Amazon Dash Button

Announced today, Amazon Dash Button is a branded single-purpose button you stick somewhere to press when you need more of a specific product, like Charmin toilet paper or Tide detergent.

[Because it came out the day before April Fool's Day, many people thought it was a prank, one of those fictional products tech companies love to release each year on April 1. Wasn't it Arthur C. Clarke who said “Any sufficiently advanced technology is indistinguishable from a tech company's April Fool's joke”? Something like that. April 1 in the tech world is like the entertainment world's red carpet, a ritual of dog and pony show and savage critique. We all know our parts. It's already begun, it seems like 80% of them are from Google. 20% time may be dead, but even 1% time from some fraction of a lot of computer engineers is one of the more powerful matters on Earth.]

On the one hand, the Dash Button is built off of some of Amazon's strengths, much more so than others they've tried. It is dirt simple, almost like one of AWS's primitives but in hardware form, and it's meant to make shopping easier, something they've always tried to do, from reducing shipping prices to 1-click shopping and onwards. Short of having products magically order their own replacements when you're close to running out, it's about as easy as it can be to replace a frequently used consumable. It is exclusively for Amazon Prime members, another perk to throw under the umbrella of that subscription, and I'm a huge fan of subscriptions a business model.

Dash Button ties in to Amazon's customer experience strengths, bypassing its weaknesses. When many people say they don't like Amazon's UX, what they usually mean is Amazon's UI. And yes, I agree, Amazon could really use more design leadership and skill on that front. The Dash Button doesn't have any visible software UI, though. It's just a physical doohickey, and it looks okay. I can't speak to the sensation of the button as it depresses, but I look forward to a detailed discussion by John Siracusa on some future episode of ATP.

[Perhaps the greatest return on investment thing that Amazon could do, in my opinion, is hire a design expert, have that person report directly to Jeff, and give that person final say-so on all major UI decisions. I've often said that who reports directly to the CEO is a tell for what a company values, and as far as I know design doesn't have a seat in Amazon's C-suite.]

Beyond UI, though, are many often overlooked elements of UX, especially in retail, and on those matters Amazon is world class. Customer service, packing, shipping, payments, returns, replacements. No company more reliably and consistently ships you stuff you order as quickly or reliably. And, if something goes awry, you just know they'll make you whole, no questions asked, unlike many other companies. It's that repeated execution that's made them one of the most trusted brands in the world. The Dash Button plugs directly into that whole incredible logistics network.

I hate the term Internet of Things, it is just an awful piece of tech jargon, but the Dash Button is one of the more practical of the early entries into that space. I know customers are only supposed to be able to ask for faster horses, but that doesn't mean they want to pay $35 to change the lighting in the living room to purple from their smart phone. It means they just want to get places faster.

Or in this case, they want faster horses delivering their stuff. As Amazon knows better than almost any company, the customer demand elasticity curve is highly sensitive to shipping costs and shipping time. I thought Amazon was joking when Jeff went on 60 Minutes to unveil their early testing of drone delivery (I thought at the time that some other planned reveal fell through so they scrambled the drone experiment as a last minute replacement since the segment had already been teased in CBS promos), but their continued testing there shows how much they know that being able to ship products in near real time is the next rung in Maslow's retail hierarchy of needs. They are being attacked by horizontal players in that space (companies that just specialist in delivery, like Instacart and Postmates, for example), and they will continue to press forward with their vertically integrated strategy. May the best player win; I'll be on my sofa waiting.

On the flip side of the ledger, the Dash Button feels like an intermediate way station on the journey to some more elegant solution. I suppose it's possible this is the endpoint for shopping replenishment in the home, but I personally don't want a bunch of branded buttons stuck all over my apartment. I can see why a brand would love a button that locks a user into their product line, but it's possible for a technology to be too primitive, too low level.

What level of abstraction do you settle in at? That's always the trickiest of product decisions, and it depends a lot on the context. Screen size, how you input data, app launching modality, all of that matters. The app Yo was widely ridiculed released on the iPhone, but there's the germ of something fascinating there. On something like the Apple Watch, with its extremely limited screen size and input modality limitations, being able to send a slight vibration to your loved one's watch with one tap, perhaps with an accompanying sticker? Just to let someone know they're in your thoughts? Powerful. I will never underestimate the power of ambient intimacy. Loneliness is one of the two grand eternal problems in tech (the other is boredom).

My bet is still that some solution with a higher level of abstraction and functionality will win out in this replenishment shopping space, but for now, the Amazon Dash Button is an intriguing first crack at it. I just need one for Harmless Harvest Coconut Water. I'm always running out, and because it's not heat pasteurized it's perishable so I have to buy it locally (delivery services like Instacart don't deliver perishables). I but it from CostCo for the discount (that stuff is not cheap), but I hate fighting the madding crowds of CostCo. I brave that capitalist jungle, though, because I am as addicted to Harmless Harvest as most people are to coffee.

Give me a Harmless Harvest Dash Button, and, if you're really evil, program it to work only occasionally, on some random interval, and I'll be pressing that thing like a rat in a Skinner Box mashing on the response lever.

Universal banks losing out to specialists?

Although it dislikes the term, JPMorgan is a prime example of a universal bank. Others – Citigroup, Bank of America Merrill Lynch, Barclays, Deutsche Bank – also combine retail and investment banking but JPMorgan is the most prominent. 
 
And universal banks have been, to put it politely, a disappointment. JPMorgan produced a return on equity of 9.4 per cent last year. That is barely adequate but it is the best of a bad bunch. None of the others made it past 5 per cent. And last year was not out of the ordinary. Those five universal banks together have managed an average return on equity of 5 per cent over the past five years. There is always an excuse – fines, new rules, restructuring charges, tough conditions in one market or another – but these are all part and parcel of universal banking. 
 
Compare that with the specialists. Look at Wells Fargo, which is predominantly in the retail sector, with a 12 per cent five-year average ROE. Or even Goldman, a pure investment bank, with 11 per cent. 
 
The universal banking model is broken, a fact some banks have realised. UBS and RBS have moved. Others – Deutsche and Barclays, for example – have been less radical so far and need to go further. The US universal banks are the most wedded to the model, promising better returns in the future. But shares in almost all of them trade at a discount to specialists. The message from investors is clear.
 

Paywalled piece from The Financial Times, via The Browser (which, if you're into more than just technology news, is a great, short, curated daily list of links to interesting reading online; another artisanal service I happily subscribe to).

How does that legendary Jim Barksdale quote go? “There are only two ways to make money in business: One is to bundle; the other is unbundle.”

Certainly feels like times are ripe for an internet only financial services play. Our arcane financial system has held up longer in its current form than I expected. I know there have been a few, though I have not tried any of them, but this article is more evidence that a horizontal (or specialized) attack might be fruitful. I'd probably start by trying to actually own the customer's money/wealth/assets, then branch out into figuring out ways to sell them financial products for those (e.g. insurance, credit cards). Customer acquisition is such a bear, though, that it might be easier for a trusted and well-known company like an Amazon to tackle.

Why the world is getting weirder

It used to be that airliners broke up in the sky because of small cracks in the window frames. So we fixed that. It used to be that aircraft crashed because of outward opening doors. So we fixed that. Aircraft used to fall out of the sky from urine corrosion, so we fixed that with encapsulated plastic lavatories. The list goes on and on. And we fixed them all.

So what are we left with?

As we find more rules to fix more things we are encountering tail events. We fixed all the main reasons aircraft crash a long time ago. Sometimes a long, long time ago. So, we are left with the less and less probable events.

We invented the checklist. That alone probably fixed 80% of fatalities in aircraft. We’ve been hammering away at the remaining 20% for 50 years or so by creating more and more rules.

We’ve reached the end of the useful life of that strategy and have hit severely diminishing returns. As illustration, we created rules to make sure people can’t get in to cockpits to kill the pilots and fly the plane in to buildings. That looked like a good rule. But, it’s created the downside that pilots can now lock out their colleagues and fly it in to a mountain instead.

From a great piece by Steve Coast on why the world is getting weirder. Follow the Pareto Principle long enough and you fix all the low-hanging fruit with a whole bunch of rules, leaving just the black swans unaccounted for.

Anyone who has worked on any tech product or service long enough, through many cycles, knows you can end up working on just edge cases. Often, when you hit this point, you're listening to a sliver of power users and are at the point of such diminishing returns that accommodating them might be counterproductive as a whole. All you do by adding that random feature they want is add some interface overhead and friction for majority of your users, whose problems you already solved.

At this point, if the user base is large and healthy enough, most smart and ambitious companies move on to launching new products and services with higher marginal returns on their resources 3 . The resource vacuum is often exacerbated by the fact that the most ambitious employees would rather work on the new new thing. So they move on to the latest hot top secret project, leaving the former product or service in a maintenance mode, with minimal oversight.

  1. Large and successful multi-product companies that reach this point often just kill off the product or service if the user base isn't large enough. Think Google Reader or Apple's Ping. A startup that reaches that point often pivots, sells themselves, or folds. ↩

It's usually the right near-term economic thing to do, but it can also leave some widely used products or services with chronic issues or imperfections that puzzle users and outsiders. How, they wonder, can a company with thousands of employees not bother to fix such longstanding and seemingly trivial issues? This is why competition is healthy, even if sometimes it seems like we have too many redundant products/services in tech.

Coast's post also includes some good career advice.

On a personal level we should probably work in areas where there are few rules.

To paraphrase Peter Thiel, new technology is probably so fertile and productive simply because there are so few rules. It’s essentially illegal for you to build anything physical these days from a toothbrush (FDA regulates that) to a skyscraper, but there’s zero restriction on creating a website. Hence, that’s where all the value is today.

If we can measure economic value as a function of transactional volume (the velocity of money for example), which appears reasonable, then fewer rules will mean more volume, which means better economics for everyone.

Far and near future sci-fi

Enjoyed this tweetstorm from Noah Smith a short while back. Here's a cleaner version of it, though it doesn't look embeddable. I'll have to do this the hard way, then:

Having tried lots of demos recently, I wonder if VR will inspire a growth spurt in near-feature sci-fi movies just because it is more cinematic and compelling on screen than most of today's tech in which the primary action consists of a programmer typing on a keyboard.

Steven Spielberg is set to direct the movie adaptation of Ready Player One next, and I see it as a natural spiritual successor to Minority Report, which contained a lot of ideas from futurists that Spielberg gathered for a brainstorm session prior to production. Minority Report felt like medium-term sci-fi when it came out, and it's already clear that many of its predictions were off. From a technological point of view, if not a social one, Ready Player One reads like very-near-term sci-fi.

There's a shortage of good near-term sci-fi in the movies, often because the filmmaking cycle (from idea to spec script to script to the option to years of sitting cold to finally going into production) is still so much longer than the actual technology industry cycle. Given the momentum of VR now, it's time to mine this fertile ground for more high concept movies that explore the norms after mass adoption of the technology. Given the incredible price pressure on VFX shops in Hollywood, many of which are closing up or suffering margin compression, a spurt of movies featuring a lot of VR scenarios would be a welcome supply of work, too.

I realized the other day that I will watch, in my lifetime, a VR movie about VR technology. I'm excited. No spoilers please.

Facebook hosting doesn't change things, the world already changed

Like any industry, the media loves a bit of navel-gazing (what is the origin of this phrase, because I don't enjoy staring at my own navel; maybe mirror-preening instead?). When Facebook announced they were offering to host content from media sites like The New York Times, the media went into a frenzy of apocalyptic prediction, with Mark Zuckerberg in the role of Mephistopheles.

All this sound and fury, signifying nothing. Whether media sites allow Facebook to host their content or not won't meaningfully change things one way or the other, and much of the FUD being spread would be energy better spent focused on other far larger problems.

Let's just list all the conditions that exist and won't change one bit whether or not you let Facebook host your content:

  • News is getting commodified. The days of being special just for covering a story are over. Beyond millions of citizen journalists that the internet has unleashed, you're competing with software that can do basic reporting. Tech press inadvertently furnished evidence of the commodification of news when, in the past few years, they all did a giant game of musical chairs, seemingly everyone picking up and moving from one site to the next. Are these sites anything more than a collection of their reporters? If so, did the brands meaningfully change when everyone switched seats? I love and respect many tech reporters, but a lot of others seem interchangeable (though I like some of them, too). Instead of just reporting news, what matters is how you report it: your analysis, the quality of your writing and infographics, the uniqueness of your perspective. The bar is higher to stand out, as it tends to be when...
  • ...distribution is effectively free. Instead of pulp, our words take the form of bits that are distributed across...oh, you know. As the Unfrozen Caveman might say, “Your packets of data frighten and confuse me!” The Internet: seventh wonder of the world. This must be what it feels like to have grown up when electricity first became widespread. Or sewer systems. Okay, maybe not as great as sewer systems, I don't know how people lived before that.
  • Marketing is cheaper. You can use Twitter or Facebook or other social media to make a name for yourself. Big media companies can take advantage of that, too, but the incremental advantage is greater for the indies. Ben Thompson is one of my favorite examples, an independent tech journalist/writer living in Taiwan who built up his brand online to the point that I pay him $10 a month to have him send me email every day, and it's worth every penny. He is smarter about the tech industry than just about every “professional” journalist covering tech, and he's covered a lot of what I'm covering here already. He's just one example of how...
  • ...competition for attention is at an all-time high and getting worse. Facebook already competes with you, whether you let them host your content or not. So does Snapchat, Instagram, Twitter, IM, Yik Yak, television, cable, Netflix, video games, Meerkat/Periscope, movies, concerts, Spotify, podcasts, and soon VR. When it comes to user attention, the one finite resource left in media, most distractions are close substitutes.
  • Facebook will continue to gain audience. Even if Facebook pauses for a rest after having gained over 1 billion users, they also own Instagram, which is growing, and WhatsApp, which will likely hit 1 billion users in the near future, and Oculus, which is one part of the VR market which is one portion of the inception of the Matrix that we will all be living in as flesh batteries for Colonel Sanders in the medium-range future. If you think withholding your content from Facebook will change their audience meaningfully one way or the other, you really may be an unfrozen caveman from journalism's gilded age. The truth is...
  • Facebook and Twitter and other social media drive a huge % of the discovery of content. Media companies can already see this through their referral logs. This isn't unique to the text version of media. Facebook drives a huge share of YouTube video streams, which is why they're building their own video service, because why send all that free ad revenue to a competitor when you can move down the stack and own it yourself. And also, YouTube's ad model is not that great: those poorly targeted banner ads that pop up and cover the video in a blatant show of disrespect for the content, those pre-rolls you have to wait 5 seconds to skip...wait a minute, this sounds a lot like how...
  • ...media ad experiences are awful. I wonder sometimes if folks at media companies ever try clicking their own links from within social media like Twitter or Facebook, just to experience what a damn travesty of a user experience it is. Pop-ups that hide the content and that can't be scrolled in an in-app browser so you effectively can't ever close them to read the article. Hideous banner ads all over the page. Another pop-up trying to get you to sign up for a newsletter for the site when you haven't even read the article to see if you'd even want to get that newsletter (the answer is no, by the way). Forced account creation or login screens, also before you read a word of content. An interstitial ad that tries to load video for a few seconds while you wait patiently for a countdown timer or X button to close it out as quickly as possible. Short articles spread across 3 pages for no reason other than to inflate page views. Articles that take so long to load that you just click away because in-app browsers are already disadvantaged from a speed perspective, and media sites compound the problem by loading a ton of cruft like ad tracking and other crap all over the place, reducing the content to just a fraction of the total payload. It's the reading equivalent of being a beautiful girl at a New York bar, getting hit on by dozens of obnoxious first year investment banking analysts in pinstripe suits and Hermès ties. This is what happens when you treat your reader like a commodified eyeball to monetize and not a living, breathing human whose patronage you appreciate and wish to nurture. And this is why I'm happy when services like Flipboard or Facebook transform content into a more friendly reading experience. Chris Cox of Facebook said that reading on mobile is still a crummy experience, and amen to that. The poor media ad experience is a symptom of the fact that...
  • ...media business models are not great. Monopolies don't have to have great business models, because as Peter Thiel will tell you, being a monopoly is itself a great business model. For the longest time at media sites, and this probably still happens, the reporters sat on a different floor for the ad sales folks. This meant that the way the company made money was divorced from the product people (to use a more techie term). This works great when there isn't a lot of user choice (“No one ever got fired for buying IBM”) and the ad sales people can throw their weight around (before), but not so great when ad buyers suddenly have a whole lot more choice in where to spend their money (now). It turns out that having your best product people separate from your ad team is a dangerous game and leads to a terrible ad experience, which should come as a surprise to no one. Many still defend this practice as a way to preserve journalistic integrity, a separation of church and state that keeps the money from corrupting the writing, but the Internet has other ways to defend against that now. It's great that the New York Times has a public editor in Margaret Sullivan, but today the eyeballs of the world on your content serve as one giant collective public editor, like some human blockchain of integrity. I sympathize with media companies, though, because even if they wanted to improve on this front...
  • ...tech companies have better ad platforms than media companies. Facebook's native ad unit may not be perfect, but it's leaps and bounds better than the god awful ad experience on almost any media site. It's better not just for readers, but likely for advertisers, too. At Flipboard, we went with full-page ads a la glossy fashion magazines because our philosophy was that when content is on the screen, it deserves your full attention, and the same with ads, never the two shall meet. This is exacerbated by the smaller screen sizes of mobile phones and tablets. Trying to split user attention with banner ads is a bad idea for both readers and advertisers, and most every study on ad recall and effectiveness that I've seen bear this out. Because of tech companies' scale and technology advantage, as noted in the previous bullet, their ad platforms will continue to get better and scale, while those at media companies will not. When I was at Hulu, we shopped around for an ad platform that could meet all our needs and couldn't find one so we just rolled our own. That's possible if you can hire great developers, but if you're a media company, it's not easy, and that's because...
  • ...tech companies have a tech hiring advantage on non-tech companies. This sounds like it's self-evident, but it's critical and worth emphasizing. It's not just media but other businesses that suffer from this (which is particularly awful for consumers when it comes to information security). At this hour of the third industrial revolution, software is eating the world, but we still have a scarcity of software developers, let alone great ones. The ones that are blessed to live in this age want to work with other great developers at cool technology companies where the lunches are free, the dress codes are flexible, the hours vampiric, and ping pong tables abound. It's like being a free range chicken, but with stock options and before the death and refrigeration. Companies like that include Facebook, Google, Apple, Amazon, and so on, but they don't include most media companies, even though most of those also allow you to dress how you want, I think. Maybe someday the market will overcorrect itself and everyone will know how to program, but by that point we will probably all be living lives of leisure while AI software and robots take care of everything while we just lounge around experiencing a never-ending stream of personalized VR pleasure. If David Foster Wallace were alive to rewrite Infinite Jest, VR would be the infinite jest.
  • Design skill is not equally distributed. In an age when software comes to dominate more of the world, the returns to being great at user interface design are still high and will continue to be for some time. It's no wonder that Apple is the world's largest company now given their skill at integrated software and hardware design. That's become the most valuable user experience in the world to dominate. It's not going to let up, either. Every day I still experience a ton of terrible user experiences, from government to healthcare to education to household appliances to retail to you name it. The number of great product and design people in the world is still much too finite, and it happens that a lot of them work for tech companies. Not for companies in all the other industries I named above. Even in tech, the skills are too finite, which is why enterprise software is being disrupted by companies like Dropbox and Slack and others that simply bring a better user experience than the monstrosities that pass for most enterprise software. And yes, these people tend not to work for media companies.
  • Tech companies are rich. Take all the factors above, add it up, and it comes down to the fact that we're living through another gold rush, and this time most of the wealth is flowing into Silicon Valley. Take a bunch of companies that are extremely wealthy and employ great software developers and designers at a time when software is eating the world, add in a healthy dose of world-changing ambition, and you get companies that keep expanding their footprints, to the point where they are all competing in almost every business. People wonder why Apple might build a car, but I say why not? Above all, they are great at building computers, and what is a Tesla other than another portable computer (“The first one is an oversized iPad. The second is a revolutionary transport vehicle. And the third is a portable air conditioner. So, three things: an oversized iPad, a revolutionary transport vehicle, and a portable air conditioner. An iPad, a vehicle, and an air conditioner. An iPad, a vehicle…are you getting it? These are not three separate devices, this is one device, and we are calling it Apple Car.”)? Facebook, Apple, Google, Amazon, et al all continue to compete directly in more and more spaces because at their heart they are all software companies. I suppose they could have all decided not to compete with each other, but companies looking to maximize return in free markets usually don't behave that way, and so we'll see all of them trying to do more and more of the same things, like stream music and video, build smart phones, deliver stuff, etc. That's how a nuclear arms race happens. Your neighbor has the bomb, it's pointed at some part of your business, you get one too, if for no other reason than defensive purposes. Meanwhile, you also try to do some virgin land grabs, because networked businesses tend to reward first movers, and that's how you end up with tech companies trying to colonize space, build self-driving cars, float balloons around the world to bring the Internet to everyone, and, to bring it full circle, be the new front page for every user.

It's worth repeating: all the things above have been happening, are happening, and will continue to happen whether or not Facebook hosts your content.

By the way, you can still host your own content yourself, even if you let Facebook host yours. Getting yourself set up to host content on Facebook is largely a one-time fixed cost of some time to provide them with some feed. It was the same at Flipboard, though some companies took longer than expected because they couldn't output an RSS feed of their content out of legacy CMS systems. It was shocking to learn that a random blogger on Squarespace or Wordpress or Tumblr could syndicate their content more easily than a famous media company, but that was often the case and speaks to the tech deficit in play here.

This may all sound grim for media companies, but here's the kicker: it really is that grim. Wait, are kickers supposed to be positive? Maybe I meant kick in the butt.

Okay, I can offer some positives. A media company may not be able to be world class at every layer of the full stack, from distribution and marketing to ad sales and producing great content, but it doesn't have to be. Far better to be really good at one part of that, the one that tech companies are least likely to be good at, and that's producing great, differentiated content.

The fact is, great content is not yet commodified. That may sound like Peter Thiel's advice to be a monopoly. Self-evident, non-trivial, not useful. But many of the best advice is just that, as banal as a fortune cookie prescription but no less true.

Let's take The New Yorker as an example. They don't try to compete on breaking news, though they have beefed up on that front with their online blogs. They hire great writers who go long on topics, and thus they can charge something like $50 a year for a subscription because their content is peerless. I'm subscribed through something like 2020 (so please stop mailing me renewal solicitations, New Yorker, please!?).

Look at Techmeme. They provide value by curating all the tech news out there, using a mix of human and algorithm to prioritize the tech news stream to produce Silicon Valley's front page at any given moment in time. Curation is a key part of discovery, you don't have to focus on producing content yourself. A daily visit for me.

Look at HBO. A media company with great content that you can't easily find a substitute for, with a smart content portfolio strategy that minimizes subscriber churn. They surprised me recently by announcing they were going to launch HBO Now, ahead of when I anticipated, at the same price it costs to add it on to cable package. Kudos to them for not letting innovator's dilemma handcuff them for too long.

Look at Buzzfeed. Ignore the jealous potshots from their elders and marvel at their ability to create content you can't easily find elsewhere. That's right, I said it. Despite being the company that everyone says just rips off other people's content, Buzzfeed actually has more content I can't find substitutes for than most tech news sites. It's not just their original content and reporting, which is good and getting better. Like Vox trying to make the top news stories of the day digestible for more people, Buzzfeed takes fun content and packages it in a really consumable way. It turns out in a world of abundance, most people would prefer just a portion of their media diet from the heavy news food group. More of their daily diet is from the more fun food groups, and Buzzfeed owns a ton of shelf space in that aisle. It's something other sites can do, but many avoid because they're too proud or because it isn't part of their brand. I saw white and gold, BTW.

Look at Grantland. They also hit the fun part of the daily diet by targeting pop culture and sports with great writers and new content daily. People jab at Bill Simmons' a lot now that he is in the media penthouse, but he started as a blogger for AOL, and he was the first writer to really channel the fan's voice and point of view. It could've been you, perhaps, but it wasn't.

Look at Gruber, or Ben Thompson, or Marc Maron, or Serious Eats, or The Wirecutter, or Adam Carolla. Hell, even look at Fox News (just don't look too long). It turns out that differentiated content is differentiated. When the world's an all-you-can-eat buffet of information, you want to be the king crab legs, not the lettuce bowl.

The value of being a generalist as a reporter, someone who just shows up and asks questions and transcribes them into a summary article, is not that valuable. If you cover an industry, do you understand that industry? Take tech reporters as an example, many of them don't understand the underlying technology they write about. That may have sufficed in a bygone age, but it no longer does, which is good for Gruber's claim chowder business but not good business. Taking the time to become an expert in a domain still has value because it takes hard work, and that is also not a resource that is equally distributed in the world.

Some companies try to tackle more than one part of the stack, with some success. Look at MLBAM. They have managed to hire some strong technologists and build such a powerful platform that other media companies are syndicating it for their own use. Yeah, it's great to have content from a legally sanctioned monopoly to bootstrap your business, but credit to them for embracing the future and leveraging that content goldmine to build a differentiated technology platform.

Is it easy to replicate any of those? No, but your mother should have taught you that lesson long ago. At least what they're doing is clear and understandable to any outside observer.

If you've stuck with me this long, you may still think that hosting your content on Facebook is a Faustian bargain. Maybe Facebook changes their News Feed algorithm and your traffic vanishes overnight, like Zynga. Or maybe Facebook holds you hostage and asks for payment to promote your content more in the News Feed.

It's possible, but that risk exists whether your content is hosted there or not. Maybe hosting minimizes that risk a bit, but Facebook's first priority will always be to keep their user's attention and engagement because that's how they keep their lights on (and pay for the free lunches). If your content is engaging, it will keep a News Feed roof over its head, and if it doesn't, it won't.

Does that mean you have to write clickbait headlines and package stories up into listicles with animated GIFs? I don't think so, and if that's not your brand then by all means steer clear. That doesn't mean you shouldn't write a compelling headline. I despise clickbait headlines that just try to coax a click when the content has barely anything of substance, just to gain a cheap page view, but I appreciate a well-written headline over a dull one, too. Jeff Bezos used to caution us against the “tyranny of the or,” or false tradeoffs. This is one example. I also believe Zuckerberg and other Facebook execs when they say they'd like to weed out the more egregious clickbait from the News Feed. I understand if others don't, but my general belief about most tech companies is that they're just semi-evil.

Let's go deeper into the FUD. What if Facebook decides to go into the media business themselves? What if, instead of hosting your content, they produce their own and prefer it in the News Feed?

First of all, if that ever happens, it won't happen anytime soon. When you're in the phase of convincing folks to hop aboard your platform, you have to remove that possibility or no one will join.

Secondly, content production isn't generally a business that tech companies love. The margins aren't great, it's a headache to manage creative types, content production is messy and labor intensive, and tech companies prefer playgrounds where software economics play better.

It's far more likely that tech companies use their ample cash to license content. Remember how I said tech companies are rich? It turns out they are richer than movie studios and TV networks and newspapers and book publishers and music labels, and it turns out that writing a check for exclusive content hurts in the short-term but is great in the long run paired with the right business model, regardless of whether that's subscription or subsidized by ads. If you have the best ad units and platform, the marginal return on user attention is higher for you than the next competitor, and that means licensing can make sense. You also get to meet some celebrities, too, who are beautiful and charming.

Lastly, if Facebook wanted to go into the media business, they could do it now, or they could do it in the future, and your Facebook hosting abstinence wouldn't matter one bit. They already have all the eyeballs they need, it's not a situation like Netflix in its early days where they had to build a subscriber base first before they could consider producing their own original content (thank you First Sale Doctrine!). Long before Facebook even had a News Feed where your articles were shared, hundreds of millions of people already tuned in to see what that cute guy or girl was up to, or to see their friends' latest selfie, and other forms of ambient intimacy. I could perhaps even craft an argument where if all the sites out there stood on the sidelines it might accelerate Facebook's move into the space.

And if Facebook did, if they decided to compete with The New York Times and Grantland and all the other media companies, or to buy one or more of them, is that so bad? Maybe you could work for them, if you're unique and differentiated. If you are, you'll do just fine, in this world and the next.

Did I mention they have free lunches?