At the outset of a conference call with securities analysts in July to discuss Twitter’s second-quarter earnings, CEO Jack Dorsey laid out his company’s strategy: “We intend to build an ecosystem of connected features and services focused on serving three core jobs: news, which is what’s happening; discussion, conversation; and helping people get paid,” he said.
The language Dorsey used — “three core jobs” — refers to a concept called “jobs to be done,” which is an approach to defining a business from the perspective of what really matters to its customers.
Such strategic focus is essential for a company such as Twitter — which competes against a varied set of players ranging from Facebook and TikTok to the Wall Street Journal and the New York Times. And Twitter’s results have been impressive. Its daily active user count has grown above 200 million, up from 126 million at year-end 2018. It is on pace to cross $4 billion in annual revenue in 2021, up from a little more than $3 billion in 2018. And as of September 20, Twitter shares had appreciated over the past five years by 170%, which compares to 185% for Facebook.
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It wasn’t always this way for Twitter. As it turns out, jobs to be done has been a key tool in Twitter’s turnaround, which began in earnest after Jack Dorsey reassumed the CEO role in October 2015. At the time, the company was still evolving and its focus was unclear. Facebook was growing users at an astounding scale and pace, and Snapchat was the shiny, new social network set to take it on. In 2015, Twitter posted a net loss of $521 million on revenue of $2.2 billion, and its shares were trading below its IPO price of $26. As Dorsey described it later, at the Innosight CEO Summit in August 2019, “We got overly reactive to everything our peers were doing. We didn’t have a clear sense of what our purpose was, and that really hurt us a lot.” (Disclosure: Twitter has not been a client of our firm, Innosight, and he was an unpaid speaker at the 2019 CEO Summit.)
Dorsey and his team were grappling with one of the most profound questions every leader must answer: What business are we really in?
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Source: Innosight
How Twitter Applied the “Jobs to Be Done” Approach to Strategy