Twitter as public and private company

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An agreement to acquire Twitter has been reached, and there are so many comments about the final purpose Elon Musk has about this acquisition.

I would try to draw a map with the main business model characteristics related to Twitter as public company and now as private company. The model drawn is very basic, and you should not consider it too much, I just do it for fun.

Twitter as public company owned by Elon Musk

The basis of the business model is mapped as below:

Twitter as public company owned by Elon Musk

Key points of the map:

  • Shareholders try to maximize the profits and hence mix relevant information with advertisement and mechanisms that “invites” the user to consume more information or to write more.
  • So many of the final users understand it (I do not know how much of them). In any case the offering of not “clean”, “objective information for the user” or call it as you prefer, I think it has negative consequences for the platform.
  • Data is provided by users, and this data in some cases is biased by the fact that not 100% relevant information is offered. This is done to maximize the profits, but we do not know how much this is affecting to the understanding of the real picture about what people really think, and what people really want to consume.

Twitter as company owned by Elon Musk (pre-mortem analysis)

This is a pre-mortem analysis, it’s the basis of the business model as I forecast at this moment (without understanding of Elon’s intentions) mapped as below:

Twitter as private company owned by Elon Musk

Key points of the map. All statements should start with “I think”:

  • Twitter is going to continue offering advertisement to keep dollars coming to the P&L.
  • Twitter is going to offer more “relevant information” to the user. I assume that not 100% of the “relevant information”.
  • When the user see more relevant information will be more predisposed to consume more information and more predisposed to write and comment more. This will increase the amount of data (which is very valuable asset of the company).
  • I forecast alliances with crypto and NTF organizations to attract users to the platform. Right now there are other platforms having reasonable amount of traffic and transactions.
  • Another move that they could do is to implement rewards in form of a crypto to the users so they can earn “twitter-coins” by using the platform and writing on it. This model is implemented already by Mastodon.
  • “Twitter-coins” could be sold, or they could be used to reduce number of advertisements or any other use.
  • You could acquire “Twitter-coins” to avoid advertisement.
  • The opening to offer more relevant information will decrease the maximization of profits through advertisement, but this will enable a data set with more quality and quantity.
  • The dataset will be used to build the next generation of Machine Learning Engines. How? I have no clue, but I think this is the direction and the fact that Elon Musk is one of the cofounders of OpenAI makes me think there will be synergies between both organizations.
  • The need of having a more evolved Machine Learning Engines is linked to Elon’s Mars mission.

Questions to pay attention

  • How is Twitter going to offer more “relevant information”?
  • How is Twitter going to increase the users and interactions happening in the platform?
  • Is Twitter going to “readmit” popular banned users as Trump?
  • Are going to be the rule of data classification going to be public?
  • Is Elon going to use the data just for his other companies? Or he is going to enable other players to get advantage of this first class dataset.
  • Is Twitter going to consider a partnership with Alphabet? (As Alphabet is one of the more advanced AI companies). Or they use OpenAI workforce to increase AI powerhouse.
  • How is the new executive team overcome the existing inertia the organization has.

On this last point, the inertia, I would like to rescue this table build by Simon Wardley where 16 types of inertia are identified. I have highlighted some of them that I consider Twitter is being affected.

Potential gameplays

The Wardley’s table of gameplays contains 61 moves, but I would pay attention to changes on “ecosystem” category.

Threads

There will be people thinking, ok, I want to leave Twitter and go to get similar content in other place.

Just goggle “alternatives to Twitter” and you will find a lot of articles offering an alternative: Mastodon, Reedit, Ello, Mind… Each one of them offer a different capability that makes them attractive for specific purposes: decentralized environments, anonymous users, groups…

Events

Some news related to events that have happened after the acquisition:

Post-morten analysis

Subscription model (November 2022)

The subscription model is something I have not think about, but now in November 2022 seems to be a possibility.

An initial $20/month fee was filtered, then $8/month… and the public open discussion continue.

From this corner of the world I propose a naïve subscription model:

“Whaling and Culling” gameplay

Based on the principle “10% of people do 90% of the work.”

  1. “Whaling”: set a short period of time to reach a challenge that is extremely difficult. During this period of time you differentiate who are the whales (employees that are really committed independently of many other things). People that are productive and committed.
  2. “Culling: When the people not performing at the level you expect, you understand they are actually negatively impacting the whales, so you fire them.
  3. With the unproductive people out, the expectation is that productive people are more productive and you can build more workforce on what is considered the right basis.

Some updates 12/12/2022

During these weeks some updates have been announced:

  • Removal of a huge amount of fake accounts.
  • Increase the number of characters per tweet from 280 to 4.000.

I have updated the Wardley Map using diagrams.net, in this way you can copy it, edit and make your updates:

Some updates on 25/12/2022

I have a question about the direction of the twitter’s users. I updated the map:

Updated Twitter map on 25/12/2022

My view is that we go “from flat to hierarchy”, where the subscription model (with different levels) and the blue check (with different colors) will promote the natural segmentation of the population.

What is yours?

January 2023

Update July 2023

Twitter is playing gameplays with respect different competitors, the table below tries to summarize the main moves I have been able to see. Note that the “actions” have “reactions”.

The horribilis Week

The weekend of July 1st (which was a major weekend in US as it coincided with July 4th) Twitter announced restrictions on the consumption of data from Twitter:

Four days later Meta announced the launch of “Thread”, the “Meta-Twitter” that is born for competing on Twitter’s space.

Then on July 5th Twitter sends a letter to Meta:

On July 7th is announced that Elon sued the law firm Wachtell, Lipton, Rosen & Katz to recover most of a $90 million fee it received from Twitter for defeating his bid to walk away from his $44 billion buyout of the social media company.

On July 12th this news was published: Twitter Sued by Ex-Employees Who Say Company Owes $500M in Severance. During the same day x.AI (https://x.ai/) was announced.

In general the direction of decisions in Twitter right now is: increase the number of blue users elevating paywalls and increase the tokenization of data activities.

My concrete next bet is that Twitter is going to:

  • What: restrict the number of followers you can follow and that can follow you.
  • Which number? I do not know, but one that forces people with small communities to join blue or lose their community that took them. I think that 1000 followers is a good number.
  • When? I think this will happen before October ’23 (next mortgage payment).
  • How? Elon will link that action to another external event that will sound as “The dog ate my homework”.

Tweetdeck will be only available to verified accounts starting in August ’23.

Update July 23rd

Twitter becomes X

As usual, feedback is welcomed !!

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