Twitter CEO Jack Dorsey says that Twitter lacked ‘focus And discipline’ for growth
On Valentine’s Day, Twitter TWTR -2.09% cofounder and CEO Jack Dorsey broadcast on the microblogging site he cofounded that he was buying back about $7 million of company stock, adding the hashtag “LoveTwitter.”
His tweet on Tuesday was a symbolic call for confidence in a company that has been losing investors’ faith. Twitter’s stock price has more than halved over the past five years, and the company’s latest quarterly results, announced earlier this month, offered little relief, with tepid user growth and a weak first-quarter earnings outlook.
DORSEY OFFERED SOME INSIGHTS INTO THE SOURCE OF TWITTER’S USER GROWTH PROBLEM
On Wednesday, Dorsey offered some insight into the source of Twitter’s user growth problem, which has haunted the company for years. Speaking in a panel at Goldman Sachs’ annual technology conference in San Francisco, Dorsey, who is also founder and CEO of payments company Square , said two things were previously missing in Twitter’s approach to user growth: “Focus and discipline.”
Instead of prioritizing Twitter’s actual users and limiting product exploration, Twitter put too much energy into catering to people who weren’t on the service, and the company tried to be too many different things as a product.
WE SAW HUNDREDS OF USE CASED OVER THE 10 YEARS
“We saw hundreds of use cases over the 10 years, and we tried to do all of them,” Dorsey said on Wednesday. “And that just didn’t work.”
“In the past we over-indexed into the folks we don’t have, so really focusing on the customers that we do have and making Twitter better every single day for them has helped our rigor and our execution and engineering,” he added.
Dorsey noted the company has in the past lacked the sense of “ownership” needed from employees to follow through on a shared roadmap. Dorsey said the company has managed to change course through “a lot of discipline and rigor to build toward a more predictable growth model.”
“That focus and that discipline made us feel like we have earned the right to do more,” Dorsey said, a comment that could suggest the CEO wants Twitter to remain independent for the time being. “We still have a ton of iteration to do, we still have a ton of simplification to do. But we also have to take bigger steps.”
Twitter reported that user growth stabilized in its latest quarter. The number of monthly users in the fourth quarter rose 4% from the same period a year earlier to 319 million users, after year-over-year growth was stagnant at 3% for the previous three quarters. (By comparison, Facebook saw year-over-year monthly user growth of 17% in the fourth quarter, despite having about six times as many users.) And Twitter had a net loss of $167 million in its latest quarter, which widened from a year-earlier loss of $90 million in the same period. Comments this month by Twitter COO Anthony Noto suggest that loss may not shrink anytime soon. Noto said on Wednesday the company will need to rethink its revenue generating products and “de-emphasize” some.
Even though Twitter isn’t profitable, user growth appears to be a much more urgent concern among investors and analysts. On Wednesday, Dorsey echoed that sentiment.
“Our focus has been on consumer usage, because everything falls from that,” Dorsey said.