This week, Fortune highlights “trouble” at Twitter.The story touches on Twitter’s lack of revenues, its management discord, its relatively small user-base, and its refusal to accept huge multi-billion dollar offers from the likes of Google and Facebook.
The truth about these troubles is that the company, operating under new CEO and a re-constituted board since last fall, knows it has them, and is re-organising the entire company around fixing them.
Re-organising might actually be the wrong word. organising – as in, for the first time – might be better.
The way we hear it is that Twitter, originally a project at another startup, later a startup with four cofounders, later still a media sensation with three CEOs in three years – has never actually been organised into a “real” company.
Twitter is hitting the reset button.
With that in mind, here’s what you need to know about…
Twitter’s board. We keep hearing that there is a schism on Twitter’s board. It sounds like a battle between the old guard and the new. Specifically, sources chatty with Twitter board members say that the company’s original venture capitalists, Fred Wilson of Union Square Ventures and Bijan Sabet of Spark Capital, are being increasingly isolated – edged out, even. Why? People speculate that Jack Dorsey’s return to Twitter has something to do with it. Remember, Jack was Twitter’s first CEO before Wilson pushed then Twitter chairman Ev Williams to push Dorsey out. (Long blamed for this coup, Williams says “the VCs asked me to do it” in the Fortune story.)
Twitter’s product. It is a firmly held belief inside Twitter’s new regime that its product is too hard to use and far too geared toward people who want to write tweets instead of people who want to read them. The view at the company is that Twitter’s product has never gotten the kind of vigorous attention and management a mainstream, intended-for-consumers Web product deserves. How hard is Twitter to use? We caught one of Twitter’s new product bosses, Satya Patel, misusing its the @reply functionality and going well over 140 characters.
Twitter’s offers. As much as Twitter’s new management wants to reset the company and build something independent and huge for the long, there is simply no way Twitter’s board would have rejected a $10 billion offer from Google last, as Fortune reports the company to have done. The truth is, Twitter never saw any such offer. Maybe one Google executive threw out the number in a casual conversation. The same goes for Facebook’s $2 billion “offer,” which was much too small of a bid to buy Twitter these days, anyway. We’re surprised Fortune didn’t more carefully couch its reporting on these offers.
Twitter’s size. Twitter tells the public it has 200 million registered users. We took a hard look at Twitter’s API and came away pretty sure that they have less than 20 million “active” users. That’s big, but not huge. The good news is that Twitter isn’t buying its own hype. The people running the place know they’ve built a service that is recognised to exist in the mainstream, but not used by the mainstream. This is the main reason they re-hired Jack Dorsey. To make the product easier to use and more friendly to people who want to consume media instead of create it.
Twitter’s ads. Twitter wants to build the same kind of self-serve advertising platform that made Google and Facebook big money makers. Despite all the previous announcements, Twitter is not sure what that platform, or the ads it will serve, will look like. Also, Twitter probably needs more users before it can really make lots of money. People used to complain about Facebook ads, but then it suddenly had 600 million people going to the site every day. Scale solves a lot of problems.
Twitter’s employees. Twitter had a couple dozen employees about two years ago. Now it has around 400 of them. Many of them were hired under Twitter CEO Evan Williams who is thought to be better at collecting brilliant, creative minds, than organised big company-builders. Expect to see turnover among the rank and file.
Earlier this week, we reported the story of Noah Glass – Twitter’s forgotten cofounder. At the end of a long interview, we asked Glass what he thought of Twitter now.
He told us, “It needs someone who’s not just mesmerized by its sparkliness, but can see it as a product. Who can look at how people are actually using it and how people want to use it.”
The good news for Glass and everyone else invested in Twitter’s success is that Twitter’s new-ish CEO and Twitter’s new board are looking this thing they’re now running with dry eyes – and they’re reaching for that big red RESET button right over there.
Note: We reached out to Twitter PR rep Matt Graves for this story. He declined to comment. So did Fred Wilson and Bijan Sabet.