Twitter Business Model Canvas: overcome stalling growth

Twitter has longstanding issues causing negative network effects. It has been at the forefront of their activities to improve the health of the platform for the last few years.

1. Reducing negative network effects and enhancing positive network effects: the paradigm of growing the user base at all cost has changed finally to make place to healthy growth and getting rid of many fake and ill-intentioned accounts as well as bad behaving actors on the platform. After years of bad financial results, Twitter has been profitable for the first time in 2018 (even before the one-off tax windfalls). This should give more breathing space for working on the health of the platform
2. Engaging the users is mission-critical for any platform business. In Twitter’s case, a lot of this happens due to the content that participants share, mainly super users (which includes influencers, VIPs from various areas, etc). But it also requires to ensure that interactions don’t spiral out of control into “shouting matches” or other sorts of negative interactions
3. More recently, Twitter started partnerships with professional content creators for the purpose of user engagement
4. Innovate: new features for users and businesses including monetisation features are crucial. Twitter (like many others) uses a mix of internal innovation efforts and acquisitions. However, there is also a list of not successful innovation/acquisitions, such as Vine, Moments, Threads and potentially Periscope to name a few. Personally, I have found Snap to be more creative in their value-add monetisation features
5. Improve the app, website: while ongoing tweaks to website/app UI/UX are normal, 2018 saw the first major update in seven years to Twitter. The tech stack was completely rebuilt among other changes
6. Improve algorithms: Twitter’s timeline algorithms (in terms of what to display to users) has changed several times. It consists of several sections and allows switching between top tweets and latest tweets. And then there are a whole range of other algorithms affecting advertisements (and the interest graph that largely determines what will be displayed for each user)
7. Careful management of influencers and content on Twitter is crucial for their success (as one stark example take the attempt of a former intelligence employee to gather sufficient crowd funding to buy out Twitter in order to ban the sitting US president)
8. Marketing via organic and paid traffic across various channels. Organic growth through word-of-mouth and integration (embedding) into 3rd party webpages have played a big role in Twitter’s growth

The master resource (or asset) of any platform are its network effects. It is the resource/asset that needs to be built and nurtured. Here is how this translates into more detail.

1. Users (Tweeters):
   • Content creators: such as super-users, influencers & VIPs that attract large follower bases and create engagement (evidenced in responses, like retweets, etc)
   • Active users: 145m mDAUs (monetisable daily active users) as of Q3 ‘19

2. Content assets:
   • Content shared by users (tweets), and retweets, likes, responses, etc
   • (Categorised) Content related to #Hashtags, trends, events and the details to build users’ interest graph
   • Embedded content assets, such as videos, images, infographics, links, etc
3. The Twitter brand and associated trademarks (e.g. “Tweet”). Twitter has built a brand that may make them appear bigger than the financial results would suggest. It ranks 2nd in the iTunes News category (Jan ‘20)
4. The App, the technology / digital assets
   • The app (4.5-stars on Google Play Store, 4.6-stars on iTunes App Store)
   • The website also hosts the full feature set for users
   • The business tools are only available on the website (there is no dedicated Twitter business app)
5. Relationship to advertisers ranging from small/medium size businesses to large multinational brands. According to one stat, “65.8% of US companies with 100+ employees use Twitter for marketing”
6. Acquisitions are always a great insight into the capabilities a company wants to gain. Now, the list of Twitter’s acquisitions is long (over 50 items) and covers many different types of businesses. Let’s look at some of the bigger ones (we only know the transaction value of a subset only)

(We are looking at this from the lens of the underlying needs, how they are served and the things that affect customer relationships. There is a natural overlap with the value proposition) Undoubtedly, one of the most important aspects of Twitter’s business model are its customer relationships “We have witnessed 

• abuse, 
• harassment,
• troll armies, 
• manipulation through bots and human-coordination, 
• misinformation campaigns, 
• and increasingly divisive echo chambers,” 

We aren’t proud of how people have taken advantage of our service, or our inability to address it fast enough.” Jack Dorsey, Co-founder, CEO Twitter A pretty damning, honest and self-critical judgment. Anyone that has spent any time on this platform in the past  knows it is/was acutely true.

Relationships to users

The relationship to its users – and non-users – is one of the most important elements of their business model and the one that requires ongoing focus for the foreseeable future until it has notably improved.  The coverage of news, sports, entertainment and events is one of the biggest value propositions. But it is used for many purposes. Some of the biggest negative network effects plaguing Twitter come from the political arena which I will use as a proxy for the wider negative effects requiring attention. Platform manipulation comes in various forms:  Platform manipulation can take many forms and our rules are intended to address a wide range of prohibited behavior, including:

• commercially-motivated spam, that typically aims to drive traffic or attention from a conversation on Twitter to accounts, websites, products, services, or initiatives;
• inauthentic engagements, that attempt to make accounts or content appear more popular or active than they are; and
• coordinated activity, that attempts to artificially influence conversations through the use of multiple accounts, fake accounts, automation and/or scripting.