As Jack Dorsey returns to Twitter’s helm, he may want to take a good look at its competitor Facebook, which managed a turnaround with a newfound product focus three years ago.
Dorsey is going to take over as Twitter’s interim CEO beginning July 1 to replace outgoing CEO Dick Costolo, whose departure was announced Thursday. Costolo’s exit came just a week after major Twitter investor Chris Sacca pinned a long op-ed about his disappointment with the company’s current products, and the potential he sees for a turnaround.
Sacca argued that Twitter had built a product for power users, and shown little ability to open up to mainstream users, or monetize those power users through major brand advertising dollars. “For most people, tweeting is scary,” he wrote, adding: “New users usually get lost in the rough before they have a chance to find any diamonds.”
Sacca went on to say some major changes to Twitter’s product to make it more approachable to mainstream audiences — and the reinstatement of Dorsey can be a first sign that the company has heard his demands. Dorsey co-founded Twitter in 2006, served as its early CEO and is seen as one of its most product-focused executives.
So what can Dorsey do to turn Twitter around? He might want to start by taking a closer look at Facebook.
The competing social network faced a similar crisis of investor confidence three, four years ago, when mobile monetization fell behind expectations just as audiences were transitioning from the desktop to mobile devices. Facebook didn’t try to combat this trend with small tweaks to its product, but took some bold bets on the future of mobile apps: The company acquired Instagram for $1 billion and went on to buy Whatsapp for a whopping $19 billion in 2014.
It also built out its own Messenger app as a separate mobile application, betting that users would in the future gravitate towards purpose-built apps, and giving up on the notion that everything had to happen in Facebook’s stream.
That bet paid off for Facebook: Whatsapp now has 800 million monthly active users. Facebook’s own Messenger is being used by 600 million users per month, and Instagram is being used by 300 million people a month. Facebook itself still attracts 1.4 billion users per month, and the company’s mobile ad revenue is skyrocketing, in part due to its multi-app strategy.
Twitter should take the same approach — and actually has begun doing so when it acquired and launched Periscope earlier this year. The live video streaming app is tied into Twitter’s platform, but delivers an independent experience — one that may ultimately appeal to more people than an endless stream of 140-character messages. The same could be true for news-centric apps or apps focused on personal media that leverage Twitter’s technology, but deliver a simpler experience more attuned to the interests of mainstream consumers.
Here’s how Chris Sacca put it: “The focus and simplicity that would come with standalone Twitter apps would be irresistible to hundreds of millions of new users and would substantially improve the experience of countless existing users all while being exceedingly easy to monetize.”
In other words: Twitter should be more like Facebook — with a razor-sharp focus on not one, but a number of key products.