Wiser! #48: Jack Dorsey quits as Twitter CEO for the 2nd time., then renames Square to Block; Plus Instagram harm to teen girls, shopping bots, TikTok and more...
What you can expect...
In this issue of Wiser!;
- Jack Dorsey quits as CEO of Twitter for the 2nd time,
- Then renames Square as Block,
- There is growing evidence that shows the harmful impact of Instagram on teenage girls,
- TikTok release new features for Social Commerce,
- The rise of Shopping Bots,
- Is SpaceX bankrupt?
- AI spending approaches $100 billion
Jack Dorsey steps down as CEO of Twitter
Back Story: Twitter founder Jack Dorsey announced his resignation this week from the social media platform he launched in 2006.
This was Dorsey's 2nd stint as CEO having been ousted from this role in 2008 only to return to the helm in 2015. The 45-year old CEO is also the boss of the payments platform Square and it was this dual CEO lifestyle that caused the crypto-advocate grief from shareholders who questioned his commitment to running Twitter.
This grief primarily came from shareholders Elliot Management and Silver Lake, who were both given a board position last year in an act of appeasement by the Twitter board. They made no secret of their demands for Dorsey to solely focus his efforts on Twitter...and for Twitter to grow its user base, speed up revenue growth and gain digital ad market share.
The TakeAway: The question I find myself asking is "why did it take him so long?" (assuming he made the decision himself, as he said he did).
Twitter was great and cool and innovative...when it was launched in 2006. But since then, Twitter has hardly been at the forefront of innovation. It missed the opportunity to be TikTok before TikTok (TikTok now has 1 billion users compared to Twitter's 800 million). And to be Clubhouse before Clubhouse (although Twitter Spaces is doing a good job as a Clubhouse look-a-like).
And looks like it will screw the transition to a subscription-based business model as an alternative to the ad revenue model that is causing social media such harm. The recently announced subscription service looks like a dude before it's even got going. It shows an absence of imagination about how to price and package it. As a product, Twitter Blue is totally underwhelming. On a more positive note, Super Followers looks sound and Twitter's acquisition of newsletter service, Revue appears to be a success in the battle against Substack.
But...user numbers have been stagnant for years and Twitter stopped reporting them in 2019. Their share price has been on a disappointing journey since floating in 2014, enjoying a short renaissance thanks to Trump's preference for brain dumping in 240 character tweets...and the bull run on tech stocks throughout the pandemic.
And the big issue for Twitter shareholders has been its inability to benefit from the huge shift of digital advertising spend online throughout the pandemic. In 2020, Twitter grew its Trailing Twelve Month ('TTM') revenue by just $1.3 billion compared to Snap who grew its advertising revenues by over $2.1 billion in the same period.
Twitter has now had 5 CEOs in 16 years. It's easy to blame Dorsey (who still owns 2% of Twitter) for his lack of focus. But maybe there are other issues at Twitter. The business model for one certainly looks like it needs an overhaul. Can the new boss sort it out...time will tell!?
Parag Agrawal: the new boss at Twitter
As Dorsey was walking out the door carrying his box of personal possessions, Parag Agrawal was moving in. Agrawal has been with Twitter for 10 years, most recently as Chief Technology Officer. He has emerged from behind the scenes to take over one of Silicon Valley’s highest-profile and politically volatile jobs.
Agrawal has become the youngest CEO in the S&P500, replacing Facebook's Mark Zuckerberg. He also becomes the latest high profile tech CEO with Indian heritage, alongside Google's Sundar Pichai, IBM's Arvind Krishna, and Adobe's Shantanu Narayen.
For more on Agrawal, read this profile in The Guardian.
Square to change its name to Block
Back Story: Meanwhile, Dorsey was unpacking his box at his other day job as CEO of Square, a mobile payment company focused on credit card processing and merchant solutions (in Q2 2021, the gross payment volume for Square was $42.8 billion!).
Within days of stepping down from Twitter, he announced his intentions with Square by changing its corporate name to Block. This signals a push beyond its main sales and payments products into businesses like music, cash transfers and the blockchain.
The TakeAway: It's no secret that Dorsey has long wanted to extend Square from being a digital-payments company into a broader organization with a number of standalone business units.
Square recently acquired Tidal, the music streaming service led by rapper Jay-Z, and started a financial services division focused on Bitcoin called TBD54566975 (the name was derived from a positive numerology report linked to the number.)
In recent months, Dorsey has revved up Square’s efforts in several cryptocurrency-related areas. He tweeted this thread about Square building a Bitcoin-mining system and last month, Square published a white paper describing plans for a decentralized cryptocurrency exchange.
IMHO, Dorsey is a smart cookie. Crypto, commerce and BigTech are converging and there's a massive gap in the market for the West's first SuperApp. You only have to look at China to see the massive opportunity when a payments platform (Square) is combined with a range of other products and services into a single app experience. By ditching Twitter, he can focus on building Square into a significantly bigger and better business than it is today.
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Is Instagram to blame for the rise in self-harm amongst teenage girls?
Back Story: Between 2010 and 2014, the rates of self-harm, depression and anxiety amongst teenage girls doubled.
The same can not be said for boys in the same age range, or for women who are older. This is unusual and the cause is unknown. However, a pair of social psychologists have been studying the data from North American and UK studies and are trying to get to the bottom of it. Their conclusion; Instagram exploits the natural vulnerabilities in a developing adolescent girl.
"When a boy steps away from the console, he does not spend the next few hours worrying about what other players are saying about him. Instagram, in contrast, can loom in a girl’s mind even when the app is not open, driving hours of obsessive thought, worry, and shame."
The research suggests that Instagram's toxicity does not come from malicious coding of the algorithms. Instead, it is the nature of a platform that girls use to post photographs of themselves and await the public judgments of others.
- Seven-in-ten U.S. teens aged 13 to 17 said they used Instagram.
- 11% of parents of children aged between 9 and 11 said that their kids were on Instagram (despite them being below the age limit.)
In 2017, British researchers asked 1,500 teens to rate how each of the major social media platforms affected them on certain well-being measures, including anxiety, loneliness, body image, and sleep. Instagram scored as the most harmful, followed by Snapchat and then Facebook.
Facebook’s own research that was leaked by the whistleblower Frances Haugen had a similar finding: “Teens blame Instagram for increases in the rate of anxiety and depression.” They also noted that “social comparison is worse” on Instagram. Whereas Snapchat’s filters “keep the focus on the face,” Instagram “focuses heavily on the body and lifestyle.”
A recent experiment for Science Direct confirmed these observations. In the experiment, young women were randomly assigned to use Instagram, or to use Facebook, or play a simple video game for seven minutes. The researchers found that “those who used Instagram, but not Facebook, showed decreased body satisfaction, decreased positive affect, and increased negative affect.”
Talking points: Girls are far more likely to be on social media than boys, who tend to spend more time playing online games.
Girls are also far more likely to be preoccupied with their appearance than boys of their own age. Any parent of adolescents will tell you that. This is the essence of the conclusion from this research. That Instagram amplifies the natural tendencies in adolescent girls to compare and judge how they look against other girls (in nature's race to get the best mate.)
But that doesn't let Instagram (or social media in general) off the hook. Because all social media exploit these natural tendencies to keep engagement rates high. They know the more they feed the user with stuff they're interested in, the longer they will stay online and the more adverts they will see. Remember, every user on Facebook is worth $40 a year in advertising fees. When it comes to young people online, it is much harder for them to understand and appreciate that many of the images they are hooked into a cycle of watching are fake or photoshopped.
In the USA, the 1998 Children’s Online Privacy Protection Act sets an age limit to restrict online access to platforms like Instagram. Originally the legislation proposed 16 as the age at which children should legally be allowed to give away their data and their privacy to sign up for an online account.
However, the online giants of 20 years ago successfully lobbied to have the age of the so-called “internet adulthood” lowered to 13. Of course, back then we had no iPhone, no Instagram, no 15-second or 140 character attention spans. A lot has changed in 20 years except the legislation and surely it's time for the US/West to revisit the online rules for youngsters.
Just as they are doing in China. The current Big Tech Crackdown has severely restricted online time for kids to 40 minutes a day and banned all online activity after 10 pm. China has also mandated routine time-outs to stop kids from getting locked into a continuous cycle of doom-scrolling on highly addictive apps like TikTok.
(Footnote: the source article was written by Jonathan Haidt, a social psychologist at the New York University Stern School of Business. He is the author of The Righteous Mind and the co-author of The Coddling of the American Mind (a book I am reading at the moment and highly recommended!).
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Snippets of Insight and Information
Facebook postpones E2E encryption to 2023
In 2019 Facebook announced a plan to move all of its messaging apps onto a system of end-to-end encryption ("E2EE"), just like the one used by WhatsApp. But this has created considerable tension with governments and law enforcement agencies because it makes it near impossible to see what the bad guys are doing. Regular readers may remember the series of articles I ran at the time of Apple's attempt to bring in Child Protection Measures. I included the data on the extent to which Facebook Messenger is used by gangs, people smugglers and criminals to coordinate and mastermind illegal activity. Well, it seems that metaFacebook has put plans on hold for a while and won't roll the feature out for at least another year.
Source: Hacker News
🛍️ According to The Wall Street Journal, dissatisfied parents are turning to shopping bots that track when sold out items are restocked. Some of them even place orders automatically. Meanwhile, online scammers are using bots to bulk buy popular Christmas toys and resell them at elevated prices. Source: Wall Street Journal
💰 TikTok has added new features to help creators monetize content. Source: Tech Crunch
🚕 Chinese tech giant Baidu received approval to run driverless taxis in Beijing. Baidu say 67 self-driving cars will operate in the suburban district of Yizhuang, and passengers will be charged a premium rate to travel in them. Source: CNBC
🚀 In leaked mail, Elon Musk says SpaceX is facing bankruptcy, "There is no way to sugarcoat this." Source: Futurism
📡 Over a third of the world's population has never used the internet according to latest research by the United Nations. Source: The Guardian
🤖 Corporate spending on artificial intelligence (AI) is expected to hit $97.9B by 2023, according to Deloitte. The AI writing assistant software market is projected to be worth more than $5B by 2028. For founders, this means new tools and new opportunities on the horizon. Source: Deloitte
🖊️ For me, I use Genei as my AI-writing tool. Check it out here ($)
👺 The Australian government is planning new legislation that will force social media platforms to unmask anonymous trolls. The new laws would require platforms to collect the personal information of new and current users. Source: Reuters
⏏️ The number of active DAOs has increased by 132% since September 2020, and their combined assets under management have ballooned from $290M to over $14B today. DAOs are organizations governed by computer-encoded rules and controlled by organization members, rather than a central government. They evolved out of blockchain technology, and are quickly rising in significance. Source: IndieHackers
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