I love Twitter, but the public markets do not. Like other consumer tech companies, investors have valued Twitter based on two interlinked factors: user growth and ad sales. Seeing as Twitter added zero users last quarter, it’s easy to understand why investors are a bit irked; in fact, they were so irked that the firm’s price dropped by about $2.20 per share after the earnings call last week.
Based on the above, you might think I’m down on Twitter. Don’t take it the wrong way, though. I really do love Twitter. If you know where to look, it’s a treasure trove of offbeat wisdom. Knowledgeable people give some of their best thoughts away for free on the platform. For example, this tweetstorm by Naval Ravikant (founder of AngelList) is nothing short of brilliant. Or consider this random gem showing that Domino’s Pizza had a better 8-year ROI than any of the major tech companies. My point is, if you seek insight and wisdom, Twitter is a phenomenal place to find it.
On the other hand, it’s pretty clear that Twitter might not be a great business. And that’s because it probably never should have been one. Twitter is fun and insightful because it’s the center of public life. News breaks there, ideas are shared there, groups get together there. Twitter is the modern-day equivalent of the Roman Forum.
And that, ultimately, is the problem. It’s very hard to monetize a forum; that’s why Times Square is hell on Earth. In a forum environment, people seek to socialize and exchange knowledge. Advertisements literally seek to subvert that intent; by demanding people’s attention, ads prevent them from engaging with each other. And this is what has hurt Twitter: advertising isn’t the right income stream because it creates misalignment between the business and its users. Ads work on Facebook because people are there to consume content, whereas they use Twitter to dialogue with each other.
Thus, there’s an opportunity for a new business here: a decentralized Twitter, which I’d tentatively and unimaginatively call “Forum.” By using blockchain technology, we can create a “Twitter the social network” that doesn’t require “Twitter the company” to run it. People could subscribe to certain “influencers” in exchange for a tiny payment of ForumCoins (i.e. the cryptocurrency that creates incentives to engage). Or they might spend ForumCoins on creating polls and asking questions.
Regardless of the actual incentive structure, decentralization is one of the few ways I can see that Twitter could actually flourish. (For the record, an organization called Mastodon is trying a lite version of what I propose here; a better solution would do something similar to Kin by Kik, but for Twitter.)