X. The Dawn of a Super App?

A new player is emerging – and has declared to revolutionize the market. A short review...

Part 1: How to kill a brand. NOT.

Brand value is a long-standing term in business. A term I have used a lot during my agency times and that has accompanied me in my career with global brands and Fortune 500 companies I have worked with and for. As an asset, a brand value can be listed in a company financial report as it represents an inherent factor to generate revenue. Though the main three brand rankings differ in how they calculate brand value and differ in results, respectively: Interbrand’s “Best Global Brands”, Millward Brown’s (Kantar) “BrandZ Top 100”, and Brand Finance’s “Global 500”. The first two popular with creatives, marketers, and business developers, while the latter has a higher standing with finance and M&A.

Back to Twitter – or should we say, “looking back at Twitter”: Brand Finance had Twitter with $4 billion in their list, Kantar even had Twitter at $7.3 billion in 2020, when the value soared before Elon’s takeover plans started to take shape. These are brand asset values that took over 15 years to build. An outlier report purported in the media from Vanderbilt University had even placed Twitter’s value at $15-20 billion, on par with Snapchat, which I find rather alarmist and overstretched – but good for news headlines and stirring attention.

Nevertheless, brand value should not be underestimated. And burning brand value can put a serious dent in a company’s business. Not only the costs of rebranding itself, but also alienating customers, misrepresenting a product’s benefits, appeal, or market value. And customer sentiment is key. Facebook, for instance, has been resilient as a brand towards the company’s renaming to Meta. Even more so for Alphabet’s “Google”: A brand that even has its own verb listed in Merriam-Webster – “to google”. The same goes for Twitter. An iconic brand that has coined the term “to tweet” for the quick injection of 140 opinionated characters into the noisy maelstrom of a global, never-ending argument. A tweet.

By the way, the bird has a name: Larry. Named after Boston Celtics NBA legend Larry Bird, listed in the Basketball Hall of Fame.

Revenue is a core metric in brand value. In 2022, Twitter’s revenue was already down 11% to $4.4 billion from the previous year. The second only, but this time serious dip since 2012, with a minor decline in 2017 when it fell from $2.5 to $2.4 billion. Just to rebound again to $3 billion 2018. The trajectory was always up. But we need to be honest that Twitter’s losses were significant over the same period. Only the years 2018 and 2019 were not in the red and saw substantial profits of $1.2 and over $1.4 billion, falling back to horrendous deficits of over $-1.1 and $-0.2 billion in 2020 and 2021.

According to Musk, Twitter is still on course to report $3 billion in revenue for 2023, though a continued decline from the $4.4 billion last year and 2021’s $5 billion mentioned above. This reflects the reported almost 50% drop in ad revenue, which supposedly constitutes 90% of Twitter’s overall income. The new subscription models for content creators as well as ad revenue sharing incentives are part of Elon’s reinvention of Twitter – from the brand to the underlying business model.

The king is dead, long live the king.

Part 2: Bottom-line business

Now X. What speaks for the rebranding though is that it massively profits mainly from Elon Musk’s own brand and the halo effect of the “X family”: SpaceX, Tesla, lesser Neuralink and The Boring Company (the one associated with Hyperloop, but has since diversified). And if Linda Yaccarino, the new CEO and seasoned marketing and media professional, can turn the ad and overall revenues around, I see “X” on a strong upside potentially surpassing Twitter’s legacy brand value faster than we might expect. The media coverage in itself is staggering. That’s already a core asset.

But the bigger picture is what media is now headlining as the “Super-App”, or what Elon calls “the everything app”. For those who have been to China in the recent years, have always come back with an eery fascination of Tencent’s WeChat. An all-encompassing, unavoidable app on Chinese mobile phones, deeply integrated with a plethora of services and deeply engrained in Chinese every day life. From hailing taxis to food delivery, from your social network to payment and even employment services (like recording your sick days with your employer), there is barely nothing WeChat can’t cover. A fascinating use case for digitalization the rest of the world can only dream of. And an eery use case as it renders over 1.3 billion users as totally trackable over almost all dimensions.

India has seen PayTM as a super-app with a digital wallet, providing payment, entertainment, and electronic ticketing. Another is Grab, Southeast Asia’s superstar across 8 countries covering delivery, mobility, financial and even enterprise services. With a market cap at $12 billion and estimated 180 million users, it is Singapore’s lighthouse application reaching from Malaysia to the Philippines. And the line up of super-apps is growing with Gojek (Indonesia), Revolut (UK/global), Rappi (South America), and more.

So, why “X”? Well don’t forget, “X.com ” was the trademark Elon Musk dropped, when merging with Confinity in 2000 that would be renamed into PayPal a year later. Another iconic brand. This seems to be a homecoming for Musk when we see payment and transaction management being introduced into the new “X”. The new content creator suite as a business model mentioned above is a telltale sign where the path is heading to. And Elon is repatriating his long lost trademark again.

Replicating Uber for transportation, Facebook and Insta for Social Media, and a plethora of news outlets for trusted information, might pose an insurmountable task for the new X on its way to a super-app. But I guess that won’t deter Elon Musk, right?

I still don’t know where to order my passport or manage my health records, though. Apart from all these fancy and convenience-promising super-apps, it’s the public sector that is truly aching. When will we digitize the core citizen services that matter the most?

“X marks the spot!” The spot on the treasure map.

The wild pirates always knew where the money was.