If you ever wondered how social startups like Instagram or Tumblr could get acquired for $1 billion or more without having any decent business model, then this video has a good explanation for it. Facebook or Yahoo did not acquire technology, talent or future revenue, they did acquire a share of your daily time which then in the future could become very lucrative.
In the description of the video Hank makes another great point, one I also wrote about in my post about Ashton Kutcher and Twitter. Hank writes
I’m just getting a little sick of the system that values aggregators of content more than creators of content, and presumes some kind of magical future where owning users free time results in lots of money.
One factor that plays into this (and I am going to dedicate another post on this matter) is that there are too many curators and aggregators compared with the number creators on the service. This is a general problem, of course and not only tied to Twitter. …
When a service is new and only used by pundits you will have a much higher number or creators using it and only a very small number of curators and bystanders. Most early adopters have a blog or vlog or are avid commenters. This ratio gets heavily watered down the moment mainstream users arrive who are in most parts consumers and aggregators of content.
So please, take a moment and watch what a great content creator has to say about startups and content aggregators.
Update: The other half of the Vlogbrothers Hank Green added his commentary on content creators / aggregators in his vlog on Tuesday. He makes the point that content on the Internet is mainly based on advertising revenue and that advertisers are really bad in understanding the relationship between content creators and their audience. They care too much about viewer numbers and not viewer quality. Pretty interesting thought.