IEX #190: Should There Be 2 Twitters?
A case for Twitter to fork its proposition and create a stratified offering
Hi Everybody, I’m just back from a week of driving around Ireland. An experience I would strongly recommend. Check at the bottom of this page for itinerary. Meanwhile, here’s this week’s IEX - a thought experiment…
As you read this, Twitter and Musk are preparing to do battle in court. Musk's now abandoned plan to buy Twitter has apparently cost Twitter $30m. Musk argues that he was given incomplete information at the time of the offer. This is the worst case scenario of a messy divorce for a marriage never consummated. Let's remind ourselves of the back story.
Elon Musk has always liked Twitter as a medium. Somewhat like Donald Trump, Musk has often defined good governance practices to shoot from the hip by posting his thoughts directly to twitter. He has directly influenced the price of Dogecoin from the time he first posted 'Dogecoin rulz'. He also famously tweeted about Tesla's price being too high, leading to $14bn being wiped off the Tesla valuation. On another occasion, he made a cannabis joke about Tesla's value which cost him $20m and a 3 year suspension from being the chairman of the board at Tesla. However, Elon Musk's capability to translate bold visions into reality is unequalled. His apparently offhand tweet 'Nuke Mars!' was a reference to changing the thermodynamic environment of the planet to make it more habitable in future.
Twitter for its part has somehow always felt like it has been underperforming, despite the fact that revenues have grown steadily over the past decade. There's always a cloud hovering over its revenue growth. The bigger challenges for twitter are focused around its ability to manage its network - controlling bots and trolls, and clamping down on hate speech, misogyny, and racism.
Musk then made an offer to buy Twitter for $44bn on the 25th of April this year. He appeared to have pulled together a funding package for the acquisition. But then after a few weeks of uncertainty, he has pulled out of the deal. At this point it gets messy with both parties accusing each other of breaches of contract, and Twitter suing Musk for $1bn. Musk unsurprisingly has strong views on how to improve Twitter. He wants to remove both content controls as well as anonymity in twitter. The latter is a point I've argued before but I realise that there are two sides to the debate.
Online anonymity is an asset for all those people across the world who are at risk of prosecution by repressive regimes, or targeted by extreme or bigoted groups, or victims of domestic abuse. On the other hand anonymity also provides the security blanket for all the racists and misogynists who can hurl insults without any fear of censure or punishment. Equally, the commercial aspects of twitter are often misrepresented, as anonymity also masks the truth about actual number of unique users, versus bots and fake accounts. Lastly, there is an increasing gaming of social media, now an accepted way of politically motivated campaigns as seen by thousands of tweets using exactly the same language, or examples, which pop up in the wake of a debate - especially true in India, where an industrial set up for social media content has become an intrinsic part of politics.
The problem is that Twitter's USP in some sense is the anonymity. Face Book is quasi identity based. It requires some verification and by design it discourages anonymity. Twitter is the home for the anonymous, on the social internet.
So what is the answer for Twitter? Where does Parag Aggarwal, the CEO, want to take Twitter, once it has gotten to the end game with Musk? I now feel that Twitter could do with a segmentation.
Let's introduce TwitterX and TwitterPLUS.
(Note: this is pure speculation and based on possibilities, and is no part based on any information about Twitter’s actual strategy)
TwitterX would be aimed at the anonymous audience. Given that that some 30% of the worlds population live in environments where they may face persecution for voicing politically unacceptable opinions (this now includes people providing abortion advice in the US), there is a clear need for a platform such as this. What percentage of Twitter's current 230m monthly user base would go here? 50%? 75%? For the sake of argument, let's say that 75% are here. Seems like a conservative estimate to me. Which means the remaining 25% or some 65m users would go to TwitterPLUS. Twitter plus would involve identity verification. It would aspire to be a place for enlightened debate in liberal societies, a place for academic and scientific collaboration, for humour, debate, and for targeted brand and marketing campaigns.
Twitter PLUS would need very strong privacy controls, and strong processes for avoiding over-targeting and protection from hyper-zealous marketers. But it could play the identity card to it's advantage and actually go all the way to implementing blockchain and working with public services as a provider of identity services. The value per user in Twitter PLUS would rocket. Marcus Rashford could choose to be on Twitter PLUS and avoid the racist abuse he receives every time he has a bad game or misses a goal. Yes, he would end up with a quarter of the followers, but on a level playing field, across all brands and people, this may still be a good trade off. Twitter PLUS viewers could be wooed with more personalised events, chats with celebrities, tie ups with credit card and other brands and even become a critical part of customer service for many brands.
On the other hand TwitterX would continue to be the wild web of faceless opinion. Its advantage would be the sheer numbers and it would be the place for dissidents and rebels, but also the home of the trolls and bots. You would have to take your chances with TwitterX. It would look to compete with the message boards, 4Chans and Reddits of the world. The biggest advantage TwitterX would have is that potentially every TwitterPLUS user could also have a TwitterX account, effectively this would mean that a significant part of the 60m TwitterPLUS accounts would be a net addition to the user base. (so even if 90% of the current audience was TwitterX, it would still mean a 10% additional and valuable customer base). Marcus Rashford could choose to engage with TwitterX selectively, impersonally, or through his organisation, and not worry about having to interact directly.
As to the transition itself, Twitter could simply introduce the Identity based TwitterPLUS, allow a year for all users to transition or get a free TwitterPLUS account, and then let the current Twitter model devolve to TwitterX. Twitter's great problem today seems to be that it (and many of it's celebrity users) want to straddle these two worlds, and enjoy both the benefits of anonymity (large numbers of unverified users), as well as the benefits of identify (targeted messages and per user value). This may be untenable in the long term, or worse still, other platforms may come in with much more targeted propositions at either end.
(Note: I’m aware that there are plenty of arguments that suggest that removing anonymity will not reduce hate speech, but I’m willing to have this debate.)
Reading This Fortnight
(was on holiday, ergo read more than normal)
Health & Wellness: Personalised vitamins - when you think about it, it’s an obvious idea. Here are the CEOs of HUM Nutrition, and Vous Vitamins - companies that design personalised vitamins for consumers (McKinsey). While on the subject, the book ‘Human Errors’ by Nathan Lents provides a great explanation of why we need vitamins in our diets, while most animals manufacture their own vitamins in their body.
Future States: The diverging demographics of India and China, and what they mean for the future. India will enjoy growth in working age population till 2050, but it remains to be seen what working age implies in a world of AI and automation. (Visual Capitalist)
Technocrime: Colourful characters such as ‘Razzlekhan’ and ‘Dutch’, a heist, months of detective work, Tik Tok videos, and $8 bn of crypto in the mix. Surely this is worth a Netflix or Amazon Prime movie next year? The biggest crypto heist in history. (Bloomberg)
Design: Identifying unmet needs in a digital age - this piece looks at the 2 axes of level of zoom, and traditional vs unconventional user behaviours, to create 4 categories (panorama, kaleidoscope, microscope, telescope) to create 4 ways of exploring unmet needs. (HBR)
Innovation History: The author Clive Thomson argues that aesthetics plays a key role in the resistance to any new energy source. Here he tells the story of how coal adoption met with a similar aesthetic dislike as do solar panels or wind turbines. Although you could probably extend the argument to any innovation. (Medium)
Energy Storage: Gravity and concrete for energy storage: a novel way to convert to electrical to potential energy by lifting blocks and reuse when required by translating the energy back to electricity. The idea seems obvious, and the innovation here, is of course in the engineering - to minimise transition losses, and make this a scalable proposition. (Wired)
Floating Wind Farms: 80% of offshore wind in European waters is in places where the fixed-bottom wind farms cannot operate as they would be out of their depth (60m). Enter floating wind farms which are moored to the ocean floor but can be clustered. (Wired). You can also read the original Global Wind Energy Council report here.
ESG Does ESG Need an Overhaul? Something I’ve argued earlier. While there has been a lot of noise asset and fund management circles about ESG investing, there is a need to get beyond 'woke capitalism' and stop dealing in nebulous and immeasurables. A glaring example of the challenge of combining E, S, and G, is that Tesla rates lower than Exxon Mobil in the S&P Dow Jones ESG Index for ESG because of social and governance weights. (Economist)
Electric Vehicles: Vehicle to Home (V2H) technologies are already in use, but could Vehicle to Grid (V2G) be around the corner? Beyond using your car’s battery to power your home when required, could you give energy back to the grid? Sometime in the future, yes. (Emerging Tech Brew) Also, here’s the start up that’s working using solar energy for cars and homes: https://www.dcbel.energy/
Autonomous Vehicles - the city of Talinn trials a self driving bus. An 8 seater with a 30kmph max speed (Smart Cities World)
Autonomous Drones: a combination of AV style intelligence and autonomous drone tech allows for much more elegant management of complex asset infrastructure. The drone just needs a high level instruction such as ‘Go to that pylon,’ and the drone uses its own intelligence to understand where the pylon is, where the parts of the pylon are that need to be imaged, and how to get the best images of back to the control centre. (Wired)
Drone Superhighway: Meanwhile, the UK will become one of the first countries to have a super highway for automated drones. Reading, Oxford, Milton Keynes, Cambridge, Coventry, Rugby, and even Southampton and Ipswich in due course could be a part of this. Project Skyway as it’s called is a consortium of multiple firms including BT and the Civil Aviation Authority. (BBC/ Economist)
Drone AI Training: How do you get drones to fly safely through those pylons and transmission towers? Microsoft has launched a simulator for training AI for drones. Project AirSim allows the simulation of flights around potentially high risk areas such as near power lines and turbines. And millions of simulations can be run to make the AI as safe as possible. (BBC)
Open Source War: Ukrainian technologists and entrepreneurs are bringing innovation and tech to the war with Russia. They call it an open-source war. Lateral networks are battling hierarchical ones. There is a constant battle to make communications and information networks more resilient - both physically and logically. These teams use every innovation methodology - experimentation, fast fail, divergent thinking, to solve life and death problems at warp speed. (FT)
Extended Reality: All day XR glasses? Great piece by the technologist Avi Bar-Zeev about the considerations for XR glasses, and why the miniaturisation of the optical equipment is key to driving this. (Medium)
Space Tech and telecoms: In the rarified echelons of the 12ghz networks, there is a war brewing between Musk’s Starlink, and Charlie Ergen’s Dish network. The government would like to maximise revenues by auctioning bandwidth but interference from one service can impact another. This debate impacts a significant amount of broadcast and/or internet access for many parts of the world. (IEEE Spectrum)
The James Webb Telescope images: You’ve no doubt seen the wonderful pictures, but this piece talks about their significance. Why the JWST images are showing us ever more galaxies, exoplanets, and light that’s travelled for 13 billion years - so not too far from the big bang. These are just the early pictures. Watch this space! (New Yorker)
Our Ireland Itinerary
We hired a car at Dublin and effectively circumnavigated Ireland in a week. Catching up with friends, finding a few unexpected jewels, and overall having a fabulous time. Much recommended.