The Limits of Organic Growth for Startups and Social Networks

Many years ago, when I was younger and more foolish, I worked for an advertising startup. Things seemed to be going pretty well! The office was expanding, the sales team was screaming into phones, the budget for servers was rising. Growth had been healthy, but now looked to be plateauing.

One day we were summoned into a large conference room. Our CEO was on the speakerphone (I told you this was a long time ago) with an important update on our financial situation.

I think every arsehole in the room puckered. Were we about to be made redundant? No! Far from it. The business had just taken on a massive amount of investment from a prominent Venture Capital fund. The champagne flowed! With this money we could turbo-charge our hiring, build new products, and accelerate our growth.

At least, that's what I thought. In my naïveté, I congratulated our head of sales on the growth of his empire. More money meant more sales staff, yes?

He was glum. "That's not how it works," he explained.

Our large institutional investors had a vast stable of other companies. Each covered a different bit of the tech ecosystem and our advertising business was about to become part of an incestuous web. Every app that the VCs had invested in would now be "encouraged" to use our advertising solution. You don't need a sales team when your customers are your cousins in an arranged marriage.

Similarly, our approved corporate chat tool would be replaced by one from another stable-mate. Who, in turn, would buy advertising from us.

Over the next few months our growth rocketed and almost none of it was organic.

Eventually I left for pastures marginally more ethical than advertising. But I continue to see the same pattern repeat itself.

When you wonder why one social network grows and another doesn't - look at the investors.

For example, I'm sure a lot of Twitter's early growth was organic. But once rich and powerful companies can direct their investments to sign up and route all their customer service / product announcements through there, it exploded. When you have a financial investment at stake, finding ways to boost growth is a priority - and a little mutually reinforced reciprocation goes a long way.

I don't know if Mastodon (and other ActivityPub services) have reached their maximum organic growth. I suspect they have. To be clear, I'm not calling on Mastodon to take on a billion dollars of VC funding. But without sales teams and without a bunch of associated organisations forced to use it, I worry that the Fediverse will hit a natural limit.

And, again, I don't know if that's a bad thing per se - but if you're expecting big companies, governments, and your favourite VC-adjacent celebrities to join, you're likely to be disappointed.