PC

PC

02-11-2022

16:47

Our Twitter subscriptions plan needs work @elonmusk. I did a pricing study on 54.3k Twitter users to help you Doge Father. TLDR: - Verification should cost much less - Twitter Blue should cost much more - Twitter has a unique opportunity to 10x subscribers Thread time 🧡

@elonmusk First - let’s set the stage (with some facts that’ll be important later). Twitter has: 1. the least # of active users compared to competitors 2. one of the lowest avg rev per user at ~$10 (FB at ~$31 for reference) 3. major influence This is a really tough physics problem.

@elonmusk Why? - Twitter hasn't been able to grow active users. - Ad market CPCs are up, but the growth rate is slowing, especially with ad folks preferring other networks - Those networks are also pulling creators "This isn't tough. We'll just do a subscription!" Not so fast.

@elonmusk What's a meaningful subscription business? If we go by Street standards (going public solves some problems), then we need a path to billions in annual rev. Even *with* the ad revenue on top of it. "Everyone will want to get verified. It's fine" Let's test that assumption.

@elonmusk Not enough premium users care about verification. Here are results of a structured study looking at 20k respondents who primarily use Twitter. Relative to other features verification's just not as valuable. "We'll throw other features in!" Let's look at that.

@elonmusk Here's a willingness to pay study from 25k general users looking at major features Twitter Blue could include. Notice how Privacy, Ad limitations, and even Follower Boosting move the needle, but not by much. "PC, we need to subsidize bot reduction" Here's the problem...

@elonmusk People look at verification as clout, not a utility. Elon's changing that, which is smart - we get people to KYC themselves *and* pay for it, using it as signal, etc. But why $20 or $8 per month? Why not $10-$20 per YEAR? "We need more revenue than that?" Hear me out...

@elonmusk Let's say at $8/month we triple the number of verified accounts to 1.2M (very generous assumption). Not bad. That's $115M in annual revenue. Wait. That's bad. It's only $115M in ARR. Sure, ad quality goes up, so ad revenue goes up, but we're fighting an inertia problem...

@elonmusk Unless we drive millions of subs (doubtful given previous track record), the Street isn't going to see a path to billions in ARR. Maybe with Elon, but doubtful. So we don't get the verification volume we want for KYC and we don't get enough revenue to get us out of purgatory.

@elonmusk So let's first principles this biotch - why $8/month? No data supports this number. None. Ok, a random Twitter poll from @jason, sort of supports it, but we can do better. Do you realize how off this number is from where willingness to pay for premium twitter actually is?

@elonmusk @Jason I know @profgalloway is Professor Cold Takes, but he was right: Twitter is the iPhone of social networks. Here's a willingness to pay study from 20k users based on household income. $100 per month! "But PC, I won't get my verification volume" I got you Poppa Doge.

@elonmusk @Jason @profgalloway We can have more than one subscription. Boom. One of the most hurtful conventions in subscription pricing is "it has to be simple". Do you know how many tiers the fastest growing subscription mobile apps have (upper quartile in terms of growth)? Not 1. Not 3.

@elonmusk @Jason @profgalloway 13 or more tiers! A user never sees more than 4 in their lifetime, but they use data and engagement to determine when to flag them. We can have a cheap verification tier ($10-20 per year) and then a truly premium tier for power users ($50/month). Here's what's cool....

@elonmusk @Jason @profgalloway 500k premiums gets us $300M ARR. 5M verifications gets us $100M ARR Dem be real numbies. The $8/month plan suffers from the painful pricing problem: trying to be everything to all people. "PC...hmmm...then why not more plans?" Exactly. Here's where it gets interesting...

@elonmusk @Jason @profgalloway People gave @jason flack for talking B2B, but the Great Moderator is not wrong. Far from it. Here's the willingness to pay of just under 10k businesses who are on Twitter. $200/month! I guess this is why @DavidSacks is the Sultan of *SaaS*. "what would we put in that?"

@elonmusk @Jason @profgalloway @DavidSacks Pricing Zaddy's got ya. Let's go back to our feature analysis. Audience curation and content promotion. Permissioning. Contact integrations. Basically vanilla B2B. Lightweight @HubSpot. I guess @dharmesh was on to something. :) "How much revenue could this be?"

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh Let's say conservatively $1k/year at 300k brands - another $300M in ARR. Something should bother you... "This is a solid business line...probably improves ad business....but still not billis in sub revenue" One day you'll trust me. Let's go back to our first principles...

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh How do we get more *subscribers*? We'll get more DAUs through these changes, but not enough to *really* break out. The secret lies with @levie and @StephenKing. How do we get Cujo's dad paid? What if we had people subscribe to each other? "OMG Patreon. No." Hear me out.

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh @levie @StephenKing The problem Twitter has with creators is content was the appendage of the marketplace. - No creator tools - Content with links get suppressed Twitter put ad mommies above all else. It's very early social network thinking. @jack, @ev, and @biz didn't have much of a choice.

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh @levie @StephenKing @jack @ev @biz Modern social networks (TikTok, OF, Substack, etc) perfectly align with creators. - They get them subscribers. - They get them views - They pay them Ads are supplemental revenue. Not core. Others do this, but Twitter has two things none of these competitors have...

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh @levie @StephenKing @jack @ev @biz 1. We're already there. I'm interacting with creators where I already follow them. No clicks off. 2. Amplification. Twitter was built from the ground up for account discovery. They have a decade on the rest of the market. "I'm confused. How does this help revenue?"

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh @levie @StephenKing @jack @ev @biz More subscriptions. I can only subscribe to Twitter Blue once. But I'll subscribe to 3-5 artists and podcasts. OF has 170M people subscribing. Patreon has 6M. And they're willing to pay mucho. Here's a study on monthly willingness to pay from 10k+ fans...

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh @levie @StephenKing @jack @ev @biz Passive fans are willing to pay $5/month. Super Fans are willing to pay $15/month. "Wait. PC - didn't Twitter try this with Super Follow?" Yea, but I think they messed it up for a couple of reasons...

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh @levie @StephenKing @jack @ev @biz Creators need pricing guidance. They're *really* bad at pricing. Here's willingness to pay based on the type of creator. Very high! But, artists on Patreon only avg a list price below $3/month. OF creators are pretty good, because OF guides them. Don't ask how I know. πŸ˜‰

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh @levie @StephenKing @jack @ev @biz The other big problem is that Twitter didn't nail the UX and feature set. Here's a feature study on Super Follow. People want exclusive content, but they REALLY want the ability to get access to the creator. "So what's that mean in real dollars?"

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh @levie @StephenKing @jack @ev @biz Let's be conservative - $5/month with 25M subscriptions and Twitter gets 20%. Boom: $300M. More importantly - this is a subscription vector that *grows* much, much quicker than Twitter Blue or Twitter Business. and just like that homies....

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh @levie @StephenKing @jack @ev @biz We got a billion dollar ARR company. Moderately growing product lines: - Twitter Blue: $300M - Twitter Business: $300M - Twitter Verification: $100M Rapidly growing product line: - Twitter Super Follow: $300M Throw in a $5B ad business with lower bots and...

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh @levie @StephenKing @jack @ev @biz Doge Father gets quicker to Mars. Solves the core Twitter problems while *accelerating* enterprise value. - @a16z and the street are happy - @jason and @DavidSacks get to buy @chamath more Loro Piana - Larry supported a friend and made money Oh, and the internet truly wins.

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh @levie @StephenKing @jack @ev @biz @a16z @chamath Well. I think I'm done. @elonmusk if you want to send the PJ for me to join the war room, I'm happy to clear my schedule. I wouldn't have my career or most of my friends without Twitter. Least I could do.

@elonmusk @Jason @profgalloway @DavidSacks @HubSpot @dharmesh @levie @StephenKing @jack @ev @biz @a16z @chamath For everyone else - hope this was helpful and you learned something. Show some love to the thread



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