Reading Time: 3 Minutes
So this week, we received news that Instagram is rolling out an experiment to see what happens when it hides the number of likes on photos and other posts.
It affects users in Australia, Brazil, Canada, Ireland, Italy, Japan and New Zealand. Canada has just finished its trial.
No longer will the number of “likes” be shown, rather it will be replaced by one user name and “others”.
Under this new system, you can see how many likes your posts get, but your followers won’t be able to – unless they click into the post and count individually… but who would?
I would imagine that there are plenty of “influencers” both large and small who are widely impacted by this, as existing and future business opportunities are reliant on the perception of popularity, usually garnered by the number of followers and likes.
Indeed, I spoke to a couple of buddies with a decent level of follower base (10,000+) who believe that Instagram has effectively killed the viability of the influencer business model.
But ya know, I can’t help but see some parallels of this in the investing world, especially how there are some crucial lessons taught…
With the Instagram model, those who embraced the platform early, and were canny enough to identify what works and what doesn’t, were able to significantly build a large follower base.
These days, it is incredibly difficult to stand out from the crowd, if you are starting out.
The perfect travel shots, sitting on a beach, food snaps, bikini bods… the market is saturated with photos upon photos of this stuff.
But in 2010 (when IG started), it was so much easier to carve out a share of a particular niche.
Similarly in investing, the easy and (often big), money is made if you can pick the trend early and ride the wave.
When everyone starts talking about a stock at $40, you can sit pretty knowing you got in at $4.
Just because you are an early entrant doesn’t guarantee success.
In reality, the earlier you are, the bigger risk you take, as there is a longer duration before you discover whether you’ve made the right move or not.
But true success rewards consistency in the long-run, not just on Instagram (regular and consistent posts), or investing (regular and consistent investments), but in life.
If you can do 1% extra on a particular task every-day, the compounded efforts are magnificent.
This is how the mega-influencers built their followings, or how the business titans of industry came to be.
Although, consistency achieves little if there is…
And this is where the latest bruhaha comes in, understanding that businesses (like social media platforms) can change at any time.
Be it a change in business conditions (economic down-turn), or a change in operating conditions (removing visibility of likes), or even a change in key personnel – change is constant.
Recognizing that change is ever-present and can occur at any time, but most importantly, adapting to this change – is the greatest strength an investor or social media influencer can have.
Don’t aim to be the most profitable (biggest), aim to be the one which can survive the longest.
Which brings us to the fundamental concept of diversification.
Diversifying revenue streams, diversifying social media platforms, diversifying investment asset classes; it’s part and parcel of good business strategy.
If one leg falls down, there are plenty more legs to stand on.
Which is why I think those Instagram users who have their primary source of online presence solely on Instagram, will struggle – whereas those who have a presence on multi-platforms, will still do OK.
How does this change affect you TFS?
Yours truly ain’t on Instagram (not that I’m aware), so it doesn’t affect me at all – but MrsFrugalSamurai is, and so what affects her, affects me (it’s OK dear, we’ll survive).
However, I can say my opinion of the matter.
Which is, that if Instagram is truly doing this for the benefit of mental health – then good on ’em.
Social media has rightly or wrongly ingrained into our daily lives, and for those who are addicted and have their self-esteem rise and fall through public affirmations, taking away some of that is a positive.
However I can’t help but think that as humans, we all want a bit of that endorphin hit.
I mean who doesn’t like that ego boost when they see the number of likes, or comments, or subscribers?
Which is why I think in the long-term, less users will be active on Instagram and migrate more onto some of the other platforms which allow us a self-congratulatory chuckle at how witty we are blogging about Instagram and how it relates to investing…
Tik Tok anyone?
What do you think? Did you enjoy this post? Please help me out if you enjoyed this and put your email in and click on the little “subscribe” button at the top right. This way, you’ll never miss my words of awesomeness! So do the right thing, be a subscriber and get it straight to your inbox fresh out of the oven!