Open networks are more valuable than closed ones: the case for the Fediverse over Twitter and Facebook

Networks are everywhere, and they are valuable. Consider:

• The road network. Imagine you’d need a different car for each piece of road. Life as we know it today would be utterly impossible without it.
• The phone network. To pick two random use cases, without it you couldn’t call customer service or summon an ambulance.
• The Visa credit card network (and its competitors). You would have to use cash instead, but arguably everybody accepting the same currency forms a network, too, and without that, we’d be back to barter. Which would be really inconvenient.
• The world-wide-web. Some of us are old enough to remember the times before. No on-demand news, music, entertainment, chatting, reservations, e-commerce and all the others.

Generally, larger networks are more valuable than smaller networks: if you are the only person in the world who has a telephone, that phone is not worth much. If there are 2 people with phones, you can at least call each other. With 3 people, 3 different conversations can be had. With 4, it’s 6. With 100, it’s 100*99/2 = 4950 possible conversations, not counting multi-party conference calls. This quadratic growth of value with the size of the network applies to all networks, according to Metacalfe’s Law.

But in this post, I want to look at another dimension of networks that impacts their values, and that is whether the network is “open” or “closed”. There are lots of details one could consider, but for our purposes here, we define a spectrum with two extremes, and lots of gray in the middle:

Fully open	Somewhere in between	Entirely closed
Anybody can connect to the network and do what they like, nobody's permission is required.		Who may connect, and what they may do on the network, is closely controlled by the network proprietor.

There can be all sorts of network proprietors, but for simplicity in this post, assume it’s a single entity, like Meta.

Here are some examples:

Fully open	Somewhere in between	Entirely closed
The public road system.		Roads on a private golf course.
Buyers and sellers using cash.	Buyers and sellers using Visa.	Internal company accounting system.
The world-wide web.		Facebook. Twitter. The old AOL walled garden.

If you had two networks that are otherwise identical in size, structure and function, except that one is open and the other one is closed, which of those two is more valuable?

Valuable to whom?

Fully open	Somewhere in between	Entirely closed
Valuable to: Platform proprietor: no, does not exist Network users: yes		Valuable to: Platform proprietor: yes Network users: yes

It’s clear that if both networks produce the same amount of total value, the open network is more valuable to its users (such as individuals and organizations), for the simple reason that there is no network proprietor who needs to get paid! The value entirely accrues to the network participants.

But there’s more to it: Cory Doctorow recently coined the term enshittification to describe the inevitable march of platform/network proprietors, over time, to siphon off an ever-larger percentage of value generated by their network, to the detriment of its users. So the older a closed network, the less value it provides to its users. (Facebook users experience this every day: ever more ads, ever less genuine human engagement. While, for its business users, ad prices go up.) In an open network, on the other hand, the value that accrues to the users does not deteriorate over time.

And finally: could AOL, the online service, ever have provided the same value as the open web? Of course absolutely not! Open networks allow many more technologists and entrepreneurs to innovate in a gazillion different ways that would never be possible in a closed network. As closed networks mature, not only do they enshittify, but they also further and further discourage innovation by third parties, while the opposite is true for open networks.

Which brings us to the Fediverse. Which is more valuable today: the decentralized, open social network called the Fediverse (with its thousands of independently operated Mastodon, and other instances), or the poster closed social network, Facebook?

Clearly, Facebook. That’s because by all counts, Facebook today has order-of-magnitude about 1000 times the number of users of the Fediverse. Same for Twitter, which has maybe 100 times the number of users of the Fediverse.

But the network effect is the only thing the closed social platforms have going for themselves. All other parts of the value proposition favors the open social network alternative. Think of this:

• The Fediverse extracts far less / no value: no annoying ads, no user manipulation favoring the business model of the network proprietor.
• More functionality: it’s one interoperable social network with apps that emulate Twitter, Facebook, Medium, Reddit, Goodreads, and many others! In the same network.
• It’s entirely open for innovation, and innovators are building furiously as we speak. By its nature, it’s permanently locked open for innovation, and there is no danger of ever getting cut off from an API, facing sudden connection charges or drawing the wrath of a gazillionaire.

So by the time the Fediverse has sufficient numbers of users, it’s game over for proprietary social networks. This is true for both user categories in social networks: individuals and businesses. (I assume here that businesses and the Fediverse will find a way of accommodating each other, mainly by businesses behaving respectfully. If not, there simply will be no businesses in the Fediverse.) Individuals will get more value from the open network, and businesses will be far more profitable because there is no network operator to pay and many products and services pop up all the time that won’t in the closed network.

Note that the critical “sufficient number of users” can likely be substantially smaller than the user populations of those closed networks today, because all value accrues to users and it’s not diminished by value extraction from a network proprietor. For many of my own use cases, in many niches the Fediverse has critical mass today already.

Can the user advantage be overcome across the board? We will have to see. But if we add up just numbers of active users of organizations that have publicly announced Fediverse plans as of the date that I’m writing this, or even have products already in the market – Flipboard, Medium, Mozilla, Tumblr, Wordpress and more – we’re already in the high 100’s of millions.

Those numbers look awfully close to the user numbers necessary to overcome Metcalfe’s Law.

tldr; The time to take the Fediverse seriously, for individuals and businesses, is now. The value of the Fediverse for everybody is much higher than the value of any closed, proprietary social network – other than the proprietary social network companies themselves. And we won’t cry for them very much.

Note: FediForum is next week, where we’ll discuss this.