Twitters Business Model Does Not Matter
Published by Rodney Rumford July 1st, 2008 in twitter.
People keep talking about twitter and what is it’s business model. At this point in time the business model or plans to monetize are not what is critical or important.
Twitter has investors that have put over 15 million dollars in the bank for them to use. VC’s do not invest in companies that do not have a plan for a business model; contrary to what some people might tell you.
The only issue that matters at this time is reliability of the twitter service. Millions of users have come to depend upon the service as a new and improved way to communicate, build audience and interact. Intermittent outages frustrate users and their patience is wearing thinner by the outage (myself included). It has almost be come a running joke about the outages. As a point of reference twitter has ~4-5 million users.
I still say that the average twitter users first instinct when twitter is down is to twitter that twitter is down. This sounds funny and every twitter user will agree with you and laugh. The reason that it is people’s first instinct is because twitter has changed the way people choose to instantly and quickly share news & information with their network of friends.
Twitter is limited to 140 characters: that is it’s beauty. “Brevity in 140″. It forces you to think before you type and to be succinct. The uninitiated might question the value of this service andwhy they would use it. But once you have some friends in the service and jump in the pool you will find multiple uses for twitter for both personal and business. As the audience grows twitter has several ways to monetize. More on that in the future…
Here is a quick video interview from Always On with Robert Scoble talking about the twitter business model (or more accurately: why it does not matter). If they are not reliable they lose their audience to other similar services like plurk, jaiku, friendfeed, pownce, etc.
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Excellent point and a lesson we can all learn from - create a business that works and the business model will naturally follow.
I agree the reliability is the key to sustaining growth. Although only half serious, I started up a facebook group to raise money on a private level for Twitter. Check it out: http://www.facebook.com/install.php?api_key=7ba2e1f815d14583831f2c98b221db47#/group.php?gid=21624136569
We’ve got $1,700 pledged so far
You can only give so much money to a cool toy before you run out utility or you find a utility that functions better, for a small price. Once the VCs get tired of shoveling cash at you, you better have a revenue stream that can sustain your growth…
Twitter is cool, but the barrier to entry is extremely small. All it takes is another start up, that is smaller, faster, and provides a few more features that Twitter hasn’t thought about — oh, and stable. Plurk ALMOST has this, but they need to rethink their UI to be more conventional, and come out with a few more features.
Ryan,
Well said. They do need a revenue model. But in the short term they have to put the reliability issue behind them. And quickly. Otherwise they wont have users to monetize.
I agree that the competition is coming hard at them, friendfeed, plurk (which i am liking more and more), socialthing, etc.
I suspect throwing hardware at Twitter would help in the short term while they re-architect the back end. I’m not sure what they could have possibly done on the back end that was so terrible that it needs massive re-tooling now to be stable. I agree with Scoble though that the business model will find you. If you’re routinely attracting many many people - someone will find a way to make money off that traffic. Twitter doesn’t need to focus on that right now. They need to focus on reliability.