Enshittification does not need to be Inevitable
As a product leader, I’ve been thinking about enshittification a lot lately. Is it inevitable? Corey Doctorow, who coined the term (see his story in Wired and the FT) argues that it is. He argues that “When a platform starts, it needs users, so it makes itself valuable to users” and focuses on creating a superb user experience. Makes sense. Think back to your first few times using Facebook or Instagram - pretty magical, right? Then, after platforms achieve product market fit and popularity, they make a switch from focusing on creating these, beautiful unique user experiences to monetizing - hence “shittifying it”. Now think about the last time you used FB or Insta…
As Doctorow argues, enshittification happens when the goals of a platform’s users and the platform itself diverge. Greg Rosalsky recently wrote a case study about this divergence on Planet Money focused on Match Group’s dating apps. He illustrates it perfectly here:
But there's an awkward tension at the heart of the dating app business model. They are for-profit tech companies that want to attract as many users as possible and inevitably make money from them. But at the same time, true success for their users — at least for the large population looking for more than just hookups — means that they find love and get off the apps. For each successful match, the dating app loses not just one, but two customers!
I’ve seen this tension play out at a number of companies and I do not think enshittification needs to be inevitable. It is a conscious internal decision (perhaps forced by investors) to prioritize short term profitability over longer term customer value.
Years ago when I led monetization at Quizlet (an ed-tech platform) the product-engineering-design team had healthy debates around this tension. My team was goaled against hitting aggressive advertising and subscription revenue targets. Yet our mandate was that we had to do this without harming the user experience or impairing the ability of students to learn on our platform. We measured this by looking at study sets studied and initially approached this challenge by launching each new subscription or ad feature as an a/b test with two success metrics: 1) revenue impact 2) study sets studied. If we saw a negative stat sig decline in #2 we couldn’t rollout the experiment regardless of the $$$ impact of #1.
After a series of successful a/b tests we began to worry about the compounding impact of all these new monetization features. Essentially asking (before the term had been coined) were we enshittifying Quizlet? To answer this question we created a holdout cohort (a small % of our user population who would never see ads) and began measuring a/b tests not just challenger vs control, but challenger vs control and holdout. Essentially we wanted to see how students in our challenger environment (with an incremental ad) performed against students in a “pure” environment optimized for the student experience (the holdout). This allowed us to ensure we weren’t “enshittifying” Quizlet.
While this example shows how companies can continue to pursue incremental monetization without enshittifying, investors still may not have patience for this measured approach. Going back to the Match Group dating app example we should ask “how might Match Group increase it’s profitability and also align to their users goals of finding love?”
One answer might be for Match to expand vertically in a user’s lifecycle. Currently Match focuses on a single point in time: dating. They optimize to keep users dating for as long as possible. Yet even this isn’t true - they optimize for their users to churn through 1st/2nd/3rd dates and return to the platform before any roots take hold in a relationship.
What if they optimized for relationships? For example, Match could facilitate unique date experiences. Imagine a date concierge (AI powered, obvi) that helped users come up with creative date ideas and facilitated reservations, flowers, all the trappings of a successful date. Match might say this would be too costly to build. Ok, what if they bought The Knot and moved into engagement / wedding facilitation? Conceivably Match could move from a matchmaking company (a very small point in time in anyone’s life) to a company that facilitates romance at all points in a user’s life. Imagine the lifetime value of a 20-year customer!!!
Taking steps like these are major product strategy changes for sure, but they would move to align Match to the goals of their users, increase lifetime customer value (LCV) and move them out of the churn game they will inevitably lose, which keeps “enshittifying” their platform.
Enshittification is a decision to prioritize short term profitability over more creative long term investments that align a platform and its users. For sure it’s harder to avoid enshittification, and we’ve all been guilty of “enshittifying” when a project we propose with large short-term revenue gets prioritized, but it need not be inevitable.