(#30) Threads takes on Twitter by storm; TikTok is a cash making machine; 28 questions to ask to your boss in one-on-one
Slack understood easily what it means to not have a strategy; at least, not a good one. Many SaaS companies will follow Slack...in a way or another.
With 100 million subscribers in less than a week, Threads shows that can be an alternative to Twitter. But, it will last? My opinions are below:
Strategy
Threads and ‘The cold problem’
It has been a crazy week for both Meta and Twitter. My impression is that this ‘fight’ started back 10 years ago:
“Twitter is such as mess — it’s as if they drove a clown car to a gold mine and fell in.” - Mark Zuckerberg, 2013
…fast forward on 6th of July 2023:
So, I have 14 points about what happened and here we go:
1/Text-based platforms like Twitter have a limited number of users they can address. Most of the Millenials and Gen Z prefer photos and videos. Critical lesson: the medium matters.
2/ Meta solved “the cold start problem” by using Instagram’s graph, so everyone had from the beginning who to follow and search. Re-use is better than reinventing sometimes.
3/ Many (ie. millions) joined on Threads for two reasons: (a) to see how the platform is [btw, RIP Clubhouse) and (b) to have a real chance to start from scratch their audiences.
4/ Social Media networks like Twitter tend to select the winners over time. Most of those who have followers and paid subscribers will almost never switch to other platforms. If they will switch, probably will be because posting text on two platforms is much easier than posting photo/video content.
5/ Threads looks like an app that was launched one month earlier and this was a good strategy move for three reasons: (a) Zuckerberg understood the capital mistake of Elon’s strategy regarding the limitations of viewing 600 tweets/day and (b) ongoing frustration with Twitter’s overall strategy and (c) a Saturday is the best day to launch an app, especially after additional 2 days off.
6/ Twitter’s strategy to make the app worse for those who don’t pay is the worst possible strategy. A rookie’s mistake.
7/ The social media participation: 90% never contribute, 9% interact and 1% are content creators. If half of those 1 % moves to threads then Twitter might be in danger.
8/ The top 1% of Twitter vs. the 20% of Instagram. Let’s assume that 20% of Instagram users join Threads and start posting and building audiences. Coming from a different medium (ie. photo/video) their output will probably be lower in quality than from the 1% of Twitter.
9/ Business model: Twitter uses an algorithmic timeline (since 2016) where the “For you” tab is now default but in a Social Network context. So, in “For you” most of the posts are from people you don’t follow. On the other hand, on Threads, everything you see, especially in the beginning, is user-generated content just like on TikTok. Why Twitter uses a different approach? Here is the reason:
10/ No ads in Threads feels great.
11/ Twitter should have changed its business model years ago. I propose in one of my first newsletters that the company should have asked for a specific fee/month. Now is too late to do that. What can save the app are: (1) The top 1% to remain here and (2) Twitter become indeed a Super App.
12/ The social media pie will just increase, but Twitter’s ability to grow (ie. new users) is very limited at this point. So, Meta succeeds here with the same strategy that limited the Snap threat. Copy & paste the product and deliver it to your billions of clients.
13/ Joining Threads is so easy and the network is there. Convenience still matters.
14/ In the EU the app will be available in the future (6 months?). Why? Because Meta the company doesn’t know what the Digital Market Act will bring. EU represents 10% of Meta’s users, but my estimation is that the percentage is much more for revenue. Anyway, we will start to see more and more this king of two-phase launches due to bureaucracy. The Verge, Eugene Wei, Ben Thompson
EV charging network
Mercedes is the last player to announce that will use Tesla’s charging network in North America. The move was expected and this means more cash for Tesla and, of course, a small loss in their competitive advantage. So, what’s left of Tesla’s competitive advantage? Scale, Distribution, and Software. Speaking of software, the full drive service will probably be ready this year, according to Elon. Mercedes, Autopilot
Slack
This strategy from 2016 didn’t age well. Two points here:
1/ This is not how you do your strategy
2/If you are a vertical SaaS you should rethink your business model…or somebody will force you to do it when is too late.
Twitter suits Wachtell
Elon is a little bit upset about the $90m fee he paid to lawyers and other stuff. Matt Levine from Bloomberg has a great post on how a sale is done, and what are the steps and implications. Maybe Elon should read it too; Secondly, this example from which you can learn too. LINK
Metaverse
I realize a couple of days ago that is not even cool mentioning in presentations anymore, let alone work for it. The Nation has a piece on the lessons of this catastrophic version of the (social?) future. -$40bn later maybe META will realize this too. LINK
SaaS as a strategy
Productiv has a fascinating report on SaaS: the average (US company) department uses 87 SaaS apps. At some point, Microsoft will come after most of them. Most of the apps don’t have a strategy. LINK
Burger King revamped its logo
Well, this might transmit the feeling of nostalgia and retro, but it can’t replace its strategy. As a food chain in the USA, the company should focus on: outdated restaurants and complex menus eventually leading to slow operations (=losing money). LINK
TikTok
The company just surpassed $1bn in consumer spending in the last quarter, making it the only non-gaming app to be in Top 1.0. Now, you should expect this kind of innovation to come from META (facebook, instagram), not from TikTok. Hopefully, META will deploy this kind of strategy to its products (=billions of users).
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Artificial Intelligence
Somebody generated the Heidi movie with AI and it looks creepy. LINK
You can use AI in your work, but that part won’t count for recognition. Here is a piece about winning a Grammy. LINK
EVs
Axios reports that electric car inventory grows across US dealerships. So, I have 4 comments:
1/ They will start pretty fast offering (large) discounts
2/ What is the unique selling proposition for each automaker?
3/ Can they be as cool as Tesla?
4/ Hitting ‘Early adopters’ is do-able, but gaining the entire category will be extremely difficult for most automakers. LINK
Open AI
The company has a blog post on how they will deal the artificial super-intelligence. Complicated stuff and I doubt it will work it. LINK
Data
EVs again
1/ Mercedes revealed they sold 56,300 EVs in Q2 (+123% YoY)
2/ Now, fully electric vehicles now account for 11% of their overall sales year-to-date.
3/ Mercedes has the capabilities (ie. money) to transition to electric vehicles, but other European manufacturers do not so much. Xpeng estimates that only 10 automotive companies can survive this transition. (Dacia is not one of them)
Deloitte 2023 Digital media trends. Two words: Immerse and Connected. LINK
House prices and rents in Europe
When comparing Q1 2023 with 2010, EU house prices increased most in:
🇪🇪Estonia (+200%)
🇭🇺Hungary (+180%)
Largest decreases:
🇬🇷Greece (-14%)
🇮🇹 Italy (-9%)
For rents, highest increases:
🇪🇪Estonia (+212%)
Only decrease in 🇬🇷Greece (-22%)
Hint! Work permits resolve these crises very fast, but not all countries want to adopt this strategy.
China’s youth unemployment
How can you aspire to be the first world power when your youth is suffering? I guess some people are manipulating some data (ie. economic, social, etc)
GDP projections
Goldman Sachs sees China and India as the two most important economies by 2075. I have seen this movie with China since 2014 overtaking the USA and still not going to happen for at least 10 more years or never (?) so I’m skeptical about this projection. LINK
India
This century might be India’s rise as the no 1 country in terms of GDP. India is now the #1 emerging market to invest in, according to 85 sovereign wealth funds and 57 central banks representing $21T in assets. LINK
5 euro* per month for very good internet speed? Yes, please. (* in Romania)
Outside Interest
In Uganda, half the population is under the age of 15. LINK
BlackRock files for bitcoin ETF. LINK
Chupa Chups logo was designed by…Salvador Dali. LINK
Havard Business Review: 28 Questions to Ask Your Boss in Your One-on-One. LINK
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Excellent points about Threads 🥂
"6/ Twitter’s strategy to make the app worse for those who don’t pay is the worst possible strategy. A rookie’s mistake." Amen, especially in a platform where the views and reactions of the 99% keep the 1% engaged.
”At some point, Microsoft will come after most of them. !!!Most of the apps don’t have a strategy!!!” So true. Using deduction, this tells me that most VCs don't know/practice much strategy. Prove me wrong 😄