The inmates have overtaken the asylum
On the eve of its big IPO moment, there are plenty of doubts about Twitter's future. But how much control does Twitter even have over that future?
Earlier this week, my colleague Liam Boluk did a good job of dumping more cold water on any remaining excitement about Twitter’s imminent IPO. According to Mr. Boluk, it is not just that it’s growing slower and remains unprofitable but rather that they are happening at the same time. Peers like Facebook had at least figured out how to effectively monetize their platform before user growth plateaued. Twitter now has to face both challenges simultaneously.
But in case this was daunting enough, I think Twitter may have to face these challenges with (at least) one hand tied behind its back. In many ways, the IPO process should be liberating for Twitter, infusing it with the capital it needs to pursue a number of key initiatives and pursue further growth. In actual fact, it comes at a time when the options Twitter can pursue are severely constrained in ways no IPO can resolve. At this monumental point in its history, the question for Twitter is less about what it should do, and instead, more about what it can do.
Perhaps surprisingly, these two similar questions may yield very different results.
“Please do not bite the newcomers”
This weekend, I read a fascinating article by Tim Simonite in MIT’s Technology Review on the gradual decline of Wikipedia. Despite being an “encyclopaedia that anyone can edit” few ever do: of Wikipedia’s 365MM annual readers, only 31,000 are active editors. While it’s probably true that Wikipedia does not need explosive growth in its editor base now that much of their “foundational” content has been developed (a point Simonite does not explore), the gradual decline in the number of editors has exposed several issues. Beyond the obvious operational difficulties this poses (Simonite notes many editors feeling overworked by the volume of edits required), a smaller and likely less diverse editorial team covers a narrower set of content than that which a repository of all human knowledge would otherwise require.
Apparently, despite Wikipedia’s best efforts, this problem stubbornly refuses to go away. The culprit? In fact, it is the editors themselves, who have steadfastly refused to adopt changes to make the site more newcomer friendly:
“It is all but impossible for the foundation to get the community to support bigger adjustments. Nothing exemplifies this better than the effort to introduce the text editing approach that most people are familiar with: the one found in everyday word processing programs.
Since Wikipedia began, editing has required using “wikitext,” a markup language painful to the untrained eye….After years of planning, the foundation finally unveiled Visual Editor, an interface that hides the wikitext and offers “what you see is what you get” editing.
After the foundation made Visual Editor the default way to edit entries, Wikipedians rebelled and complained of bugs in the software. In September, a Request for Comment, a survey of the community, concluded that the new interface should be hidden by default. The foundation initially refused, but in September a community–elected administrator released a modification to Wikipedia’s code to hide Visual Editor. The foundation gave in. It made Visual Editor opt-in rather than opt-out—meaning that the flagship project to help newcomers is in fact invisible to newcomers, unless they dig through account settings to switch the new interface on.”
No matter how important a change may be to Wikipedia’s ultimate survival, if it doesn’t please the core content creators, it is dead on arrival. The prisoners have taken over the Wikipedia asylum.
Turns out, Twitter may not be much better.
The Tweet is mightier than the sword
While not immediately obvious, Twitter shares several key similarities with Wikipedia. When first launched, both were nothing less than revolutionary methods for communication and collaboration online. Similarly, both are crucial “utilities” in the digital ecosystem whose social value may always exceed their possible monetization potential (Mr. Boluk notes this in his piece, and it’s probably a topic with exploring itself). But, most importantly when assessing their ability to make business decisions, both rely heavily on a small core group of users to generate the vast majority of their content.
For Twitter, these “content creators” are a relatively small group of celebrities, journalists and Twitter junkies who produce a highly disproportionate share of Twitter’s content (“bots” or “zombie accounts” likely account for a portion as well, much to Twitter’s disdain). They interact with one another frequently and are read, retweeted or commented on by millions of other predominantly “content consumers” (including yours truly). Ultimately, they create the vast majority of Twitter’s value such that losing even one of their voices would be amplified by lower engagement throughout the Twitter network. When Twitter identifies in its S-1 that a significant risk is if “users do not continue to contribute content”, it is exactly these content creators they are referring to.
The resulting dilemma Twitter faces is that every implementation of a new feature carries with it the very real risk that a small but important group of users will reject it and cause damage to the quality of the service as a whole. Although this is a very real scenario for Twitter, it contrasts strongly with Twitter’s peers like Facebook, where connections are far more decentralized and the loss of any single individual, even a well-known one, is minimal.
It is hard to say exactly what the implications of this concentration of power are: unlike Wikipedia, it’s not clear that the “content creators” will veto any proposal that comes their way. For example, last week’s unveiling Facebook-like photos in the newsfeed – a savvy move to improve the visibility of advertisements – was met with disdain but ultimately acceptance. Yet at some level, Twitter will emerge into the post-IPO world with fewer options on the table than its peers. As a result, it may be less nimble, less adaptable and slower to decide, as Mr. Boluk says, “what it wants to be when it grows up”. When Facebook IPO’d, the business model was still in flux (particularly for mobile), but investors were willing to wager that through constant experimentation and iteration, they would achieve stability. For Twitter, with a powerful set of core users that it must please, that future seems less clear.
Twitter has always been known as a user-first company, largely unwilling to dilute its core product in pursuit of profit. While this may be due to Dorsey, Costolo and others’ love for the purity of their product, it certainly seems possible that they may realize they have no other choice.