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Leaders Letter 162 – Threads Strategy Breakdown

Dear leaders, are you one of the 100m users who flocked to threads over the last couple of weeks? 

I am and I must confess, I am not so convinced about the product and its lacklustre product features…yet.

I suspect you have heard it at least mentioned within your business, from the employees using it and as likely from your Marketing or Growth team with the race to get the account and find if you are relevant within the evolving app culture. 

This week I am going to breakdown one of Focus’ core offerings strategy and break down Treads, what it is, why it launched and why it is different, how Meta has thought about the landscape and how they’ve used this launch (smartly or not I’ll let you decide) to misdirect some of its recent failures. 

The Threads TLDR

  • App only (threads.net prompts you to download the app) 
  • Threads is an extension of Instagram – it connects to your Instagram account and supplies you with an @ with a specific number you joined 
  • Threads are built into the Instagram platform enabling micro-updates (500 characters)  
  • Updates can be shared publicly or privately (you set when you sign up) 
  • It has limited features and is by all accounts an MVP 
  • A curated feed that does not allow users to select just those they followed (a lesson from their previous growth days that the feed has to be incredibly valuable) 
  • As a platform, it wants to sit away from news and not be known as a news outlet like Twitter (this will be harder for Threads as this is what people use microblogging platforms for) 
  • There were no ads for a week (Hulu were exclusively the first)
  • Think of a really lightweight Twitter 
Mark Zuckerberg’s tweet poking fun at Elon Musk on Threads launch

Strategy Smarts 

  • Record Breaking – Leveraging the user numbers across the Meta portfolio (Facebook 2.9b MAUs, WhatsApp 2.2b, Instagram 2b MAUs) is driving record user creation and download numbers was incredibly smart and knowing how difficult being an audience can be this was strategic smart and savvy.
  • OrganicTikTok spent over $2b to gain a record number of downloads, user accounts and drive retention through advertising efforts, this has been largely organic channels and knowing they gain mass attention from the tech press and mainstream media
  • New & Alternative – An alternative method to always posting videos and the perfect picture on your native Instagram feed and threads allows users to have something to say and create a new space to be different or be more you. Twitter usage has dropped and it was prime time to release new. We might see Meta allow this to fly too close to the sun and crash quickly after the engagement levels drop. If you follow a number of friends, not media outlets and personalities the updates have already dropped (falling foul of the deliberate full feed of random content)
  • Creating FOMO – creating FOMO around a new product to remove time spent on other apps is intelligent in a market full of attention and time-based apps (while many were enjoying JOMO (joy of missing out) was happening on Twitter)
  • Algorithmic Driven Feeds – Something that Meta got right with Instagram and Facebook was flipping the feed from chronological feed to algorithmic-driven feeds with affinity signals and then learning from a superior product in TikTok. TikTok took algorithmic-driven content to another level and then evolved into an entertainment engine from anyone showing in a feed created for you versus just from people you were connected to. This shows how the internet went from and where it is now, with numerous apps driving entertainment for “free” with us as the product aka being sold to by advertising and subscription models.
    Meta has tweaked their approach to offer similar features and has helped to drive engagement and usage. 
  • Acquire Or Copy – When you hit Meta’s size and scale you cannot easily acquire a competitor or new entrance in the market due to anti-competitive laws and measures. Meta is famous for using Snap, iMessage, Telegram (chat and group platform) and TikTok features in its brand’s umbrella and roll directly into their apps. This is another example of Meta and their leadership team embracing the Microsoft approach to strategy, copying key features and killing others with distribution within their own ecosystem (think recently with Teams fighting with Slack and Teams winning the professional chat app battle)
  • Meta Huge Scale = Controllable Narratives – By releasing a new product it starts to remove narratives away from other platforms and helps to control mass narratives and then how they communicate (we will see exec and media companies exclusively updating and using threads)
  • Big Army Big Battles – Fighting for time and attention from Twitter and importantly against TikTok – this isn’t widely discussed but new products reduce the usage of other platforms while users work out the new platform, the etiquette and the culture of the new app/platform 
  • Hitting Other Apps That Have Potentially Run Their Course – Twitter is struggling to stay relevant (other platforms in the same category as Twitter such as newer players Mastodon and Bluesky), and BeReal was effectively killed off by Instagram and TikTok being inspired by their USP and rolling in a product feature and then usage dies off. This is a smart tactical move(s) for these big platforms horrible for BeReal and similar apps and services that are easily copied 
  • Data Collection – This is the most controversial piece here, Facebook, Instagram and WhatsApp all collect a large number of data points on their users and use it to inform their next series of decisions. This is well known and although this has caused a large number of headlines, court cases and investigations, it hasn’t stopped Meta from releasing a new app with a new set of data collection and a way to connect users into cohorts 
Threads announcing record-breaking weekend, no more official numbers since

Meta Misses & Misdirections  

  • The Metaverse – Meta invested multiple billions in a new metaverse (the company re-branded around) and it hit its stock price and confidence in Mark Zuckerberg’s leadership 
  • AI Struggles – Meta has struggled to have any breakout with their AI tools and while rivals are making bigger steps in the perceived AI battle – we should never count out Meta but their very slow approach it’s likely hindering them from an investor’s perspective 
  • App Store – Facebook wants to become a marketplace for others and an app store alternative, allowing users to download apps directly from their potential version of an app store. This is the play Mark Zuckerberg has wanted to lead on since his earnings call back in 2018 —  “Our biggest competitor by far is iMessage,” “In important countries like the U.S. where the iPhone is strong, Apple bundles iMessage as a default texting app and it’s still ahead,” 
  • Hits & Misses – Despite the Meta brand’s dominance, Instagram and Facebook apps have had a number of product feature misses, including audio and creator funds. Can Threads be a hit or will it be a miss and popularity nose dive like a clubhouse or more recently BeReal.  
  • Creators Only? Instagram threw itself into the creator economy and has struggled with making its shop feature and shopping experiences work – Facebook has also struggled with shopping away from ads – for now, that works, however, in the near future Meta brands will struggle with stuffing more ad units 
  • WhatsApp Controvisal Usage – WhatsApp is a behemoth, it has however struggled with governments (and Taliban) using its platform and having their messages leaked or released – despite its e2e encryption this will have a negative impact (despite all of the convenience and free use via data packages) 
  • 80:20 rule: Apart from on WhatsApp Meta’s properties have a 20% creator role and 80% viewer role (consume content but don’t create) – this will likely also become the norm on Threads. Will their growth teams be able to break this and can their feed be important enough to fill the boredom slots that other apps do already?  
  • Mark Zuckerberg vs Elon Musk – A supposed MMA fight and spat really has taken a leaf out of the music beef (between rappers) playbook to pull attendance away and be part of multiple conversations. This may have seen fun but is a waste of time and effort  
  • Step Out – With many elections coming up, Meta has now built a new (currently) mostly completely organic product that shouldn’t influence the election 

Having worked in a space where Facebook entered with a bang, you prepare for their growth engine and its huge breadth of users and ability to cross-sell to hurt you, interestingly, in two businesses I was in or across this didn’t materially hinder or hurt us. With the right prep for the teams and a reminder of why we were different and to focus on our journey, we drove the business forward. I am not sure Elon and Twitter have the same sort of defence. 

Whatever you think of Meta, there are always numerous lessons we can and should take away, from their aggressive tactics to their ability to engage and retain users and drive more ads into their ecosystem while glueing the user data together. It is the modern-day company that has navigated numerous issues and continues to be stronger for users and advertisers. 

This week’s focus item is to: learn from how Meta leveraged its own ecosystem and a weakening market to drive a record-breaking app that may or may not keep its mass appeal… 

Have a great week! 

Thanks,

Danny Denhard 

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