Stickiness

I have no interest in investing in IPOs, so I won't be buying Twitter's. It may do fine, who knows?

I do have an interest in trying to figure out how durable companies' competitive advantage is. When I think of Twitter, one obvious comparison is Facebook.

Facebook went through a much maligned IPO, it came public in the high 30s, cratered down south of 20, and was last seen heading north of 50.

Of course, short term price movers are about sentiment, Facebook rules ($38 at IPO)! Facebook sucks ($19)! Facebook rules ($50)! But this is so much noise, the important part is the moat which is determined by the competitive advantage. A big part of this is stickiness. 

To me, Facebook does have a certain amount of stickiness. I am not a Facebook user, but its users upload gobs and gobs of stuff. The sheer amount of stuff, the dialogs around this leads users to 1) come back and 2) makes it hard for them to pick up and move.

I am a Twitter user (@oneraindrop) so I know more about that one. I enjoy it, but I can easily go days without worrying about checking Twitter. More to the point, I don't put much effort into maintaining twitter feeds, I do not often go back and check old tweets, and most importantly if a better messaging tool came along, how hard would it be to move to it? I think the time spent moving to a new messaging client would be measured in minutes and the end experience could likely be similar to Twitter.

Moving off of Facebook, would take much, much longer, and you would have to rebuild deeper relationships. Whereas Twitter is very point in time, so it would just be pointing your new messaging client at the next messaging service, and you are up to speed on the conference conversation or whatever. People have whole parts of their lives, family, vacation, illnesses and more on Facebook, its a real snapshot of their personal history and it exists on Facebook. Whereas, on Twitter do people worry much about perserving who tweeted what at a conference in 2009? I suspect Twitter's move to Favorites is one attempt to make it stickier, but again - anyone use del.icio.us recently?

Maybe I am missing something, may they do, but it sure looks to me like Facebook has created a way stickier long term relationship. What do you think? Am I missing something on Twitter's stickiness? 

Comments

[jcran]

http://www.youtube.com/watch?v=Q6NpHbMFaQ8 Watch 32:00 mins in

[Daniel Miessler]

I think you're exactly correct about this.

It's also the reason that Google is so afraid of Facebook, as I talk about here:
http://danielmiessler.com/blog/the-reason-google-is-terrified-of-facebook

Essentially, replacing Google is easy for someone because you search and you leave.

Facebook on the other hand is designed to be where you hang out. So if you could search from there it'd be devastating to Google.

Google doesn't have that pivot, and they know that.

[gunnar]

@jcran - thanks for posting, that is an interesting discussion, and I think a good depiction of the main bull case for Twitter - closed loop ad system with location. I do not doubt that someone will do this and generate excellent returns

However, Twitter has not done this yet. They have some and maybe the most capabilities to pull it off, but I still wonder on stickiness. What would it really take to switch? Not much as far as I can tell.

I know people said the same thing about Facebook (MySpace) but every day that someone doesn't switch off of Facebook, their moat gets wider - more memories, pics, are uploaded.

Twitter's moat is more or less static, large user base, cool platform, but nothing that would be too terribly hard to a) leave behind and b) recreate on a new platform.

Daniel's post (below yours) has some interesting insight on Google is scared of Facebook, they could not take them out with Google+, I wonder if they chose the wrong target, it seems way easier to try and take out Twitter.

Also, the points raised by the VC in the video you linked, around closed loop, if they pull that off that is great - but its great for investors and advertisers. It does nothing to strengthen the stickiness from the user standpoint and could very easily make it worse. So it still does not address the keypoint.

None of this is to say they can't or won't pull it off, they created the space and it may be they run the table from here on out, just saying that it looks to me like Facebook has a relatively wider moat.

@Daniel - really interesting post, thanks for linking,

"When you search for books, you may get Amazon results, but included will be a list of your friends who also read the book, or are currently reading it. Want to chat with them real quick about it? Well it turns out Facebook is good at that."

we may be seeing the next stage play out on mobile right now