On rising tides etc.

Thoughts on Twitter’s “growth problem” 

Disclaimer: I used to work at Twitter but it has been almost a year since I left and I have no inside information into the company’s strategy, product plans or anything else. This post is based solely on my opinions as a long-time user of the product and observer of silicon valley.

There has been a lot of talk about “Twitter’s growth problem” — how it is the cause of the stock price falling (although stock is doing great lately), executives leaving, and pretty much everything else one can claim is “wrong” with the company. As well as much theorizing on how to “spur growth” for Twitter.

I have a different take: Twitter —the product we know today—will not grow much further. It may gain another 50 million or even 100 million monthly active users (MAU) but it will definitely not grow by an order of magnitude or even get close to 1B active users. And that’s probably OK.

Twitter — the broadcast medium of 140 character Tweets — has reached its local maximum. How can we know this?

1. In the time that Twitter has existed, global smartphone penetration grew from below 1% in 2006 to almost 25% in 2014. In mature markets like US, smartphone penetration is already at 66%! In the history of technology there has never been a rising tide as fast as this one. If the Twitter ship did not lift beyond 250mm MAU when the tide was rising at this unprecedented exponential rate, then it is highly unlikely that Twitter can make its ship lift now that the tide is slowing to linear growth.
2. Social networking is rapidly moving away from 1:many broadcast mediums like Facebook and Twitter where you send infrequent messages to lots of followers, to 1:few narrowcast platforms where you send tons of messages to a handful of friends. Mary Meeker captured this perfectly in her Internet Trends report (slide below.) To use yet another meteorological analogy, if Twitter could not get further with the wind behind its back, it is highly unlikely to do so now that it’s going against the wind.

I don’t think this is cause for alarm. Twitter is part of the fabric of society and isn’t going anywhere, and it has shown incredible creativity in monetizing its current userbase. But also Twitter still has fundamental assets it can leverage towards building or buying (+ reinforcing) completely new types of audiences.

A big one is identity. Twitter’s @names are like DNS for entities: people, brands, organizations, parody characters. A disambiguated namespace to identify anyone or anything on the interwebs is powerful. Imagine being able to message anyone on any platform (text, Whatsapp, Snapchat etc) with their Twitter @name, without knowing their phone number or usernames in other apps. Imagine paying anyone with their @name like M-Pesa does with phone numbers. Etc.

I’m confident we will see a lot more interesting things from Twitter but they may not look like the Twitter we know today. #onward