Tales from the Echo Chamber
I’m constantly amazed by how short news cycles have become and the extent to which the Twitter echo chamber now defines how we judge a hot startup. Valuation news is regularly leaked, for example, then relentlessly retweeted, seemingly providing instant validation for many companies, when in reality, valuations for private companies mean very little.
Unfortunately, it’s starting to seem that journalists are fighting a losing race in trying to keep up with what’s truly novel. For several years now, savvy investors have been effectively gaming Twitter and mastering the ability to trumpet their investments in 140-word sound bites. It’s no wonder that Chris Sacca –- who previously worked as the head of special initiatives at Google — has raised a “secretive” new $1 billion fund, just four years after striking out on his own as an angel investor.
Journalists have lost control of the story. In rushing to retweet the latest auction results from SharesPost, we’re not thinking about what we’re writing or questioning what we’ve been told.
“’Are we paying too much attention to things that don’t deserve it?’ is a worthy question to ask,” says journalist John Battelle, the founder and chairman of Federated Media and founder of the Industry Standard, a Bible of the first Internet boom. “You have to step back and make a few phone calls, and I think the world is bereft of that kind of reporting right now. Absent being able to identify the next big company, there’s an inclination to declare any startup as having that potential…It’s not unlike a journalistic gold rush. Only so many people can go into the hills.”
Recently, I asked Owen Youngman, the Knight Professor of Digital Media Strategy at the Medill School of Journalism, whether today’s “real-time” media is helping to fuel a 2000-style valuation bubble.
“In my memory,” said Youngman, “a lot of glossy magazines back then were by and for the same people that are running up valuations today, and they could make even the wispiest of ideas seemed substantial.” Today, in contrast, “we have tweets that fly by faster than you can see them. If someone doesn’t see [an online story link] in the first five minutes after it’s tweeted, it’s gone forever.”
Youngman added, “I have a hard time thinking things are worse today because we’re all tweeting.”
I hope he’s right. I think he’s wrong.
Abigail Johnson said on March 3, 2011
Thanks, Connie. Great point!
Dan Becker said on March 4, 2011
Yes to Batellie’s question. And evidently per this short comment thread, we are paying too little attention to the things that are important. Like intellectual integrity, thoughtful editorial, and responsible analysis.
I am a bit disappointed by Youngman’s response. Look around, and ask yourself: as cool as twitter board is, really is it a comprehensible flow of information? How about national and political blogs, doesnt it seem that discovery algorythms are driving discourse and constituents into further divisive camps with seperate set of facts? Or the act of publishing, how regardless of topic it seems akin to sparking an info war with somebody?
How could all of this not contribute to a bubble? Markets work like operations work with trusted information systems. Currently we are drowning in information, our digita media systems and channels are still young and developing.
No doubt digital media has and will continue to bring considerable innovation and value the world over. However the fundamentals of professional media and communications have not changed: trust, narrative, attention economics. i have to smile when information engineers reinvent what most media professionals already know, in the end they often pioneer a radical new breakthrough in vocabulary: trust = social proof, editorial/narrative = curation, and attention economics = discovery. -Seems old school.
Connie said on March 4, 2011
hi, dan, thanks for the comment. agree with many of your points above.
ultimately, the issue is seo, of course. while the fundamentals of journalism haven’t changed, the business of supporting it has dramatically. the result is that we write about, then tweet about, then relink to the “hot” stories and companies that drive eyeballs and ad dollars, to the exclusion of many other important stories. the harsh reality, too, is that unless you’re the new york times or select few other outlets, analysis just doesn’t pay. as you note above, people don’t make time to read it. it doesn’t monetize well as a result.
the danger is that all this circular reporting — and the volume of it, and the speed at which it’s getting published –is skewing broader perceptions of what’s really going on. it’s dangerous in politics, as you note, and it’s dangerous in business.
no one is going to be holding a gun to public market investors, making them invest in some of the junk that’s liable to go public in the next year or two. but i sort of feel like reporters and bloggers (myself included) will be responsible to a degree when they get caught holding the bag.