Super-AppDecember 3, 2021
Two years ago I wrote a letter to the chairman of Twitter calling for Jack Dorsey to be replaced as CEO. Or, more to the point, for the board to appoint a full-time CEO. An executive who spends 90% of his time running another company and plans to spend half the year on a different continent looked like a recipe for poor shareholder returns. Spoiler alert: It was.
This past February, as there were now directors on the board acting as fiduciaries, I predicted Dorsey would be replaced by the end of the year.
Between the day @jack reclaimed the CEO position and the day he resigned (six years), Twitter’s stock increased 33%. The S&P 500, Facebook, and Google rose by 121%, 283%, and 447%, respectively.
My next prediction? Twitter will be acquired by the end of 2022, most likely by Salesforce or a fintech company like PayPal or Stripe with inflated currency. Jack could also reunite his sister-wives — in a man-bites-dog scenario, the company formerly known as Square could acquire Twitter. Why? For the same reason it’s now called Block. Super-apps.
A super-app offers a suite of internet services on one platform. Block already boasts an armament of super-app services: peer-to-peer payments (CashApp), crypto and stock trading (also CashApp), lending (Afterpay), music streaming (Tidal), it’s dabbled in food delivery (Caviar, sold to DoorDash in 2019), and its core merchant-payment platform (Square). Building social into the platform is the logical next step to becoming America’s first super-app.
I wrote about super-apps last week in New York magazine, and excerpts from that article appear below. It was timely: Super-app stories have been in the news ever since.
- Square changed its name to Block — this was announced 48 hours after Dorsey exited Twitter. “Square” will be reserved for the merchant-payment business; the three-dimensional moniker encapsulates all its various products. Twitter would give Block even more dimension.
- ByteDance (TikTok’s parent company) invested in iMile, a last-mile courier service that connects mostly Chinese e-commerce companies to consumers in the Middle East. Dance videos are just the bait — commerce is the hook, and ByteDance is building services for more than limber-limbed teens.
- Grab, the “everyday everything app” from Singapore, made its public debut yesterday after a $40 billion SPAC deal. It’s the biggest SPAC to date, though the stock fell more than 20% by the closing bell.
- Indian super-app Paytm IPO’d with a $20 billion valuation — the largest public listing in the nation’s history. However, however … it, too, shed more than a fifth of its value on the first day of trading. Then slid further before maybe finding solid ground at $14 billion.
In sum, it’s getting crowded in the super-app lobby. The competition in India now includes: Amazon Pay, Google Pay, WeChat, and PhonePe (owned by Flipkart/Walmart). Southeast Asia also hosts many players: Gojek, Line, Sea Limited, Tokopedia, Zalo, and more.
And for good reason. The super-app market is the digital Iron Throne. Super-apps live on mobile, and mobile is the internet in emerging markets. India, for example, has three times as many cellular subscribers as the U.S., and Indians spend 17% more time per day on their phones.
Long term, however, it’s the world’s largest economy that is the biggest prize. A platform that services every aspect of the consumer experience in any market will be one of the most valuable companies in that market. The firm that establishes super-app leadership in America will be the most valuable company in history. Some thoughts below, with excerpts from our piece originally published in New York magazine on November 24, 2021.
Who are the strongest challengers to Apple and Google? Most apparent, the other Big Tech behemoths, Amazon and Facebook/Meta, who aim to leapfrog by building alternative interaction paradigms, a pretentious way to say “voice” (Amazon) and “VR” (Meta). And while they are both trying to skate to where the puck is headed, Meta is on thin ice with a portal that makes you nauseous. Voice is underhyped, and VR overhyped.
The likely epicenter for aspiring super-apps is fintech. Payments in particular: PayPal, which owns Venmo, and Block né Square. And new fintech unicorns are being birthed weekly, including crypto-based businesses that are also in a position to leapfrog with long legs of capital, vaulting over the entire existing financial system. Fintech companies that reach scale have valuable infrastructure, acquisition currency in the form of overheated stock, and trust. Traditional Big Tech leaders, social media companies especially, have burned through acres of PR heat shields over the past years, relentlessly assaulted by bad press as they ask people to come for teen depression and stay for insurrection. Fintech has been (relatively) unscathed. Plus, these companies begin their assault from higher ground: payments.
Life is so rich,
P.S. Making predictions can be dangerous. It might put you in the Twitter crosshairs of Elon Musk. Yet I persist. Join my free Predictions livestream on December 7. You probably won’t regret it.