On Thursday, Twitter announced--via Tweet, naturally--that it had filed its registration papers with the SEC to have a confidential initial public offering. It’s been a busy time for the company. In Twitter's preparation for the public markets, CEO Dick Costolo and his team are in an all-out sprint to remedy anything about the startup that might signal it’s not ready to be a grown-up company. Twitter, which has an escalating, intense rivalry with Facebook, is determined not to repeat the mistakes its nemesis made in its IPO last year, mistakes it’s only now recovering from. For starters, Costolo won’t be wearing a hoodie to an investors’ roadshow. And he won’t leave the company vulnerable to months of criticism about an undercooked strategy.
Recent reports have indicated that Twitter is nervous about the relative size of its overall user base (550 million, or half that of Facebook) and its relatively high “churn rate,” business-speak for how many users drop off the service during a given period of time. Unlike revenue, which is growing sufficiently to have earned private but approving nods from Twitter insiders, board and investors, there are important issues relating to its product, along with shoring up proof that its revenue model works, that Costolo needs to resolve before everyone gets a look at its S-1 document.
Fast Company has spent the last few months reporting a feature on Twitter’s transformation from an earnest yet dysfunctional startup into a formidable company. Look for it in our November 2013 issue. But for now, here are five things to look for in the months ahead as Twitter prepares to be a publicly traded stock:
The task of making Twitter easier for non-techies to flock to and enjoy without a crash course in social media training remains a company-wide priority. “Product is our most scarce resource,” says Chloe Sladden, Twitter’s VP of media. “It’s been important to Dick for a long time to crack that code, that the user experience on Twitter is delivering everything that we say that it should. That will make everything else go.”
Right now, the team concedes that you currently have to be a bit of an expert user to appreciate Twitter. “We’re not delivering the product as we should,” admits COO Ali Rowghani, acknowledging that Twitter can be an alien (and alienating) experience for first-time users. The simple things that power users love like hashtags, @replies, and homebrewed jargon, such as still inserting “RT” before someone else’s tweet instead of hitting the retweet button, are cryptic and techie. The noble goal: Make it so that a regular person can join Twitter and have a good time right off the bat. “So we are thinking about that now,” Rowghani says.
Conversations, which launched in late August, is just the first of many modifications to Twitter’s product that is designed to achieve this goal. It breaks what had been an uninterrupted flow of reverse chronological posts, connecting a series of tweets where one person is replying to another even if the conversation took place over an extended time period. And most notably, it lets anyone who follows even one of those people to be able to follow along.
In late August, Twitter acquired a social-media analytics company called Trendrr. In addition to helping the company corner the market on data related to social activity while watching TV, a much cherished cornerstone of its revenue model, it will help Twitter do a better job steering tweeters to have come to the site to find someone to talk about Olivia Pope’s wardrobe (#Scandal) or laugh off the next #Sharknado, more quickly find the conversations and content that would make the experience more social, interactive and fun. Earlier this year Trendrr released a product called Curatorr, which lets brands, media companies, and advertisers offer immediately curated twitter streams which can be embedded on websites, tablets, and television. Imagine tuning in to the Super Bowl and Twitter has already put together rosters of athletes, commentators, comedians, and celebrity fans to watch the game with. “This is all about making it easier for people to find a conversation they want to watch or join,” Sladden says.
Twitter encourages, nay, requires users to watch live TV if they want to follow the fan and celebrity commentary around a show. This, of course, runs counter to the larger trend of timeshifting, binge-watching, and Netflix, and appears to be working. At present, Twitter executives and advisors have waved off Netflix and its practice of releasing all episodes of a season series at once because it destroys social viewing. Before long, don’t be surprised when Twitter uses that Curatorr product to customize Twitter feeds that can be cued to roll along with watching a timeshifted show or one on Netflix.
In August, Twitter made two moves that connected its advertising to commerce. The one that got all the attention was hiring ex-Ticketmaster CEO Nathan Hubbard as its new head of commerce. His mandate is to make Twitter more friendly to retailers. Conventional wisdom says to expect super special promoted tweets offering deals based on your location, your activity, and yes, maybe even what you’re watching on TV. Tweet about what you ate for breakfast and get promoted ads for orange juice or a grocery-store coupon for bacon. This, of course, would make Twitter no different from Facebook, Yelp, Groupon, Foursquare, and many other tech companies pursuing that dream of location-based commerce. Costolo, Rowghani, and their peers are obsessed with finding ways for Twitter’s product to be distinctive from its rivals, so expect something more when it does turn on commerce. One possibility: Adding more and more power to its multimedia “Cards” (the thing that hosts a photo or an article when you expand a tweet). Get a promoted tweet from Ford and start to configure your car on Twitter before being routed to a dealer.
Much more quietly, Twitter also made a deal with Datalogix, an expert in measuring how online ads translate to real-world sales. Twitter now claims that it can quantify the impact of promoted tweets on sales. An early study indicated that users who engaged with a Twitter ad were 12% more likely to buy a consumer-packaged good such as cookies or crackers. Even people who just saw the ad were 2% more likely to buy. Twitter is also working the media-buying giant Starcom Mediavest to help clients such as Coca-Cola and Walmart to make real-time ad-buying decisions on the service.
While Twitter continues to fine tune the here and now, they are also looking ahead. “Global is already happening for us,” says Glenn Brown, who runs its still new Amplify product, which allows broadcasters to run in-Tweet video clips like instant replays or trailers, kicked off by a short advertisement. He points to new Amplify personnel in the UK, Latin America, and a new program in Japan matching an all-star baseball game with TV Asahi and Mazda. Sladden is also looking to take over the world. “We have people in India, Europe, and Latin America, studying the media landscape,” she says. Entertainment and sports have been dominant in building out Twitter’s business, but Sladden can now apply those lessons and the products they helped create while overseeing Twitter’s news, politics, and non-profit content.
[Image Mash: Joel Arbaje | Williams and Rowghani image: Joi Ito on Flickr]