Why Twitter cannot pull the trigger on new products to take on rivals

Two years after returning as Twitter’s chief executive officer, Jack Dorsey has pulled the company back from the brink, persuading people to spend more time on the micro-blogging site and attracting more advertising. Investors ratified his efforts this week, when Twitter posted a surprise surge in revenue growth and a first-ever profit. The shares rose 12 per cent.
 
Now the question is whether Dorsey can build on the momentum and turn his company into a true rival to Facebook. Twitter badly needs to attract new users—something it failed to do this past quarter. Facebook does it in part by innovating and rolling out a steady stream of new products. But Dorsey has struggled to unleash Twitter’s creative spirit.

 
The social media company has dreamed up new product ideas aimed at broadening its appeal only to abandon them for fear of alienating users, according to current and former employees. A Facebook Groups-style product was embraced and erased; ditto for Snapchat-style filters for the Twitter and Periscope apps. For more than a year, the company has been working on a Snapchat-esque feature that makes it easier to post videos on the app, according to a person familiar with the matter. There’s a working demo, but the design hasn’t been finalised.
 

Dorsey has focused on core products, like making the timeline more “personalised and relevant” and doing a better job of matching people with their interests. He has cut deals with media partners (Bloomberg produces TicToc, a global breaking news service for Twitter’s site). In the fourth-quarter earnings call, he said Twitter would have “a much more cohesive strategy” around events, such as seeing sports scores during live games. But these mostly amount to incremental tweaks that make Twitter easier to use — not sweeping changes with the potential of attracting millions of new users.

 
A Twitter spokesman declined to comment but pointed to strong revenue growth and the first quarterly profit.
 
Dorsey’s leadership style fosters caution, according to about a dozen people who’ve worked with him. He encourages debate among his employees and waits — and waits — for a consensus emerge. As a result, ideas are often debated “ad nauseum” and fail to come to fruition. “They need leadership that can make tough decisions and keep the ball rolling,” says a former employee who left last year. “There are a lot of times when Jack will instead wring his hands and punt on a decision that needs to be made quickly.”

 
By contrast, Facebook has moved quicker and hasn’t been afraid to make drastic changes to its platform. There’s been a cost to that approach too: regular user backlashes and engagement with its newsfeed that declined 5 per cent in the last quarter.
 
Since its founding, Twitter has made a religion of listening to users. After all, they came up with some of the company’s best ideas — including the hashtag, reply and retweet. After the flow of good ideas from users stopped, Twitter was hard-pressed to come up with its own.
 
The company does give its engineers room to explore. Several years ago, Twitter instituted “Hack Week” during which employees got an opportunity to think big. The frequency of these events fluctuated from one to four times a year. Participants gather at Twitter’s San Francisco headquarters and work in teams to develop their product ideas, but only rarely are they sufficiently compelling to be taken seriously by management, according to several people who have attended.

 
There’s never been a shortage of ideas: the challenge has always been to balance what its 330 million monthly active users want, versus changes that could entice the rest of the global population to join. Debating that conundrum often means out-of-the-box ideas are shut down. It also means that the same ideas are often addressed over and over again, year after year.