It all starts good, then it turns bad…

Case Study #1

In 2007, Netflix introduced the streaming service, promising a better and cheaper solution.

Fast forward 16 years later…

In 2023, streaming services like Netflix, Disney+, Hulu, Paramount Plus, and Apply TV Plus are all raising their prices to gain profit.

Case Study #2

In 2009, Uber was founded with the promise…

“What if you could request a ride simply by tapping your phone?…”

“…even when you can’t find a taxi. And it’ll be better and cheaper!”

Recently, Wired’s editor – Steven Levy – confronted the Uber CEO about why a 2.95-mile Uber ride from downtown New York City to the West Side cost him $51.69… doubling the estimated cost provided by the app and exceeding a taxi.

Notice the trend? 😏

Every “Unicorn” goes through the same 4-phase lifecycle.

– Phase 1: The founder started the company with an innovative idea and promised a cheaper (more convenient) solution. 🙏

– Phase 2: The company uses investors’ m.o.n.e.y to back up uneconomical growth to increase market share aggressively. 📈

– Phase 3: The company hits a plateau in growth… and funding dries up. 😱

– Phase 4: The company jacks up the price to gain profit… immediately after they’ve crushed the traditional competitors. 🤑

And it repeats.

The cycle starts again with another company with another promise.

Sounds familiar?

Yes, this is the same lifecycle every social media platform goes through.

Every SM platform starts with a promise of a better experience…

…goes through an exponential growth phase when businesses can get a ton of organic (or cheap) traffic

…then the platform changes the rule to jack up the ad cost – while reducing organic reach. (This pushes small businesses out of the market to make room for the 800-pound gorillas 😞)

…until a new platform replaces the old.

Platforms like Facebook, YouTube, and Instagram are in the later profit stage, while TikTok is in the early growth stage.

And this is why people claim:

“FB doesn’t work anymore!”

“YouTube doesn’t work anymore!”

And expected soon…

“TikTok doesn’t work anymore!”

In reality, they all can work… as long as you know the rules.

Now, I’m not sharing this to prove that SM platforms are bad.

Far from it.

Social media is a big part of e-commerce marketing.

One viral post/video can bring in a scary amount of traffic.

(Standup comedian Matt Rife went from broke to $25M in one year. It all started from ONE viral video.)

But I wouldn’t rely on any social media platform as the backbone for your business.

Especially since they can take away your channel/page overnight without any reason or appeal.

So, what do you focus on?

Let’s continue tomorrow.

Stay tuned and enjoy the adventure,

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Cheering for you,
Wuyen

P.S. Which SM platform are you using right now? I’d love to know. 

Please share with me here.