Even the most revolutionary companies can make critical missteps that shape their long-term trajectory. Jack Dorsey, co-founder of Twitter, recently admitted that the platform’s biggest mistake was how it approached monetization. We listened to his interview with Nicolai Tangen on In Good Company and learned some valuable lessons. "We raced to monetization way too quickly," he reflected, noting that Twitter force-fitted an advertising model that led to long-term challenges.
What if Twitter had taken a different path? Could it have built a more sustainable, user-first experience? In this article, we explore Dorsey’s insights into what went wrong, the alternative business models he wished Twitter had pursued, and what entrepreneurs can learn from one of social media’s biggest "what ifs."
Twitter’s Rush to Monetization
Twitter wasn’t initially built with business in mind. Dorsey and his team saw it as a way to share real-time updates and engage in public conversations. The platform exploded in popularity, attracting millions of users, including politicians, celebrities, and news organizations. However, as Twitter grew, so did the financial pressure.
Venture capitalists and Wall Street were eager to see Twitter generate revenue. With Facebook and Google thriving on ad-based business models, Twitter followed suit. The company aggressively pursued an advertising-driven approach, prioritizing growth and monetization over other potential revenue streams.
But according to Dorsey, this decision was a mistake.
Why the Ad-Based Model Was a Problem
Dorsey believes that Twitter’s reliance on advertising fundamentally altered its purpose and created unintended consequences. "We copied the model of the day," he said, referring to how Twitter adopted the standard digital advertising playbook instead of considering other revenue options.
Issues With the Advertising Model:
- User Experience Compromised – To maximize ad revenue, Twitter had to prioritize engagement and impressions, leading to algorithmic changes that amplified controversy and virality over meaningful conversations.
- Misaligned Incentives – Twitter’s real customers became advertisers, not users. The platform’s success was measured by how well it sold ads rather than how well it served its community.
- Pressure to Scale Quickly – Unlike subscription or commerce-driven models, an ad-based system forced Twitter to prioritize rapid user growth at the expense of quality interactions.
This rush to monetization shaped Twitter into a company that constantly had to balance advertiser demands, content moderation concerns, and user expectations—all while competing against tech giants with far greater ad infrastructure.
What Jack Dorsey Wishes Twitter Had Done Instead
In hindsight, Dorsey believes Twitter could have taken a different path—one that might have preserved its original essence while making it more financially sustainable.
Alternative Monetization Models Dorsey Supports:
- Subscription-Based Twitter – Instead of relying on advertisers, Twitter could have charged users for premium features, offering an ad-free experience and exclusive content.
- Commerce-Driven Approach – Dorsey envisions a Twitter where users could exchange money directly on the platform, allowing for native commerce and financial transactions.
- A Decentralized, Open Protocol – One of Dorsey’s biggest regrets is not making Twitter more like an open protocol, similar to email or Bitcoin. If Twitter had functioned as a shared infrastructure rather than a privately controlled company, it might have avoided many of the content moderation and regulatory challenges that followed.
The Role of Decentralization in Social Media’s Future
Dorsey has since backed projects like Bluesky and Nostr, which aim to create decentralized social networks where users have more control over their data and algorithms. These projects attempt to fix the problems Twitter faced by prioritizing openness and user choice over centralized control.
Lessons for Entrepreneurs: Think Long-Term, Not Short-Term
Dorsey’s reflections offer powerful lessons for founders and business owners:
- Don’t just follow industry trends – The fact that Facebook and Google thrived on advertising didn’t mean Twitter had to.
- Align revenue models with core product value – Twitter was built for public conversation, not for selling ads. A subscription or commerce model might have been more sustainable.
- Consider the long-term impact of monetization decisions – The business model you choose early on will shape your product, customer base, and future growth.
Twitter’s decision to prioritize advertising may have propelled its financial growth, but according to Jack Dorsey, it was a costly mistake. If Twitter had taken a different approach—whether through subscriptions, commerce, or decentralization—it might have created a more sustainable, user-friendly ecosystem.
For entrepreneurs, the lesson is clear: Business models shape the soul of your company. Choose wisely.
