Twitter – Sleeping Giant or Sitting Duck?

In this post I will look at Twitter as a business, identify some of its biggest challenges, add my own experience as a user and draw a conclusion about the future direction of the company.

My relationship with Twitter – it’s complicated

People who follow me on Twitter probably know that I am quite active and that I like engaging with others on a number of topics, usually connected to entrepreneurship and startups. However, very few of you know that I actually only started doing this in January 2015! Before that, I had my account idly sitting there, not doing much at all. Then, I decided to give it a go and engage with people properly, and voila: from 80 followers to currently c. 2,500 in just over five months – without any aggressive following, I usually just follow back. So yes, you could say Twitter works for me, and I do enjoy sharing with and learning from others. Also, my Twitter presence has proven really valuable in both content distribution and content discovery.

So why, I hear you asking, do you feel you have a complicated relationship with Twitter? And why do you think Twitter, a platform with such a massive and active user base, is facing serious challenges?

Surprisingly enough, I have more than just one axe to grind with the old blue bird…and I am going to tell you why!

The Product – Twitter is not really evolving

Let’s get straight to the point: Yes, Twitter have worked on some features here and there over the past few years. They redesigned the profile quite a bit, for example, and built some really helpful analytics. From my point of view, however, not much has really happened to the core product. This becomes especially apparent when you compare it with two other companies who have undergone significant product updates, and even evolutions, in the meantime: Facebook and LinkedIn.

Please note: I do not suggest product updates for the sake of just doing them; they should add tangible value for the user. In Twitter’s case, however, there are many opportunities to even just iron out some glaring flaws – and yet nothing much happens. Here is my personal hotlist of significant UX improvements:

        • Abolish automated tweets: “Hey Matthias (+15 more people), thanks for following me!” Services such as IFTTT (otherwise a really great tool) have made it possible to send new followers impersonal, meaningless welcome tweets – for what purpose? Is it meant to make me feel welcome and appreciated when some algorithm tweets to me? I get why people want to do it, but Twitter really should think what kind of automation it wants to allow via its API to avoid spam.
        • Abolish automated Direct Messages: See above – just that it is even worse! “Thanks for following me, please also like my Facebook page!” Are you mad?! You just got something (a follower) and you immediately want more? The spirit of Direct Messages should be a very personal, private interaction – and yet automation has managed to completely ruin that feature. Again, why is Twitter tolerating this spammy behaviour.
        • Fix disappearing Notifications: Has it ever happened to you that months worth of Notifications simply disappeared? Sometimes they come back, sometimes they do not. While this may not be crucial to some users, I find it disturbing that such a basic, basic product feature has such obvious flaws!

This list is not exhaustive, and I am sure other people can tell you a lot more examples of low-hanging fruit improvements Twitter could make (hint: leave a comment!). To me, policing spammy user behaviour is particularly important as it can easily make or break a service in the eyes of its community. Other companies like LinkedIn should also work on issues such as spammy pictures in their news feed, but that is a story for another blog post.

Community management – if only!

There are a couple of things a company should do to be successful in the long run. While a lot of them are related to its inner workings (e.g. growing a solid culture to support organisational growth and preserve integrity), there is one essential factor no company can ever ignore: the voices of its customers and users.

In Twitter’s case, customers are advertisers, and users are people like you and me. I honestly do not know how well Twitter takes care of their paying customers, but if their handling of users is any indication, I would not get my hopes up.

In short:

Customer care and community management at Twitter are the worst I have experienced in any sizeable tech company!

I am the type of user who sends messages to customer support if I find something not working the way I believe it should, or if I think something could be improved. Why? Simply because I want to help companies I interact with understand what their users think. I have sent quite a few tweets to companies like LinkedIn or Buffer, and I was amazed by the speed and dedication with which they replied and often even followed up.

With Twitter, not so much: I do not remember ever receiving just one response to a tweet when I pointed out an issue or suggested an improvement. Other Twitter users I spoke to made the same experience, and I wonder why a social network thinks it is a great idea to be anti-social on their own platform? Should a company not be happy if their user base cares about the product? It is a strong connection which is easily weakened, if not destroyed, by a lack of responsiveness – because it sends a simple message: “We do not really give a f*** what you think!”

It honestly puzzles me as I simply refuse to believe that the people at Twitter do not understand this very simple truth – so why on Earth are they trying so hard to alienate loyal and caring users? If anyone has an insight, do let me know please.

One thing is certain though: Ignoring your users will lead you to disaster.

Twitter’s Business model – quo vadis?

Looking at Twitter’s business model again brings up the inevitable comparison with other social networks such as Facebook or career networks like LinkedIn. All three of them have an advertising-driven business model (although LinkedIn also heavily monetises their talent solutions and premium paid account models).

Comparing Twitter’s financial success to both Facebook and LinkedIn, established companies which have also been around for a few years, make Twitter look like a dwarf.

Twitter, LinkedIn and Facebook: Revenue and Net Profit Margin
Data Source: Google Finance

While both Facebook and LinkedIn have shown not only impressive revenue growth over the past few years, but also managed to break even some time ago (LinkedIn dipped back into the red last year due to some big investments), Twitter has achieved neither.

Personally I am a big supporter of delaying profitability in the interest of fuelling growth: companies such as Amazon took a very long time to become profitable, and even nowadays reinvest almost all of their profits in order to further develop their product portfolio. However, Twitter’s situation is completely different: the company is not incurring losses caused by tremendous growth, but because the business model simply does not carry itself!

I have yet to understand how Twitter plans to ever drive significant revenue from their advertising business. Consider this:

  • According to numbers from Buffer, the average life time of a tweet is 18 minutes – very short compared to 90 minutes for a Facebook post, which is bad news for advertisers on Twitter
  • User’s attention span on Twitter, given the nature of the Twitter Home Feed, is very short (hint: this is where most of the ads appear in the form of sponsored tweets)
  • Recently Twitter started including sponsored tweets on user profiles as well – personally I find this is getting really spammy, and I am not sure how well it actually works

In a nutshell, I fail to understand how Twitter will be able to drive enough engagement to their paid ads to generate significant revenue going forward. Historic revenue is lagging behind that of its peers, and while you may argue that Facebook or LinkedIn are somewhat different products, Twitter’s valuation of currently $24.5BN, almost identical to LinkedIn’s $24.4BN, sounds very optimistic.

Unless there is a new monetisation strategy about to be launched which will be a game changer? If anyone has any insights on Twitter’s monetisation strategy and disagrees with what I wrote, please comment on this post as I would really like to hear about it!

The verdict

When reading this article you may think that I really hate Twitter. Not true. As I said earlier, I really love using the product, and it has been a tremendously helpful platform for me. In fact, this is the only reason why I wrote this fairly long post.There was a story the other day about Yelp being up for sale, and I never thought about writing about it, although Yelp is also facing considerable challenges. Unlike with Twitter, I do not feel a connection with their product.

So the reason why I wrote this post is because I wanted to share my point of view on a company which managed to build a really great product – and is now facing some big challenges in succeeding as a business.

Some of those challenges Twitter cannot necessarily control, such as their competitive environment. What they can (and should) improve, though, is their way of interacting with users and how they portray themselves. From my experience, Twitter is not seen as particularly progressive and innovative these days – something Facebook, for example, is a lot better at.

And finally, Twitter needs to come up with a completely new way of generating revenue. The nature of its product (very short half life of tweets, combined with extremely short user attention span) are a terrible combination. Unfortunately I do not have a perfect answer on which ad formate would work better on Twitter, but my instinct would tell me to look into other revenue channels, such as monetising access to user data a bit more. However, I still believe the big break through is somewhere else.

Personally, I do hope that Twitter takes a turn for the better. It is such an essential platform and one of the pillars of digital interaction – if anyone at Twitter is reading this, please know that your users care, and maybe you should do the same when it comes to them – it would be a really great, first step.

Got any comments, good or bad? Please tell me what you think, and what other thoughts and ideas you have on how to make Twitter better!