Pascal’s Wager in AI

When Noah and I were first starting Percolate, one thing I really enjoyed doing was pitching our vision for what we wanted to do. In 2010, that was helping marketers build and develop their content for social. 

More than one very smart person told me they didn’t think it was a good idea because it wasn’t that big of a problem, and social media was a bubble. Thank goodness we didn’t listen, but I’m reminded 14 years later why that was a valid objection. 

What Social Media Taught Us

In 2010, Facebook was worth $15B dollars, valued privately by a late stage private investment by Microsoft that many thought was bonkers. Twitter, as a second example, couldn’t figure out how to monetize. I was even part of a team at Federated Media that built the first ad API execution/ad business model for Twitter, and given the dysfunction of that work, I was a bit skeptical. 

But, by 2013, the world had changed pretty dramatically. By then, I was excited to show people who were once naysayers and bubble prophets that, in fact, social media had taken over the world. I did that by showing the valuations, both public and private, of social media companies. In fact, if you added up all the social media companies, the market would very clearly signal that just a few social companies were worth more than all traditional media companies combined. I lost the original slides, but there is this talk on YouTube and a snapshot of the slide:

This slide had the opposite effect of what I was trying to say. Again, it led many people to argue that social media was in a bubble. “Facebook can’t possibly be worth more than Viacom, Disney, etc, combined?!,” they cried. Well, Meta, née Facebook, is now worth 18x more than when this slide was created and is way bigger than all those other companies combined. There are clearly no remaining questions in marketing departments around the world about Meta being far more important and strategic than their traditional alternatives. The learning lesson for me was to understand and dig into the market, which was clearly telling us that what was happening at Facebook was special and should be studied—bubble or not. 

Something similar is happening now. 

Why the AI Wager Is Rational