Don’t Fear the Social Media Bubble

In a blog post last week, Umair Haque put forward the idea that we’re currently experiencing a social media bubble, and he also explained why he thinks this is a bad thing:

Call it relationship inflation. Nominally, you have a lot more relationships — but in reality, few, if any, are actually valuable. Just as currency inflation debases money, so social inflation debases relationships. The very word “relationship” is being cheapened. It used to mean someone you could count on. Today, it means someone you can swap bits with.

He then says that this relationship inflation leads to inefficient allocation of attention, investment in low-quality content because that is what’s most popular, and a weakening of the internet as a force for good.

That’s pretty alarming.

As much as admire Haque’s work, I think there are a couple of flaws in his argument. I’m 100% with him in his desire for the creation and sustenance of thick, meaningful relationships and for the creation of awesome things that make our lives genuinely better. But I’m not convinced that social media is preventing progress towards these goals.

There are two parts of his argument that I’m not so sure about. The first is the contention that all ties within social media are weak ties. Now, social tools like facebook and twitter certainly do conflate genuine friends with acquaintances. But does it follow that because the tools do, that we do as well? I don’t think so. In a highly recommended post, Stowe Boyd responds:

He suggests that because we are creating and expending time on a growing number of weak ties then we are diminishing our involvement with intimates. I think this is debatable. While the time I spend writing this blog or twittering could in principle be applied to talking to loved ones directly, in reality many of my closest friends read this blog and my twitter stream to remain in contact with me, at no extra cost (here I am adopting Umair’s economics jargon). This in no way weakens my strongest ties, and certainly is the wellspring of thousands of weak ties.

And, as Erica Glasier points out, there are lots of valuable things that we can do with weak ties:

Thin relationships, or “weak connections” make these upper-Maslow interactions possible. You don’t need a high level of investment in someone to trade ideas. Their input is valuable precisely because they come from a different perspective, and aren’t bound by politeness or concern for your ego. I’ve mentioned the findings that novel input from new friends sparks more innovative, creative solutions. The more the merrier.

Weak ties can actually be pretty useful. There are tons of things we can do with our weak ties:

  • We can get a job. The first use of the idea of strong and weak ties came through Mark Granovetter’s paper The Strength of Weak Ties (summarised here). His study showed that people are far more likely to find a job through weak ties than they are through strong ties, because people that we are less closely attached to are more likely to know things that we don’t already know ourselves.
  • Like Erica says, we can use our weak ties to swap ideas, and to get ideas to spread. For examples of this, just look at the ways that Umair, Stowe and Erica use twitter, just for starters.
  • Large numbers of weak ties can be incredibly useful for finding out specific information quickly. Paul Gillin has a good example in the comments to his recent post on search:

    OK, I want to take a run after dark and avoid bad areas of town. In that case, recommendations from my Twitter followers would be my most useful source of advice. In fact, I probably couldn’t even find that kind of information on a search engine.

So, I agree with Boyd that having social tools equate strong and weak ties does not necessarily devalue weak ties. Furthermore, there are plenty of uses for weak ties, many of which actually do create thick value. I think that the key to this issue is ensuring that we keep the distinction between friends and acquaintances clear in our minds.

The second thing I’m not sure I agree with is the idea that bubbles are bad. They’re certainly inefficient, which is bad from a neo-classical economic view. But in many cases bubbles create an incubator for experimentation, which is often the only way we can discover the value in novel technologies. Here’s the way Jason Potts put it (a link to the pdf):

Bubbles are good because they promote variety and experimentation in an economic system. The bubble process facilitates the sort of structural change that economic growth always, in some form, requires. Economic systems, when they are open and therefore competitive, need bubbles to grow. So they require institutional systems and policy frameworks capable of (perhaps vigorous) interaction with bubbles.

A bubble works by concentrating financial liquidity and entrepreneurial attention onto an asset class and its forward prospects. Inside a bubble, the cost of experimentation, and therefore variety generation, is lowered and, by incentive effect, the process of structural change is accelerated. Access to finance is easy inside a bubble. Similarly, the cost of failure is reduced, and the uptake of novelty is high. The economy becomes energised around the bubble, as do the entrepreneurial spirits of agents who happen upon it. Learning is accelerated within a bubble, and radically new business ideas can get a start, as can radically new products. Real bubbles theory, then, is the idea that from a bubble environment there flows the incipient variety upon which the evolutionary economic process of enterprise and wealth creation feeds. Bubbles breed variety, and variety feeds economic evolution, and therefore growth.

Jason is talking about bubbles more like the boom than policy-driven bubbles like those in housing. The issue is that when we have something new, like the internet, or social media, we have to figure out what the best use of it will be. In the bubble, it is only obvious in retrospect that was a dumb idea (those huge shipping charges!) and was brilliant. At the time, this was still an open question – and plenty of people thought that amazon was pretty stupid when it launched (Who buys books without seeing them first? How will we know what we’re looking for without book store clerks? etc.). It’s only through experimentation that we discover what the killer ideas are.

It’s the same with social media. It wasn’t obvious when it launched that twitter was going to work as it had – it couldn’t be because twitter is built on the network of connections within the tool. Bubbles are useful precisely because we can’t pick the winners in advance.

The issue that Umair might take with this is that growth isn’t by definition good. I agree with this, so in as far as bubbles drive growth, then they aren’t necessarily good. But I don’t think that they are by definition bad either. Our challenge is to figure out how to drive investment in creating things that have genuine sustainable value. This problem is the same whether or not the social media bubble exists. What we really need is an awesomeness bubble.

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

Please note: I reserve the right to delete comments that are offensive or off-topic.

15 thoughts on “Don’t Fear the Social Media Bubble

  1. Well presented thoughts! Thumbs up to the insight that bubbles provide the hot, wet environment necessary to foment some real changes.

    SoMe is a revolution in terms of the way senior management in traditional orgs think and operate, and it takes an extraordinary situation—maybe a bit of a bubble—to introduce such new thinking across the board. “The uptake of novelty is high”, as Jason Potts says.

  2. Tim,
    Another thought-provoking post and you make some great points.

    I too have great respect for Umair and admire his work – however on this one I respectfully have a differing POV than him on a few points.

    First, I am not sure “bubble” is the right word to describe social media. The growth in relationships or connections is not really based on speculations – there is an inherent value to be gained by participating and so I don’t think there will ever be a domino meltdown in the use of social media – it has a pretty good earnings yield (to borrow an accounting term).

    I also totally agree with Umair that social media has caused a ‘relationship inflation’.However, I don’t agree with him that it has debased relationships. I have formed some wonderful relationships in the social media community that in certain cases are deeper than some of the friendships I have in real life. Also, meeting the “social” friends in real life in a conference or tweet-up really cements that relationship into a greater stability. [I make ‘friends’ at work based more on co-location than common interests and so many of those ties wither in time. The friends made in social media stream are based on a solid foundation of common-interests, viewpoints, and belongingness and so (imho) is more long-lasting.

    And lastly, Umair mentions that the exponential growth in ‘friendships’ has not resulted in an accompanying rise in trust. Very true – but then that is to be expected. This goes back to the Dunbar’s number analogy. One might have 100s and 1000s of friends but can only “develop” and maintain a relationship with a certain number realistically. In other words, in social media the level of trust is not directly proportional to the number of nodes you are connected with.

    And lastly, as you, Mark, and Erica have exemplified – there is a lot to be gained from weak-ties. This in fact is one of the underlying tenets of social-networking and network weaving. Weak-ties are critical in bridging communities and incorporating new ideas into a domain.

    Enjoyed the post as always.


  3. Interesting points Ned. I’ve also made a number of connections online that have turned out to be remarkably strong. Meeting ‘internet people’ is now a regular part of my travelling – & I suspect that this will be the case again on my next big conference trip in June.

    The trust question is an interesting one. It could well be a Dunbar’s number issue. On the other hand, there is a fair bit of solid research showing that levels of trust vary across societies and across time – so trust definitely isn’t simply a fixed value thing. I need to give this issue a bit more thought, I think…

  4. Thanks Renata – I’m not sure that this counts as the two of us ‘playing ball’, but I certainly find a fair bit of inspiration from his work! :-)

  5. Tim,
    Excellent catch on trust and one I should have caveated in my comment. Totally agree with you that one cannot generalize this particular dimension.

    Trust is complex – and a topic on which we can have an interchange & discussion on for hours. Trusting your life in the hands of someone is different from trust in e-commerce. Then there is the question of trust & faith -what makes them different. And trust & performance – which comes first etc. etc. :-)

    The key point I was trying to get across on trust was that [mathematically speaking] the number of folks I trust and the number of nodes I add to my network are not linear. Further, how skewed this relationship is will depend on how risk-averse one is.


  6. Thanks for the clarification Ned – I think you’re definitely right about that. That idea of getting at trust within networks analytically is a tough one. You’re right that it should grow non-linearly, but actually measuring it is tough. A couple of my PhD students are working on related issues – it will be interesting to see how far they’re able to get!

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