To understate it, Threads’ unprecedented launch success has been well documented. In the week since its launch, pundits for and against have already raced to share their prognostications, calling Threads both a potential $8B annual revenue juggernaut here to save humanity from Elon’s Twitter and the next slick, yet soul-less cloning attempt from Meta, with the ultimate promise of Google+. We think the rushed simplification and absolutism is clouding a more nuanced discussion around the app’s meteoric rise, the real purpose it can serve, and outline how this new cage match with Twitter could play out in the days ahead.
The Hot Start Problem: Inertia Without Identity
An app’s growth typically doesn’t precede its purpose, but Threads solved its cold start problem before it could establish its own value proposition. Even Adam Mosseri, Meta’s head of Instagram, acknowledged the unusual sequence of events:
They say “make it work, make it great, make it grow.” Well, we certainly did things out of order…
According to The Verge, Meta onboarded the first handful of employees to the beta on June 18 and had just 3,000 users testing the app prior to launch. During the beta, Threads appeared to make a sincere attempt to foster genuine discussion, community and a larger identity, but the exercise was cut short when Twitter’s rate limiting debacle signaled a vulnerability that proved too alluring for Mark Zuckerberg. Threads’ debut was rushed but well-timed, gathering enough inertia to drive Chief Twit Elon Musk to demand employees “ship better features faster than ever” and CEO Linda Yaccarino to highlight Twitter’s “largest usage day since February” in an attempt to counter claims of falling traffic after Threads launched.
While the launch proves Meta can still move fast and break things, the inertia came at a cost: Threads, at present, is nothing more than a home of 100M+ early adopters and looky-loos subject to vapid, fish-in-a-barrel engagement farming by enterprising brands, creators and celebrities.
Threads’ Value to Meta
Also from Adam Mosseri:
The goal isn't to replace Twitter. The goal is to create a public square for communities on Instagram that never really embraced Twitter and for communities on Twitter (and other platforms) that are interested in a less angry place for conversations, but not all of Twitter.
Let’s reset: Meta’s ultimate goal is not to create an altruistic conversational utopia, but rather to increase shareholder value. A week after launching Threads on July 6, Meta’s stock price is up 7%, outpacing the 2% bump in the S&P 500 over the same period. Now, the direct revenue upside of a public square at Meta isn’t immediately clear or compelling at face value. Threads could quickly be operationalized within Meta’s exceptionally robust ad ecosystem, but even entirely matching Twitter’s peak revenue of $5.1B in 2021 would have yielded just a 4.4% increase to Meta’s topline revenue last year of $116.61B. Perhaps Meta can monetize microblogging far better than Twitter ever could, and perhaps the microblogging TAM stretches far beyond Twitter’s peak of 373.6M users. Or, perhaps Threads also offers other benefits to Meta…
A PR Masterclass
Just a few months ago, Zuckerberg faced scrutiny over arguably wasteful levels of spending in the metaverse ($36B invested into its Reality Labs division since 2019) and pivoted into a “year of efficiency” via mass layoffs. Now, Zuck is successfully riding the wave of anti-Elon sentiment to mask not only Meta’s recent failures but larger crises in its past. Those put off by Musk’s worldview have turned a blind eye to the very company that mishandled user data in the Cambridge Analytica scandal, knowing/unknowingly swayed political elections, and helped create the same echo chambers Twitter is accused of fostering today. Seemingly with a snap of a finger, Meta has captured the rooting interest of scorned journalists, their employers and relentless jet tracking enthusiasts alike.
Pursuit of “Big Data”
There’s also something less obvious to consider: Meta’s full send into artificial intelligence and the role Threads could play in it. Meta has quickly amassed a staggering stockpile of graphics processing units (GPUs) critical for training large language models—and it’s even built a proprietary chip specifically to help advance its AI technologies. These chips were acquired and created to help Meta’s models ingest and train using massive amounts of data. Threads could potentially supply Meta with a new tranche of real-time and culturally relevant text data to accompany the wealth of visual data it’s already captured via Instagram. So, as Twitter raises its garden walls to prevent third parties from exploiting its tweets, securing direct, first-party access to conversational data certainly doesn’t hurt Meta’s larger AI endeavors.
The New Cage Match
Twitter and Threads can coexist because they are fundamentally different at their cores. The social graph of Twitter is primarily built upon topics of interest, whereas Threads and Instagram’s social graphs are built around people (close friends, mid acquaintances, weird uncles, “live, laugh, love” aunts, and the brand / creator class). This difference doubles as Twitter’s moat and could drive an increasing disparity in the volume of relevant, compelling content between the two platforms.
Meta’s promise of a more civil Twitter alternative has attracted meaningful interest, and mirroring Instagram’s social graph is a logical way to leverage a person’s IRL network to keep them more accountable. While this could help Threads users better self-censor, it could also throttle honest, open-thinking conversations and thus dilute a “town square” of depth and dynamism beyond the mundane and vanity-fueled fodder prevalent on FB and IG today.
At Twitter, Musk has doubled down on the company’s stated commitment to the “freedom of speech, not reach”. This pursuit inevitably yields the good, the bad, and the ugly—particularly with a social graph largely detached from real-life, everyday connections. Twitter can suffer from rampant toxicity and a structure that rewards trolling and instigating hot takes, but it also remains home to amplifying marginalized voices, uncensored debate and occasionally genuine conversations between strangers.
In the end, we’re interested to see how fast Threads evolves its product and community identity but remain skeptical that it can offer what the latest wave of Twitter defectors actually crave: a platform that’s not only civil, but compelling and authentic. Competition is always good, but it appears the clock is already ticking for Threads engineers to capitalize on the early inertia of interest…
Exhibit A: Google searches from July 6-12 for Threads eclipsed Twitter for a day but are already dropping precipitously.
Exhibit B: Sensor Tower data from July 5-9 shows engagement (avg time spent per user) for Twitter has held steady at 30min/day, while Threads dropped 60% from its July 6 high to ~7.5min/day.