Marc Andreessen explains why user-generated content platforms like YouTube, Twitter, and Wikipedia succeed. Revenue-sharing models have mostly failed, he argues, because people contribute driven by passion and self-expression, not money. Clay Shirky's work supports this view.
Chapters
You see all these user-generated content companies, famously YouTube and blogging platforms and so forth, and they all seem to— Twitter most recently— and they all seem to have the characteristic that the company that runs them ends up making a lot of money on advertising and the people who actually create all the content don't. And so wouldn't it be a good idea to basically share the revenue out with the users? Almost every attempt I'm aware of to try that has failed. And so in practice— and there have been a whole bunch of attempts for 10 years, and I bet you have never even you haven't heard of any of them because they failed so spectacularly that they just vaporized. The successful user-generated content applications and sites tend to harness people's passions much more than they tend to harness people's greed. And so just in practice, the sites and services that are super geared towards how people think and how they want to live and how they want to act, independently of how they make money, but to give people a platform for expression or a platform for communication, that's really good and fun and empowering and wonderful to be on. Like those are the ones that tend to win in terms of user behavior and the ones that try to split revenue generally never get anywhere. And this is one of the— this is— a lot of economists look at this, a lot of free market economists, University of Chicago economists look at this and say, well, this can't be true because everybody knows that humans are purely economically motivated and only want to make money and never want to do anything for fun. And then you just look— I'll give you another case study, Wikipedia. Nobody makes money on Wikipedia. Google launches this big effort called Knoll, and the big promise of Knoll is that it's going to be like Wikipedia except if you contribute to it, you can make money. And I mean, it's like a dead zone. Like there is like nothing on Knoll, and Wikipedia is gigantic. So it just— Clay Shirky talks a lot about this in his book, "Here Comes Everyone," is there's something really magical about harnessing people sort of in large numbers on things that they love and things that they enjoy doing. And that seems to be the template for it much more than immediately trying to figure out how to help people make money, which is just a really interesting large-scale psychological experiment, but one for which there's now a lot of data.
