The “Network Effect” has become so ingrained in how we develop business models that it is considered a law. From the example of the nth fax machine being more valuable than the first from five decades ago to the notion that social networks become ever more valuable the more people they have within them, it has powerful logic.
But it isn’t a law.
Networks are inherently fragile. Meta’s hoovering up of rivals made for easy short-term gains, but as it now faces being broken up with its reputation in tatters, not such a good long-term move. Poor moderation and over-commercialisation have undermined it. Unfair algorithms, privacy scandals and strategic drift have weakened it further, and it may yet be that its sycophantic relationship with a ruinous administration may prove the final straw.
The same applies to businesses, and of course, countries. There is a fine line between being an accepted dominant partner and an abusive bully. When that line is crossed, trust is destroyed, and the weaknesses generated by complacency are shown in stark relief. What used to be a differentiator disappears. Relationships and supply chains reconfigure. The world moves on.
On Substack, smaller networks have far more resonance than the major social networks. Our ability to decentralise into small, meaningful groups is amplified, and our ability to use AI to research, explore and experiment with ideas amplifies things further. Smaller groups offer us the privacy, intimacy and relevance that make exploring the confusion we find ourselves surrounded by easier, and offer us options of “multi-homing” - being part of a selection of small networks where we count for something, as against being an anonymous data point on spaces such as LinkedIn or, God forbid, X. The relationships and trust we develop far outweigh the illusory benefits of exposure at scale.
As the world embraces what is termed the “exponential gap”—the increasing gap between the complexity generated by multiple threads of exponential change and the organisations built to manage more linear change—my interest is focused on the local—our work and wellbeing in this changing environment—rather than the compelling larger-scale changes that we can observe but not affect.
The power of scale seems to be reducing. Brands have less power when it comes to work - big organisations used to add cachet and specialist knowledge, but now AI can do most of the work of a hundred newly minted McKinsey MBAs lined up end to end. Furthermore, younger talent prioritises purpose, culture, flexibility and autonomy over prestige. In this week’s Economist, they point out that working from home is still very real, despite the RTO hype - the “big office buzz” is not what it once was. Indie working, freelancing, consulting, and building new ventures for themselves, aided by AI, are real options to big companies, seen as slow-moving, bureaucratic and risk-averse.
Cory Doctorow captures this ethos in his work on “enshittification” - an appropriately ugly word for an equally ugly pattern of online products and services gradually declining in quality over time, a process where platforms initially prioritize user experience, then degrade it to cater to business needs, and finally abuse both users and businesses to maximize profits.
The same now is true of most careers - getting sucked in easy, getting trapped by a combination of debt and workload almost inevitable, and finding ourselves in our forties, either stuck or abandoned all part of the business model.
Stopping the roundabout means breaking the flywheel that powers it, fuelled by “Easy”
Taleb observed that a regular monthly salary is a drug that keeps us inside the cage. I think he was only scratching the surface.
“Easy” is an equally powerful narcotic. In an economy that worships efficiency, making things easy for people is a powerful draw, but harbours a paradox. East likes well-defined tasks, and well-defined tasks curb creativity. Equally. “Easy” likes structured information, which again can be a killer of creativity. “Easy” likes automation which in turn breeds complacency, and recent work on AI suggests that whilst it can up the game of less creative souls, it does so at the expense of homogenisation. A recent study on generative AI tools (e.g. using AI to brainstorm ideas or draft text) found that providing AI assistance boosted individuals’ creative output quality, especially for those who were less creative to begin with. However, there was a catch: when many people used the same AI tools, their outputs became more similar to each other, reducing the diversity of ideas. Researchers observed a >10% increase in similarity between stories written with AI help, and warned of a “downward spiral” in collective novelty if everyone leans on the same generative engines.
An inconvenient truth is that challenge and difficulty are central to developing resilience, creativity and “grit”. When people face serious difficulties or adversity, they sometimes undergo what psychologists call post-traumatic growth, emerging from the experience with new strengths and perspectives. Research highlighted by executive coach Paul Goodchild notes that post-traumatic growth is often characterised by … an increased ability to think creatively. In other words, overcoming challenges can rewire how we approach problems, making us more inventive. In the workplace, teams that weather a crisis or resource constraints frequently report that the constraints fueled imaginative solutions. For example, a mid-career executive who endures a business downturn may learn to improvise and discover unconventional strategies to hit targets. By contrast, an executive whose environment is always cushioned – ample budget, abundant support, no tough calls – might never tap into that level of creativity born from necessity. The concept of “valuable friction” refers to deliberately doing things the hard way sometimes, so as not to lose the human touch and critical thinking. That friction might be the late-night brainstorming, the painstaking analysis, or the trial-and-error in a new project – experiences rich in learning. Far from being wasteful, such efforts are “mental nourishment” that strengthens creativity and problem-solving skills.
“Easy” is pernicious. In pursuit of performance, it is easy for mid-career individuals to delegate tasks, including research and trials, to “get things done”, but in so doing, lose touch with the skills and difficulties of actually doing it. It might be an acceptable risk when times are relatively stable. Still, practical redundancy soon follows when either technology (or simple human stupidity) takes us from the complicated linear to the complexity-driven exponential, and we find ourselves too expensive for the job we are stuck in, and unpractised in the thinking and creativity required for the next step up.
Breaking the flywheel of “Easy” is necessary for our world, yet making life generatively difficult is an art. We have to live in a world where “easy” is seen as a virtue and an attraction, while finding space to practice what is difficult.
We are going to need it.
It is what artisans have always had to do. Now is no different.
Every Wednesday, at 5:00 pm UK, I host a group on Zoom where we surface the difficult and play with it, embracing uncertainty and ignorance as a teacher. If you’d like to join us, drop me a line. There is no charge, but we keep the groups small, so space is limited….