Threads: Can Zuck just copy Elon’s homework?

Sascha: [00:00:02] Welcome to The Dive, the podcast that asks, who said business news needs to be all business. In 2013, Mark Zuckerberg said of Twitter, It is such a mess. It's as if they all draw a clown car into a gold mine and fill in the ten years later, he's now mining for that gold. Mark Zuckerberg, the billionaire founder of Facebook, is no doubt an incredible entrepreneur. But his critics have fixated on one thing, and that is that he has a habit of copying his social media competitors. And we've seen the most salient example of this in this last week. Meta has launched Threads, which, let's face it, is a Twitter clone. 

Audio Clip: [00:00:40] And the alternative to Twitter is now live. 

Sascha: [00:00:43] It's been the unavoidable headline of the past week. But in today's episode, we wanted to dig a little deeper. We wanted to understand the story behind Threads and ask the big question that we were left with when we realised that Threads is basically just copying tweets as homework. It's Monday, the 10th of July, and today I want to know what are the rules around copying your competitors products? To talk about this today I'm joined by my colleague and the co-founder here at Equity Mates. It's Alec Renehan. And Alec, welcome to The Dive. 

Alec: [00:01:12] Sascha, Good to be here. This is obviously the big story that dominated our news feeds and seems like everyone jumped on Threads for a second. Have you been on?

Sascha: [00:01:23] I have. Do you call your thread feed your thread home page? It doesn't look like Instagram has the grid. There's all that terminology that kind of comes up when you discover a new social platform. I don't know how to talk about Threads yet. 

Alec: [00:01:36] I don't know. 

Sascha: [00:01:36] Yeah, this is a big question. 

Alec: [00:01:38] It is a big question. I guess we'll find out in due time. 

Audio Clip: [00:01:42] It's the battle of the billionaires. After Elon Musk recently challenged Mark Zuckerberg to a potential cage match and Zuckerberg agreed, the two have yet to physically face off, but the source of their dispute, Zuckerberg's company, Meta, is now entering the ring to take on Twitter. 

Sascha: [00:02:00] So Elon Musk owns Twitter. Mark Zuckerberg earns Threads, but these two billionaires will literally try to square up to a fight, an actual cage fight about a month ago. So before we get into the serious actual business story, I want to ask, is it more or less likely that these two middle aged men fight? And who's going to win, in your opinion? Yeah. 

Alec: [00:02:25] Well, whoever wins will lose, I think is the. Yeah. 

Sascha: [00:02:28] That's kind of the, the motto of today isn't it. Really. 

Alec: [00:02:31] Yeah. Yeah, yeah. So I don't know if it makes it more or less likely that they fight. Elon Musk's mum shut the fight down. This story just gets more and more ridiculous. After the head of the USA, Dana White, said he was going to facilitate the fight and they were serious. Elon Musk's mum said it wasn't happening. 

Sascha: [00:02:52] Yeah, yeah. 

Alec: [00:02:53] So we can get into the minutia of who wins the fight. Elon Musk is a lot bigger than Zuckerberg, but Zuckerberg has been training in jiu jitsu. But honestly, Sascha, it's so stupid.

Sascha: [00:03:06] It's so stupid. 

Alec: [00:03:07] Let's get to this business.

Sascha: [00:03:08] And it's like, I might not have billions of dollars, but my parents aren't publicly like shutting me down on the Internet, So that's fine. 

Alec: [00:03:17] Honestly, it's a trade-off I would make if I could be a billionaire. 

Sascha: [00:03:19] Oh wow. 

Alec: [00:03:20] About my mum tweet really mean things about me. 

Sascha: [00:03:24] I'm going to call your mum then. Okay, So for our listeners that don't spend too much of their lives on social media like us, clearly give us the story behind Threads.

Alec: [00:03:34] Yeah, so Threads launched this week, but the story actually goes back a few years in 2019. Meta, which is the parent company of Facebook, attempted to introduce an Instagram companion app with the name Threads. It was a little bit different to the Threads that we've seen today. It was a camera first messaging app with a status update feature. I don't really know what that means, to be honest. A camera first messaging app like Yeah, is that Snapchat photo first? 

Sascha: [00:04:03] Yeah, it sounds kind of like a cross between SNAP and Braille, doesn't it? 

Alec: [00:04:07] Well, you know what, Sascha? We're never going to find out because Threads, the original version of Threads closed down in 2021. Not enough users. I guess. Some of the features were integrated with Instagram and at that time that was the story of Threads. [00:04:22][15.2]

Sascha: [00:04:23] But the chaos at Twitter that we've seen over the last year or so has opened the door again. [00:04:28][5.4]

Alec: [00:04:28] Yeah, and we should be really clear that this is because of Twitter. This is directly aimed at Twitter Midha have been public in saying that the chaos at Twitter has made space for a new product on the market. In an interview with The Verge Instagram, head of product Adam Mosseri said the company felt that the recent, quote, unpredictability at Twitter had created a need for a new platform. Mosseri went on to say, Obviously Twitter pioneered the space, but just given everything that was. Going on. We thought there was an opportunity to build something that was open and something that was good for the community that was already using Instagram. When Threads launched. Mark Zuckerberg also posted about it, threaded about it, tweeted about it, whatever you want to call it. Zuck said it'll take some time, but I think there should be a public conversations app with 1 billion plus people on it. And then in another post, he said, Twitter has had the opportunity to do this, but hasn't nailed it. Hopefully we will. So let's not get it twisted. Zuckerberg has copied Twitter and is explicitly going after Twitter. 

Audio Clip: [00:05:42] Big news today. We are launching Threads, an open and friendly public space for conversations. It takes the best parts of the Instagram experience and creates a whole new app around text ideas and sharing what's on your mind. You just sign up with your Instagram account. 

Sascha: [00:05:59] Okay, so Meta launched this product last week. I think I even jumped on to Instagram and saw the countdown, which is really sad on my part. But how did it go? Has it been a success? Yeah.

Alec: [00:06:10] So 2 million people signed up in the first 2 hours. 5 million people signed up in the first 4 hours. And after the first day, 30 million people had signed up. Okay, so a good start. There are a lot of celebrities there. When I jumped on, I saw Mark Cuban. I saw Gary Vey. I read reports that Anthony Albanese, the Australian prime minister, that Chris Hemsworth was there. It's important to note that because of Instagram's dominance, more than a billion people using it, Meta, have made it very easy to sign up. Interestingly, one thing to note as Threads develops, you also can't delete your Threads account without deleting your Instagram account. What? So the idea? Yeah. So they using numbers will maybe be a bit inflated because I figure a lot of people are going to try this stuff out given it's in the zeitgeist so much. I think the important thing isn't so much how many people have jumped on and given it a try. What celebrities are on there. But like, is it actually a good app? Because I think avid Twitter users would agree that while Musk's takeover and the firing of engineers certainly hasn't crashed the platform, it probably doesn't feel as sleek as it once was. 

Sascha: [00:07:30] Yeah, I think it definitely feels chaotic. 

Alec: [00:07:32] I just feel the algorithm doesn't know me as well as it once did. But I think the early reports of Threads is that it's really well designed and it's well made. The Guardian's tech reporter Carey Pohl wrote Using Threads felt like a fever dream in which Twitter and Instagram had a more usable brainchild.

Sascha: [00:07:50] Yeah, so we are podcast, but we're going to try and describe what Threads is like. Alec, can you give me a bit of a rundown of what it looks like for those who haven't used it?

Alec: [00:07:59] Just think of Twitter with about like 10% better design, just a little bit slick. It's the same. It's you can post posts, not tweet posts, Threads like two of up to 500 characters. You can include images, gifs and videos of up to 5 minutes in length. You can repost other people's tweets. You can reply to them in the comments. It is a microblogging platform like Twitter. 

Sascha: [00:08:25] Yeah, and whatever Zuckerberg and the melee team say, it's undeniable that that basically copied Twitter, which had me wondering, Can you do that? And that's what I'm going to ask Alec after the break. Welcome back to The Dive today. We're talking about meds, Twitter, clone Threads. And when we say clone, I really do mean clone retreats. Now might be called reposts, but it's a text based character, limited broadcast style, microblogging social media. It's Twitter without Elon Musk. So the question is like, can meta do this? 

Alec: [00:09:07] Yeah. Now, this is a big question and this is a much bigger question than just this story, because Mark Zuckerberg's biggest moves in business. Well, his biggest move was founding Facebook, but his other two big moves were buying Instagram and WhatsApp. 

Audio Clip: [00:09:23] Yeah, so Instagram is great. They're this super talented group of engineers. They're building this amazing product. They just crossed 100 million registered users and they're killing it.

Alec: [00:09:33] But the Mark Zuckerberg story outside of those big moves has been a lot of copying. 

Sascha: [00:09:40] You don't say.

Alec: [00:09:41] And we should note that copying your competitor isn't illegal. Where in the podcast and media business, if we see another media business do something. 

Sascha: [00:09:52] There's nothing a business podcast. 

Alec: [00:09:54] Like a business. 

Sascha: [00:09:55] Daily Business Podcast. 

Alec: [00:09:56] There's nothing stopping us doing it. That is the brutal cut and thrust of competition. There's intellectual property protections. You know, Zuckerberg can't steal Twitter's code and use that or anything that they've patented. But in terms of ideas, ideas are free and anyone can take them. And executing those ideas is important. 

Sascha: [00:10:18] Yeah, it's one of your favourite sayings, isn't it? There's no points for originality. 

Alec: [00:10:22] A 100% million. Mark Zuckerberg. Birds of a Feather. Yeah. Between us, we have about $100 billion. There is a question about the size of Facebook and the market power it has, but let's put a pin in that conversation and let's just tell the story of Zuckerberg copying other social media. 

Sascha: [00:10:43] Yes. Alec, can you walk me down memory lane? Because mentioning some of these when we were researching it, I totally forgotten about some of these social media company.

Alec: [00:10:51] Yeah. So this is a pretty long list. So maybe give me like a music pad or something. All right, here we go. So Snapchat Stories feature led to Instagram stories. Twitch, the gaming streaming site Source Facebook. Try Facebook gaming Slack So workplace by Facebook Tinder led to Facebook dating. Can't say I remember that one. Foursquare where you checked in at different places that led to Facebook. Reddit's success led to Facebook groups that that one certainly hit. Yeah, Periscope. 

Sascha: [00:11:28] This was the blast from the past. I was like, Remember Periscope? 

Alec: [00:11:32] Or I'll be honest, I don't really okay. I was like, You go live on Twitter was a 

Sascha: [00:11:37] Yeah, I used to work at another radio station and we tried to do a couple of live concerts on Periscope. It was a nightmare set up to get all the tech. So I work and then it would glitch halfway through. So yeah, Facebook Live is definitely a better experience. Yeah. 

Alec: [00:11:53] So Periscope, as you said, led to Facebook and Instagram live, eBay and the success of those in Australia, Gumtree, but mainly eBay led to Facebook Marketplace. Tik Tok recently has led to the big Instagram reels push. Yeah, the encrypted messaging apps signal and Telegram led to WhatsApp embracing encrypted messaging. Twitter announcing a policy of paying for blue checkmarks when Elon Musk took over led to Mehta announcing a similar policy. A leaked internal report showed Meta was working on a real competitor known as Roll Call. 

Sascha: [00:12:31] I bet you they put that one in the bottom two. 

Alec: [00:12:32] Yeah, I feel real. Has flirted close to the summit. 

Sascha: [00:12:36] Of its moment in the sun. 

Alec: [00:12:38] And now Sascha to close it out. Twitter's chaos has led to Threads. 

Sascha: [00:12:45] So let's unpin what? You've previously put a pin in Alec and talked about if there's any issues about metal being so big that they can't copy things. 

Alec: [00:12:54] Yeah. So copying isn't illegal. That's the starting point. As long as you're not infringing on other people's intellectual property, that's okay. But with a company as large as metal, there are questions about abuse of market power. Yeah. You can't use your size, your power with suppliers, the customer base, to unfairly compete with other companies in your same market or to push into adjacent markets. But it's abuse of market power is hard to define and the line is quite blurry between what is just brutal competition. There's this famous case in Australia, Queensland, WA, which basically was like business is brutal and it's like, that's not unfair. 

Sascha: [00:13:39] Yeah. Are you just more efficient, smarter, clever or faster, or are you bullying people out of the space? 

Alec: [00:13:46] Exactly, Exactly. And fairness, when it comes to a competitive endeavour like business is hard to define. So there have been hearings in the US Congress about this. There's been antitrust hearings over there During one hearing where Zuckerberg had to testify, he did admit that Facebook has, quote, certainly adopted features that others have let in, as have others copied and adapted features we've invented. Fair call from Zuckerberg. He was then asked directly by Representative Pramila Jayapal if Facebook ever threatened to clone a product from another company whilst attempting to acquire them. Now that would feel like an unfair abuse of market power. Yeah. You agree to the terms that we're dictating to you or we're going to just rip your product off and destroy you? Yeah, you can imagine. That being said in a Facebook boardroom at some point. 

Sascha: [00:14:37] I mean, we shouldn't get ourselves in trouble. It wouldn't. It sounds like something that could feature in a Hollywood movie that might be based on stories that could be true.

Alec: [00:14:48] Yeah. Now, Zuckerberg replied to that question by saying, quote, Not that I recall.

Audio Clip: [00:14:52] His Twitter, the same as what you do. It overlaps with the portion. You don't think you have a monopoly. It certainly doesn't feel like that to me. Okay. 

Sascha: [00:15:02] Well, as you said, Alec, we can imagine, but there's plenty of investigation and we certainly don't have an answer to that question today. But I want to pivot back to the man who seems to be in all our episodes, Elon Musk. How has he and, you know, the greater board of Twitter responded to this.

Alec: [00:15:23] Yeah, bad news for people who are sick of Elon Musk, because next up on the The Dives content list, we're looking at private space stations. 

Sascha: [00:15:30] Oh, yeah. He's just everybody's, everyone's got his fingers in too many buyers.

Alec: [00:15:35] The good thing is the story there is a lot bigger than Elon. 

Sascha: [00:15:38] Yeah. Okay.

Alec: [00:15:38] But let's talk about how Elon and Twitter have responded. Not surprisingly, the first response we saw from the. 

Sascha: [00:15:46] Are they Memes? 

Alec: [00:15:46] It was a meme. 

Sascha: [00:15:47] Yes. Memes.

Alec: [00:15:47] Yes. Someone posted on Twitter that his new app was built entirely using this keyboard and it just had three keys. The control button, C and V? Mm hmm. Copy and paste. Which Elon responded with a laughing emoji. 

Sascha: [00:16:03] Yeah. So classic Elon.

Alec: [00:16:05] Such a 2023 sentence. Then Elon tweeted something which I felt was a bit weird. Yeah, but we it seems par for the course at this. 

Sascha: [00:16:15] Point and it still gets to be in the episode. Let's hear it.

Alec: [00:16:18] Musk quoted. It is infinitely preferable to be attacked by strangers on Twitter than indulge in the false happiness of hide the pain. Instagram. Now people can quibble which of those two things would be preferable, but I'm actually going to say it's a choice. You don't have to make bit of a false dichotomy that you could just opt out of either of them. 

Sascha: [00:16:39] Just turn your phone off and go outside. That's what I say. 

Alec: [00:16:43] Now, let's be fair to Elon, both sides of this were a little punchy and both used memes, actually. Zuckerberg got on Twitter and tweeted for the first time in more than a decade, and it was just the Spider-Man cartoon meme where there's two Spider-Man pointing at each other. 

Sascha: [00:17:03] Yeah, I'm familiar. 

Alec: [00:17:05] Yeah. So he's definitely leaning into the fact it's a direct clone. So yeah, the Billionaire Meme was leading to a cage match soon. 

Sascha: [00:17:16] Look, we're not in the business of predictions as fun as they are. But, Alec, I am going to ask you to look into the future and tell me, what do you think happens next? 

Alec: [00:17:24] Yeah. So Threads at time of recording has about 30 million users. Twitter is estimated to have 368 million little bits. So they haven't come and beaten Twitter yet. Instagram does have over a billion users though so that is the competitive advantage that Threads have over. Some of the previous Twitter competitors that came and sort of went. Mastodon had a moment in the sun, Blue sky, if anyone remembers that. Yeah. Threads has an advantage over them, but they're not nearly as big as Twitter yet. Mm hmm. And social media has this habit of embracing the hot new thing and moving on very quickly. We mentioned burial earlier. Threads could be real. Yeah. And there's been plenty of examples before that as well. Network effects are the most important thing in social media. The value of social media increases with every other person on the. It's not a very social platform if it's just you and none of your mates and none of your family and none of the celebrities that you actually want to follow. And that is why Twitter and Instagram and Facebook and TikTok have such an advantage because they've built those network effects. And when you have them, they're really hard to break. Can Instagram break Twitter's network effect and create a new network for those that want to share their thoughts in 500 characters or less? Monetisation is also the interesting question here. Threads has launched. Without advertising, the company hopes to build a substantial user base before giving priority to profit and revenue, and they can sustain losses on this platform for a long time because they have such profitable other platforms. Again, an advantage over Mastodon and the like. But we do know that Ellen has pissed off a lot of Twitter advertisers in the early days. He was pretty clunky, I guess, with how you manage them. And we know that revenue has fallen for Twitter. We just don't know how much because it's not public anymore. If Instagram can leverage its strength with advertisers and convince them to advertise on Threads rather than Twitter, that is going to be the body blow to Twitter, to Elon and the massive amount of debt he has to service from when he took over the company. 

Sascha: [00:19:46] So, Alec, big question, Are you going to be a Threads user? 

Alec: [00:19:50] Well, Equity Mates is on there because you got to be everywhere in this business.

Sascha: [00:19:55] Come follow us. I like his writing Threads for someone. Please.

Alec: [00:19:59] Yeah, yeah, yeah. We're actually giving away a few books as part of our hurried Threads Launch strategy. I think there's eight books that we're giving away, so jump over two Threads and you can win one of those books. Not a lot of uses on Threads, so probability is high that you might win one. 

Sascha: [00:20:14] Yeah, well. 

Alec: [00:20:16] But honestly, Sascha, I don't know. Long term, I think Equity Mates doesn't have a great presence on Twitter, so probably we'll do this for a couple of weeks and then move on to the next thing. 

Sascha: [00:20:29] Well, come along and join us and explore the new space. But I think we'll leave it there for today. But come on with some books I like. I'll see you on Threads for at least the next couple of weeks, but more likely on the mic later this week. 

Alec: [00:20:41] Sounds good.

Sascha: [00:20:42] Thanks so much for joining us on The Dive today. If you enjoyed this episode, send it to a friend. It's honestly the smallest thing for me and makes the biggest difference to us. I'll be back in your feeds on Wednesday. Until next time.