I was just reading about the Trouble at Twitter – how U.S. visitors were down 8% in October – on Tech Crunch. The CEO mentions that they’re hoping a “slew” (currently a couple) of new features will help revive growth on the site – such as the retweet button, lists, and geolocation features. It very well might – but it got me thinking about a peculiar competitive position they are in.
For most of the last year, Twitter has done very little innovation directly. But thanks to their open API, that doesn’t mean innovation hasn’t been happening – all kinds of new tools and applications have been constantly emerging. My question is centered around how they’re going to manage this ecosystem, as the company itself starts innovating more. There are more and more data points emerging that indicate, to me, that the line between partners and competitors is blurring.
Coming at it from one side, TechCrunch highlighted in September how StockTwits is growing up and away from Twitter, as they develop their own desktop app. To quote the article, “Yes, StockTwits is slowly breaking away from the service that inspired its name.” What should the company do if StockTwits, slowly but surely, starts to compete with them directly? On the other side, Lists are a step towards Twitter helping users sift through information directly – something TweetDeck already does (in a different, and more advanced, way). If Twitter continues to innovate on this front, what are the competitive implications?
It’s a question I constantly struggle with in our research – and it seems particularly relevant when a company is facing slowing growth (or a decline) in users, before they’ve found a business model. Could the ecosystem implode on itself? Or will they find a way to keep working with each other? What do you do if a current “partner” looks like a future competitor – and what implications does it have for prospective partners / the innovation cycle?
