Twitter has become many things: a way for politicians to horribly embarrass themselves, a channel for brand promotion, a marketing mechanism to pay social media influencers with fake followings, a tool to vet someone's creditworthiness, and a form of news platform. Now, with the annual shareholder meeting scheduled for next Monday, Twitter is a target for an unusual takeover attempt.
Over time, Twitter has developed into a strange black box so many plug into, hoping for the Right Things to happen. Unless, that is, you were an investor, and probably one of the big up-front VCs or angels or early employee with options, in which case you'll have some sense of ownership. It might only be a tiny fraction of a percent, but you know that part of your fortunes move with those of Twitter.
But in its last reported quarter, Twitter's revenue dropped for the first time as advertisers started getting cold. That raises the question of the platform's future. Consumers have grown accustomed to being on the outside of Twitter and other Internet black boxes, taking what features they might enjoy, knowing they could be taken away. This time, some people have decided enough is enough. They're talking about a cooperative-model takeover that may not have a prayer of actually working, but is still an important example of creative thinking. Here's the quick description from the site BuyTwitter.org:
If Silicon Valley can disrupt whole industries, why not innovate with company ownership, too?
With chaotic stock prices and politics threatening Twitter, we want to save "the people's news network" as a vital public utility. That's why we propose Twitter study ways to build user loyalty and increase shareholder value, through broad-based ownership and accountability similar to a co-op.
The proposal is up for a vote at Twitter's annual shareholder meeting on Monday, May 22. The chances of getting the greater-than-50% of votes necessary are decidedly smaller than almost any tiny fraction greater than zero you can think of. This isn't going to happen, but that's not the point. The important aspect of this quixotic venture is that it has reexamined what has become an overly comfortable business model.
High tech has fallen into a rut based on some assumptions. A company will be backed by serious money from a few sources, it will rely on young talent, and it will be disruptive. But why do all these have to be true?
For example, youth isn't necessarily the font of innovation. The prime time is middle age as it turns out. Disruption is fine, but why not disrupt the all the assumptions that tag along?
The disruptive idea the #BuyTwitter movement has recognized is that big money up front expects the big pay-off. That's generally meant an IPO or a good acquisition. Those, in turn, also depend on large sources of money. But why not consider whether there are other ways to finance an exit or development?
Not to get into politics too much, but the 2016 election offered some interesting money lessons in this regard. Both major parties have assumed that they needed big sources of money to compete. But Bernie Sanders relied on smaller donations, took virtually no corporate money, and still raised more than $228 million. Small individual contributions alone brought in $135 million.
That's not enough money to buy out Twitter, with its market capitalization of almost $13 billion. And yet, if you consider that the platform has an estimated 328 million users, it could be had for $40 per person. Not that it is going to happen by any means, but it technically could.
The questioning of basic assumptions, including how ventures get funded, is important because that it can open the door to new possibilities. In Austin, Texas, when Lyft and Uber left over background check requirements, alternatives came in, including non-profit Ride Austin, Fasten that charges drivers only $1 commission per ride, or RideFare, which also takes a smaller cut of overall pay and lets drivers develop direct relationships with customers for repeat business. The alternatives reportedly had problems on the last night of SXSW, when rain drove a huge number of people to seek rides and the apps started to crash.
But, again, the important point is that innovation is possible outside of the "normal" ways of doing business. And maybe, one day, someone will find a way to do other innovative things -- like buy out Twitter and turn it into a public utility.