Saturation
The whole situation regarding Elon Musk’s takeover of Twitter shows a general opinion on necessary reforms in the business of social media. With concerns about privacy at an all-time high and political overlap becoming a problem with things like hate speech, social media companies have caught themselves in the middle of this mess. This was further amplified when the whistleblower from Meta Platforms (known as Facebook) leaked nasty details about surveillance and the hunger for money in whatever way possible.
When opportunity comes, people will pounce on it, and it’s adding to a market that is already oversaturated. Former President Donald Trump has explored the social media world with his Truth Social app, which has been underwhelming so far, and that is one of countless examples. Former executives of companies like Facebook and Twitter are joining in the game, the most notable one being HalloApp which was founded by 2 former WhatsApp executives. The company has raised $15 million in venture funding, and their business model relies on a subscription over ads, which is an interesting view as companies like Meta have struggled massively with their ad business due to Apple’s new privacy policy.
In the past, it’s been a major struggle for startup social media companies to break into the tier Meta, Twitter, Google, Snap, and ByteDance have laid in as scalability is a major problem. Along with that, these companies have bought many social media startups on their way to the top, something that regulators are investigating for possible antitrust violations. However, the public eye is changing as we’ve talked about, giving way for these startups to attract their user base and slowly take out the big fish, which would shift the whole industry.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.