An Open Letter to Jack Dorsey

I’ve had several conversations with my friends over the past few months literally asking “what is Twitter? why do you use it?” I don’t know if there are good answers to that. A recent Mashable article says:

I joined Twitter in 2009 by the prodding of one of my closest friends. … I tweeted, “WHAT IS TWITTER?”

Seven years later, I’m still asking this question despite the thousands of tweets I’ve sent, hours I’ve spent each day browsing and favoriting, and years I’ve had reporting on the highs and lows of the company.

For me, in writing, the easiest description is a microblogging site or a social network. But either way that’s often accompanied by the word “struggling.”

“Microblogging” is a made-up word used to describe “whatever it is that Twitter does”. But Twitter doesn’t offer good blogging tools at this point. As a specific example, I don’t know how to find tweets I made in the past about a subject, or how to find “what I tweeted about on this day 3 years ago”. I could figure it out, but it’s not a part of the product that Twitter is trying to offer. This, by comparison, is trivial on Blogger.

As a social network, Twitter is a dying competitor to Facebook and LinkedIn. Twitter says almost nothing about who a person is. For me, Twitter is a combination of interesting links, and one-off thoughts that seemed too irrelevant or irreverent to post to Facebook. For Kim Kardashian, it turned out to contribute to her getting robbed. I won’t even start on Donald Trump.

So what’s a positive way of looking at Twitter?

$TWTR the Company v. Twitter the Product

Let’s take a step back. Twitter ($TWTR) is a corporation with headquarters in San Francisco, CA. It’s current CEO is a man named Jack Dorsey. Almost all of its revenues and value can be traced to a single product, also called Twitter. Twitter can be found at the website http://www.twitter.com/ , and as a native application on Android and iOS.

I’ll use $TWTR to refer to the corporate entity throughout, and Twitter to refer to the product, Twitter.

What is Twitter?

A few years back, Facebook had an infamous marketing campaign where it said “Chairs are like Facebook”.

Twitter is not like a chair. Right now, Twitter is like a hammer.

Right now, we have a metaphorical room filled with millions of people using Twitter. And you give each of them a hammer, and say “we want everybody to use hammers more”. And right now, the whole of American society is seeing the results of that. Presidential candidates hammer on each other. The “pro-GamerGate” and “anti-GamerGate” teams hammer on each other. Wild hordes of angry teenagers hammer at whoever their idols say mean things about.

This is wildly inappropriate behavior. I’m not a lawyer, but the phrase “attractive nuisance” comes to mind.

Engineering Twitter

There’s a terrible trend in the San Francisco tech scene where “engineer” is viewed as a synonym for “software engineer”, which is itself a synonym for “programming”. It isn’t. I’m not a licensed engineer, so rather than offer my opinions I’ll quote the National Society of Professional Engineer’s Code of Ethics:

Engineering is an important and learned profession. As members of this profession, engineers are expected to exhibit the highest standards of honesty and integrity. Engineering has a direct and vital impact on the quality of life for all people. Accordingly, the services provided by engineers require honesty, impartiality, fairness, and equity, and must be dedicated to the protection of the public health, safety, and welfare. Engineers must perform under a standard of professional behavior that requires adherence to the highest principles of ethical conduct.

The fundamental strategy for Twitter, and thus the fundamental question for the long-term success of $TWTR, must be: “How can Twitter be designed to protect the public health, safety, and welfare of our users.”

Right now, the main Twitter news is its attempts to stream NFL games. This suggests that Twitter’s current strategy is “how can we increase the number of people visiting our website in the next 3 months”.

The Twitter Product

Twitter is a service that lets you send 140 character messages to various people. This sentence also describes WhatsApp and SMS and Signal and many other apps.

Twitter’s main difference from these other services is that it offers a public record of these messages. For example, it’s common for news organizations to cite tweets in their news coverage. This, for historical tweets, is turning out to sometimes be scandalous for the individuals involved.

Well, Twitter *sometimes* offers a public record. There are “public” Twitter accounts and “private” Twitter accounts. These are barely the same product. They have very different uses. Private Twitter accounts only show posts to your friends. It’s a great way to vent and to express opinions best not shouted to the whole world.

Putting them together, Twitter becomes a sewer, a cloaca of the internet. Everyone is forced to shovel all their communications into a single, unfiltered stream. And thus I get chocolate in my peanut butter, I get hazelnut, I get leprosy and vegemite and gummy vitamins and shards of metal.

I‘m not sure that I’m going overboard with that analogy.

I think Twitter *desperately* needs to have a second brand, a second domain, a second app, for private tweets versus public tweets. Everyone will have the same @ handle reserved on both sites. The private site can read, can kibitz on things on the public site. But nothing on the private site is ever world-readable, and nothing on the private site is ever accessible on the public site. Perhaps then the healing will begin.

The Future of $TWTR

It seems to be a consensus among pundits that $TWTR has too many employees. I’m going to assume they’re right. There was already one round of layoffs last year. Having a second round of layoffs will depress morale far further. So, apart from an acquisition, the only way to climb is up. And to climb up, you need new products.

The most obvious option is to sell similar products to your existing customers. But who are $TWTR’s customers? More specifically, who signs checks to give the company money? I believe the answer is “ad agencies”, or their new version, “ad tech startups”. It’s almost certainly impossible to make more money from them; if it were possible you would be better off to avoid these middle-men completely.

You could sell new products directly to your users. I doubt that Twitter socks would make an impact to the bottom line. More materially, I don’t believe any “Twitter Pro” service could possibly work; I can’t imagine any content that people would be willing to pay to receive on Twitter (as opposed to through some other medium).

Which leaves, finding new customers to sell products to, probably “enterprise”. In my opinion, the most obvious product opportunity in the software industry is for large software companies to turn their internal tools into something that they can sell to companies in non-software industries. It’s not hard to imagine a product similar to Slack masquerading as “Twitter for Work”.

Both Microsoft and Oracle have been doing some version of this for decades. It’s a business model.

The Media

Twitter is a desperate company, besieged by enemies on all sides, with no obvious ways to increase revenue or decrease expenses. It could just die.

However, Twitter is also one of the 5 most important media organizations in the country. Twitter’s position as a media organization is, unfortunately, an impossible one to monetize; doing so would drive away all of the news creators who use the product the way it is.

If “media” is the future of Twitter, it must be swallowed up by the largest company it can find, and as soon as possible. It’s incapable of standing alone in its current form.

Acquisition Prospects

The big 5 tech companies (Google, Facebook, Amazon, Microsoft, Apple) are about as unlikely as Procter & Gamble or General Electric to buy Twitter. A Google combination makes sense, but the media just reported on a failed deal, making this seem unlikely. Facebook would probably have anti-trust issues; Microsoft just bought LinkedIn earlier this year and is unlikely to want a similar acquisition so soon; and Amazon and Apple are unlikely to be interested.

Various media companies have also been mentioned; I have no insight into the media industry and won’t try to speculate.

But one company, while notably smaller in market cap, is bigger in terms of employees than all of those companies. IBM.

I think there’s a lot to be said for an acquisition of Twitter by IBM. The price, even at the current $18 per share of $TWTR, would probably be higher than the intrinsic value of the Twitter product as part of IBM. There is a lot of goodwill that can be ascribed to the acquisition, though. $TWTR gives IBM an entrance into the 21st century beyond robots that play Jeopardy. $TWTR also lets IBM improve on its ability to sell modern cloud software to enterprises; most of the open-source stack for cloud computing was initially developed at $TWTR.

(author’s note: I currently own Salesforce stock and have no comment on that combination.)

Conclusion

So Jack. Being the CEO of $TWTR seems like an impossible job to have right now. I don’t see how you manage another job at the same time.

Here’s what I think $TWTR need to work on:

1. Redesign the main Twitter experience to combat abuse. I would consider 10–20% user attrition in this process unavoidable. As long as the redesign successfully eliminates the structural issues that lead to Twitter multiplying abuse, I would not worry about this.
2. Look for new products to launch. Absolutely forbid these products from having any integrations with the existing product on twitter.com whatsoever until after they launch. The only sensible integration would be for login credentials, but Google and Facebook logins are far better products at this point. I’m sure you can negotiate a deal over that.
3. If you aren’t satisfied with the results after #1 and #2, sell the company. The company is worth more whole than in pieces, but $TWTR can’t survive as a whole company on its own unless you have new products. And, apart from revenue and profitability, the single biggest negative impact on Twitter’s value is the risk of something terrible happening as a predictable consequence of Twitter’s inability to effectively combat abuse.

Good luck, Jack. You can definitely use a lot of luck.

Signed,

Alexander Power, Twitter Shareholder