Got FOBO? Try a Discovery Platform

This week’s piece for The Innovation Armory explores the characteristics of great discovery platforms. The need for effective digital discovery stems from a consumer Fear of Better Options (FOBO); next generation discovery platforms aim to mitigate FOBO to save customers time, enable more mindful consumption and alleviate choice paralysis in this age of digital clutter. Thank you to Bradley Davis (CEO of Podchaser) and Moussa Zeid (Head of Business Development at Fable) for sharing your perspectives. The next piece will be on promising pockets of opportunity in social commerce featuring the perspectives of founding and senior executives from ShareChat (a leading social network in India), Perfect Corp (AR-based technology for virtual try-on in beauty & cosmetics) and Bambuser (a Sweden-based virtual live video shopping platform). If you’re interested in the next update, please subscribe below:

The Internet Has Amplified FOBO

By now, most people are familiar with the phrase FOMO, Fear of Missing Out, but fewer have heard of FOBO, Fear of Better Options. This is effectively the 21st century fear of not making the best decision and the corresponding obsession with maximally optimizing each and every choice. Have you ever tried watching Netflix with your partner, family or friends only to aimlessly scroll for hours and eventually throw in the towel and decide there is no content you are actually in the mood for? That’s FOBO at its finest. Despite a nearly infinite catalogue of content, FOBO caused you to make no decision while still wasting time and draining emotional energy:

The digital age has massively expanded our choices, whether it be for consumer products, entertainment, content or restaurant delivery. While greater choice of course has phenomenal benefits for customers like more pricing transparency and product diversity, too much choice can set up consumers to be even more disappointed with their choice without a proper framework within which to make an effective decision amid a growing sea of options. By giving consumers more choice, there are paradoxically certain circumstances where the internet has made us less happy or fulfilled by our decisions. Psychologically speaking, FOBO is a combination of choice exhaustion, anxiety, self-blame and disappointment that stem from three areas in our decision-making process:

Great Consumer Software Builds a User Experience That Minimizes FOBO

Paradoxically, many of the best consumer software products actually limit choices in value-enhancing ways for consumers to ease our decisions. For example, Tik Tok’s consumer recommendation algorithm directly serves users videos they are expected to enjoy when they open the application vs. forcing the user to search for that content amidst a vast sea of options. Uber matches you with a car based on rating, proximity, cost, size specifications, etc., with all of that calculation done behind the scenes and without your direct involvement. How would you feel if every time you picked an Uber, you had a choice of 100 different vehicles that spanned all of the decision vectors their algorithms might want to use to serve you a vehicle? Your head would probably feel like a muppet with its head on fire:

In consumer software, developers inherently choose when to give consumers choice vs. automate / withhold information at each point in an application so as to not overwhelm consumers and trigger FOBO. Greater user interfaces limit unnecessary and unhelpful information to maximize the engagement and meaning that a user gets out of the application, while minimizing white noise that is confusing, distracting and anxiety-inducing.

Effective Discovery Platforms Also Help Limit or Eliminate FOBO

Best-in-class digital discovery platforms not only aggregate a class of goods or content. They must organize, filter and connect that aggregated information in ways that help consumers make the best decision for them personally while minimizing FOBO. Specifically as it relates to cross-media entertainment, there is an exponentially growing trove of content online with which consumers can occupy their time. Discover platforms help get through that clutter while avoiding decision paralysis or regret. To learn more about the key features for effective discovery platforms, I spoke with founders of two businesses building vertically-focused media discovery platforms in two distinct entertainment / leisure categories: podcasting and reading / literature. For podcasting discovery, I caught up with Bradley Davis, CEO of Podchaser, a platform to discover, rate and follow podcast creators. 

My Conversation with Bradley Davis (CEO of Podchaser)

SN: Could you tell me more about the founding story of Podchaser?

BD: My background is in industrial sales and in that role I would drive door to door to manufacturers and fell in love with podcasts while on the road in that role. When I wanted to dig in more and hear more interesting podcasts, I hit a wall and couldn’t find many discovery tools. I went on Reddit and posted on the Podcast sub-Reddit and asked if there was an IMDB for podcasts and, if not, if anyone wanted to build one with me. That is actually how I found our co-founder based out of Australia. Podcasting discovery is a really interesting problem because of the origination of podcasting as a fragmented medium by design. Because of that, you need an aggregator to standardize and taxonomize as well as rate / review and provide credits for who is on each podcast. We realized there is an opportunity to build a Nielsen, a RottenTomatoes and an IMDB in this space and Podchaser can be all of them.

SN: Besides the decentralization of the medium that you referred to, what are other notable differences for podcast discovery as it relates to other types of media? 

BD: The majority of podcasts that exist today are not active or have very few episodes if not just one. From an efficiency perspective, it is difficult to collect all of the proper meta-data for every single show and is not necessarily worthwhile especially if they won’t be releasing further episodes. You can also find Podcasts that are fantastic that only have a few followers that haven’t grown because they have yet to be discovered. We think that our avid Podcast listeners on Podchaser are so plugged into their niches that they are likely to surface those opportunities better in manual circumstances sometimes than purely automated algorithms could. The goal is to marry our algorithms with human discovery scouts. We view humans as our tastemakers and algorithms as the tools to tastemake most efficiently. The long tail is what is so cool about podcasting. You need to have the archive and tools for people to find hidden episodes. In addition, the sheer volume of podcast generation is massive. A TV show can cost millions to produce but because the cost of production is so low, the volume is higher for podcasts and it becomes more difficult to know as a consumer which are worth actually paying attention to.

SN: In your mind, what makes for a good discovery platform beyond just ingesting and aggregating media? What additional tools and features make it more compelling for users?

BD: Certain features are table stakes: a certain level of ubiquity and scale. Looking at Yelp, TripAdvisor, Google Reviews, those businesses have scale. Greater scale and more reviews engender more trust. That said, the RottenTomatoes model flies in the face of that. You can have a critic Tomatoe Meter based on 7 critics and you may trust that more than the IMDB review that has thousands of people contributing to it. Quality in lower volume can be a differentiator as well. In addition, social is becoming more and more important. The best form of discovery is word of mouth and it is important to productize that. As we have been building out Podchaser, we have tried to make the UI feel like you are getting a podcast reference from a buddy at a bar, making users feel friendly with one another even if they might be strangers in real life. 

SN: Besides social familiarity, what are some of the other ways that you look to engender trust in Podchaser as you scale?

BD: There are a few podcast critics out there, but overall there are a very small amount. We view our job as increasing that amount 100x. We want to incent reviews and ratings through gamification. When you see someone on Podchaser, we want you to be able to view someone as credit worthy within a specific niche, like true crime, technology, etc. We are developing tools so that you can subscribe to a Podchaser user / critic. You can also subscribe to specific speakers who may appear across podcasts. If you value someone’s opinion and they leave a review on a podcast, you probably want to know about it. Once we attract enough critics, then we can get into more advanced analytics for each critic, like how often do they give five stars, how critical are they and measuring review impact.

SN: Beyond podcast speakers, listeners and critics, how does Podchaser collaborate with other constituents of the podcast ecosystem like creators and players?

BD: They are all critical pieces of the puzzle. We are a third party agnostic data aggregator. This data is very valuable to these platforms to power discovery in whatever way they see fit. They need data for their algorithms to spit out better and better recommendations. The value we bring is the credits, reviews and table stakes data so that other player apps can spit out best in class podcast recommendations. An increasing focus this year is working with larger platforms to monetize these data relationships.

SN: How are you thinking about the monetization levers for the business going forward?

BD: Today we monetize through a subscription offering called Podchaser Pro which is effectively a research and planning tool for everyone that interfaces with podcasts. We take a sample set that touches 15M podcast users and graph that into a 1-100 ranking that we call a PowerScore. We also collect demographic information and audience figures that we tie in. We give you the tools to discover, qualify and contact the podcasts that you want to work with. This is similar to IMDB pro where it is a very enhanced search networking functionality. With a certain amount of scale, advertising potentially makes sense specifically for Podcasting. Our business API can also serve similar data and podcast credits from Podchaser Pro to player applications.

SN: What is the relative concentration of Podcast plays across different players? What does the optimal distribution look like for Podchaser to sell effectively into players?

BD: Podcast distribution is relatively distributed, but larger concentration is Apple, Spotify, Google, Overcast, Podcast Addict, etc. While there is a high concentration between Apple and Spotify, independent applications even with just one developer still can have millions of MAUs. This is a unique feature of podcasting vs. other types of media. Up until now, there had not necessarily been a proper discovery platform to find those smaller independent shops.

For literary discovery, I spoke with Moussa Zeid, Head of Business Development at Fable, a platform to form and join book clubs for the purpose of literary discovery, connection and mental well being. Through Fable, users can discover new literature through expertly curated portfolios of books that relate to a specific functional or literary topic. Users can also join book clubs with thought leaders in areas of interest to more meaningfully engage with their content.

A Snapshot of My Conversation with Moussa Zeid (Head of Business Development at Fable)

SN: Could you discuss some of the social features you are adding to Fable to augment the literary discovery process? 

MZ: When you buy a book or create a reading club (our virtual reading clubs), you access the application’s social features. We feature influencer reading clubs that users can join to engage with influencers and other readers. In addition, while you read in your own reading club, you can highlight areas of the book that you find interesting and create threaded conversations with your club around a very specific discussion point. Over time, we plan to let you have direct conversations with authors and read alongside them through your reading clubs. 

SN: As you think about book club functionality going forward, what are the important scaling parameters to effectively translate this offline activity into a digital format to aid in the discovery process? 

MZ: At the moment, we are focused on more localized communities (as in you read with your immediate network like family or friends) vs. a relatively noisy club with thousands of strangers and unknown users. In the latter, until we build out more advanced social features, the book club participation may be lower for early adopters. We are focusing on these more targeted groups to maximize engagement and increase trust initially. The next step is to bring in more well read influencers to regularly start more reading clubs. These influencers are meant to be well known in their spaces and read alongside users. We don’t want this to be a town hall like other social media networks, we want it to feel like more of a living room experience. In addition, we want to foster meaningful discussion that is centered around the content so that users feel like they have a purpose as they use the site. Over time, we want you to be able to follow Tastemakers throughout Fable, not only celebrities and other individuals on your social graph who have similar reading interests to you.

Differentiating Features of An Engaging Discovery Platform

Some pessimists of discovery platforms view this business model as easily commoditizable as many of these sites just aggregate disparate media sources and content. However, I think there are creative ways to build a sustainable and differentiating competitive moat with a discovery platform focused business. Beyond the more obvious table stakes aggregation and ingestion of media data core to all of these platforms, I wanted to distill other key takeaways from my conversations with Bradley and Moussa around important features to consider when developing a differentiated discovery platform:

1. Verticalize to Limit Clutter - Horizontal discovery platforms contain too much information to effectively link customers with purposeful content that is most personally significant to them. If the horizontal scope is too wide, it can actually limit consumer engagement by triggering feelings of decision paralysis and choice regret. This verticalization is key to minimizing FOBO and mitigating negative experiences with information gathering and decision selection. Moreover, vertical discovery platforms engender a greater sense of purpose for the user when engaging with the site because of its focus on a particular media (i.e. podcasting or literature). Users engage with a more tailored set of content and therefore feel a more narrowly defined feeling of purpose and productivity. Fable’s narrow focus on book clubs and reading is for the purpose of fostering mental well being through reading. Alternatively, when you merge unrelated content and mash it into a horizontal attention-driven discovery dashboard, you get users endlessly scrolling on Facebook or Instagram feeds for hours only to regret time wasted and leave with a feeling they could use their time with more purpose.

1. Decouple Media to Encourage Depth of Engagement - Fable is building tools into its platform that decouples a longer form media into small pieces to facilitate deeper engagement with literature. The ability to highlight a specific literary passage and create a threaded discussion, encourages mindful, methodical and productive discussions within books, thereby enhancing the experience for readers. Similarly, PodChaser breaks down longer form podcasts into component parts by isolating contributors and guests on specific episodes. This makes it possible for podcast streamers to more meaningfully engage with specific thought leaders they would like to track across interviews. This decoupling both adds meaning to the customer experience and enhances the data moat of these discovery businesses by giving these platforms better insight into how consumers engage with very specific pieces of content as opposed to more generalized insights from clicks or generalized plays on long form media. My personal view is that it is important to continue to monetize this granular data by improving and continuing to drive value for B2C and B2B subscription offerings vs. pushing an advertising based model. Consumers will engage deeply in content they know is worth paying attention to. The issue with an advertising model is that consumers can’t trust something is worth paying attention to if someone is paying for them to see it. 

2. Creatively Redefine and Influence Taxonomy - Existing taxonomies for categorizing media and products for consumers can be enhanced in ways that reinforce the brand of the 3rd party discovery platform as a category-defining platform. This taxonomy is extremely important because it is often the decision framework that consumers follow to make a decision within that medium or sector. Redefining it in a consumer-benefiting way gives your platform an advantage in serving valuable and meaningful content to users. Moreover, it helps limit choice paralysis in consumption by giving consumers a more useful and personalized criteria through which to select consumption decisions. For example, Fable’s book club goes beyond normal definitions of book genres to book portfolios professionally arranged along a functional thematic area:

1. Expand Beyond Reviews to Professional Curation - All consumers have thought leaders and creators they look to for ideas, products and channels that resonate personally with them. While many discovery platforms focus on aggregation of reviews and ratings, leveraging these thought leaders and tastemakers to drive engagement is an important vector to discovery. In fragmented media channels, these experts may not themselves be discovered or well known and it can be the responsibility of the discovery platform to increase the visibility of those with a growing follower base. Podchaser is building out a network of native tastemakers for podcasting that previously did not exist within podcasting. Its moat will be stronger, the more specific this tastemaker base is across sub-vertical genres within podcasting. This tastemaker focus has already been used in e-commerce to drive consumer product conversions from social media influencers. Aside from MasterWorks in the education space, I believe there has been a largely neglected opportunity for intellectual thought leaders and influencers to collaborate with discovery platforms to drive engagement with custom-curated media content. Fable’s book portfolios are a great example of use of professional curation. This curation also minimizes decision regret that is core to FOBO because it gives a user’s consumption choice the stamp of approval from a trusted intellectual influencer.

2. Empower a Previously Neglected / Overlooked Stakeholder - An important stakeholder within the podcasting ecosystem that has traditionally been overlooked is the podcast guest, a thought leader that will collaborate with a studio on a specific episode but who did not build their brand natively within the podcasting medium. Prior to Podchaser, there was no systematized way of tracking a guest’s appearance across podcast brands and podcast episodes. These guests are important to improving podcast content quality and attracting both tastemakers and new users to the medium. Podchaser’s organized credit system for this stakeholder empowers a neglected stakeholder to thereby add incremental value to the whole podcasting ecosystem.

3. Build an Engaging Social Experience - Building functionality to drive social engagement within a vertical discovery platform helps to grow and retain users by building on community effects (see my earlier piece: Beyond Network Effects: The Power of Community). The ideas we as users are exposed to through reading and podcasting help to inform our worldview, preferences and to a certain extent, our identity over time. If social tools through these discovery platforms help us find a community of like-minded readers or podcast listeners to engage with, these tools become tied to our sense of self. Fable’s social book club features empower readers to connect both with other like-minded readers and directly with creators, locking in users with powerful community effects. On a related note, In a medium with low incremental production costs, I think it is interesting to consider whether the discovery platform powers the social experience or if the social experience should power the discovery platform. For certain medium-specific social networks, I could see specific opportunities to back channel effectively into discovery. One such example is Clubhouse, which as it expands, could have the archived creator-generated audio content from its audio-only conversations to power an audio discovery platform that blends podcasting and proprietary live audio across verticals.

Breaking Down the Key Stakeholders of Discovery Platforms

Podchaser is an interesting case study for how best-in-class discovery platforms have the potential to serve as the connective tissue for an ecosystem by bridging and providing value to related stakeholders including: Podcast Creators (studios like Gimlet, Crooked, etc.), Distributors (players like Apple, Spotify, Stitcher, etc.), Streamers (You and Me), Guests (Celebrities / Thought Leaders Who Appear in Podcasts) and Influencers (Critics and Tastemakers).

In podcasting, the presence of a 3rd party discovery platform has the potential to have a multiplier effect on the number and growth of all other stakeholders, thereby increasing the total addressable market for podcasting broadly as a space. As more studios get greater visibility and distribution for their episodes, it attracts more guests to the space. This increases both the quality and quantity of podcasting episodes, which is likely to attract more streamers and incent the development of a new class of podcast critics and tastemakers. This is a classic positive  flywheel that a central third party discovery platform is critical to enabling. If discovery was tied to a specific player / distributor vs. a third party, the flywheel value is more likely to be captured by an individual corporation as opposed to the ecosystem broadly. This would decrease the total addressable market for the ecosystem as a whole (with much of the value taken away from independent creators) but asymmetrically advantage a specific company. 

Fragmentation and Decentralization of Emerging Media

This discovery flywheel is most likely to emerge in new forms of media that originate in a relatively decentralized and fragmented fashion vs. more traditional channels. The more fragmented the initial media, the stronger the flywheel. Much of this effect is rooted in reducing FOBO for stakeholders. Streamers overcome FOBO over podcast consumption decisions, studios overcome FOBO over podcast creation decisions and guests overcome FOBO over brand channel prioritization. The decentralized origins of podcasting are why I believe the need for a third party platform discovery platform in podcasting is more important than in more traditional forms of media. Radio and television, for example, due to high fixed costs of production and high variable costs of distribution, came into existence through a more centralized media ecosystem.

I could see a need for similar types of content discovery platforms as new forms of consumer digital media arise. I believe NFT-based Scarce digital art assets will eventually require a similar third party discovery platform. Beeple is an example of an artist producing NFT-based digital art and he is now selling his art through more traditional art distributors like Christie’s. More of these modern artists will emerge and as they do, there will need to be a full ecosystem of creators (artists), tastemakers, distributors (digital auction houses) and guests (rights to portray an existing digital character). I could also see a similar need for a 3rd party discovery platform to streamline consumer interaction with emerging VTuber content across platforms. For those who aren’t familiar, “VTuber” is an acronym for Virtual Youtuber and is a virtual avatar that consumers watch sing, dance and game across media channels for entertainment. CodeMiko is a VTuber avatar that has especially gained prominence on Twitch with over 2M+ active broadcasters.

Applying the Discovery Framework Beyond Media: A Case Study in Travel Experiences

These concepts of effective discovery principles also apply well beyond media into a variety of different verticals. One sector that could benefit from applying some of these principles is within travel experiences, specifically businesses like Viator, Booking Holdings or Airbnb’s Experiences segment. The next generation of these businesses could further differentiate on a discovery basis through tastemaker curation, taxonomy redefinition and socialization:

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