By Adam Fraser.
I began this blog post a week ago; they say a week is a long time in politics and it also feels like a very long time in the Twitter universe.
In between, the big news – CEO Dick Costolo has stepped down as Twitter CEO, Jack is back (co-founder Jack Dorsey) as interim CEO and in what seemed a fitting reaction, the Twitter universe went into meltdown debating the whys and the hows of it all.
I wrote some time ago about a change in strategic direction for Twitter and more recently about their less than convincing quarterly results. The feeling had certainly grown over recent months – Twitter was somewhat directionless, unsure what it was trying to be and unclear where to head.
Enter stage left Chris Sacca, arguably the most successful early stage tech investor on the planet who has been a significant investor (and believer) in Twitter since its early days. This guys knows tech. He knows Twitter better than anyone. And a couple of weeks ago he shared his personal vision with the world of where Twitter should go in an 8,500 word manifesto.
It’s a well thought out, deep dive into Twitter and clearly comes from the heart. “I bleed aqua” he tells us early in the piece. Beyond any direct financial interest, he clearly cares. If you are interested in Twitter’s strategic direction it’s a must read.
It’s also balanced and doesn’t in any way try to paper over the cracks of what isn’t going well for the company – most fundamentally that user growth has stalled.
The venture capital investor perspective shines through, with gems including:
“Twitter can afford to build the wrong things. However, Twitter cannot afford to build the right things too slowly.”
Chris has no sacred cows. Power users – myself included – hold the rawness and serendipity of the strict reverse chronological, self curated timeline in high esteem. He says Twitter needs to evolve to re-ignite user growth:
“It is time to ditch the assumptions that:
- Recent Tweets are always the best Tweets.
- Only the people we follow post the best Tweets.”
He is also clear (and spot on) about what differentiates Twitter and makes it special, as the place people go to talk about live events:
“Live events tug at the very threads of our being. We all crave shared experiences….In a world of pre-fabricated and polished appearances, live events are raw, authentic, and vulnerable. They bring us together and reveal our commonality.“
To maximise its ‘unfair advantage’ in this area, Sacca wants Twitter to build a separate tab and add human editing/curation to the mix to produce the best content and a shared experience around live events.
He also suggests channels organised by location, topic and popularity to help make some sense of the wail of noise that can be an unsorted Twitter stream.
In also suggesting a “Best of Twitter” channel, Sacca demonstrates his deep understanding of human psychology (and humour):
“Never underestimate each of our desires to tend toward the mean and feel at home within a big group. Too much personalization can be exhausting.”
Separate apps are the ultimate “channel” curation play and Sacca goes ‘all in’ in suggesting “Twitter NBA”, “Twitter News”, “Twitter Music” as potential examples of separate apps. It’s disruptive, cutting edge thinking.
Other new ideas – a vault to store the best of what you find on Twitter, more engagement for new users via questions of the day and surveys, integrating Medium/Wordpress to allow longer form content to remain within Twitter, hearts instead of favourites to boost engagement and decrease that lonely feeling and a longer term home (than the current 24 hours) for Periscope live stream videos where he believes a YouTube scale opportunity exists.
You may not agree with everything but it’s all thought provoking, insightful, interesting and very creative in its thinking.
If you take a step back from the constant buzz and commentary which stems from being a listed company, it’s hard to conclude the “Dick failed” at Twitter. From close to zero only 5 years ago, Twitter will turnover around $2bn this year. It has over 300m monthly active users and a reach well beyond this, in relation to people accessing its content but not logging in to the site. It has become the global Town Hall for discussion on the current zeitgeist and has entrenched a spot in our collective culture.
Has Twitter been too slow to develop its product offering as Sacca suggests? Perhaps. The more pertinent question is arguably ‘could it justify its valuation to Wall Street investors’? The market cap (and baked in revenue expectations) had been taken to a level (at one point over $45bn, now around $23bn) where the clear answer is no. Hence the constant short term pressure on quarterly user numbers and results. Perhaps the market expectations were never realistic, misunderstood the nature of the platform (a medium of connection not a “media channel”) and set an unachievable performance bar for management.
No question Twitter has potential to grow and evolve, thus driving stronger financial performance. And some of Sacca’s ideas are very relevant in that context. But the decision to IPO when it did, thus putting the business in the full glare of the world as it grew from being a toddler to an adolescent was probably just as relevant a factor in the CEO change we have just seen.
Some major challenges await the new permanent CEO. The world (and especially the digerati) wait with baited breath. Running commentary (in 140 character chunks) will not be in short supply.