The resignation this week of Twitter’s CEO, Dick Costolo, was not a surprise, but can anyone else do better? Here are my three suggestions for what needs fixing.
Having resisted pressure for over a year, Dick Costolo finally fell on his sword this week. Twitter’s investors have been pushing (some say conspiring) to make this happen for months. It’s a far cry from the headlines that greeted it’s IPO in 2013 when the WSJ crowed “Relief, riches and a $25 billion finish” as the first day of trading closed.
In some ways the crisis at Twitter is confusing. The company announced Q1 revenues of $436 million – up 74% from 2014 – and growth to 301 million active users – up 18% year on year. The company is still loss-making but, at least on the revenue front, Twitter looks to be pushing forward quite strongly.
Yet the company is undoubtedly in crisis and while Jack Dorsey, one of it’s founders, is stepping in on an interim basis to calm the storm and find a new CEO, looks set for an uncertain few months.
So, what can the new CEO, whoever it may be, do to revitalise the platform that changed the world?
To my mind there are three fundamental problems with Twitter:
Twitter is often lumped by commentators among social networks like Facebook, LinkedIn and Instagram. This is deeply unhelpful. Twitter is not fundamentally about social networking, it’s about sharing information and engaging in public conversations. One of the reasons Twitter works is precisely because it doesn’t hold vast amounts of user data. But without that data, it’s advertising targeting potential is severely limited.
And for all it’s add-ons (including Vine and Periscope) it isn’t a content channel either. Sure, you can consume content on Twitter but, unlike real social networks, it’s not a space in which consumers are prepared to while away the hours. The platform simply isn’t built for stickiness in that sense.
Investors too are guilty of heaping expectations on Twitter that it’s shoulders are simply too narrow to bear. Comparing a platform built to facilitate conversations with strangers with the slew of private messaging apps, like WhatsApp and Snapchat, is just silly.
Private messing apps are inherently viral, since you need your friends to use them. In this context, building up 500 million users over a year or so, as the fastest growing apps have, doesn’t seem such a stretch – but don’t expect a public messaging platform, even one relied on by the world’s media, to ‘compete’ with that. It’s apples and oranges.
Twitter may be loved by it’s users, but it’s never been easy to explain or get started with. The majority of people, when introduced, simply fail to find a purpose in their life for Twitter: “why would I want to publish what I’m doing to the world?” – especially when most of us have Facebook, SnapChat, Instagram, WhatsApp etc. for sharing news with friends and family. In spite of various improvements, Twitter has never managed to plug this fundamental hole in it’s business model. In it’s current form it could never achieve the global usage of those platforms.
So, if Twitter’s new CEO wants to build an advertising engine like Facebook, s/he will not only need to rebuild the structure of the platform, but it’s very reason for being. That’s a tough call for anyone. I won’t be throwing my hat into the ring (they wouldn’t want my hat, anyway) and I imagine quite a few big hitters will refuse this particular chalice as Dorsey passes it round.