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Why Meta launched Threads to take on Twitter
A deeper look into the backstory & the product strategy they are trying to hatch.
Hey BPL fam,
It’s all over LinkedIn, the news and on TV.
Meta launched what many are terming as the “Twitter” killer - their own micro-blogging platform.
While this isn’t Meta’s first rodeo in attempting to clone a social network, the hype for Threads is astronomical, particularly because of 100 million users joining the fold in 5 days. Twitter might need to pay attention.
In this edition of BPL, we’ll unpack the story and discuss the following:
What is Threads?
How does it compare to Twitter as a product?
Why is Meta launching Threads? The background story.
Why enter the micro-blogging space?
What product strategy will Meta counter Twitter with?
How is Threads ensuring growth?
Where could Threads fail?
What is Threads?
In short, Threads is a text-based microblogging app that will rival Twitter as the virtual town square. Users simply log in via Instagram, port their contacts and get to interact with an all-too-familiar feed experience.
The app is certainly intuitive although still limited. People certainly aren’t confused about what it’s for. And within just a few days, it has garnered over 90 million posts from more than 70 million users.
How does Threads compare to Twitter as a product?
Threads is not shy to show off stark similarities to Twitter. But, at the moment, it lacks a lot of the features Twitter boasts. Some perceive this as purposeful minimalism. Others take it as an inferior product.
While Threads does the basics right (posts, replies, sleek interface), it still has a few things to think about.
Lack of Onboarding.
It’s surprising to see the onboarding sequence had poor messaging and makes very little effort to collect preferences to personalize the experience.
For instance, the ”How Threads Works” screen doesn’t tell you anything about the value proposition. All I could glean is that it’s an Instagram product, it’ll be a part of a movement called Fediverse (most people don’t know what that is) and some comfort notes on privacy.
I’d say it’s the most underwhelming initiation screen I’ve seen for a while.
Then, it’s off to the races to get you to port your Instagram contacts:
While sites like Quora collect interests to personalize content, Threads takes the user straight to the feed. It seems like lower friction but the lack of relevance on the feed can be annoying.
It’s really hard to find content that you’re looking for through text-based queries. There’s no proper search facility.
There is no mechanism to group posts by a topic which makes it hard to find interesting stuff or catch up on a trend.
No recommendations engine. I don’t have an easy way to search for product marketing, tech or engineering creators. I had to fish them out manually.
Mix reviews on feed order.
The feed is ordered by the algorithm based on what you’re most likely to interact with. Now, some folks are loving this as it helps prioritize content relevancy BUT for others, the absence of chronology is off-putting. The jury is till out on this area.
Limited to Instagram users.
While this may not restrict their top-of-funnel that much (Insta has nearly 2 billion users), a faction of users might not want to tie their accounts.
Threads still isn’t available in the European Union due to privacy concerns.
Apart from this, I got stuck with a little issue on Android as I was unable to scroll down on the view pane to see what I was writing on the reply to my own thread.
I personally don’t see these product gaps as a major hindrance to adoption though.
If a significant volume of users adopt Threads, you can expect Meta's engineering team to quickly address these issues.
Oh and did I mention there are no ads? Till now that is.
Why is Meta launching Threads?
Meta's launch of Threads is strategic and multifaceted.
It's an attempt to break into the microblogging space that Twitter has long dominated.
Threads is an opportunity to exploit the current volatility surrounding Twitter.
Threads could well give them access to a secret ingredient they need for their LLMs and eventually, the Metaverse.
But some background context first.
Meta’s not being doing well lately in several dimensions.
Meta took a ginormous existential bet on the Metaverse in 2021. It was a desperate pivot to protect it’s relevancy by claiming they were going to be pioneers of the new digital future.
That promise hasn’t been realized. There doesn’t seem to be any tangible progress either.
In fact, Meta absorbed a $13 billion operating loss on Reality Labs which was supposed to power the Metaverse engine. Furthermore, the adoption of Meta Quest 2 is still not fast enough to create a “revolution”. 21 million headsets sold is still a fraction of their user base.
Moreover, Meta’s virtual-reality game, Horizon Worlds, hasn’t really set the gaming stage on fire either due to constant bugs and quality issues.
These rather bitter facts meant Meta was going to continue leaning heavily on their ad revenues.
But to make matters worse, Apple’s new privacy features (App Tracking Transparency (ATT)) abruptly halted growth in Meta’s Ad Revenues last year.
Image credit: FourWeekMBA
Meta’s vortex of gloom continued when it also lost some of it’s “employer” appeal as they had to bid farewell to over 10,000 employees in recent months due to over-hiring in 2020.
This isn’t to say Meta is going into a financial or existential crisis just yet. But in that pursuit of the Metaverse, Zuckerberg is unloading billions which does leave a strain.
Moreover, these occurrences also imply they’re losing both mindshare and market share to their competitors. No one likes a business that’s not pointing north.
Their relevancy in the market got further diluted when Generative AI’s poster child, Open AI, burst onto the scene last December.
In response, Meta rolled out their own LLM, a 65-billion parameter model called LLaMa in February 2023. Initially it was made available to researchers for academic purposes only. But after a leak in March, it effectively became “open-source”.
Zuckerberg cited one of the use cases for Generative AI will be to help marketers “generate” creatives for Facebook Ads.
But here’s the interesting part from that press release:
"There is still more research that needs to be done to address the risks of bias, toxic comments, and hallucinations in large language models. Like other models, LLaMA shares these challenges. As a foundation model, LLaMA is designed to be versatile and can be applied to many different use cases, versus a fine-tuned model that is designed for a specific task.”
Meta needed to feed the right fodder to train LLaMa effectively.
Currently, it’s trained on web-scraped data which misses out on thoughts, opinions and perspectives of people conversing behind login walls.
Assuming they had the license to train the LLM using content posted on their existing product lines, Meta would still be sorely missing a text-heavy platform to hook into:
Facebook user-generated content (UGC) is more geared towards personal connections.
Instagram UGC is a visual library.
Whatsapp is an app with secure, private conversations.
They were missing a verbose forum like Quora, Reddit…or a Twitter.
In short, Meta needed a shorter-term win that could:
generate revenue fairly quickly
leverage their existing strengths to win a market
create a rich data bed of text-based intellectual thought
reclaim relevancy in the market & restore some faith in the company
Why enter the micro-blogging space?
Meta had already failed with copycat ventures like Poke (Snapchat), Lasso (TikTok) and Facebook Paper (news-reading with large pictures & videos).
But then they noticed a sense of desperation in their long-standing counterpart, Twitter - the app they were always paired with in the early 2010s as the pioneers of the social media revolution.
That leaves Twitter.
In recent times, Twitter’s user base has had mixed reviews about the platform. And after Elon’s unceremonious takeover of Twitter, many policies didn’t fly well:
refusal to change content moderation policies that initially “suppressed” parties were excited about
putting up paywalls for Twitter verifications
a feud between Substack and Twitter (which eventually ended)
daily post restrictions
With these practices in play, Twitter started falling out of favor with advertisers:
Now, Twitter’s user base touches around 400-450 million monthly active users.
That’s certainly sizable and a mammoth to displace. However, when you compare that with the 2+ billion MAU behemoth that Instagram is, it reveals the fact that there are sizable user pockets that haven’t embraced the text-based social media format.
A huge chunk of Instagram creators never made the Twitter plunge as they focused on growing audiences on Instagram.
More than 40 percent of the US public uses Instagram which will likely give Threads an upper hand in terms of core user base.
But Instagram creators primarily focus on photos/video content and may not necessarily embrace the microblogging format in droves. That requires a different skill set & a certain way with language.
Also, as per Hootsuite’s data from October 2022, 55.8% of Instagram users aged between 16 and 64 that are not in China use Twitter as well. Compared to overlaps with Facebook (82.9%) and Youtube (75.5%), this is still a small number.
So, Zuckerberg might not be entirely wrong when he went on Threads and commented the following:
“It’ll take some time, but I think there should be a public conversations app with 1 billion+ people on it. Twitter has had the opportunity to do this but hasn’t nailed it. Hopefully we will.”
“The goal is to keep it friendly as it expands. I think it’s possible and will ultimately be the key to its success. That’s one reason why Twitter never succeeded as much as I think it should have, and we want to do it differently.”
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But what product strategy is Meta hoping to counter Twitter with?
Here’s a draft version of what Meta might be aiming for with Threads based on information circulating in news publications:
Let’s delve into some strategic points here:
1. Better censorship acumen
Firstly, Threads is trying to position themselves as a non-toxic, kinder platform unlike Twitter that will not be mired with disinformation, controversial censorship & hate speech. That’s a bit ironic though given Instagram has had it’s own fair share of “free speech” challenges.
Since October of last year, a large faction of the Twitter community has been voicing concerns on how the platform has been managed. Many have been opening up to substitutes like Mastodon. Meta will hope to take advantage of that.
Interestingly, as Meta is learning the hard way, it’s easier said than done.
Those “respectful” boundaries can be very subjective. Threads has already been caught in the act with a few censored posts.
And that has led to appeals like this:
2. Winning the creator-verse
Creators find it hard to jump on a new social network to rebuild a following.
Meta partly solved this by a tight Instagram integration to allow IG creators to bootstrap their following quickly.
But apart from that, Threads will eventually support ActivityPub as well - a protocol that lets people take their followers to another service if they leave Threads or the app ever shuts down. The term "fediverse" has been coined to denote the federated universe of apps that abide by the same set of communication rules.
That de-risks investments creators make on the platform & lowers decision friction to give Threads a try.
That ownership of followers is also what helped newsletter apps like ConvertKit and Substack to grow to a sizable number.
3. Poaching the advertisers
It’s no secret that advertisers have pulled spends from Twitter in the past 12 months as seen above. Meta will eye this as a window of opportunity to nab those that left Twitter and get them to invest heavily in Threads.
An ads platform on Threads seems to be inevitable:
Threads doesn't currently display ads, but Zuckerberg said the switch to monetization would happen once the platform is running smoothly and "on a clear path to 1 billion people. — NPR
They have strong expertise in running ad networks and Threads will organically expand the surface area of eyeballs they can monetize. This will be a crucial aspect to their product strategy.
4. Turning Threads into a Platform
Threads will have to open up APIs soon to allow developers to build on top of their app layer.
For example, many businesses use scheduling platforms like Hubspot, Buffer & HootSuite to schedule their posts to social media channels. A Threads API will enable them to get listed into that ecosystem and allow other SaaS platforms (e.g. social analytics) to emerge with unique use cases.
Meta could easily monetize the API, at least in the medium run, before the data is made public. This is especially pertinent in the current context where many AI-players are looking to train their data on such a firehose of textual content. In fact, Reddit was able to hike their API prices for AI tools using them as a data source.
Twitter monetizes it’s APIs too:
In summary, Meta will benefit in the following ways:
Threads can generate revenue by adding a new ad platform
They can leverage their existing strength by fueling user acquisition via Instagram.
They get to use microblogging content to train LLaMa. (if privacy terms allow)
They get to create an API platform to hook the developer community. (and potentially monetize)
Will it succeed in execution? Time will tell.
How is Threads ensuring consistent growth?
Threads has experienced a spectacular initial adoption due to its seamless integration with Instagram which has over 2 Billion users.
By providing users with an immediate network of individuals they already follow on Instagram, Meta has lowered the entry barrier, which has undoubtedly contributed to its explosive growth.
Now, here’s why Twitter needs to legitimately concerned of this growth. Typically, copycat products are frowned upon and got a lot of heat from early adopters. However, generally the reception of Threads has been overwhelmingly positive.
Celebrities, brands and professionals are discovering the world together and connecting with a lot of optimism.
People, for the most part, are loving the “vibe” of Threads with the absence of bots & nefarious comments. That’s exactly the tone that Zuckerberg would have wanted to start with.
But user signups are the wrong metric to measure.
Everyone is impressed by the stagging 70 million user count in 2 days. That’s definitely no joke. But for me, the more impressive part is 95 million posts (and how that statistic grows over time).
Remember Google Plus?
When Google rolled out it’s response to “Facebook”, Techcrunch posted this chart and people went nuts:
Google Plus touched 10 million users in 2 weeks. The growth was meteoric.
But like Threads, they were feeding their growth from a legacy user base using their other services. Users of Google products like Gmail and Youtube got ported over with a few clicks.
By October 2013, Google was boasting a whopping 540 million monthly active users. However, the definition of “active users” was murky which inflated it wildly. For example, even people interacting with the +1 Google button were counted as active users.
It eventually died as the time on site was abysmal, a fraction of the user base would actually visit the Google Plus site and engagement tapered out heavily.
I’m aware that it would be naive to equate Google Plus with Threads. Threads has a separate app presence that users have to give consent to install & it is getting serious content contribution from a massive community.
However, the point is that we shouldn’t be disillusioned by the sign-up count which was fueled by the Instagram network. Instead, Threads success will be better indicated by tracking engagement metrics over time like:
unique content creators posting monthly
unique post counts posted monthly
median reaction volume to posts
network density (follow actions)
monthly “active” users
Where could Threads fail?
Where could Threads fall short? Some areas that they’ll have to think about:
Failing to cover the product deficit. While early adopters will be tolerant in the start, Threads will need to bring in most of the loved features people had become accustomed to on Twitter. I personally don’t think Meta will slack on this area.
They can’t stick with a me-too product. The large majority will resort to matching feature parity, so it is important to create clear unique value propositions that sets Threads apart.
This means Meta will have to add their own unique identity to Threads, either by adding a new content format or some live interaction layer (like LinkedIn Live or Twitter Circles). Embedding LLaMa as a chatbot in the experience to discover, summarize or synthesize content (threads, images and videos) might be another opportunity to explore.
Privacy issues has been a staple contention for many of Meta's products. This may deter some users from adopting Threads.
In regions with strict data privacy laws (like the EU), adoption could be a significant barrier. They’ll have to address that sooner than later.
Twitter also filed a lawsuit for copyright infringement. They claim that Meta recently brought in former Twitter employees who leaked trade secrets. It’ll be interesting to see if these allegations hold ground.
To sum up, the journey of Threads is just beginning to unfold.
It remains to be seen whether Threads can shake Twitter's established roots or not.
One thing is certain - we are in for an exciting time in the social media space. Amid the drama, we can anticipate a flurry of 'expert' advice on mastering Threads, businesses jumping on the bandwagon to position themselves as forward-thinking, and the inevitable rise of new influencers.
I’m a fan of product choices. As we saw earlier this year with Google getting a much needed wake-up call by Open AI, I feel Twitter will also be forced to react in some way. As a consumer, this is always a great sign. I felt Twitter had stopped taking big bets and innovating as it should have because of it nestling way too deep into it’s comfort zone.
Threads might just spice up the space. However, it still has to make the right plays to offset Twitter to win significant market share. Time will tell.