Could Twitter make it rain with blockchain?
There are several reasons why I write about the intersection of business and technology. First, it helps me clarify my own thoughts. Writing has to be far more precise than a conversation. It provides me with a frame of reference for when I get questions from friends, colleagues, customers or media about any particular topic.
It helps me to remind myself how accurate my thoughts were at that time. Was I right or was I wrong?
For instance, here is an abridged version of an article about Twitter which I posted on LinkedIn in January, 2018:
Twitter - the should, the could, the would company
Twitter, the decade plus old company, is still trying to define what it is and how to make money. It is trapped in a business model of providing free service in exchange for our souls and friends.
Based on the past performance there is little hope that Twitter's future will be brighter. The number of free users is not growing fast enough (if at all) and the revenue from ads is not rising fast enough to stop the bleeding.
Let's skip down to my recommendations at that time. In 2018, I had some specific ideas about how to change its trajectory:
Twitter should abandon the eyeballs-for-money race. Selling advertising is an unprofitable distraction.
Twitter should stop being an arbiter. Every country, every culture, every belief, and every person has a different view about what’s appropriate, and not. It can never satisfy everyone - that's a losing proposition.
Twitter should focus on what it is good at – being a messaging platform.
Twitter should open its platform to the developers – again.
I also had some ideas around how Twitter could take advantage of blockchain and cryptocurrencies. Specifically, by applying blockchain to tweets, Twitter could lightly adjust its brand slogan to something even more powerful: “A message is message; Twitter delivers it.”
What did I think Twitter could get out of these recommendations? An army of developers for a whole new app ecosystem, a way to severely threaten some of its competition at the time, like Slack - and maybe most importantly, a clear path to monetization.
What has changed from 2018 to 2022? I would say, not much.
Twitter is growing its revenue, but is still not making money. It is planning to repurchase an additional $4 billion of its own stock.
Its Monetizable Daily Active Users (mDAU) was last time reported to be at 217 million. They have an ambitious goal to reach 315 million average mDAU in Q4 2023. (So, profit seems secondary to user growth. Keep in mind, this is for a company founded in 2006. Just how long is too long for a mature company to show a profit? Amazon took 14 years and there was a much clearer path for profitability …)
What about Twitter in the next 4 years? Other platforms are far more successful these days in grabbing attention with short form content. This is reflected in their rapid growth and far better monetization strategy.
Twitter is a public company and it can be in business thanks to investors giving it more money. However, those investors need to determine how much longer they are willing to pay for this.If there is no change in Twitter's business model, somebody will come and buy it and turn it into something more useful..
You might think from what I’ve shared above that I’m saying Twitter’s future looks bleak. Far from it.
Twitter’s technology is still solid. More than ever I think that my argument for Twitter as a messaging platform stands.
I’m looking at this from the perspective of technological capabilities. What could Twitter do next? You may have a better idea than me about the broader potential of business opportunities for the company.
In the meantime, I am working hard to learn more about business - and clarifying my thinking through these columns. That's my recurrent pattern.