I think the people that have been raising these and similar concerns over the years are mostly non-technical users of the larger instances that feel insulted if the response is “fork or host your own” as usually done (I am guilty of that as well).

Yes, this is a very good point. I decided to move this to Fediverse Futures community, because of my interest to take feedback and translate/transfer to technical realms.

For regular non-technical would-be fedizens its very likely they encounter Mastodon first and also to choose a large instance. Mastodon is relatively well-productized and the big instances feature prominently. With little understanding how fedi works it is easy to become exposed to its bad aspects. Some fedizens then leave again, while others move on to different instances. But rarely they move on to a different microblogging app Pleroma is tiny in representation, and most people probably haven’t heard of e.g. Hometown. Luckily more and different apps are joining (e.g. GoToSocial), so gradually there’ll be more choice.

Btw, I am not worried about people leaving fedi and don’t share Eugen’s vision of offering an alternative to the traditional social media platforms for the masses. I feel for fedi it is way more important to retain and further improve its culture and lively communities. And that works best on a path of slow growth, while the technology matures. On the other hand I am worried about the fediverse not evolving fast enough, and becoming irrelevant and slowly languishing. Our Spiral Island must be stronger to weather future storms.

The only “solution” I can think of is trying to foster small communities

Communities are absolutely key and crucial to fediverse. I advocate we take community way beyond mere instances.

communities that can pool resources and help each other to overcome emotional, technical & financial hurdles

A “Tragedy of the Commons” for the Fediverse is imho huge problem that indeed needs to be tackled. There are few people willing to do the community work, advocacy and the boring chores (also a problem on SocialHub). On technical side (and maybe funded too) I’ve been working on Fedi Foundation, but if that picks up steam I don’t know.

On a non-technical side there’s more interest in offering bundled services to fedizens, which is very positive development.