The Rise and Fall of X: Revealing the Truth Behind its Super App Status

Twitter’s Rebrand to X: A Bad Joke or Elon Musk’s Super App Ambition?

Twitter’s recent rebranding to X has sparked mixed reactions, with some viewing it as a bad joke and others seeing it as Elon Musk’s long-held ambition for an all-conquering super app. This move comes after Musk previously changed Twitter’s logo to a Shiba Inu, which resulted in a significant increase in the value of dogecoin. However, the rebrand has been met with skepticism from experts, who argue that X is far from being a super app.

The Vision Behind X

Elon Musk has been pushing the concept of a super app since the late 1990s. His vision for X encompasses messaging, ecommerce, video, and AI, all on a single platform. Musk believes that X can create a global marketplace for ideas, goods, services, and opportunities, powered by AI. However, experts argue that the transformation Musk envisions is limited by several factors.

The Limits of Building a Super App

One of the key requirements for a super app is a robust financial technology infrastructure. To achieve this, X would need to build a new system that enables seamless payments between users and businesses. This would require compliance with regulations, which can be a challenging task. Additionally, X would need to regain the trust of users and advertisers who have abandoned Twitter since Musk took over.

David Shrier, a professor of practice in AI and innovation at Imperial College Business School, points out that X is implementing a 23-year-old business plan that didn’t work then and is now being executed from a worse market position. The declining brand equity and user experience of Twitter pose significant challenges for X’s success as a super app.

The Regulatory and Trust Challenges

Building a financial rail that users trust and regulators approve of is a daunting task for Twitter. Fintech companies are required to comply with strict regulations to verify customer identities and monitor financial flows to prevent criminal activities. Musk’s approach to staffing, which involves significant layoffs, may not align well with the need for robust compliance departments.

Frances Coppola, an independent analyst, expresses skepticism about X becoming a reality due to the regulatory hurdles it would face. She points out that Musk would need to assemble a team of experts to navigate the hundreds of regulatory challenges worldwide, which could be financially prohibitive. Moreover, Twitter’s handling of content moderation and trust and safety issues raises concerns about its commitment to compliance with regulations.

Rebuilding Trust and Revenue Generation

Musk’s takeover of Twitter has resulted in a decline in advertising revenue, with big advertisers losing interest and dropshippers gaining prominence. To bring back advertisers, X would need to detoxify its platform, creating a safer space for brands and influencers. Payment to influencers based on engagement has already begun, but the sums paid on Twitter are relatively small compared to other platforms.

To compete as a super app, X would also need to establish its own video platform, something Twitter has struggled with in the past. Musk’s influence on the platform has already sparked controversy, with right-wing talk show host Tucker Carlson launching his show on Twitter and facing backlash for promoting conspiracy theories and supporting Russia’s invasion of Ukraine.

The Importance of User Experience

Musk’s emphasis on AI may be impressive, considering his track record in the field. However, experts argue that great AI alone does not guarantee success if a platform’s key influencers have been alienated, audience numbers are declining, user experience is worsening, and brand value has collapsed. Therefore, the success of X as a super app ultimately hinges on addressing these fundamental issues.

Editorial: The Realities of Building a Super App

The rebranding of Twitter to X and the ambition of creating a super app highlight the complexities and challenges involved in building such a platform. While Musk’s vision for X is grand, the reality is that success in the super app space requires more than just AI and a multitude of features.

Regulatory compliance, user trust, brand equity, and revenue generation are crucial factors to consider. History has shown that even tech giants like Meta, Apple, and ride-hailing companies have faced limitations and hurdles in building successful fintech ecosystems. Therefore, it is important to approach the idea of a super app with a realistic lens.

Platforms like X need to prioritize user experience, establish strong compliance departments, and regain the trust of users and advertisers. Detoxifying the platform, creating a safer environment for brands, and offering competitive payouts to influencers are key steps in attracting advertisers and rebuilding revenue streams.

Furthermore, the development of a reliable financial technology infrastructure, coupled with rigorous compliance measures, is essential to gaining the trust and approval of regulators. X must demonstrate a commitment to following regulations and addressing content moderation and safety concerns.

In conclusion, while the concept of a super app may be alluring, its success relies on overcoming significant hurdles and addressing core issues. Musk’s rebranding of Twitter to X is just the first step, and the journey towards realizing a super app vision is far from certain.

Advice: The Path forward for X

As X embarks on its journey to become a super app, several key considerations should guide its future actions:

1. Focus on User Experience:

X should prioritize improving the user experience to regain the trust and loyalty of users. This includes addressing issues related to content moderation, safety, and platform stability.

2. Build a Strong Compliance Structure:

Developing a robust compliance department is crucial to gaining regulatory approval and ensuring the platform’s adherence to financial regulations. This will help X establish trust with users and regulators alike.

3. Rebuild Brand Equity:

X needs to develop strategies to rebuild brand equity, attract advertisers, and create a safer space for brands to engage with users. This includes detoxifying the platform from harmful content and fostering an influencer ecosystem with a diverse range of content.

4. Strengthen Monetization Channels:

To attract advertisers and generate revenue, X should explore innovative monetization channels that go beyond traditional advertising models. This may include partnerships with brands, offering value-added services, or creating unique opportunities for businesses to connect with users.

5. Learn from Past Failures:

Understanding the pitfalls and challenges faced by other tech companies in the fintech space can guide X’s strategy. By learning from these experiences, X can avoid repeating mistakes and develop effective solutions.

In conclusion, the path to building a successful super app is challenging and requires careful consideration of various factors. X must address user experience, compliance, brand equity, and revenue generation to have any chance of realizing its vision. By taking proactive steps and learning from past failures, X can position itself as a formidable player in the super app landscape.