In my last post, I opened the topic of how Twitter has set-off on a course to threaten their community in favor of finding revenue streams. I’ve seen a few people starting to write about this – most notably Mike Loukides’ great opinion piece at O’Reilly and Ryan Kim’s numbers-driven take at GigaOM. Between the two, they hit many of the salient points, of which I’ll only echo a few later on.
The strangest thing about all this developer controversy is it’s playing out at exactly the same time as the original founder Jack Dorsey is celebrating the fifth anniversary of being green-lighted to build Twitter. Jack is now dedicating his blog to the IM-by-IM story of the first moments of Twitter. (I selfishly wish he’d turn on an RSS function so I get the posts immediately in MacMail.) It’s the kind of inside story I absolutely love because it humanizes the creation of an epic Internet brand. And every entrepreneur should be following along on the hopes of picking up one tiny nugget about how to build a great company.
I can’t help but think this is the classic story of Management 2.0 – when the original founders who had the ‘dream’ are moved aside in favor of more professional managers. This is both a success and a failure of the original founders. It’s a success in the fact they created a service that captured the hearts and minds of millions of people – literally Ev, Biz and Jack changed the way people communicate, which is not a small thing.
At the same time, that success had a heavy price for a company that was built from the mind of a few “change-the-world” entrepreneurs. As Twitter’s valuation exploded and they continued to raise millions in VC money, the pressure mounted on creating a business model. There were stops and starts all along the way (the best example being promoted tweets), but nothing ever really stuck. The failure to stand up some type of revenue model clearly put enough pressure on the three co-founders to move them off into other ventures (in varying degrees).
And I’m guessing it’s not a coincidence that Jack has Square aimed at financial disruption the likes of what Twitter did to communications – but it’s got the revenue model built in from Day One. In fact, Square is aggressively driving the cost of merchant processing down, and being handsomely rewarded with reports of more than $1M/day in transaction volume. It’s yet another example of great UI/UX and design blowing up an industry segment that’s stuck in the 1970s. If there’s one guy on the tech scene right now that’s channeling the Steve Jobs mojo (and could absolutely be our industry’s next superstar), I think it’s clearly Jack Dorsey.
But what really worries me about Twitter’s current tone is that they’re simply turning their back on the incredible ecosystem they created while growing the company. It’s like any other platform-to-developer symmetrical relationship (think Apple/iOS or Sun/Java) – the real power play requires BOTH sides to be in perfect sync. If the platform gets too far ahead without developer support, you end up looking like RIM and if the developers get too far down the build path without platform support they simply die on the vine without buyers for their innovations. And platform lead Ryan Sarver may have couched the whole position in ‘customer experience’, but we all know it’s about Twitter’s least-common-denominator advertising strategy that requires them to control the client and the impressions it serves.
And at the user level, Sarver’s stats about 90% of people using a Twitter brand client once a month are completely meaningless. I actively use at least four separate Twitter clients depending on the task – Echofon is my first choice for synced timelines across all my devices, Brizzly is web-based and does a great job of integrating multimedia into my stream, and HootSuite rocks for it’s scheduling capabilities and metrics. All that being said, I’m a huge fan of the newest breed of Twitter-branded clients for both OSX and the iPad. They’re solid enough to be my Number One backup when Echofon just isn’t handling a task well. But the point is I have choice. I don’t care that the user experience in different in all of them – in fact that’s what I love.
Honestly, I expect more from the brand Twitter than resorting to crappy-ass advertising. These were the guys who changed how we communicate on a daily basis! They saved me from an overloaded inbox, and gave me the tools to personally curate information from some of the smartest people in the world (for me, that’s Mark Suster, Jack Dorsey, Esther Dyson, Dave McClure and hundreds more). My tweetstream is an always-on, thought-provoking expedition of all things startup and technology. But the true power is it’s something completely different for each user; witness today’s trending topics that range from Japan to Nate Dogg to Sharron Angle.
So yeah, I’m pulling for something bigger and better than banner ads – and because I believe Twitter is one of the most important ‘startups’ of our time. But beware the tale of Canada’s poster child Research in Motion. After being the corporate darling of the 90s and early 2000s, their unwillingness (and inability) to cultivate a developer following exposed a nice soft underbelly that Cupertino eventually took advantage of with the killer combination of a watershed device and a well-incented developer community. While hardware and software clearly have different dynamics, the core issue is the same: epic scale requires a healthy ecosystem where all the players are appreciated, supported and make money. That’d be a tough lesson for Twitter to learn in reverse after five years of glowing success…