When capitalism fails: The case of Twitter, when huge isn’t enough

Published January 1, 2016

Here in a nutshell is an illustration of either capitalism’s weak point, the silliness of our current ideas of value, or — most likely — a bit of both. Twitter, you see, is apparently in trouble. Why? Because, while it has more than 300 million active users, tremendous brand recognition, free continued advertising from every network that promotes its talent’s Twitter handles — well, it’s not growing that fast anymore.

twitterusersAnd that is the problem with capitalism: If you aren’t growing, you’re failing. The company is desperately trying to come up with new ideas: Combining tweets into “moments”. Removing the 140-character limit. And who knows what’s next. Because, you see, 307 million users is a sign of failure. Not for users, mind you, but for investors. As one article put it, the company rolled out its “Moments” product “to resuscitate growth and get Twitter back on track with Wall Street.”

So here’s what’s going to happen: Because Twitter’s huge success isn’t enough, the company is going to keep adding features and changing itself to try to drive growth and make investors happy. (Again: Size doesn’t matter, growth does.) The more the company messes with its success, the more people it will drive away as it tries to become something it’s not. Growth will slow even more, and happy users will become unhappy ones. Investors will complain, the cycle will repeat, and the product will eventually fix itself into failure.

Can you imagine, say, running your own store? You make a lot of money, you take care of your family, you employ a bunch of people… but because you aren’t expanding every year you’re considered a failure? Well you are.