By Alexander Kristiansen
Creating a large userbase for a digital platform is no small task. Building a large audience requires patience and diligence. Continued support is required for a growing population, using user feedback and continues updating of services. New features entice users to stay with the platform, as it can further distinguish itself from the competition. Once you have established a large and thriving userbase, it can be considered valuable. This phenomenon is also known as network effects. One interesting case showing this is that of X (Formerly known as Twitter).
From humble beginnings in 2006, the company was founded by Jack Dorsey, Noah Glass, Biz Stone, and Evan Williams. It exploded in popularity, and by 2012 already had 200 million active users (Vanian, 2022). The company was then purchased by Elon Musk in 2022 for $44 billion. This was a very polarizing move for Twitter’s users, as Musk is known for having many controversial opinions and business practices. He promptly changed the name of the company to X (because it’s his favorite letter) and established a paid tier system with blue verification check marks. These controversies were not going unnoticed by X’s competitors, and Meta promptly aimed to take advantage of the situation. Through their already established platform of Instagram, they launched Threads. It was essentially a direct copy of X, large being text based, and having comment chains where the highest upvoted responses would appear on top. Many disenfranchised X users, among others, moved to the competitor, and Threads amassed 100 million users in 5 days (Leigh, 2023). This shattered all records, and Threads was poised to become the new big social media. However, the userbase has dropped by 82%, and now there are only 8 million daily active users (Leigh, 2023). Ultimately, X remains dominant in the segment, showing the power of network effects. Threads was not able to compete in terms of content available on the platform, which is a by-product of having a large community. This content production will only garner more and more users, further established this platforms network dominance. It will take a new platform with some serious innovation to take the throne from X.
Reference:
Leigh, D. (2023). We Asked the Experts: What Happened to Threads?. TechRound. Available from: https://techround.co.uk/news/we-asked-the-experts-what-happened-to-threads/#:~:text=However%2C%20since%20that%20explosive%20start,who%20desired%20a%20desktop%20experience.
Vanian, J (2022). Twitter is now owned by Elon Musk here’s a brief history from the app’s founding in 2006 to the present. NBC. Available from: https://www.cnbc.com/2022/10/29/a-brief-history-of-twitter-from-its-founding-in-2006-to-musk-takeover.html
