Twitter - the Bull Case for Creators
This newsletter has come out a bit later than typical.
The reason being I had to change my trousers several times today as the crypto market capitulated.
Fortunately, it looks to have bottomed (no pun intended) and is now reversing rather than descending into another two year bear market.
To $10K ETH and beyond? We shall see.
I finally found a name that resonates with what I'm now focused on:
Less Permission, covering the intersection of the creator economy (newsletters, podcasts, communities) and ownership economy (coins, NFTs, DAOs).
Whether decentralized or not, I believe that creators should be part-owners in platforms they contribute to which is why I own $TWTR stock...
I think Twitter is going to win the creator market
Earlier this year I joined as an adviser and Head of Growth for a UK startup called SupaPass (no longer involved). From my perspective, it's a Patreon alternative, where a creator puts their premium content behind a paywall on their own domain as well as within their own app.
It's a very well-designed product due to the efforts of a very talented web dev Shaun who works there, who built the awesome Crypto Litmus for checking the colour of the market.
Total bloodbath today!
Anyway, the issue with these SaaS tools is discoverability.
You still need to:
Build an audience
Get them to visit your website / app / page
Get them to convert
That's a lot of marketing and a lot of work.
Patreon tries to fix this with their 'Find a creator' search box but that only really work works if you've already built and audience and they heard you are on Patreon.
Substack has done a great job with Substack Reader where they have now categorized Discover so you can find newsletters based on interests.
But I think that the majority of their users are finding relevant publications due to the fact that they leverage the Twitter social graph (just like Clubhouse does) so that you can find newsletters of people you follow on Twitter (and others can find you).
But soon, Twitter will have every part that a creator needs to both build an audience and make a living from it.
It started with the acquisition of the paid newsletter service Revue, followed up by the market-stirring announcement of Super Follows and now the rollout of Spaces.
Soon Twitter will be able to bundle the following company's offers:
Substack - free and paid newsletters with Revue
Clubhouse - audio conversations with Spaces
Patreon - in-built membership / subscription platform
And all a creator will have to say is "go to my Twitter profile".
No website, no Patreon app to log into and check for updates, and no 3rd party software required.
Having said that, Patreon has done an incredible job with its app integrations such as adding and kicking people out of Discord communities and Twitter would have to offer these over time.
Paid subscriptions for users?
If the above doesn't convince creators to build on the platform, the following may convince investors to buy the stock.
Twitter is rumoured to be launching a paid subscription service for power users called Twitter Blue which Jane Manchun Wong thinks will cost $2.99:
Twitter recently reported having 199 million monetizable daily active users - if a relatively conservative 1% paid for a subscription at $2.99/m that's only ~ $70M additional annual revenue.
However, if there were to be tiered pricing (bringing in the acquisition of Scroll) and average revenue per user could get to $100, then we are looking at -$200M additional annual revenue. Based on the 2021 Q1 revenue of $1.04 billion that would be a 5% bump, mostly profit.
Furthermore, if Twitter could grow its mDAU by 50% and convert 2% at a $100 ARPU, then that's a very meaningful 15% increase in revenue.
Jason Calacanis broke down the Twitter news in a recent episode of This Week in Startups, but actually did the math on 'Twitter Pro' back in 2008. Yes 08.
When Super Follows launches, the URL I'll be dropping everywhere won't be a website, payment page or even newsletter signup.
It will be twitter.com/richardpatey, and you should follow me there if you don't already.