Tech & VC 27 Jul 2007 05:29 am
Twitter Business Model
Update: I should have read Umair Haque’s post before posting this one. Umair nails it. In my post, traction is just a proxy for underlying transitions that Umair identifies. It’s not a great proxy, but it’s a heck of a lot better than a spreadsheet.
Original Post: There’s a lot of buzz about the fact that Twitter’s business model is not immediately apparent. I have one quick comment on that subject:
You can have the most killer business model in the world, more genius than AdWords, but if you have no traction, it will never matter. A business model requires users to make it spin.
But, if you have traction, backing into a business model along the way to bigger traction is easier. In fact, taking this path, you’re more likely to back into a business model that is endemic to your web service instead of a business model that is offensive or antagonistic to your users. You can iterative on the business model as you grow to fit how people actually use your service, instead of how you *think* people might use your service (much like the development of AdWords, which Google didn’t implement until over two years of operation).
It’s less about frothiness and more about priorities.
2 Responses to “Twitter Business Model”
on 27 Jul 2007 at 6:26 am 1.Erik Schwartz said …
Both are necessary.
The biggest risks of traction with no business model is run rate while you invent a business model, and will the business model you invent change the fundamental user experience that gave you the traction.
When twitter was more mobile focused the first was a huge issue, terminating SMS is expensive. As twitter has grown I don’t see many people availing themselves to the mobile option, so it seems less an issue.
So the question now is can they change the product to make money without changing what made the product appealing?
Outside of the digerati, how much traction does twitter have?
on 27 Jul 2007 at 2:49 pm 2.overture said …
I always find it funny to see people continue the perception that Google “invented” adwords. Better to say, Copied GOTO/Overture – which leads to a possible addendum to your post – ie., it gives the company enough time to vet through existing business models of competitors to see how to implement a winning one on top of the traction they have been able to acquire until then..