Threads by Instagram now has over 80 million users since its launch on July 6. This chart might need to be updated with a new #1 depending on how it goes over the next couple of hours.
Zuck is striking in Twitter’s moment of weakness
A company can go into decline in two ways:
Doing too many (wrong) things at once or not doing anything new
There have been numerous changes since Elon took over Twitter.
What went wrong?
Eugene Wei puts it across succinctly in his recent blog post:
“By pushing everyone towards paid subscriptions and kneecapping distribution for accounts who don’t pay, by switching a TikTok style algorithm, new Twitter has redrawn the once stable “borders” of Twitter’s communities.”
It alienated its existing users due to the numerous changes in its algorithm.
To make matters worse, Elon started to impose limits to how much its users can read on its platform.
Limited reading when the company relies on ad revenue and is incentivised to keep its users on its platform?
It doesn’t quite make sense.
Elon says it has to do with scraping and system manipulation, but many believe it could be a cost issue as there’s news saying that Twitter is refusing to pay its Google Cloud bills.
Zuck saw this window of opportunity and very quickly launched Threads by IG.
It wasn’t Zuck’s only brilliant move.
Creating FOMO amongst users
Getting a social network to a critical mass is the most challenging part.
You would have won more than half the battle once you had a critical mass of users and creators.
In fact, it would be very difficult to take you down once you establish a strong network effect, where every new user who enters the platform makes it more valuable.
To give you a simple example, think of the telephone. If you own the only telephone, it would be of no use. If everyone has one, and you can communicate with anyone, then it becomes a valuable network.
Threads’ clever marketing strategy is to assign a ranking to your Instagram profile as soon as you sign up.
My rank is 836,673 which means I’m the 836,673rd person on the platform.
Sharing badge numbers became popular, especially among early adopters who brag about their early use of the platform, which generated hype.
As a creator, the FOMO is even greater because you will grow slower when you join late.
When your IG followers join, Threads will ask “do you want to follow these people?”
If you haven’t yet joined Thread? The list won’t include you.
This means that you won’t be able to convert your followers from Instagram as efficiently.
The return of “Move fast and break things”
This entire launch of Thread feels like the old Facebook motto, “Move fast and break things”.
The reason why I say this is because it is extremely obvious Thread is a minimum viable product (MVP).
There’s no poll function, no bookmarking, the search function doesn’t work well, and the interface looks terrible.
It’s still too early to say if this platform will be a winner.
Zuck does have a track record of copying competitors… and winning.
Case in point: Snapchat with Stories and TikTok with Reels.
For now, they’ve certainly overcome the challenge of attracting users and creators.
Next will be to quickly roll out new functions to retain them.
LinkedIn next?
It’s unlikely Zuck will make a move to replicate LinkedIn’s network anytime soon.
But I wouldn’t say that I will be surprised if there’s another MVP on standby any time LinkedIn shows a moment of weakness.
And hey!
If you haven’t heard about it already, I’m on Threads by IG too and I’m sharing a ton of investing gems there.
>> Click here to follow me @steadycompound
See you there!
Cheers,
Thomas
[Waitlist Open] Register your interest for my new investing course. Build a portfolio of resilient businesses, master valuation and position yourself to enjoy the magic of compounding with stocks.