The Prof G Pod with Scott Galloway
No Mercy / No Malice: Threadzilla
Sat Jul 15 2023Description
Meta's threads disrupts the social media landscape while Twitter faces challenges with safety and moderation. Threads, similar to Twitter, struggles with balancing openness and generating revenue. Government scrutiny intensifies as Meta gains market power.
Insights
Corporate Disruption
Meta's threads registered 110 million users in less than a week, causing the most violent corporate disruption in platform history.
Impactful Business Decision
Elon Musk's reduction of Twitter's workforce by 80% is considered the most impactful business decision of the year.
Cost Cutting vs Revenue Increase
A firm with a 20% operating margin can achieve a similar increase in value by cutting costs $1 billion or increasing revenue by $5 billion.
Twitter's Challenges
Twitter faces issues with trolls, bots, and inappropriate content, impacting its user experience.
Unfair Employee Treatment
Elon Musk fired people without valid reasons, refusing to pay severance and vendors.
Revenue Decline
The decline in Twitter's revenue is correlated to its reduction in workforce but not solely caused by it.
Disruption Factors
Disruption is driven by stasis and the incompetence of incumbents, rather than just innovation or excellence.
Threads' Success
Threads' early success is attributed to dysfunction at Twitter and Meta's monopoly footprint, rather than its own product innovation.
Market Dominance
Existing social media networks with market dominance are impervious to startups.
Challenges Faced by Twitter and Threads
Twitter's new CEO faces difficulties selling ads on a platform lacking safety and moderation teams. Threads, similar to Twitter, struggles with balancing openness, diversity, decency, and revenue generation.
Chapters
Meta's Threads and Twitter's Disruption
00:01 - 09:09
- Meta's threads registered 110 million users in less than a week, the most violent corporate disruption in platform history.
- Elon Musk's reduction of Twitter's workforce by 80% is the most impactful business decision of the year.
- A firm with a 20% operating margin can see as big an increase in value by cutting costs $1 billion as it can by increasing revenue by $5 billion.
- Twitter has held up under various demands but faces issues with trolls, bots, and inappropriate content.
- Elon Musk fired people for arbitrary reasons or no reason at all, refusing to pay severance and vendors.
- The decline in Twitter's revenue is correlated to its reduction in workforce but not caused by it.
- Disruption is driven by stasis and the incompetence of incumbents, not necessarily innovation or excellence.
- Threads' early success is more a result of dysfunction at Twitter and Meta's monopoly footprint than its own product innovation.
- Market dominance is its own defense, making existing social media networks impervious to startups.
Challenges Faced by Twitter and Threads
08:40 - 12:31
- The new CEO of Twitter, Ms. Yacarino, is facing challenges with selling ads on a platform that lacks safety and moderation teams.
- Twitter had its largest usage day since February, indicating its continued popularity.
- Threads, a platform similar to Twitter, faces similar challenges in balancing openness and diversity with standards of decency while generating revenue.
- MySpace and Friendster were once popular social media platforms until Facebook surpassed them in user count.
- Meta has an opportunity to establish itself as a new platform that takes content moderation and misinformation seriously.
- Government scrutiny will be intense if Meta gains significant market power in another segment of the social industry.
- Threads hasn't launched in the EU due to regulatory issues with Instagram and Threads coupling.
- The FTC and DOJ pose a threat to Threads as they scrutinize Meta's ownership of the platform.
- Elon Musk challenged Mark Zuckerberg to a trial by combat, but so far Zuckerberg seems to have the upper hand.