Twitter layoffs - lessons for FinTech

  • Twitter has been buzzing over the last couple of days with news of layoffs at, ironically, Twitter.

    Bloomberg is reporting that the company may cut up to 8% of its staff, or around 300 people. The blame is layed at the door of slow revenue growth, particularly when compared with rivals Facebook and Snapchat. Quarterly revenue in Q2 '16 was $ 602m, down on the $ 710m for Q4'15, but still representing 20% year-on-year growth. Investors can be a demanding lot.

    There is irony too in the rumours that it is the sales team that is first in line for redundancy. Why, when the single biggest issue is the lack of revenue and user growth, Twitter would target the only part of the business that has the potential to remedy the situation is a mystery.

    Either way, the company is having to slim down. There were reports earlier in the year that Salesforce and Disney were both considering bids, but the enthusiasm of both looks to have waned. This leaves the company having to find ways to put its house in order itself.

    So, what can other tech businesses take from this?

    Twitter has, since inception, based its value on the number of users. Investors have been happy to plough vast amounts of capital into supporting operating losses while global domination was pursued. Once the number of new users began to plateau, attention swiftly turned to revenue and questions started to be asked about the viability of the business model. While we should applaud the investors for giving Twitter the required runway, they can only make a return if the company is profitable or if another party sees a way to monetise the vast user base and is prepared to pay a premium for it. With the latter option seeming to fade, it has to be about the revenue - it should come as no surprise that the music is showing signs of slowing, if not stopping altogether. 

    The takeaway has to be in the dangers of relying on somebody else to work out your revenue model. Businesses should plan for independent profit and monitor progress towards it.

    Another observation lies in the product. Aside from a few algorithm changes in the background and the launch of the Moments news feed, Twitter hasn't made any significant changes to the product for a long time. Essentially, it has stood still, while other platforms like Instagram and SnapChat have launched with new features that appeal more to the new audience. When it has sought to replicate some of the features of other platforms, for example the introduction of picture posts a few years ago, it has been accused of copying and being behind the curve.

    Any business has to continually sense the market and maintain differentiation. There is limited value in a me-too business unless it is measurably better in its delivery.

    Like many tech businesses, Twitter seems more concerned with maintaining the development team, than getting out there and commercialising the operation. By taking the axe to the sales team, it shows the sort of knee-jerk reaction to sales and marketing that is seen in many businesses when costs need to be cut. By all means change the sales team if it is not performing, but don't cut off yor lifeline.

    Commercialisation might be a lot less fun than development, but ultimately, that's business.

    Twitter is a long way from being a lost cause and remains one of the greatest success stories of the Millenium. To go from a standing start in 2006 to 310 million monthly active users and 6,000 tweets being sent every second is remarkable and has defined a generation. The challenges will be solved, but the lessons available to businesses with more humble ambitions are worth taking.

Related articles

  • Read More

    SharpSpring launches visual workflow builder to enhance lead generation and sales

    SharpSpring recently announced the launch of their Visual Workflow builder. The new feature intends to make the process for creating workflows easier and brings it in line with the likes of Pardot...

  • Read More

    Why can’t we make faster business decisions?

    Malcolm Gladwell, in his book Blink, argues that the lengthy procrastination that often takes place in decision-making is ‘post self-justification’, because we actually make up our minds pretty...

  • Read More

    Marketing activity so bad it’s quite literally criminal

    A news article came out through the Bangkok Post (we found it through The Verge) last week about the arrest of three Chinese nationals. The trio had been paid over £10,000 a month to run a...

  • Read More

    Jason Dilworth joins The Marketing Eye to develop technical capability

    Financial services marketing agency, The Marketing Eye, has appointed Jason Dilworth to the new role of Technical Director in a move designed to expand and develop the company’s data-driven...

  • Read More

    A third of B2B marketers are tracking sales through social

    For an industry whose origins and continuing existence rely heavily on the accurate analysis of statistics, the insurance sector would do well to note the seismic shift taking place in modern...

  • Read More

    Repeat, Repeat, Repeat – 4 reasons to keep contacting the same prospect list

    Asking someone to buy your product or sign up to your service after only one mail-shot or email is unrealistic. We can’t expect that one email, no matter how carefully crafted, will be enough to...

  • Read More

    Promoting video content on social media

    So, your business has splashed out on a big, beautiful high quality piece of video content, you are going to want to stretch it as far as it will go, right? Then don’t do what everyone else does...

  • Read More

    Four Facebook ad campaigns you should be running to attract and retain investors

    With around one-fifth of the world’s population on Facebook, you would think generating brand awareness and leads from it would be a piece of cake. The reality is less straight forward. With a...

  • Read More

    6 quick wins when you first sign up to marketing automation

    Marketing automation systems are powerful, intelligent and the bedrock of many businesses' marketing strategies, but getting to learn and understand them takes time and dedication. Not becoming...

  • Read More

    7 characteristics of social media implementation in B2B marketing

    If you look for evidence of the potential benefits to B2B organisations of social media, you will see both lead generation, as well as brand reinforcement are being addressed to great advantage....

Take the first step

To find out more about how we can help you grow faster, please get in touch. We'd like to hear from you.  Or try our instant marketing healthcheck, it's free!

Quick Contact

Quick contact

Close

Contact us

T 01825 765617

E hello@themarketingeye.com

Our offices

Full details of our offices in London and Uckfield more

Request a call

Close