How Twitter Could Fail, According to Twitter

The day has arrived. The Twitter IPO is filed. The S-1 is public. And in the document, as per S-1 rules, the company has spelled out for would-be stock owners all the ways it could really blow it.

It a nutshell, it’s the same way every tech startup risks failing, and many have: either by not making any money, or by trying so hard to make money you ruin what was great about the product to begin with and alienate your user base. And then don’t make any money.

In this particular case, that would mean failing to generate advertising revenue because people stop tweeting, or people stop caring about what people are tweeting about. Since Twitter is about as promising, volatile, and risky as a preteen celebrity, there are lots of ways that could happen. Here are some of the reasons Twitter could fail, as outlined by the young social network itself:

If it doesn’t up its ad game. Twitter’s banking on its promoted tweets taking off, and offering more targeted advertising. That means getting its hands on more user data, including geolocation data. It writes that as of now, “we do not collect extensive private personally identifiable information directly from our users” and “we do not have real-time geographic information for all of our users.” That might need to change.

If it invades your privacy. Yes, personal data collection is a double-edged sword. Veer too far in one direction and you risk violating user privacy and damaging the company’s reputation while you’re at it. Twitter writes that it must find a way to  both “process, store, protect and use personal data” and also “continue to earn and preserve our users’ trust, including with respect to their private personal information.”  

If the VIPs go home. One of Twitter’s major bragging rights is its impressive Rolodex of influential users. Obama’s on Twitter. Miley Cyrus is on Twitter. The president of Iran, where Twitter is censored is on Twitter. Hell, it’s now being used as a platform for international diplomacy. It can’t risk losing this particular user base.

If the competition wins. For one, there’s no shortage of social networking startups nipping at Twitter’s heels hoping to become the Next Big Thing. Two, Twitter will have to keep rolling out strategies to lure users away from Facebook—like dominating “second screen” TV watching, and introducing real-time video clips embedded in tweets.

If it’s overrun with spam. As I recently wrote, social media is the new hotbed for spam, which has tripled in the first half of this year alone. Twitter’s already batting off fraudulent accounts, fake followers, faux tweets, and bots. If the spam flood isn’t dammed, humans might start jumping ship.

If it’s overrun with ads. Or, Twitter could wind up being its own worst enemy like many startups before it, by letting the pressure to deliver on ad revenue threaten user experience. This point isn’t lost on the company, which writes: “Users believe that their experience is diminished as a result of the decisions we make with respect to the frequency, relevance and prominence of ads that we display.”

If it stops being hip. There’s the product, and then there’s the company itself, and both have to stay fresh. If the startup-y corporate culture changes and people no longer want to work at Twitter, the company could have a tough time recruiting the top talent needed to continue to innovate.

If it keeps getting hacked. “We experience cyberattacks of varying degrees on a regular basis,” Twitter admits. Security breaches can expose sensitive user information, which can be especially risky given the aforementioned users. 

If it doesn’t go international. To increase revenue you have to expand to new audiences, and a big part of that means going overseas. Still, there are lots of hurtles to clear. “For example, in South Korea we face intense competition from a messaging service offered by Kakao, which offers some of the same communication features as Twitter,” it writes. As another example, many parts of the world don’t have high-speed internet, without which Twitter is substantially less fun.

If it gets tangled up lawsuits. In fact, Twitter’s already tangled up in a number of expensive lawsuits, mainly from firms or people suing for intellectual property infringement. The scrappy startup doesn’t have the kind of resources that big media and entertainment companies do, and could get crushed by legal fees.

If it just drops the ball. As I mentioned before, Twitter’s young. It’s IPO comes much earlier in the company’s lifetime than say, Facebook’s, and it’s only been generating any revenue at all since 2009. Almost no social media companies have managed to turn a profit, IPO or otherwise. Will Twitter be any different?