Consumers sit at the heart of the digital revolution. We know from McKinsey’s research that the benefits of digital disruption accrue mostly to the consumer, not the disrupter. And we can see how companies that put customer utility and experience at the heart of their business have been able to build massive scale quickly. Think Facebook, Google, and more recently Pinterest — but what about Twitter?
There is a structural flaw in the very fabric of Twitter that is holding it back from becoming one of the truly great dotcoms. Popular, sure; influential, yes. But at the end of the day, the purpose of a corporation is to return a dividend to a shareholder — and on that front the likelihood of success remains opaque.
The problem is not Twitter’s current financial performance, though it is not stellar. The issue is its users.
Twitter’s customers do not love it. Worse, they don’t hate it either. They just don’t care.
We have written before how Twitter has a quitter problem, and how its customer acquisition is grossly inefficient. Now more evidence, courtesy of data from Twitter analytics outfit Twopcharts, which has been helpfully visualised by Statista.
According to the data, very few of Twitter’s users engage with the company’s services regularly after they register. “According to the data there is a large discrepancy between the number of accounts created and the number of accounts that actually remain active. Of the 284 million accounts created in 2013, only 37 million (12.9 per cent) were still actively tweeting in February 2014.”
The site then contrasts that fairly parsimonious engagement result with the behaviour of Twitter’s initial customer base — the users who made the service famous early on. “On the other hand, of the four million accounts created in 2008, one million were still tweeting in February 2013, indicating that early Twitter adopters are more likely to stick with the service.”
Twitter’s co-founders, Jack Dorsey and Evan Williams, and CEO Richard Costolo, along with a key investor — Benchmark — filed statements with the regulators last week informing the market they will not be offloading their shares on the fifth of May, when the protected period ends.
That’s right, they filed statements to tell the markets … nothing. Ask yourself why. Or go back and look at what happened the day Groupon came out of the lockup: the price tanked ten per cent immediately (admittedly Groupon’s shareholders had taken a thorough beating in the intervening months, whereas Twitter’s still have their heads above the water level).
But don’t think for a minute that the message comes from a position of strength.
None of which is to say the problem is insurmountable. In fact, there is an excellent analogue for Twitter and the problem it faces today — a company which experienced the same situation with a disinterested audience set and which reinvented itself to stunning effect.
That company is LinkedIn.
For years, LinkedIn was a user ghetto. Its customers rarely engaged with the platform, except perhaps to update their CVs when they wanted to send a message to the boss.
LinkedIn solved that conundrum by transmogrifying first into a media business. Then, once it had successfully engaged its blue chip executive readers, it evolved again into a business as a service platform. It succeeded because it had a simple story to tell: it would tell stories. Or, rather, it would make it easier for others to tell, like and share stories. LinkedIn’s feeds became the daily serendipity engine for business people.
But what is Twitter? Right now, nine out of ten people who register can’t answer the simplest question: What’s the point of it, after all?