X (yes, Twitter) is broken. It is broken because people have rigged the monetization system. In the past, I used to get value for my business research on Twitter where I could type something, and get some views about that topic.

But today, the results I get are totally uncorrelated with my search. Why? They have taken XEO (X Engine Optimization) to a new level. Simply, you can write any nonsense and hashtag trends so that when people search those trends, you show on the search, and by showing on the search, if you are a monetized account, you make money when those visitors see ads!

So, consider this tweet or whatever it is called now: “We are traveling to Umuahia tomorrow for the group meeting #Obama Biden Ukraine INEC  …”. You can list and tag unrelated things, which are trending at that time. Now, when people search for “INEC”, this post shows up. Notice that this post has nothing to do with INEC.

Why is this happening? Incentives. People want more visitors for those monetizing their accounts, and they’re pushing noise into the platform to bring traffic. Without the money, this would not have happened. They would have focused on hashtagging Umuahia alone! Elon Musk and team must fix this, because its search is broken.

Comment on Feed 

Comment 1: This is not completely the case.

The issue with deliberately misplaced hashtags has been a thing before Musk took over and long before monetization was activated.

The Twitter Trend Table has always been a powerful section of the app, and long before Musk came in, users will do anything to appear on the trend table, and in many cases where they could not, they just simply place the trending tags for the day in their tweets to drive more traffic and visibility to their post.

(The trend table gives informal communities with similar interest, geography, and activity pattern a sense of what the top conversation for the day is. And it drives tons of traffic to the top 10 tags on it daily.)

It’s something that has been prominent and I have personally been irritated by before Musk took over.

If anything, maybe the behaviour just got worse since you can now earn from those views.

Comment 1R: This is correct. However, like Ndubuisi Ekekwe opined, X or Twitter is completely broken. I had mentioned this earlier on that oftentimes trends lead you to totally unrelated posts. It used to be there in the pre-Musk era but it is now completely a metastasized cancer.

Comment 1R: Your last paragraph is what’s happening actually. The behavior has changed because of monetization. People will do anything now to get that.

My Response: Great point there. I think it is the scale that is the issue now as there is a clear monetary incentive to do it 

Bootstrapping a business with personal funds often proves to be a very herculean task if at all that is possible. Hence, how to secure and leverage external funding opportunities invariably constitutes a focal question in the heart of start-ups or emerging entrepreneurial firms.

Over the years, several corporate financing structures have developed, providing external funding for entrepreneurs or businesses in their early stages. These include Angels, Venture Capitals, Accelerators, Incubators and government grants or public funds. Business owners could choose any one of these alternatives based on their prevailing capital structure, model and stage.

Although each funding structure has its own targeted business or corporate investees, they collectively shape the investment ecosystem as a whole.

Accelerators

Accelerators focus mainly on early-stage enterprises or start-ups and provide them with contextual support in addition to financial support. In other words, Accelerators provide not only financial support but also mentorship, education, and networking services to enhance and accelerate the growth of early-stage entrepreneurial firms.

Accelerators are more likely to provide contextual support than financial investment as they target highly precarious firms in their early stages which do not particularly interest other institutional investors; especially the VCs. Therefore, Accelerators prefer to invest in firms that VCs think have low profitability.

Accelerators started to wax strongly in the investment ecosystem following the establishment of Y-Combinator in 2005. Since the founding of Y-Combinator other star accelerators like Techstars, and 500 startups have developed. Studies have shown that Accelerators not increase the survival probability of entrepreneurial firms and provide higher and faster returns on investment compared to VCs; they also influence the making of an effective venture ecosystem.

Angel Investors

Angel investors provide early-stage entrepreneurial firms with both financial and technical support to scale. Angel investors are often highly experienced in management and they seek to have appreciable managerial influence on the businesses they are funding. Studies have shown that most angel investors are former entrepreneurs and business managers who are investing their wealth in firms as a way of giving back to society. Therefore, unlike other investor types that are motivated by high returns, angels are motivated by the growth of the funded firms.

Venture Capitalists

Venture Capital is an equity-based financing provided to small businesses or start-ups with high or long-term growth potential. Generally, Venture Capitalists prefer to invest in relatively more mature early-stage entrepreneurial firms characterized by high industry-knowledge and technology as well as the capacity to generate profit by selling shares or initial public offerings. Most VCs concentrate in specific industries where they have expertise and can be able to mitigate risks.

In addition to providing finance support, VCs can also provide mentorship and networking opportunities to the funded companies. Funding decision in VC usually takes more time compared to other investor types because it involves a more painstaking vetting and profiling of potential investees. A type of VC funding called Micro-VC makes investments on a small scale and increases its contextual support for targeted firms, similar to accelerators, to avoid high investment risk.

Incubators

Incubators manage early-stage companies through different developmental phases until the companies have the wherewithal in terms of finances, physical structures and human resources to function independently. Incubators’ support to early-stage companies can include; office space, administrative functions, education and mentorship, access to investors and capital and ideation. These may involve a fee on or an equity stake in the business. Unlike Accelerators that focus on established early-stage businesses, incubators focus on concepts that have yet to transition into a full-fledged business.

Relationship between Investment Types, Behaviours and Performance

Early-stage firms that could access one or more of the aforementioned external funding should have higher survivability and liquidity compared to early enterprises that could not access any of those investment supports. However, studies have shown that investment behaviour and performance can differ according to these investment types.

Choi and Kim (2018), analyzes over 30,000 investment data involving Accelerators, Angels, and Venture Capitalists from the CrunchBase database and discovers that the performance of Accelerators differs from that of Venture Capitalists, but is similar to that of Angels. The study shows that while Accelerators’ investees perform well post funding, Venture Capitals’ investees perform well in terms of survivability.

Resource:
Yunsoo Choi and Dohyeon Kim (2018). The effects of investor types on investee performance: Focusing on the seed accelerator. Cogent economics & finance