Block + Twitter: a ballad of Elon Musk and Jack Dorsey
A case for creating a decentralised global social platform
With the Twitter-Musk saga finally coming to an end, everyone is intrigued to know about the direction in which Musk navigates Twitter. The initial weeks can be described as chaotic at best, with some experts even comparing Twitter to be a startup all over again.
One thing is clear, there is a need to amp up the revenues and Musk is exploring all the possible scenarios that aims to leverage the platform capabilities to uncover opportunities.
Your Twitter account will be your bank account in the near future.
Musk suggested that, in the future, users could send money to others on the platform, and be offered a high-yield money market account to encourage them to move their cash to Twitter. This was one of the directions that Elon Musk, Chief Twit at Twitter suggested during an interaction with Twitter advertisers.
This is on similar lines to what Apple announced recently through its partnership with Goldman Sachs to introduce high-yield savings accounts for Apple Card holders. For Apple with its existing ecosystem of hardware and software, the pivot to banking is a sure-shot winner.
For Twitter, it seems to be a long road ahead. If we apply the business design lens, we can visualise a few scenarios of which one seems to have a higher probability of succeeding. The scenario is of Twitter joining forces with Block (erstwhile Square) considering the fact that the future of Twitter is pegged to be of a decentralised platform. Below is my argument for such a collaboration.
<Twitter> Jack Dorsey <Block>
Jack Dorsey is the co-founder of Twitter and was its CEO until 2021. At the start of the last decade, Dorsey also founded Square, a fintech platform that revolutionised payment acceptance for small businesses across the board.
Square has been at the forefront of the ongoing transformation from physical cash to digital cash. Square started as a hardware company that enabled underserved merchants to accept credit card payments and digitise their business. In its latest quarter results (as of Sep 2022), it’s solutions that are focused on food, retail and services reported gross profit growth of 45% year over year, much faster than Square’s overall in the quarter.
Later on, they launched the Cash App, a consumer-focused app that allows individuals to quickly send, receive and invest money. It was launched to compete with mobile payment apps such as Venmo and PayPal. It has expanded further by offering a full suite of banking products by virtue of launching new products, partnerships and acquisitions.
What the Square app is to the merchants, the Cash app is to the consumers.
Their developer platform extends its software capabilities by allowing integrations with hundreds of third-party products built by developers and partners using its open platform. Over the years, it has released a slew of services and apps, from payment acceptance to banking to BNPL.
With the seller and consumer ecosystem in place, Block has pivoted to a new vertical as it prepares for the future of commerce and money. They are building an ecosystem that is focused on blockchain and the larger universe of DeFi (decentralised finance). In the beginning of December 2021, Square changed its corporate name to Block, Inc., signalling its commitment.
They launched TBD, an open source platform that enables developers to build products and services on decentralised technologies. Then there is Spiral, an independent, bitcoin-focused entity that builds and funds free, open-source projects that improve bitcoin’s privacy, security, UX and ability to scale.
If we look at the financials, Block is growing at a steady place. A case in point is their Q3 results (as of Sep 2022):
- Overall, Block delivered strong growth across their multiple ecosystems with gross profit of $1.57 billion, up 38% year over year.
- Cash App generated $774 million of gross profit in the third quarter, an increase of 51% year over year, and 84% on a three-year CAGR basis
- Square generated $783 million of gross profit in the third quarter, an increase of 29% both year over year and on a three-year CAGR basis
The case for Block + Twitter
So, what does it have to do with Twitter?
- For starters, Block and Twitter share the same DNA owing to its founder Jack Dorsey
- The journey which Block has made since its inception has similarities with Musk’s vision for Twitter in the long run
- Both Musk and Dorsey are technologists first with a proven track record of reimagining and building companies that have redefined industries
- Block has a profitable business model and roadmap with a strong ecosystem of customers, consumers and developers
While Twitter has been a leading social media platform for over a decade now, the traditional ads platform model could be described as a legacy model. Dorsey believes the future is decentralised. In fact, he’s publicly stated that if a native currency for the internet was born in the 90’s, traditional ads platforms may have never existed. Musk seems to share similar thoughts on the future of monetisation for social platforms.
Keeping aside the minor disagreement that Musk and Dorsey have displayed in the past weeks, they are both supportive of each other. This is where I believe that Block and Twitter should join forces to leverage synergies and reimagine a truly decentralised global social platform.
The platform can be leveraged for empowering the civil society with the right set of tools to craft a shared future that includes financial inclusion.
What are your thoughts on the proposed scenario for Twitter? Would love to hear them.
Until next time!
~ Sajid
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Sajid is a Strategy Consultant who works at the intersection of human behaviour, business design and innovation strategy. He blogs at sknotes and tweets @sajidkhetani
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