Teams. Teams is, if you squint, it's kind of like the Figma of Enterprise. It's the collaboration point where everything plugs into it. And what's the default in Teams if you want to create a document? You use Word, right? This is the way to the Word file format used to be lock in. Now the lock in is that Word is the default document creation in Teams, right?

Microsoft sort of pulled out the same strategy, and there is an extent to which because the desktop was open, that's why Adobe could thrive. Anyone could install an app. And once you were on the desk, you could do anything you wanted to. Now Microsoft has like, oh, yeah, we have a platform. you can add this functionality to teams. They have this really nice, small defined box that you can fit into, and you'll never be allowed or able to build something that would actually threaten Microsoft itself. You can add value to Microsoft, but you can't threaten Microsoft.

Apple is the most extreme version of this with the iPhone and the app store. So all these are super valid pushback on your part. The question, though, you do have to think about what is actually the payoff for customers. Like to the extent, I'm not saying that the customer benefit standard or whatever it's called. Consumer welfare. Consumer welfare. Yeah, yeah. Consumer welfare.

Between the two of us, they came up with it. That's not the end-all, be-all. But I'm also don't think it's right to throw it in the trash can. Like, because there's a lot of consumer benefit. And maybe your long-term concerns are true, but also in the long-term, there might be a new paradigm that completely upsets the apple car all over you. It could be. I mean, Adobe is going to be well-permaterment. position to make the plateau or plomo offer to consumers over the next five or six years

if you're trying to design something. Which is what they've done, which is what they did with. Yeah, that was the shift of subscription. That's exactly what it was. Yeah. So we'll see how it evolves. We'll continue to monitor this story on Sharp Tech. I do not think we've heard the last of it.

But let's keep it moving. We have a Melbaig. We have a Melbaig to get to. Exactly. So on that note, we'll start with this question from Tim. He says, Ben made the point that whatever Instagram changed, people pushed back on and then subsequently used it more. He seemed to use this as an indicator that people didn't know what they wanted, but that meta got it right. I'd argue another point.

Yes, meta made it easier to discover new and unexplored content, but I'd say it's more like cigarette companies finding a more efficient way to get a higher dose of nicotine to you. Let me use my own example, Tim says. I got off of Facebook and Instagram because I suddenly noticed that I was losing a lot of time every day on cooking and do-it-yourself videos. They didn't add anything to my day. They didn't add anything to the experience of my social network. They stole time I didn't want to give to them. Yes, they did it more efficiently, but at what cost? Ben, I have some thoughts here, but what's your initial reaction?

How much do I want to dive in the water here? Facebook and Instagram didn't take anything. Like, sorry, Tim, you were the one that was choosing to watch those videos. Now, I'm sympathetic to the argument that they make it super fun and you can sit down like, holy crap, I just spend an hour on reels or TikTok or whatever it might be. But I do push back on the ascribing of responsibility away from. individuals and two companies. And so I know that's why he made the cigarette analogy.

I think, though, we're getting into pretty dodgy, dodgy territory when we're comparing, like, physiological effects of, like, nicotine addiction to, to the social media stuff. And, again, of course they're incentivized and working to be on there longer and show you more ads. And all that stuff is true. But it's almost more of a philosophical point in some. respect where I just don't think you're going to have a well-functioning society in the long run if we think it's sort of company's jobs and regulators' jobs to control to what extent and how people spend their time. Yeah, that's totally fair. And I think I agree with you in the grand

scheme of things in terms of like assigning responsibility to companies more than individuals. I will say they're there, well, actually, I'm learning how to be a tech journalist here. I'm not going to try to be a neurosurgeon, but I think there are probably some physiological effects associated with social media use. And that's part of what makes this stuff so addictive. No, for sure, especially you get likes or something that's enjoyable. You get that dopamine kick. Like, I get it. And again, maybe you say, oh, you sound like a cigarette advocate in the 50s. Like, that's possible. I'm just very hesitant about the idea of this is a role for government to fix or companies or on those lines. And, you know,

I acknowledge there may be an aspect of that's fine for Ben. Like, if I feel like I'm using reals too much, I just don't use reels. And so maybe I'm the wrong, I'm the wrong, you know, I'm a robot and the wrong person, the wrong person to ask about this. But I, so let's put it this way, I recognize the concerns that are here. I just think any solution that would actually address these concerns is going to be much more problematic and have even worse secondary effects. And so I kind of push back on the premise.

a bit. Well, and that I totally agree with. I don't think that there should be regulation controlling Facebook and Instagram and what they can and can't do in this particular department. My reaction to Tim's question was a little different because I look at it as they jeopardize their long-term relationship with him because he felt like the products weren't useful. And so the way he, whether it was Instagram or Facebook's fault or not, he personally was like, I'm sick of using this stuff. And his formerly positive relationship with both of those platforms, presumably, changed as a result of the way they were capturing his attention on meaningless bullshit. So it's a really great point. And this is probably why Facebook pulled back on the recommendation

stuff is they were, they had too many people like Tim were like, yeah, this isn't what I wanted. I'm going to stop using it. I mean, an example, from my personal point is I, you know, I'm very scarce with notifications. I will have notification, like maybe like DMs only, for example, or only stuff that's like really directly relevant. I turn off all the mentions, all this sort of stuff. And Facebook at some point, the Facebook app, like the notifications started getting out of control. Oh, something else happened. Despite the fact I thought I had the preferences mostly all turned off.

And what happened was I just turned off notifications completely. I never get a notification from Facebook. And the long-term outcome is I use it much less. Only when I'm super bored and I'm bored of real. Like maybe I'll venture over to see what's happening in Facebook. That was a great example where their push for engagement actually killed it in the long run. And I think that's an encouraging factor, right? The payoff of the degree to which we do value personal choices and responsibility.

And maybe, you know, this should be surfaced more obviously. Apple has done this to Apple's credit, like you could turn off notifications for an app right in the lock screen. Like that's an option now. Like, this app is driving up the wall. I'm just turning it off completely. And guess what? That's like way worse than showing you one more video or, you know, showing you one more

ad. So I think that like your analogy and example is, is sort of encouraging in this regard. All right. And that's the end of the free preview. If you'd like to subscribe and receive every episode of this show, you can do so by subscribing to Stratecre Plus. That'll give you access to every Sharp Tech episode, all of

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