Twitter's Revival, Pt. 2

Packy is a self described "narrative investor" and so does not do anything remotely close to objective analysis. But his is still a nice recap of what Twitter has done recently and could continue to do.

You can catch Twitter's Revival, Pt. 1 with Kayvon Beykpour, Twitter's head of consumer product, here.

Audio Source: https://www.notboring.co/p/how-twitter-got-its-groove-back

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How Twitter Got Its Groove Back

2020 was a good year for Twitter. Since Elliott Management and Silver Lake took board seats in March, $TWTR is up 94%. As of Q3, the company had 187 million monetizable Daily Active Users (mDAU) up 29% from the previous year. For context, Facebook grew DAUs by 12% over the same period, albeit off a much higher base. 

At the start of the pandemic, Twitter decided to prioritize its revenue products, and after a slow Q2 due to the pandemic, the company roared back. Revenue grew 14% YoY to $936 million in Q3, smashing estimates. Twitter has mostly focused on brand advertising to date, but aided by the rebuild of its ad server, it has started rolling out direct response ad formats, and will launch a new Mobile Application Promotion offering this year. It’s also working on tools to let SMBs better self-serve ads, overhauling what has traditionally been an absolutely terrible product. 

It might be working, too. Last night, @nongaap highlighted a few ads during the Super Bowl that seem more targeted, timely, and relevant than anything I’ve ever seen on Twitter. 

If Twitter finally gets ads right, that’s a huge tailwind, but the most exciting thing about Twitter is that it’s started making moves against the Fantasy Jack Twitter Roadmap. 

• Verification. After nearly four years of letting verification languish, shrouded in uncertainty, Twitter announced in November that it’s bringing back its verification program. It will keep its focus on organizations and influential individuals for now, and isn’t moving all the way towards verifying all real people and companies, but it’s a step in the right direction that shows it’s listening to users. 
• Subscription Products. While Twitter hasn’t launched any subscription products yet, it has publicly announced that it’s planning to, and that it’s being more thoughtful about it than the Prof. At the Oppenheimer Technology, Internet, and Communications Conference in August, CFO Ned Segal said: 

When we think about subscription, I wouldn't want you to think too narrowly about the opportunities. There could be subscription opportunities for advertisers. There could be subscription opportunities for consumers. There could be -- whether they are people who use the service a lot to create content or those who tend to be viewing content more or those who are somewhere in between. We don't feel constrained when we think about these opportunities, and I wouldn't want you to think so either.

Notice that he didn’t mention Kim Kardashian’s 69 million followers once, but he did highlight Creators. 

• Products for Creating, Sharing, and Monetizing Ideas. This is where Twitter has gotten most aggressive recently. Let’s break it out. 

In If I Ruled the Tweets, we suggested that Twitter should build or acquire products for newsletter creation, podcast consumption, and audio-only rooms, among other things. After years of soporific product development, they’re actually starting to make moves! 

In December, Twitter acquired social screen-sharing app Squad and announced the launch of Spaces, its answer to audio-chat unicorn Clubhouse. Spaces lets Twitter users host conversations directly within the app, and the Squad team will work on the product. 

In early January, Twitter acquired Breaker, a social podcasting app, to help build Spaces. Then, two weeks ago, on January 25th, Twitter acquired newsletter platform Revue. 

Combined, these moves point to a more confident Twitter, that, election behind it and Trump out of its hair, is focused on the future. It is going to build Creator-focused products and diversify its revenue streams. The pieces are starting to come together. 

Twitter’s Creator Bundle

With the launch of Twitter Spaces and the acquisition of Revue, Twitter is building a Creator ecosystem in which it keeps some of the value it creates. It’s competing with two hot, a16z-backed startups, Clubhouse and Substack, to own the conversation and the associated monetization opportunities. I think it will win the newsletter wars, which will give it a leg up in the audio wars. 

When Twitter acquired Revue, Ben Thompson wrote about the acquisition, calling it “the sm...