One of Twitter’s biggest investors gives his prescription for fixing the company
Twitter’s board of directors will hold its quarterly meeting tomorrow, in the midst of a stock price swoon caused by stagnated user growth and an earnings miss that has caused some on Wall Street to call for the ouster of CEO Dick Costolo. There will be plenty to talk about, perhaps including an 8,300-word letter posted today by large Twitter investor Chris Sacca, titled “What Twitter Can Be.”
Sacca takes pains to say that he is not an activist investor, and he never directly references Costolo or any other Twitter (TWTR) executive by name. But his twofold message is clear:
- Twitter has done a lousy job telling its story, thus indirectly implicating its CEO.
- Twitter has failed to adequately evolve its core product in a manner that would attract new users without sacrificing the devotion of its existing “power user” base.
It’s this second part that is the most interesting, because Sacca has tons of ideas for what Twitter’s product team should introduce. Some of them are big ideas, some are incremental. And, yes, some would be best accomplished by purchasing startups in which Sacca has investments.
A lot of Sacca’s suggestions essentially boil down into Twitter needing to introduce some sort of human curation into its feed. Or, more specifically, that it needs to create new feeds (or “channels”) that include human curation, while maintaining the raw feed for traditional users.
For example, there should be curated feeds around specific live events — with a separate tab and plenty of scheduled promotion in the main feeds. This would be particularly important for new users who don’t have a robust list of followed accounts, thus reducing confusion. Plus, more experienced users could follow an event that isn’t core to their normal Twitter experience, without the hassle of finding the most relevant people to follow.
Sacca also believes this channel idea could be extended to various subject matters at a fairly granular level, plus on a geographic basis (something Twitter once used to do much more of). Or around that day’s most-shared links or images. He also believes that these tabs could sometimes be structured as stand-alone apps, and gives the example of Twitter NBA. Why be just a tiny part of the NBA’s app, when Twitter could build its own that includes both tweets and scores? To a large extent, he’s telling Twitter to get over its shellshock over its failed Twitter Music experiment.
To further new user engagement — particularly for those who wonder “What do I tweet” — he also suggests that the company introduce questions, polls and other interactive content. Additional suggestions include that “favorites” be replaced by hearts, the introduction of “read receipts” that will let users know verified users (i.e., celebrities) have seen their follow or tweet and alerts that let people know they helped launch a trending topic.
Finally, Sacca heaps praise on Twitter’s acquisition of Periscope, lamenting only that the videos disappear after one hour rather than being archived in a way that would better enable long-tail monetization.
Done right, and done soon, hundreds of millions of new users will join and stay active on the service, hundreds of millions of inactive users will return to the service, and hundreds millions more will use Twitter from the outside. Countless users, new and old, will find Twitter indispensable, use Twitter more, see great ads, buy lots of stuff, and make the company much more money along the way. I believe Twitter can do it. I hope now you do too.
That last line could be read as intended for any current of future Twitter investor. But, mostly, it’s aimed at — and timed for — the company’s board of directors.
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