The Social Media Apps Investors Are Watching as Twitter Writhes
It’s been just over a week since Elon Musk assumed control of Twitter.
During that time, he’s fired the social media giant’s C-Suite, proposed laying off half the staff and suggested an idea for monetizing the verification system on Twitter with an $8 monthly fee for Twitter Blue.
Not surprisingly, Musk’s manic approach to change has some venture capitalists keeping a close eye on competing apps.
Roy Bahat, head of Bloomberg Beta, said he saw potential in a company called Planetary.Social, which Bloomberg Beta recently backed.
Planetary.Social promises to give users more transparency by letting them view and choose the algorithms that control their feeds, something most networks don’t allow. The app was founded by Jack Dorsey’s former boss and aims to be an open-source competitor to Twitter, even as it competes with Dorsey’s very similar product called BlueSky, announced in February.
Then there’s other newer platforms gaining traction, like BeReal, a French social app that launched in 2020. BeReal pings every user at a different time each day to alert them to capture a photo within two minutes regardless of what they’re doing, with the goal of showing a more authentic picture of people’s lives on social media. A similar app is Somewhere Good, which builds “worlds” for people to communicate in real-time with audio replies to specific question prompts.
Kimberly Nixon, managing partner at L.A.-based Open Venture Capital, said she’s looking at newcomers to “see how these teams are evolving the idea of shared experiences and community building in digital spaces.” Nixon said she’s keeping a close eye on both BeReal and Somewhere Good. Mastodon, a decentralized microblogging app, was also mentioned by a number of VCs.
Nixon told dot.LA she believed that for all Musk’s focus on tweaking features, the core value in Twitter lies in how it connects users.
“The format is forgiving and encourages rapid and constant updates,” she said. “But what makes or breaks Twitter is community."
Which is why, Nixon added, “any new platform that is going to compete for users' and investors' attention will likely need to be dually focused on creating high levels of community engagement and creating a set of tools that promote successful interactions.”
Tony Silva, a Los Angeles-based investor, noted Twitter users usually skew older, and said appeasing that demographic will be key to Twitter’s ability to succeed if it raises paywalls.
Silva said he thought any viable competitor to Twitter will have to focus more on “content creation than social-personal relationships,” and added that leading apps – including TikTok – draw in millennial users through “escapism” since they’re usually watching videos made by strangers.
Silva said both investors and users agree “it’s all about video content. Companies that give the customer unlimited amounts of information, more than their competitors, are going to win.”
But, according to Nixon, whatever platform ends up challenging Twitter could contain a mix of qualities from other competitors, like “a mash up of AngelList for funding and posting opportunities, LinkedIn for profile creation and something as prolific, but not as divisive, as Twitter for engagement.”
Ultimately though, it’s unlikely that Twitter is at risk of a major exodus of users to another app.
“I doubt that frustration with Twitter is enough of a reason for folks to go to a new network,” Bahat noted. “What makes people do something new is when they get something wildly valuable and different.”
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