Will Twitter Fail?

Nov 20, 2022

There's been talks of the imment demise of Twitter due to how many employees chose severance over Elon Musk's "Twitter 2.0" ultimatum. Will Twitter fail?

How it could fail:

  • Technical risk. Twitter's technical debt substantially affects the user or advertiser experience (e.g., broken website, leaked data).
  • Execution risk. Morale evaporates. The best employees leave and Musk is unable to ship new features or maintain the old.
  • Market risk. Twitter succeeds in rewriting Twitter 2.0, functioning than ever before, but fails to become a $44B+ company (e.g., DAU increase but revenue flat).

While the discourse (on Twitter, of course) is focused around (1) technical risk and (2) execution risk, I think that (3) is the more existential risk and difficult to overcome. However, I've learned in my career to not bet against Elon. Benedict Evans puts it best – he's a bullshitter who delivers.

On technical risk,

I don't believe that Twitter will suddenly stop working. Yes, many developers who had deep knowledge of insufficiently documented services left. This makes it that much more difficult to replace services, add new features, or fix bugs. A smaller team forces Twitter to focus on the securing and optimizing the critical path (e.g., creating tweets, generating timelines, and everything else that is "core Twitter"). Tangential services might break, and some of those breaks might have an unusually large blast radius, but the core should continue to work.

On execution risk,

You can laugh at Elon for posting a "code review" that's an architectural diagram, or not understanding GraphQL's request pattern, but he generally gets it. And he's been able to execute twice before – with Tesla and SpaceX. The opportunity has attacted some of the best developers like George Hotz who see the personnel vacuum as a once-in-a-lifetime opportunity to have outsized impact. And when is that last time a company had a CEO who was such a power user of the product?

On market risk,

I think Elon will pull Twitter 2.0 off, whatever that means. Rewrite and streamline the architecture, add new features, and generally make Twitter "better" than it was before. But will it matter? Twitter has a very different business model than Tesla or SpaceX. Subscription revenue is not likely to outpace advertising revenue anytime soon. Even if you increase DAUs, will Twitter's advertising business flourish? Other platforms have advantages – richer media like photos and video (higher CPM), better data on revealed preferences (i.e., what you actually do on a platform like TikTok or Instagram), or other advantages in ads (Apple – platform, Amazon – conversion tracking, Google – data).