What Musk and Zuckerberg should learn from McDonalds [System Design Sundays]
Why Twitter and Meta should pay attention to the Fast Food Wars over the last 20 years
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On Sundays, I will go over various Systems Design topics⚙⚙. These can be mock interviews, writeups by various organizations, or overviews of topics that you need to design better systems. 📝📝
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This week has been eventful for the social media space.
We saw both Twitter and Meta come up with some sizzling new takes. Twitter revealed that premium users could now upload videos up to 8GB. Combined with Twitter’s increase in character limit for Blue Users- this is a clear bid for Twitter to capitalize on the long-form content space- something that should help it repair its relations with advertisers and increase its power in the space.
On the other hand, we have seen Meta allegedly push toward a new text-based spinoff. The app, reportedly codenamed P92, will be compatible with ActivityPub—the decentralized protocol used by the open-source Twitter alternative, Mastodon. Users will be able to log in with their IG Credentials, which should allow Meta to capitalize on another data source to push ads.
, writer of the newsletter did a fairly interesting thread on the development here.
This continues the trend of social media companies trying to take over each other’s domains by copying features in a bid to attract more advertisement money (to read more about the larger big tech war- read this). However, this trend has a clear challenge that tech companies will have to navigate- the lack of differentiation. So far, each of these platforms has been focused on a particular niche- IG on visuals, YouTube for longer-form videos, etc. In this article, I will be going over why this lack of differentiation can be a problem from a software perspective. Since this situation has some parallels with the fast food wars, we will be looking at how fast-food companies struggled with the lack of differentiation and identity in the last decade and what we can learn from it.
Why the lack of differentiation in social media companies will cause challenges
The spicy fast food wars- I’m guessing most of you don’t spend your free time watching the Modern MBA’s videos on the economics of different companies. So to give you some context, fast food is a very cut-throat business with a lot of brands vying for supremacy. Around the mid-2010s, there was a spike in health-conscious customers, who wanted more healthy options from these companies. Fast food brands like McDonald’s caved, offering more healthy options on their menu. However, this backfired, with worse performance and higher operating costs for companies. Let’s cover why
Why expansion isn’t always the right answer- Ultimately, fast food companies make money by efficiently serving a large number of people. More options on the menu require more ingredients, equipment, and moving parts (this is why fast-food companies are generally hesitant to introduce completely new permanent items). This is the enemy of efficiency- increasing operating costs. The healthy options also lead to a loss of identity- which is a problem that Social Media Companies will need to be proactive in handling.
Why this is relevant to Social Media- Just as with all other fields, different social networks are optimized in different ways. On a platform like Twitter, you don’t really care about posts created 7 years ago. This is not true for YouTube. This means that the recommendation algorithms, search capabilities, and user journeys are all designed differently. 8 GB videos (which would ideally have more long-term value) would be more suited to YouTube than Twitter’s current architecture. Similarly, text and visual content are very different, and this will be a challenge for Meta to navigate as they proceed (my personal take is that Meta should release P92 as its own app). It makes no sense to add features if they don’t synchronize well with the overall user experience of the end user.
The costs of adding complexity- Integrating completely different mediums into the platforms would radically increase the complexity of code bases that are already notorious for their size and scale. And this will come with a whole can of worms. As MIT researchers discovered, differences in architectural complexity could account for 50% drops in productivity, three-fold increases in defect density, and order-of-magnitude increases in staff turnover.
Overall, how different social media companies continue to take over each other’s turf while keeping their own core functions strong will be interesting to watch. Meta was able to take Snapchat’s cake through stories, so successful integration is possible if done correctly. If you’re interested in the fast food wars, I highly recommend taking a look at the following video by the amazing Modern MBA (one of the 5 channels I recommend to learn more about Money over here). His video is a masterpiece in the importance of differentiation, clarity about product vision, and coherent messaging. PS- it is almost 1 hour long.
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