Twitter announced its Q4 earnings today, and it’s clear the Twitter platform isn’t working.

The signs are obvious. Twitter has had trouble figuring out how to monetize its user base. At the same time, user growth has stagnated. At the end of last year, Instagram passed Twitter in monthly active users for the first time. So what should Twitter do? Here are four steps that Twitter CEO Dick Costolo needs to take in order for Twitter to take flight again.

1. Provide the necessary leadership to steer Twitter in a slightly new direction

It’s now or never for @DickC. He must refine Twitter’s product-market fit under public scrutiny. This is his next and biggest (last?) test. 

Investors are calling for Twitter to improve user growth and engagement on the platform. They’re not as concerned with Twitter’s business model. While platforms are where the money’s at, Twitter’s platform is not growing as it once was. One article puts it, “One suspects a billion users will be a lot tougher than a billion dollars.”

Twitter’s interaction model is severely flawed (more on that in point 2) and is preventing the company from fostering the engagement that platforms like Facebook and Instagram enjoy. Consider the following:

  • Average quarterly growth in monthly active users (MAUs) has gone from 11 percent in 2012 to 5 percent in 2014
  • 741 M inactive users, out of which 40-50 percent have tried to do something on Twitter and quit
  • 44 percent of people on Twitter have never sent a tweet, while at least 419 M users’ most recent tweet was more than a month ago
  • Only 43.4 M users tweet more than once a day

On the one hand, you have investors clamoring for a better Twitter, a Twitter that can effectively onboard new users and keep them engaged and coming back for more. These investors also want Costolo to mobilize Twitter’s installed base and get them tweeting again.

But on the other hand, you have Twitter’s 43 M core users who will resist major changes. This group will likely view any substantial departure from the Twitter heartland as blasphemous and express their discontent in 140 characters or less.

Costolo must act with a “time is of the essence” mentality. Rumors of potential CEO replacements already populate his customers’ timelines. Developing and communicating a plan for fixing the Twitter product must happen now.  

2. Fix Twitter’s interaction model

Twitter had the product-market fit to bring them to an IPO, but they don’t have the product-market fit to bring them profitability.

Twitter is a cold place. Spam overpopulates timelines and buries the good stuff. You can tweet influencers, but they’re likely to never respond because they’re inundated. You can get followed only to be unfollowed moments later, just because someone is fishing for followers.

It’s not uncommon for a user to test out Twitter, not understand the experience and then relegate themselves to being a passive observer. This is a large and growing group of users that is a thorny parasite in Twitter’s side. Many of these users will complain that they just don’t “get” Twitter. They don’t see the point.

And they’re not wrong. The platform is very specific in who it rewards. Up until recently, very little effort had been made to improve engagement and discovery on Twitter. Recent product enhancements such as Instant Timeline, While You Were Away, native video and Group DMs are all good steps, but the flawed nature of Twitter’s interaction model remains. The model only serves a small but highly active subset of all potential users. A product reorientation is required. Not a complete 180-degree shift à la Foursquare, but more of a 45-degree shift.

3. Eliminate or put on hold unnecessary distractions until core issues are addressed 

The Fabric initiative is a misguided attempt to better position Twitter for the future, but Twitter should be focused on fixing its platform.

During its Flight Conference, Twitter introduced Fabric, a suite of tools developers would use to build or improve their app. The idea is that Twitter will provide free tools and the developers will be more likely to include Twitter in their apps, thus expanding their reach into the 2 million apps out in the market. While these attempts can help expand Twitter’s reach with a critical audience, they serve more as a distraction at the moment. Expansion won’t matter if the product loses relevance and its following, a real possibility if Twitter continues on its current path.

4. Enable passive consumption of content

Scrolling through Twitter is like making it into the end zone from the one yard line. It’s not easy. It hurts.

Instagram recently cleansed itself of fake and spam accounts. Why hasn’t Twitter done the same? Well, the company is about to announce 2014 Q4 earnings, and the last thing investors want to hear is that Twitter deleted close to 10 percent of its active users because they were bots. Twitter is allowing public opinion to deter it from its mission as a company and its commitment to users.

Cleansing Instagram was the right thing to do. Instagram users go to the platform to leisurely scroll through images from people and organizations that matter to them. The more Instagram does to preserve this simple value exchange, the more trust the user will have in Instagram. 

On Twitter, the abundance of ad-like tweets from solopreneurs (the ones that followed you only to unfollow later) and automated responses from bots soil the experience. Sure you can unfollow the pesky solopreneurs but this takes away from the experience. There’s too little real interaction on Twitter, and too much clutter prevents users from casually consuming content. 

Published on: Feb 5, 2015
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