A VC - Latest Comments in Twitter's Business Model

Re: Twitter's Business Model

Mark Essel — Fri, 24 Jul 2009 07:07:20 -0000

First off, while out wallking and reading I got this crappy news jingle in my head "Fred's vacation on location", trust me it sounds better than it reads. Ok past the momentary morning madness.

Copycat systems are fine as long as they aren't patented right so Twitter following facebook could work. I can say from experience that while banging my face into the keyboard for 17hours yesterday, I really really hope both fiendfeed and Google App Engine survive for at least a few years. Learning and developing on platforms can feel like iteratively leaning ancient Greek and then flushing it down the tubes. For developers, if you choose the right platform/language now you can potentially have a fantastic income for years to come. Pick the wrong one, and you just wasted Xyears of your life. For programmers it's all or nothing with platforms.

It'd be fantastic to have VC like development, where you back several platforms and at least a few are home runs. Buts that's not the way it works :()

Re: Twitter's Business Model

fredwilson — Fri, 24 Jul 2009 05:47:10 -0000

And how is an rss feed for people pointless and stupid?

Re: Twitter's Business Model

oscar — Thu, 23 Jul 2009 21:17:34 -0000

It's going to be interesting to see where it develops. But from the get go I have said it's pointless and stupid. It's an RSS feed for people.

Re: Twitter's Business Model

Clayton — Sat, 11 Apr 2009 21:03:03 -0000

Obviously they can sell their personal information and thoughts like facebook does.

Re: Twitter's Business Model

blacksonville — Tue, 09 Dec 2008 03:33:49 -0000

I think you are on it about Facebook. The new Facebook Connect featuring the best of dataportability is where the industry will slow down a bit as users try to catch up with how to aggregate their personal audience.

Re: Twitter's Business Model

Kurt — Mon, 08 Dec 2008 13:30:45 -0000

Brass tacks. When will the ads start?

Re: Twitter's Business Model

fredwilson — Mon, 08 Dec 2008 12:47:16 -0000

What ads?

Re: Twitter's Business Model

Prokofy — Tue, 01 Jul 2008 00:29:50 -0000

Elvis is channelling Dylan and Randy Newman there, it's a good tune.

Re: Twitter's Business Model

Prokofy — Tue, 01 Jul 2008 00:28:15 -0000

But what has Facebook done *lately*? It has scale, it learned from the mistake, but that was awhile ago. People are migrating to FriendFeed.

Re: Twitter's Business Model

Curt Monash — Sun, 10 Feb 2008 07:21:40 -0000

I think it's grow huge or die, because Twitter is fated to be integrated with instant messaging (and IRC-style chat, for those few who care). But scaling will require a total reinvention of the technology, and Twitter doesn't have much in the way of barriers to switching, so it's not at all obvious Twitter-the-company will be the winner here.

http://www.texttechnologies... spells out what's needed (warning: 1500 words).

CAM

Re: Twitter's Business Model

George Scott — Fri, 18 Jan 2008 13:15:38 -0000

My philosophy is when you make people money they will pay you. If twitter can make people money then people will pay something.

Re: Twitter's Business Model

Tinymeat — Sun, 06 Jan 2008 21:42:43 -0000

I'm intrigued with Threadless' crowdsourcing/social networking business model. Many of the illustrators we work with found us by our artist series wallets being posted on in Threadless user's blogs. It's frustrating at times to see this all happen for us organically rather than at the rocket speed of a site like Etsy but I am grateful for all of the technology and tools available to business owners today. I am so pleased to be growing a small business today rather than 20 years ago.

Re: Twitter's Business Model

fredwilson — Sun, 06 Jan 2008 16:25:01 -0000

Etsy is gloriously brilliant but so are several other of our portfolio
companies

I don't like to play favorites so they'll have to show the world themselves

fred

Re: Twitter's Business Model

Tinymeat — Sun, 06 Jan 2008 15:23:02 -0000

I guess they all can't be as gloriously brilliant as Etsy eh Fred?

Re: Twitter's Business Model

fredwilson — Sat, 05 Jan 2008 14:27:02 -0000

I think you misunderstand my point. Every business needs a business model at some point. The question is when you start to execute it. Our portfolio company indeed.com waited two years, got to scale, then executed its business model and is everything you look for in a business now

Fred

Re: Twitter's Business Model

Sat, 05 Jan 2008 11:43:02 -0000

http://blog.roam4free.ie/ne...

Fred - how about a response to this commentary on Twitter?

Re: Twitter's Business Model

Stephen Rockman — Sat, 05 Jan 2008 06:37:02 -0000

Come on, this is just the latest version of 'the emperor's new clothes' ... as in ‘lets all pretend that zero revenues and millions of uniques equals a real business and hopefully no-one will find us out.’
i find this deeply depressing and only exacerbated by the fact that , as a VC you're on a streak. Seven or eight years back we all learned what it meant to talk up businesses that had no viable commercial future and as far as i know the fundamentals have not changed since then. A land grab at any cost , which is what you are advocating, does not in itself generate a business that is capable of throwing off cash; size only matters in terms of underpinning the multiple and supports, not replaces, a real business model. Of course your view will work for the handful of businesses for whom Google, Cisco et al will provide the exit but for all the other entrepreneurs and investors who are capable of building interesting and valuable businesses this is just a cruel and ridiculous illusion dressed up as unassailable cant.

Re: Twitter's Business Model

fredwilson — Fri, 04 Jan 2008 16:14:03 -0000

The right investor will understand the various monetization opportunities that you'll have in front of you. If they don't, they aren't right for you

Fred

Re: Twitter's Business Model

Nathan Snell — Fri, 04 Jan 2008 02:01:53 -0000

Lots of interesting stuff to consider. The biggest question I have is:

Given what you propose of the "build the business and figure out how to monetize later" how exactly are entrepreneur's who aren't well connected supposed to secure funding money? Do they do the biz plan and go into the presentation and when financials come up say "This is how much money we expect to lose each year. We haven't figured out how to break even yet. But given our team we're confident we'll figure out a way. Google did, after all."

The above is not intended to be a disrespectful sarcasm so much as a to the point, no bull quote that gets my question across.

At the point of the end of the quote, do you just bank on the investor loving your business idea? Not to mention, unless I am mistaken, realistically if you can't project future sales (ala no business model) how are you supposed to do a proper valuation of the company?

Re: Twitter's Business Model

chadrussell — Fri, 04 Jan 2008 00:29:16 -0000

I think this really points out the difference in startups and deals during the 1.0 days as opposed to the 2.0 ones where you had the idea and model but no actual live product, audience, or scale. You would get funding (or try) and build from there and hope to gain an audience to profit from. Now days building your product, and getting to scale is where it seems the deals are happening and seems to be the approach that woks best for most. Maybe it is just me though. I definitely agree for these types of businesses, it is really the best way to go. Once you get good momentum going, that alone can take your business where it probably would have never gone doing the reverse approach. Even if no business model is ever hatched, there is still value in terms of the audience you have created. That alone is worth something to someone.

Re: Twitter's Business Model

Stephen L. McKay — Thu, 03 Jan 2008 18:50:56 -0000

Fred,

My point exactly.
There is so much, and so very many oportunities out here right now, and it is all do-able!
It's where we want to go, and what we want to do.

Steve

Re: Twitter's Business Model

fredwilson — Thu, 03 Jan 2008 16:41:01 -0000

Wow. Thanks for the support and encouragement. Believe it or not, it really helps to have people who like what we are doing and share that with us

Fred

Re: Twitter's Business Model

Goto Ao — Thu, 03 Jan 2008 15:56:44 -0000

Sorry Fred! I'm not belittling Twitter. But, how on earth can you monitize x98.us/pt - which amounts to a TinyURL. What is required to build the bubble you apparently want is a UNIFORM AND COHERENT network with hundreds of Interchangeable Master Channels (IMCs) that basically allow anybody to in effect built their OWN private Internet, in the dot-com name space. In other words a Web-based platform that mimics the dot-com name space itself with hundreds of IMCs that are themselves layered across the public Internet. This then allows persons with marketable business ideas and who want to OWN their own Internet to layer their own applications from Facebook, Ning, or wherever inside the IMCs themselves - which for practical purposes are independent from ICANN and nonethelesss perfectly resolve in the DNS root. Persons with marketable business plans can thereby build their iown nnovations in what amounts to their own private Internet(s) and, thus, accept advertising dollars world wide BECAUSE the IMC network itself can accommodate almost every conceivable brand name product or service anywhere in the world, in a proprietary level three brand channel, but without the garbage and the security and privacy hassles that are killing the public Web. If you don't yet know about IMCs, you are (very respectfully) behind of, and not in front of, the curve.

Re: Twitter's Business Model

zaid — Thu, 03 Jan 2008 13:40:41 -0000

"But every ounce of time, energy, money, and brainpower you spend on thinking about how to monetize will take you away from the goal of getting to scale. Because if you don't get to scale, you don't have a business anyway."

That is a big point you make that many VCs still cannot understand.

I was at a local web2.0 meetup about a year ago hosted by one of the two tech VCs in the area. The discussion about monetization came up. When it was my turn to speak I said for most web2.0 ventures, monetization is a distraction. The real focus should be on growth. And like Calacanis and you say, it is almost impossible for an early stage startup to be doing both *well* Most folks in the room were shocked by the idea that trying to make money can be a distraction - these same people are probably still confused about why YouTube was acquired and Facebook's valution.

Re: Twitter's Business Model

Kirill Bolgarov — Thu, 03 Jan 2008 12:15:54 -0000

IMHO, Twitter's is a basement, its about social data syndication or whatever buzzword you can invent ;)
It has really really wide prospect of monetization. For example - Twitter fits perfectly with a mobile phone - because its basic and simple. And this is the holy grail of social networking tools, I mean merging online and "offline" social networks into one.
Fred, I've always been sort of your fan, and the more I think of Twitter the more I get there :)