Twitter has $3bn enough to finance losses for a long time. The company isn’t going to disappear anywhere soon. The question is whether Twitter can ever meet Wall Street’s expectations and not whether Twitter is a useful product or project for a sub-set of people. (See Anthony De Rosa elide on this topic
My take is that the core premise of Twitter is exceptionally useful to a small number of people. People who are interested in topics, subjects and areas of expertise so much so that they are willing to go out and find that information rather than waiting for mainstream media filters like newspapers and Edgerank to get it to them. Those people are probably like Exponential View readers, small in number, but for whom Twitter is valuable.
Apple provides a cursory precedent for Twitter. Back in 2002 it faced a declining market share and a cash pile in excess of $4bn. However, Steve Jobs approach to solving Apple’s problems have been different to those at Twitter. Some may remember that Jobs took a saw to Apple’s product lines, axing multiple confusing and overlapping desktop and laptop ranges; eliminating the profitable printer unit and weird appendages (like online services and their software-based modem.) A good review of how Jobs simplified Apple is here
This relentless focus on a few things allowed Apple to stabilise and only five later it was a hugely more complex business with an iPod unit, a phone unit and a media distribution business.
Apple, of course, has a more robust business model than twitter. It sold something which had a margin on it, rather than trading on the less tangible quality, user attention. However it strikes me that Twitter’s recent moves have been to complicate and bloat the product (Moments, anyone?) and continue to be complicated by the fact that revenue-driving activities (brand partnerships) run head-on to the process of figuring out exactly how to give the people who keep Twitter relevant what they need.
Is it possible to laser in on subject-oriented geeks & info-junkies and keep Wall Street happy in the short-term? Almost certainly not. But hard choices….
If Jack’s listening, I’d encourage him to look deep into the core of Twitter’s most loyal users and build out from them. It could maintain the firms relevance which is the foothold from which you can build a long-term success. (Below Nova Spivack has a slightly different take.)
Back in 2002, I commented on Apple
: “Relevance isn’t something that appears on a balance sheet… Relevant firms rarely die. Far from it, they flourish.”