Who Killed Twitter 1.0?
Disclaimer: this post is a (mostly bad) opinion and should be read as is.
Twitter 1.0, the Twitter we know from 2006 to 2022 is dead since Musk acquired the company. Many previous users complain that Musk is responsible for the fall of Twitter. And some previous employees went to the press to declare that Musk was the person who burned everything down. Is that true?
Musk did not kill Twitter 1.0. Twitter did it to itself. If Twitter was so strong and if the leadership had control of the company, a takeover would not have been possible. Zuckerberg famously said that Twitter was “a clown car that Fell into a gold mine”: data and facts showed he was right.
Twitter leadership failed to build and grow a tech company when every other successful tech company else saw their value multiplied by 3 or 5 times. Twitter mismanagement, weak culture and poor results made the company vulnerable to a hostile acquisition.
Poor Company Results
Below is the price of the Twitter stock from its IPO (2013) to its sale to Musk (November 2022). In 8 years of operating a tech company, the stock stayed mostly flat. In other words, Twitter leadership team failed to create value and grow the value of the company.
If you compare Twitter with other tech stocks like META, Alphabet/Google or Amazon, it’s clear that Twitter leadership failed to build a profitable business. All strong performing tech companies in the same period saw their value increase by 300% to 500%.
Twitter was able to grow a social network but failed to build a business. The company performed poorly on the market and became vulnerable to a hostile takeover.
Fun fact: Disney was planning to acquire Twitter in 2017. The deal was almost done when Bob Iger (Disney CEO) decided to pull the plug after seeing the potential risk of user-generated content.
Weak Management and Culture
Even if the company value did not increase, the management continued to spend on hiring like a drunken sailor without creating business value. In 3 years (between 2018 to 2021), Twitter doubled its workforce while it did not add any significant features to its product.
The tech culture became weak. Twitter was once a tech leader in the early 2010 with major investments and contributions in innovative technology (for example in Apache Aurora/Mesos or Scala ecosystem). But in the late 2010s, Twitter was just a follower or whatever Google or Meta were doing.
Management was weak, afraid to take any risk and always played it safe. On the tech side, engineers were promoted from intern to staff in just a few years by playing the right politics. And many engineers who performed poorly were being promoted to manager when they should have been let go. This sets the wrong incentive: strong performers leave and find better opportunities (in companies with a strong stock), while poor performers stay because they want to stay in their cushy jobs (and, let’s be honest, a fat paycheck at the end of the month).
The numbers are clear: the company had a business problem (not making enough $$$) and a culture problem (too many people with the wrong incentives). With the right culture and incentives, this would probably not have happened.
No Captain in the Cockpit
Twitter leadership always took decisions that minimized downsides instead of taking bold bets with potential strong upsides.
Every single decision made was the most consensual one to avoid making waves. Poor performers were kept and promoted, and decisions were not based on improving the bottom line but to avoid conflict. One good example is Twitter infrastructure, once on-premise, started to go to one cloud provider and ultimately started to go to another one to please some executives. Quick, the Twitter infrastructure (something supposed to store messages with 280 characters) became a giant monster with its datacenters and multiple cloud providers for different purposes. It was so complex that nobody understood how it worked.
It’s also no secret that some people at the company were driven by a political agenda, and the leadership was either complacent or totally blind to it. The interview of Jack, Vijaya Gadde and Tim Pool is a good example of how the leadership was biased or uninformed of what was going on at the company. During this podcast, Jack and Vijaya said they are not aware of many issues on the platform. The more recent hearings with Vijaya and Yoel Roth were, unfortunately, equally embarrassing. Twitter was politically biased and was closer to being like CNN than a “public town square”. It would have not been a problem if the company had been transparent and clear about it. Media such as CNN or Fox News are clear about their political leanings. Twitter should not have engaged in the culture wars ; it should have focused on what mattered: building a profitable business.
During his tenure as Twitter CEO, Jack was also CEO of Square (which has its difficulties). Jack owned less than 3% of Twitter and had no incentive to give his full attention to growing the company. Yes, he was a good public figure for the company, but a poor leader who was unable to grow a sustainable business and take hard decisions (to his credit, it is probably hard when you do not use a laptop).
Twitter employees loved Jack. When investors tried to replace him to put a better operator (e.g., what the company most likely needed to thrive), employees supported him. The employees loved their captain, and they fail to see the direction was set on an iceberg.
Fate loves irony.
Jack was very focused on his relationships with artists and other CEOs. He was not shy to tell journalists that the best Twitter user was Elon Musk. During the last Twitter all-hand, Chrissy Teigen showed up and, in a cringe moment, declared herself the “mayor of Twitter” (that sets the bar low). Shortly after, Jack called his friend “E” to discuss how Twitter was a great product to him. Employees loved this segment.
Fate definitely loves irony.
When Jack decided to leave Twitter, he recommended Parag and the board followed the decision. Instead of appointing a CEO with good operating experience, the board decided to move forward with someone who had no other work experience before joining Twitter (for information, Parag had only internships before joining Twitter).
What could go wrong?
With no experience running a company (leave the fact it has 5,000+ employees and most were not needed), poor communication skills and constant media pressure, it is no surprise that things got off-track rapidly. And it did.
Twitter was an easy target for Musk. The problem is not Musk getting Twitter. The issue is 10+ years of constant failure from previous leadership to build value and grow a strong company. It made Twitter weak and easy to take over. Jack partially acknowledged this later in a tweet.
What is coming for Twitter 2.0?
After years of poor management and (very) slow product development, Twitter needed a reboot. Reducing the workforce by 50% to 70% was more than necessary: when you are too slow to move, it’s a good idea to cut the fat and focus on what makes you run fast. An initial cut of 50% (and cutting the right people) would have helped the company tremendously. However, it appears that Musk did not cut the fat but also the muscle and the bones, leaving Twitter unable to operate correctly (the number of outages, bugs and other glitches are the proof of this).
It’s unknown what direction the company is taking. And what the vision is. Twitter has the same issues as before. Twitter 1.0 was politically biased and censored right-wing content, but Twitter 2.0 censors according to its owner's opinion, which is finally no different. Twitter 2.0 does not seem to move faster than Twitter 1.0 and the only major change (Twitter blue) was a gimmicky release that offered no value to the end user.
Time will be difficult for Twitter. Until now, there was no viable alternative. All Twitter copies were either difficult to use (e.g., Mastodon) or full of content nobody wants (e.g., Truth social and other extreme apps). With the recent release of threads, Twitter now has a real competitor. And with a ton of experience in building social media apps and almost unlimited resources, Meta is well-positioned to become the public town square.