Sunday, October 20, 2013

Twitter and the IPO

A few weeks ago, Twitter announced that it was going to be releasing an IPO, joining the ranks of companies like Facebook as social media companies get into the big game.

Of course, every time this happens with any of the "new media" companies, one overriding question haunts them all: How, exactly, do you plan on making money? This isn't an unimportant question; for most companies, there's a clear and valid way of measuring profitability. But with social media (and web site in general), the question has become a lot...hazier. One would think it wouldn't be much different than, say, a magazine or a television station selling advertising, but the internet is, of course, different.

Anyway, this article (looking for the "social" downside of a Twitter IPO) pins Twitter's problems on more than just a revenue model and prospects for future growth: It's that people are confused by Twitter. And that's just absurd.

First off, the article looks a lot like a scattershot attempt to take down the company, since the Facebook IPO pretty much bombed (and made juicy headlines). It's entirely possible that Twitter doesn't mind this sort of coverage, since it tempers expectations in the media as to how their IPO will go.

But the point of my post isn't necessarily the financials of it; it's just that Twitter is by far one of the easiest applications in social media to use.

Some of the objection of "Twitter quitters" I can understand. Most people are confused by the utility of it, and I can see that; if you don't have a lot of friends that also use Twitter, following random celebrities probably isn't going to be much more interesting than just to doing it at all. So there may be a little bit of education: following news sites, weather, local governments, etc can be significantly more useful. If you set things up right, Twitter can be at extraordinarily effective "news feed" for whatever interests you may have.You do have to wade through that bad stuff to get to the good, and it's not hard to see how someone could get frustrated.

However, some of the other objections people have seem...well, silly. It takes about two seconds to figure out how hashtags work, and being confused by shortened web links seems silly. Even not understanding acronyms can be quickly and easily fixed with minimal effort. New rules with photos and videos make things a little easier to manage as well.

I suspect a lot of these dissatisfied users are those sort of people who type search items into the web address bar. Twitter isn't ever going to capture those users.

The fact is, Twitter has more or less gone out of its way to make the product as useful as possible with a minimal amount of complication. Following and getting followers is not much different than Facebook; composing tweets is just like composing a text message; and while there are a few different functions that require a little explanation (retweeting, conversations, favorites) none are required to find it useful.

So, in my mind, articles like this get it backwards. The problem with Twitter isn't that it's complicated or difficult to understand; it's that people need to find a way to make it useful so it becomes worth it to put the minimal effort into it to be able to figure it out. It might take five minutes to teach someone 90% of all there is to know about Twitter, and the rest of it can be learned as needed.

I'm certain there's a certain level of tech-savviness required for using Twitter (such as knowing what web links are), but that's not necessarily a problem unique to Twitter. In the end, of course, the IPO will be a success if people think it has a profitable business model and has the potential for needed growth; this is IPO 101. And getting new users is a valid assessment point, which the above is a part of, so it's not something that can entirely be ignored. It's just the focus should be on presenting its utility rather than streamlining its usability, since it's already pretty much as easy as possible. You guys will have to let me know how it goes, because sadly I'm not rich enough to figure out firsthand.

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