A Couple Of Things– The Rise of Enshittification, and the Power of Generous Giving

Enshittification describes how platforms collapse under their own incentives. GaryVee reminds us how value compounds through generosity. The space between them is where trust is forged.

Was ‘information’ always meant to be free flowing? The early age of the internet would say ‘yes’ to that, but then came the business of and with information flow, which made monetizing and scaling profitability free flowing.

I took a valley jump into one of the Word Of The Year entries, recognized by two different lists in 2023 and 2024 alongside taking a step back to drift into the importance of giving more to build long-lasting value, and sustained trust. Read on!

The Enshittification Of Everything

Earlier this month, I renewed my Uber One subscription, and it felt like just another task on my to-do screen. Similar pop-ups have translated into an easy-going conversion on other apps in the past six to nine months. Have I gotten better rated drivers? I don’t know, but they were good. Have I gotten better vehicles? I don’t think so, but I’ve minimized the most basic hatchbacks to avoid the curse of missing seatbelts. Have I gotten a lot of discounts and cashbacks? The discounts are as imaginary as the ride fares, and the cashback is always too low to be redeemed for anything. Algorithms set the tone, platforms bank the experience, and consumers continue to buy tickets for perceived augmentation of basic services.

I must agree, I never ran into this depth of questioning these high-value subscriptions, before reading this piece, by Shephali Bhatt. Shephali talks about the price of human interaction in the age of automated customer support—how the basic support model of yesteryear is today’s too-hard-to-reach. While running through the ‘Word Of The Year’ lists a few days ago, I paused at ‘Enshittification’—the 2023 American Dialect Society and 2024 Macquarie Dictionary’s Word Of The Year. The term refers to the gradual deterioration of an online service or product as a result of profit-seeking, and was coined by Cory Doctorow. In this talk, he outlines how the digital platforms and organizations acquire customers, put them through a descending value drain over time, and scale up the profitability. According to Cory, there are three stages in this process:

· Acquire customers at scale: Seed and cascade highly relevant content, attractive offers and deep discounting that acquire customers, whose usage patterns shape micro and macro preference algorithms over time. When scaled acquisition trends, it leaves no one behind. every other person one knows is on the platform—from the one next to you on the couch, to an acquaintance miles away. The network effect is at play, and the cost of leaving a platform is the price of FOMO, or an unpopular trend.

· Forge and scale partnerships: Adapt the role of honest distributors to connect the producers of goods and services with prospective consumers by offering an advertising platform to effectively reach the right audience. Discounts continue for the end consumers, discounts are enabled for advertisers, and everyone is swimming along the tide.

· Turn up the profit dial: Once everyone is comfortable with the platform, make the access pricier, and connection dearer. The costs for the advertisers rise, and ad blocks, faster deliveries, and relevant offers come at a subscription cost for the end consumers.

In his talk, Cory goes in depth with the forces that influence enshittification—market competition, regulation, and interoperability. The other side of the argument rests with the traditional demand and supply economics. Scarcity fuels demand, higher demand drives premium, and premium pricing bring in higher profits. However as consumers, instead of paying higher for differentiated experiences, we’re paying higher for core essentials, alongside staying away from mediocrity. Getting a good car, with best drivers, and with minimal wait times is the core value of a ride-hailing cab service. Riding in an SUV or a hatchback is the basic differentiator. A business class airline experience in a cab, or a premium lunch serving while on the road are some augmented differentiators that can command a premium subscription fee. There’s an opportunity to profit better from the right side of the value game, and thereby reduce enshittification.

What Are You Leaving On The Table To Have Them Return?

I’d bookmarked this conversation with Gary Vaynerchuk on the Uncensored CMO podcast, which I got around to listening towards the end of last week. As one would expect with Gary’s content, there are a lot of punchlines, sharp insights, and interesting perspectives, but the point that resonated the most with me was around driving real value.

Disclosure: I’m a subscriber to ‘The One Thing’ newsletter by Jon Evans, the host of the Uncensored CMO podcast, who wrote about the same takeaway on his short note following the release of the episode.

Gary talks about the act of giving, and the permission it compounds over time to make an ask—hiking prices, exclusive deals, signing up for offers etc. I’ve been in many negotiation sessions during my MBA days, and in real life while structuring media deals, but I have never come across such an articulation and application of giving value first to receive later. I look at what one leaves on the table today as the cost of acquiring an extended customer Lifetime Value (LTV). Gary speaks about the different negotiation styles between him and his father, where the latter would negotiate for today, but would potentially lose the customer for tomorrow, because people remember how you made them feel and may not return to transact post being on the receiving end of a hard-fought negotiation.

When we draw parallels of cultivating value with the phenomenon of enshittification, organizations transact across the three stages (mentioned in the previous section). When brands reach the third stage, they often walk into a trust deficit. Once the brands obtain the permission to make the ask, they need to think about how they’ll make the customer return despite higher prices or an absence of discounts. That’s when the value of the product, service or the brand is truly tested. This is where trust is the multiplier, and not the discounts and cashbacks.

Gary churns a lot of content for free, but when he writes a book, the content of the book needs to be equally good as the free content, in order to ensure recurring sales of his future paid content. In the truest sense, no business can take the customers’ time for granted, and force a choice by restricting the parameters. The real value always needs to match the perceived value for a long-term relationship to trudge on.

Listen Up

From their self-titled best-selling album Kingdom Come released in 1988, here’s one of their biggest hits Get It On’. If the sound reminds you a little, or a lot of Led Zeppelin, you’re in the company of many like ears.

I’m forever on the lookout for tunes old and new, You can check out my expanding Trove Of Tunes that I’m curating in a Spotify playlist.

Cheers,

Shri