One of the most curious elements of the Silicon Valley story has been the enduring and almost mythical power of its reality distortion field. For the Valley’s technology darlings, the reality of collapsing user numbers, endless security and privacy breaches are meaningless. In fact, they can actually help the companies. What matters is the story those companies weave about themselves, endlessly repackaging and representing themselves to the world to spin every near-fatality into a success story. Twitter’s ability to reframe its fading and stagnating platform into one claiming modest growth reminds us how easy it is to spin the media and Wall Street narrative simply by redefining a few key metrics and that Wall Street’s refusal to demand transparency from Valley companies means there are few opportunities to fact check companies’ overly optimistic claims.
The sheer power of Silicon Valley’s reality distortion field was on full display earlier this week as Twitter announced its earnings. News that should have sent investors running for the hills was instead embraced as a fairy tale turnaround story of mythic proportions.
Rather than reporting a half-decade long stagnation and decline in daily tweet volume and tweeting users that bring it back to where it started years ago, the company managed to woo Wall Street, media pundits and the public by completing its pivot to a new definition of “user” that focuses on people it can show ads to, rather than those that actually produce the content that brings all of those users to its platform in the first place.
Reading through this week’s headlines, it was striking how universally glowing media coverage across the world was about Twitter’s growth prospects using the company’s new metrics.
Not one major article charted the falling daily tweet counts, the stagnating number and age of user accounts that actually post the content that draws users, the soaring retweet density and the myriad other metrics that paint a fading network in a rapid state of decline.
Instead, by offering analysts a new user number that it could show growth in, Twitter succeeded in completely rewriting the script around its earnings report.
Instead of a depressing story of a stagnating platform in rapid decline, all it took was one changed metric to pivot the story into a lavish deluge of glowing press touting a skyrocketing company with soaring growth and a blue-sky future.
What makes this story so interesting is that not one of those articles bothered to actually dig a bit deeper to get a more holistic perspective on Twitter’s platform health. While monetizable users are the ones that bring in the revenue that investors care about, those users don’t come to Twitter without all of the content being contributed by all those posting users that are not reported anywhere in Twitter’s statistics.
It is remarkable that Wall Street has largely allowed technology companies to regulate themselves.
No automaker would be permitted to constantly change its metrics from “cars sold” to “cars looked at” to “vehicle interest” to all manner of other artificial metrics. Investors want to know how many vehicles went out the door to a customer and for how much.
Social platforms for some reason have escaped this level of scrutiny.
Wall Street has allowed the social media companies to largely define themselves how they each want to present their growth and platform health using whatever metrics present themselves in the most positive light. In fact, investors appear to have even embraced the idea of companies constantly redefining those metrics as their platforms begin to shrink in order to preserve some measure of positive press.
The company appears to have no intention of releasing these less flattering numbers.
Asked last month for basic platform statistics, a spokesperson responded only with “not commenting.”
Asked earlier this week why it does not report the total number of daily tweets and daily tweeting users given how critical they are to understanding the platform’s overall health and the continued influx of monetizable users, the company did not respond to a request for comment.
Similarly, asked whether in the interests of greater transparency Twitter would commit to releasing official statistics summarizing the number of daily tweets, unique tweeting users, daily retweet count and other key metrics of its platform health and if not, why not, the company did not respond.
After all, why should it?
It is obvious Wall Street has little interest in greater visibility into Twitter's health and the press is perfectly happy repeating whatever metrics Twitter offers, so there is absolutely no incentive for the company to do anything other than maintain the status quo.
Putting this all together, Twitter’s incredible success this week in pivoting the narrative around its growth numbers reminds us that a company can quite literally redefine reality merely by continually pivoting to new metrics that present itself in the most positive light at any given moment in its corporate trajectory.
In the end, Twitter reminds us that perhaps Silicon Valley’s greatest invention has not been any technological invention, but rather its perfection of the reality distortion field.
