Social Media Goes Anti-Social In 2023 As Social Vertical Reaches Its Decline Stage

It’s no secret social media stocks are struggling to find their post-pandemic footing, with Snap SNAP down nearly 60% year-over-year and Pinterest PINS down 24% in the last thirty days alone.

And the picture isn’t rosy even when the recent stock-price action is: META META is up 110.25% the last six months but primary platform usage has plateaued or declined, and the stock strength is largely a function of Zuckerberg declaring 2023 will be a “year of efficiency” which is a Silicon Valley shine on recent layoffs which have morale at an all-time low.

The fact is the world has turned and it appears users have signaled their shift in priorities - a shift which spells danger for players in social media as daily time spent using the internet decreased to a six-year low when it dropped 5% quarter-over-quarter at the end of 2022. It seems many (especially in the United States) have reached a saturation point with too many feeds, too much screen time, and are starting to focus elsewhere.

One key is the growing sense that these products which seemed so exciting and interesting are bad for our mental health. According to the CDC, teen suicide rates have increased by 31% during the years where social media reached its ubiquity, becoming the second-leading cause of death for young people. There is growing evidence the two are intrinsically linked.

In short, social media is becoming smoking.

The damage to the mental health of social media users is not surprising - much of the discourse is awful which has some who are not ready to abandon ship looking to new alternatives.

Clubhouse, a live-audio based network, had its moment in 2020. The social app which asks its users to published unfiltered and “real” images, BeReal, saw a similar rise and fall in late-2022 and early 2023. Elon Musk’s acquisition spurred the launch of more Twitter clones and knockoffs than you can count. Tik Tok, the hottest social network, is facing legal challenges which may see it banned in material ways (or entirely).

What’s gaining traction and appears to have some staying power are those which focus on niche audiences. As controversial as it may have been at launch, Truth Social has not suffered the same attrition issues are many other new social platforms - its users generally share a political ideology and stick to that. Minus Social, part performance-art project, part social network, promises more private, intimidate, and supportive environments with people you really know. Mastodon, which offers community-based rules and enforcement (rather than being subject to the whims of social CEOs), has continued to grow despite its confusing product and on-boarding. Other high-growth areas of technology, like live-stream e-commerce, are finding success not as broad mass-appeal tools but in niche.

This is an increasingly-challenging time to separate the signal from the noise for the investor. The winning play appears to be one which focuses on content creators, especially those who are platform agnostic, rather than trying to blindly pick a horse.

After all, social media is popular culture. The platforms, apps, and trends reflect the spirit of the moment. And if we read into the way people are behaving online, it appears we’ve decided social media is heading in an anti-social direction - for better or worse.