If I Ruled the Tweets (Audio Edition)
|Jul 13, 2020||5|
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I’m trying something new today and including the full post with the audio edition.
Let’s get to it.
If I Ruled the Tweets
On April 7th, just weeks into the Coronavirus pandemic, Twitter and Square CEO Jack Dorsey announced that he was giving away $1 billion to fund global COVID-19 relief. The world applauded Dorsey like this level of generosity was something new for him. Anyone who’s been following Twitter, though, knows that Jack Dorsey has been giving away value for years.
Twitter is the most undermonetized product in the world, because it doesn’t know what it is. For someone so into meditation, @jack’s lack of self-awareness is a surprising error with major implications.
Twitter’s ads business struggles to support the entire company.
Twitter doesn’t know who its customers are, or what its Job To Be Done is for them.
Twitter captures almost none of the value that it creates.
Creators are left without features they would happily pay for.
Twitter Profiles are the most underdeveloped real estate on the internet.
But Twitter still has a shot. One decision in 2015, and the company’s soporific product cadence since, was a blessing in disguise that gives Twitter a blank slate to build the product that it was meant to be all along.
In her recent book on Instagram, No Filter, Sarah Frier includes one paragraph about the 2015 battle between Vine, Twitter’s six-second video app, and its biggest stars:
Twenty of the top Viners banded together to negotiate with Twitter, saying that for about $1 million each, they could post every day for the next six months. If Twitter rejected the deal, they would instead start posting Vines to tell followers to find them on Instagram, YouTube, or Snapchat instead. Twitter refused, the stars abandoned the app, and eventually, Vine shut down entirely.
That short paragraph represents one of the major Sliding Doors moments in recent tech history. What does the app world - Facebook, Instagram, Twitter, TikTok, Netflix, and more - look like if Twitter had given into its biggest stars’ demands?
Sliding Doors moments are what-ifs based on small tweaks to the timeline, popularized by the 1998 Gwenyth Paltrow banger, … Sliding Doors.
The movie runs two timelines in parallel, split by one moment in which Paltrow’s character, Helen Quilly, either misses or catches her train home.
In Timeline 1, Helen misses the train, gets mugged, hits her head, and finally gets home just as her fiancé’s ex drives off, none the wiser that the two had just slept together.
In Timeline 2, Helen jams her shoulder between the “sliding doors,” catches her train, and makes it home to catch her fiancé in bed with another woman.
As the short-form video app TikTok sweeps the world - it is expected to generate $500 million this year in the US alone - Twitter’s critics are running the sliding doors scenario on the company’s 2015 decision to effectively kill its own short-form video app.
In Timeline 1, Twitter plays ball with the Viners. It pays them what they want, listens to their product feedback, and turns Vine into what TikTok is today. Twitter is an engagement powerhouse.
We’re living in Timeline 2. Twitter says no to the Viners and ultimately shutters the app. Its main product stagnates and its stock price follows suit. TikTok fills the void and its parent company, ByteDance, is worth 4x as much as Twitter, with a valuation rumored to be between $105-110 billion on 2019 net profits of $3 billion - nearly as much as Twitter’s total 2019 revenue!
But there’s a twist in Sliding Doors, and it applies to Twitter, too.
In Timeline 1, the one in which she stays with her fiancé, Helen is miserable.
In Timeline 2, after a couple of days of deep sadness and lots of drinks, Helen cuts her hair, starts her own PR firm, and falls in love with a much better guy.
Timeline 2, the one that seems like it would be worse for Helen, allows her to rediscover who she is. Her new path ends up being so much better than the one she was originally on, because Timeline 1 Helen wasn’t her best self after all.
(Let’s ignore the part where Helen gets hit by a van and dies. Life is unpredictable!)
Twitter’s Timeline 2 has the potential to be so much better than Timeline 1, but the company is still in the midst of a five-year post-breakup funk. Since it hasn’t rediscovered itself yet, I’m going to play the role of “concerned best friend” and help Twitter snap out of it.
If Twitter had kept Vine alive, it would have set a bad precedent, giving into creators’ demands and paying them off while failing to capture value itself. Even worse, it would have allowed Twitter to continue to delude itself into thinking that it’s a social network.
Here’s the thing:
Twitter thinks it’s Facebook, but it’s LinkedIn.
Twitter thinks it’s an ad product, but it’s a subscription product. It thinks it’s an Aggregator, but it’s a Platform. It thinks it’s a social network, but it’s a professional network: one built for the Passion Economy, based on the strength of ideas instead of past experience.
That realization should be liberating for Twitter and Jack Dorsey. Instead of being the world’s least innovative social network, it can be its most innovative professional network. Twitter should be the beating heart of the Passion Economy, and begin capturing some of the tremendous value it creates.
Today, we’re going to give Twitter a makeover with its new identity in mind.
What’s wrong with Twitter and why?
Who is Twitter’s customer and what is its Job to Be Done (JTBD)?
What would Twitter look like if I ruled the tweets?
Twitter is the most undermonetized product in the world. IT’S TIME TO MONETIZE!
What’s Wrong with Twitter?
Twitter is simultaneously my favorite product and the company that most frustrates me.
As a Twitter user, I love the product.
According to my Weekly Screen Time Report, I spend 5x more time on Twitter than I do on any other app. Not Boring would not grow the way it does without Twitter. I meet and talk to people I would otherwise just read about and admire from afar. If anything, I want to be able to do more on Twitter.
As a Twitter shareholder, I can’t stand the company.
Twitter’s stock has underperformed all of its peers… significantly. Twitter is down 14% since its 2013 IPO. Its next closest competitor, Google, is up 186% over the same period. Facebook, lacking scruples in its pursuit of Rubles, has more than quadrupled.
So I have a lot of thoughts about what Twitter should do. I’m not alone. On Friday, I asked this question (on Twitter of course):
I’ve never gotten more engagement on a tweet. Twitter users love talking about what they would do to fix Twitter.
Responses ranged from “Sell the company” to “Ban the Nazis,” from “Remove the bots” to “Fix search.” Nikhil begged: “fix DMs holy shit nothing else matters please jack i beg you why are they so bad.” People asked for a podcast app, the ability to write longer-form content, and verification. Even Y Combinator founder Paul Graham got involved:
Reading through all of the responses, a pattern emerged: Twitter is terrible at being an ad-based social network, and isn’t giving Creators a pro subscription product they would happily pay for.
Social versus Professional Networks
Incentives shape behavior, both on the company and individual level.
Social networks - like Facebook, Instagram, and Snap - work by getting you and all of your friends in one place, keeping all of you engaged, and selling your attention to its real customers - advertisers. Facebook generates 98.5% of its revenue from ads.
To PG’s point, engagement-chasing leads to toxicity. Social networks are incentivized to show user growth (which disincentivizes, say, removing bots from the platform) and to keep users in the app (and outrage is a great way to keep people glued to their screens).
Professional networks - like LinkedIn - like engagement and ad revenue, too. Who doesn’t? But ads are not their main source of income. Before Microsoft bought it for $27 billion in 2016, LinkedIn made money in three ways: Talent Solutions (recruiting and learning tools, 65%), Marketing Solutions (ads, 18%), and Premium Subscriptions (want to see who viewed your profile? 17%). Only 18% of LinkedIn’s revenue comes from ads; 82% comes from subscriptions.
Professional networks aim to deliver measurable value to as many of the best companies and top people as possible, and get them to pay directly for that value. Bots and outrage are harmful to professional networks, because they make it less likely that users achieve the things they are willing to pay for to achieve - hiring, partnering, and selling.
Twitter makes money like a social network: Advertising Services (ads, 86.5%) and Data Licensing (selling companies a firehose of Twitter data, 13.5%). It generates revenue by keeping people engaged, generating data on them, and either using that data to sell ads or selling the data itself.
But Twitter isn’t very good at the business of being a social network. Twitter has long struggled to grow or monetize its user base. In 2019, Twitter made $3.4 billion from 330 million users. Facebook made $70.7 billion off of 2.5 billion users.
Facebook is for everyone who has friends, family and an internet connection, which is pretty much everyone. Twitter is not for everyone. It’s for knowledge workers who rely on Twitter to exchange ideas, promote their work, and take place in the global, real-time conversation.
That is definitionally a smaller target market than Facebook’s, but that doesn’t mean that Twitter needs to be a smaller business. Twitter’s audience is more targeted and professional; it should be able to generate more revenue per user than Facebook does. Arguably, Twitter actually does create more value than Facebook. Its lack of self-awareness, though, prevents it from capturing that value.
The Informal Bill Gates Line
Twitter is a charity masquerading as a for-profit business.
It’s nearly impossible to calculate the total value that Twitter has created for its power users - both individuals and companies - by giving them a place to build an audience, connect directly with fans, and promote their work. And Twitter keeps almost none of that value for itself.
Let’s take Substack as an example.
Substack would not exist, at least not in its current venture-backed form, without Twitter. I surveyed a group of newsletter writers about how they grow their audiences, and 95% of them use Twitter. For Substack, that’s incredible. Its customers - writers - write on Substack, share what they write on Twitter, and take advantage of Twitter’s graph to find new subscribers. Some percentage of those subscribers pay the writer and Substack takes a cut. Other writers see Substack on Twitter and decide to start their own Substack, and the cycle starts again.
Who’s capturing the value here?
The writer captures value in the form of a new free or paid subscriber.
Substack captures value in the form of new paid subscribers and new writers.
Twitter captures almost zero value. You could argue that it captures a little in the form of increased engagement that it can sell ads against, but when one of its users sees a Substack post and clicks the link, she leaves Twitter and gives her attention to Substack.
This happens millions of times each day, for thousands of non-Twitter products - YouTube, Medium, The New York Times, Spotify, podcasts. Don’t get me started on podcasts. In-app podcast discovery is notoriously awful. You know where people discover podcasts? Twitter. Countless media and tech companies and personalities amplify themselves on Twitter, for free, and then bring users off of Twitter and into their product.
This is how Aggregators work. They aggregate demand, and collect a tax for sending that demand to its final destination. Every time I search on Google, for example, if I find what I want, I leave Google. But Google collects money from the company to whom I divert my attention.
Twitter is terrible at collecting that tax. Its Promoted Tweets are a hard-to-use joke. Twitter is a very bad Aggregator.
The other way of looking at Twitter is as the Platform that is further above the Bill Gates Line than any other platform on earth.
The Bill Gates Line is a phrase coined by Ben Thompson based on a Bill Gates quote about Facebook Platform:
This isn’t a platform. A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it. Then it’s a platform.
By that measure, Twitter is definitely a platform, but it’s an informal one. Whereas developers build directly on top of traditional platforms, like Windows, the businesses built “on top of” Twitter, like Substack, do so informally and without Twitter capturing any value.
Twitter is so far above the Bill Gates Line that it’s much closer to another Bill Gates Line - the world-record $35 billion that Gates has given away through the Gates Foundation.
It is time for Twitter to start capturing the value that it creates, improve its experience for its customers, and get its stock moving. For that, it needs to understand who its customer is, and what the Job to be Done is for those customers.
Who is Twitter’s Customer?
There’s a phrase that goes back to the pre-internet era that people apply to social media:
“If you’re not paying for the product, you are the product.”
It means that ad-supported businesses sell your attention (the product) to advertisers (the customer).
On social networks, users are the product, and advertisers are the customers. In non-ad supported businesses - from subscriptions to hardware to food - the product is the product, and the buyer is the customer.
On professional networks, like LinkedIn, most users are the product, but power users are the customers. Anyone can use LinkedIn for free, but users who need more capabilities - who want to recruit beyond their own network, see who’s viewing their profiles, or reach out to qualified leads - can pay for additional functionality. Like a social network, everyone on LinkedIn benefits from more people being on LinkedIn, but certain people and companies can pay to benefit more.
For Twitter, Creators, the 10% of users who generate 80% of the tweets, are its customers.
Twitter should adopt LinkedIn’s model - keeping the current Twitter product free and open for casual users, and charging its customers - the Creators who rely on Twitter to build and grow their businesses.
What is Twitter’s Customers’ Job To Be Done?
The "Jobs to be done" (JTBD) framework, developed by Clayton Christensen, says that customers hire products to do a certain job for them. For Netflix, the JBTD is “I need to be entertained.” For Facebook, it’s “I need to connect with friends and family.” For Google, it’s “I need to find something on the internet.”
What is Twitter’s JTBD for Creators? “I need to get my ideas in front of people.”
Twitter is the Platform for Ideas. Its customers are the Creators who create and share ideas. It should diversify its revenue stream away from ads-only by adding a subscription product and monetization options for those Creators.
I’m not the first to suggest that Twitter should launch a subscription. Last week, a Twitter job posting suggesting that the company is hiring for a subscription product shot around the internet. Its stock popped 7%. Professor Scott Galloway previously wrote that Twitter should buy up dying media companies and also charge verified users a monthly fee based on their follower count, or something.
But the Prof is just as confused as Jack. A half-baked subscription product that extorts Twitter’s top users based on the follower counts they’ve spent years building up doesn’t make any damn sense.
Thanks to the 300+ replies with suggestions for improving Twitter, though, we’re ready to Play Fantasy Jack.
If I Ruled the Tweets
As @Post_Market said, “Twitter is the town hall.” That’s a wonderful thing, but real business doesn’t get done in the town halls. It gets done in the back rooms. Currently, those back rooms are off of Twitter. Jack needs to take them back.
The Fantasy Jack Twitter Roadmap is all about making it easier to create, share, and monetize great ideas, build communities, and capture value:
Table Stakes: Verify identity to clean up the conversation.
Twitter+ Subscription: Paid tools for Creators to find, create, and share ideas.
Twitter Create: Twitter should be the place to build subscription businesses.
Profiles as Creators’ Home: Develop the most underdeveloped real estate online.
This roadmap seems like a bold departure from the Twitter we know and love, but it really just represents Twitter getting out of its own way and building better versions of the things that happen outside of its control today.
1. Verify Identity and Allow Filtering by Verified
This is table stakes.
A social Aggregator might not want to verify users, creating two classes, one of which is far less valuable to advertisers, and exposing that its user base is smaller than it looks. A professional Platform for Ideas absolutely should.
Twitter used to verify its users - giving them a blue check on their profile - until it caused an uproar in 2017 by verifying a white supremacist. Now it only verifies some people, occasionally, through a non-public process that involves getting in touch with someone at Twitter. It’s messy.
Dror suggests that Twitter should “give people a chance to verify their identity, even for a small fee” and “allow filtering of posts, comments, and notifications by verified.”
The ability to filter by verified solves the bot problem, squashes trolls, and raises the level of discourse on Twitter. To PG’s point, when you’re not optimizing for Daily Active Users (DAUs) and engagement alone, you can lower toxicity.
2. Build Twitter+, a Subscription Product for Creators
Charging the most popular Twitter accounts a monthly fee based on their follower count is a progressive tax that could lead to a mass exodus. That’s not the move. But Twitter should absolutely build a Pro subscription offering for its Creators.
The subscription product should enable creators to do the JTBD better - generate, create, and share ideas - spark conversations around those ideas, and get paid for them. As a Twitter Creator, I would pay for:
Bookmarking → Note-taking and Networked Thought. Marc Geffen’s idea is my dream. My Twitter Bookmarks is where things that I really want to read go to die - there’s no structure, no way to annotate or add notes, no way to connect ideas. Twitter should buy mymind or Roam, and integrate it into the product, making it easier to collect, organize, remix, and share ideas.
Better Search. Twitter search is terrible. Chris Muscarella wants search that works across messages, DMs, and bookmarks, with cached links in all of those sources. It can also greatly improve tweet search - it knows, for example, how many times a tweet on a given topic was liked and retweeted, and by whom. It can assign weight to certain people’s engagement, and build its own TweetRank.
DMs That Work. Please, Jack. Help Nikhil here. Currently, you can only search by name in DMs, not by any of the content in the messages. So many good conversations happen out of the main feed and in DMs, and Twitter should make it easier to spin up (and then search) group DMs, conversations around certain topics, and ongoing 1-1 chats. The fact that I’m in Telegram chats with people who are so active on Twitter is a fail.
Comment CRM. Twitter Creators receive a lot of comments and questions. Twitter should build an easier way to track and manage them.
Who Viewed Your Profile. I recently canceled my LinkedIn Premium (being unemployed and not looking for a job, and all). “Want to see who viewed your profile?” is LinkedIn’s #1 reactivation tactic, and it almost gets me every time.
Early Access to New Features. In this new world, Twitter is a product company again. Early access to new features would be enough to get some power users to pay on its own.
Monetization Options. See next point.
Twitter is in a position to create the ultimate Creator bundle, and add to it over time. Live presentations, Superpeer functionality, free promoted tweets - the bundle would only get more valuable over time.
At $20/month (Roam alone is $15/month), Twitter+ is a $1 billion annual opportunity, without assuming that the improved offering attracts new users.
3. Build, Buy, or Partner on Products for Creating, Sharing, and Monetizing Ideas
This is where Twitter takes back the value that it creates for so many other companies. It needs to get a little mean to make that happen.
Twitter is the place that Creators go to grow subscription businesses. Twitter Create should be the place that they go to build subscription businesses.
To start, Twitter should build a monetization product for Creators to easily collect subscription or one-time payments, from which Twitter takes a small cut. Instead of a Memberful plug-in on a Squarespace website, Creators should just build it all on Twitter.
Some people have suggested that Substack, which makes it easy to create a subscription newsletter, is the paywall for Twitter, and that Twitter should buy Substack. That’s crazy. Substack has raised $17 million dollars, which means that it would cost Twitter well over $100 million to acquire the company. Twitter can recreate Substack for much less than $100 million, with better functionality.
Twitter should build its own blogging and newsletter product, with a text editor, email send, analytics, referrals, custom domains, an ad-network, and easy ways for writers to grow their lists by selling promoted tweets based on follower and subscriber lookalikes, and the interest graph.
Additionally, Alex Carter suggested that Twitter should build a standalone podcasting app. That’s one approach, and it makes a lot of sense. It’s hard to share clips, notes, or anything other than an entire podcast, and Twitter could improve that.
Another approach would be to team up with Spotify. Spotify has spent a lot of money to acquire valuable IP like Gimlet, The Ringer, Joe Rogan, Kim Kardashian, and The Obamas, and is working on building out a podcast ad network. Spotify would expand its reach and improve targeting, and Twitter would earn some of the revenue it helps Spotify generate.
Why would Spotify do that? Remember, Twitter’s mean in this scenario 😈. Spotify links don’t preview anymore? Oops. Podcast discovery happens on Twitter, and Twitter should capitalize on that.
Beyond newsletters and podcasts, Twitter can give Creators myriad ways to monetize: storefronts, an expert network, paid communities, access to audio-only rooms, online events, and more. Creators might even sell bundles of their own offerings to superfans, and automatically give discounts based on retweets and referrals. Twitter is in the strongest position to integrate payments and growth, and let Creators do the rest.
Based on very rough math, this could be a $2 billion opportunity for Twitter almost immediately. Nothing would expand the Creator TAM more quickly than Twitter getting this right.
4. Make Profiles Incredible Places to Hangout
Twitter Profiles are the most underdeveloped real estate on the internet. Right now, when you click on someone’s profile, you see 160 characters on them and their most recent tweets. It’s such a huge miss. Because it’s not in the main feed, Twitter should be a lot more experimental with Profiles. Someone’s Twitter profile should be a glimpse into their world, and Twitter should both create its own features and open up its API to make that happen.
Imagine clicking on my Profile and popping into a Roadtrip experience. I’m DJ’ing my favorite songs and we’re having a conversation about the day’s tech news. People that I follow can join for free, non-follows could pay me a small fee.
I could highlight what I’m reading (assuming someone finally makes a better Goodreads), my NewsletterStack, my favorite Spotify podcasts, and the products I recently hunted on ProductHunt. I could invite accredited investors to join the Not Boring Syndicate, and show off the performance of the Not Boring Portfolio.
My Twitter Profile would be what a LinkedIn Profile would be if it were a living, breathing thing, created in and for 2020, based on what I’m currently creating and consuming.
Of course, since I’d host my newsletter on Twitter Create, there would be a subscribe button front and center, with links to the three most recent posts. If you enjoy your experience in my little corner of Twitter, you could hit a button to tip me so that I can keep creating.
Oh yeah, and with all of that engagement, maybe Twitter could even build an ad network to let relevant companies sponsor my profile, finally creating an ad product that makes sense 😉
Hit the Road(map), Jack!
Twitter dodged a bullet five years ago when it refused to pay Vine’s stars. It’s not a social network, and it’s not a product for passive entertainment. By not building in that direction for the past five years, Twitter left itself a clean slate on which to build a product for its real customers.
Twitter is a professional network for the Creators whose ideas and products shape the conversation and the world. It should be proud of that. Twitter needs to get its swagger back, and a full reset on priorities and a bold new vision would do just that.
The path that I laid out has the potential to double revenue in short order, and we didn’t even have time to cover how companies might engage with all of the new functionality that Twitter builds for its creators. Company profiles with Shopify integrations would be so clean.
I’m bullish on Twitter if for no other reason than how much I and so many others still love and rely on it, despite all of its shortcomings. Twitter creates so much value, and it’s time that it captures it.
@jack - if you have any questions, you can find me @packym, on Twitter.
Thanks as always to Dan and Puja for reading and editing! If you liked what you read, I’d really appreciate if you hit the heart button, leave a comment, or share the post!
Reminder: Join me on July 14th (tomorrow) for a conversation with Compound Writing on how to write and grow a newsletter by not being boring. The event is available to Compound members and Not Boring subscribers. Signup here:
Thanks for reading, and see you Thursday,