Twitter’s Future is Actually Its Past – Where Twitter Went Wrong and How to Right It

With the resignation of Twitter’s CEO, Dick Costolo, there has been a sudden burst in commentary on what is wrong with Twitter, and where they should focus next.

There are suggestions that Twitter should focus on live real-time events. There are suggestions that Twitter should focus on algorithms to filter content so they are more like Facebook. There are also comments from Twitter’s leadership that Twitter will not change its present (broken) strategy.

It’s clear that Twitter’s growth has stagnated. But to solve this problem, Twitter doesn’t need to invent a new strategy, because they already found the right strategy years ago. The problem is that they abandoned it.

Twitter was doing great, in fact, before they shut down their open APIs and started killing off their developer ecosystem and all the network effects they generated.

By shutting down their APIs and ecosystem, Twitter shut off an enormous funnel of third-party Web endpoints and apps, all of which were driving more new users and engagement than Twitter could ever generate on their own.

It was precisely their open-API ecosystem that powered Twitter’s explosive growth. And it’s no coincidence that Twitter’s growth and engagement started to slow not long after they shut them down.

Instead of trying to reinvent their business or continue with their present approach, Twitter should return to what drove most of their growth and engagement in the past: their original open ecosystem strategy.

Re-Open the Floodgates

Twitter’s once-thriving developer ecosystem was their true engine of growth.

And if Twitter’s leadership wants to catalyze explosive growth once again, they should re-open their APIs and app ecosystem, as widely and as quickly as possible.

But this time they should make a promise — publicly and in writing – to their developers and partners – that they will not shut them down again.

Closing down Twitter’s huge and thriving ecosystem was a bad decision based on old-paradigm portal thinking.

Twitter’s leadership didn’t understand that Twitter is a network not a destination.

Instead of playing to their strengths as a network, it was decided to transform Twitter into something much less interesting — the next AOL.

Twitter is NOT a Media Company

AOL has already proved it’s not a great idea to be AOL. So why did Twitter’s leadership aspire to that? Perhaps they thought that they could control their ad revenue by controlling their user-experience.

But Twitter has never been able to make great consumer facing experiences. The strategy of trying to become another walled garden destination like AOL was a bad match to their DNA from the start.

Even years after shutting their APIs and closing down their ecosystem, Twitter has still not managed to deliver portal or mobile user experiences that come close to those they killed off.

Twitter’s big mistake was not realizing that what they thought was their greatest weakness (an uncontrolled open API with thousands of developers using it to innovate in all directions) was really their greatest strength.

Twitter Could Be for the Stream, What Google is for the Web

As I have said for many years, what Twitter should have done (and could do again), is to let everyone and anyone publish and subscribe to Twitter as easily as possible.

Remove the barriers to viral growth and adoption: Open up the APIs again. Make them free. Open up the firehose and make it affordable to all.

In the past I have called this idea the Freemium model for Twitter data.

Here’s how it works:

  • Anyone can build an app or site around Twitter data, using free and open APIs — but with one caveat: every nth Tweet is an ad slot owned by Twitter. Twitter sells the ads in those slots and anyone using their data is required to display them.
  • The only way to NOT show these required Twitter’s ads, is to pay Twitter for the value of the ad slots. Those who pay for the ad slots can sell their own ads in those slots, or they can choose not to show any ads at all if they wish. Either way, Twitter gets paid for the ad space.
  • To further sweeten the deal, Twitter could even offer to share revenues on their ads with apps and sites that carry them: Millions of apps and sites would suddenly be in business with Twitter.

The Freemium model is a Darwinian approach to evolving product-market fit for every opportunity around Twitter’s data, and growing a huge ad business in the process.

The Freemium model could make Twitter just as central to the era of the Stream, as Google was for the era of the Web. This is a much bigger play than trying to become a destination.

There are far too many niche uses and applications of Twitter data for Twitter (or anyone) to build and monetize by themselves. No single interface or app could possibly achieve product-market fit for all these disparate opportunities.

The long-tail of opportunities is worth at least as much, or more, than the head of the tail. So let the ecosystem fill out the long-tail of opportunity, and catalyze it with an open monetization model — just like Google did for the Web.

As the saying goes, “Innovation happens elsewhere” — so let thousands of developers and millions of webmasters figure out how to drive attention and engagement to Twitter, for specific use-cases and audiences — all at no cost to Twitter.

It’s Time for Twitter to Return to its Roost

Being the world’s open public API for short messages is what caused Twitter to grow in the first place, and it was working amazingly well until Twitter’s leadership decided to abandon that direction in favor of a destination strategy.

Being open and integrated into everything is a much bigger play than trying to be a closed destination that tries to be all things to all people.

Twitter was once doing this very well and they can do it again, if someone in upper management simply realizes the value of this approach.

Shutting down millions of endpoints and a rabidly supportive and thriving ecosystem, instead of monetizing them, was a bad move. No wonder growth and engagement have stagnated ever since.

The solution to Twitter’s problems is to go back to their original DNA: a more open strategy: If it ain’t broke don’t fix it!

Twitter should not try to be AOL — a closed, private portal.

Twitter should be Twitter – the world’s open, public network — the pulse of the planet!

Stop thinking about Twitter as a destination, and instead think of it as a network.

Twitter’s future is really its past– If only Twitter’s new leadership can see this clearly.

It’s time for Twitter to return to its roost!


See Also

Read my previous posts on Twitter’s Strategy:

Why Twitter’s Engagement has Fallen

Is Twitter’s Business Model Going to Work?

Twitter is No Longer a Village

The Twitter API Insanity

Why Twitter’s API Strategy Must Change

How Twitter Can Save $50 Million, Forget Tweetdeck and Go Freemium on its API