Twitter, I think its time we had that talk …

August 17th, 2012 § 0

So Twitter, you’re getting older now and you’re starting to make some bad decisions.

I think its time we have that talk (no, not the one about where babies come from)

The talk about where REVENUE comes from

Revenue is that ever important thing that you avoid in the board meetings as you “aggressively grow your user base” and “measure social interaction”

Don’t get me wrong those buzzwords are great, and they have led you to several rounds of financing, netted you top tier investors, and helped you build one of the most impressive engineering teams in all of tech. But what those buzzwords do not do is produce dollar bills.

Here’s what will

The one thing we know you have that is truly valuable is not what you are charging for. its your DATA, millions of users give you information that they are willing to tell the world on a daily basis. This is valuable, it teaches you about people’s thoughts, feelings, moods, who they are going to vote for and you probably know really creepy things like who is more likely to get pregnant or go out and drive drunk.

My point is it may seem like its just a little microblogging site where people share what they had for dinner, but in reality they share what is important to them, and people care.

To get to the point we are at with social media today users gave up something huge. PRIVACY. It started with Facebook. The news feed at one time was a BIG deal, The pushback over it was enormous, yet here we are just a few years later and users have all but given up on privacy, people e-blast their lives for all to see.

And you, you’re a huge part of that. You’ve made it fun for people to talk about all sorts of things. This is where your data really becomes valuable.

In fact people love twitter so much they pay for “clients” to more efficiently manage their social lives. Some people simply need an experience different than the one you are providing. That does NOT mean you are somehow failing. That just means others can innovate on what you’ve built as well and you can build an eco-system around your business.

When businesses are profiting from your information there is no problem in asking for a cut.

Imagine an iphone full of apps only Apple created. Doesn’t sound too great does it? Now what about PC’s … what if Gates had not let anyone develop software for PC, Microsoft had made everything we used. Same for the Mac? The world would not be nearly as wonderful a place as it is today.

Let’s take that one step further to the web. What if google chrome only let you browse sites made by google, and Internet Explorer’s only stop on the “information superhighway” was microsoft.com?

But in fact, they did just the opposite, they went out gathering people to write software for their Computers, they went out trying to build an eco-system around their products. They realized very early on that more people developing for their platform meant more revenue for them, and they capitalized on that eco-system. Meanwhile, you’re busy trying to kill your own.

Now you’re probably thinking, “Zach, aren’t you being a bit dramatic here” but honestly that is what you’re doing! You are stifling innovation on one of my generation’s game changing inventions!

Ever since I was a child I’ve thought about ways to make money in business. My main problem with the creation of so many social sharing tech companies was always that I wondered how they would truly monetize.

People say Google has done it, they have a portfolio of free products that pays in dividends on advertising alone. And they do!

But they also provide data that is valuable and they charge for it. Their acquisition of ITA in 2010 is a wonderful example of the value add of providing travel data to startups and established companies in the travel space. This is just one of several products that generates significant revenue at the Mecca in Mountain View. This is not a coincidence.

Twitter, you now have about 175 million registered users. A fair majority of tweeters are passionate about doing so and have even built brands doing so. These users are what compels people to create twitter clients, make lots of calls to your API and keep your servers busy.

I’m sure your thought process is that keeping users on your site, viewing your ads and keeping those ads relevant is what ultimately will earn the revenue that will keep your IPO from becoming the next Facebook-sized disappointment. And you know what, you might be right!

But here’s another thought for you.

Instead of seemingly trying to force only Twitter made clients on users why not charge those who are profiting on your data for it?

Why not benefit from those who benefit from the social web? You helped create what the social web is today. You keep me more informed than my local news in most cases. Heck I got stuck at SFO during a bomb scare and found out what exactly had happened on you a full 45 minutes before any news site in the bay area had put the story on their website.

Really what I am trying to get across here is that the web is social. Twitter is a large part of innovation in the web, why not innovate the way you produce revenue on the web as well.

It just makes sense!

You have built something truly valuable. You deserve to profit from that value.

At one time Paul Graham, regarded by some as the “Godfather of Startups” was asking people to apply to YCombinator with something made on Twitter. Let’s get something straight. He was funding businesses to make money, not blow through it. If he felt businesses built on Twitter were enough to produce real revenue, why do you seem to feel as though you cannot charge for it?

Recently when someone Asked PG if that was still a valid request for startups he gave a much different answer.

“It certainly doesn’t seem as promising a territory as it used to. Not so much because it’s more dangerous as because Twitter hasn’t turned out to be a “platform” in the same sense as say iOS has.”

Why not become that platform? Now is the time to truly innovate. The ball is in your court. What’s your next move?

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