The Internet is largely a communications medium. It's also used for content distribution, commerce, and a number of other things. But the thing I do most on the Internet is communicate. Via email, Skype, instant messaging, blogging, commenting, and twittering. It makes sense. When you connect 700mm+ of the Earth's inhabitants to a global network, people are going to use it to talk to each other.
There are lots of different ways to communicate on the Internet:
Text/Voice/Video
Asynchronous/Synchronous
Reply Expected/Reply Optional
Private/Group/Public
There is something really powerful about public, asynchronous text communications where a reply is not expected. A great example is blogging. You blog something and it's out there on the Internet for public consumption. Others read it and they either comment or create their own blog post in reaction. Collectively, we engage in a discussion.
The asynchronous aspect of blogging is critical because "real time" conversations such as conference calls don't scale past something like 20 people. Keeping the communication public is equally vital. When anything is made totally public with no limitations on who can participate, you create an open market for ideas, thoughts, and opinions.
The optional reply is arguably the most important aspect of this whole new way of communicating--it sets blogging apart from more traditional online communication like email and instant message.
But blogging is not without it's limitations. With a focus on publishing a formal, reverse-chronologically formatted web page, blogging lacks the banter that characterizes most forms of live conversation.
Twittering is an emerging new form of communication on the Internet that changes the expectations associated with other forms of communication and yet it's fundamentally different than blogging. Twitter provides a platform for banter that blogging doesn't and it's available in so many places via IM, mobile text messaging, or the Web that it induces a different sort of behavior. Twitter encourages people to adapt and invent behavior to suit their needs.
This emergent behavior is particularly intriguing. Some of the most interesting platforms on the web have been extended and enhanced by users and now support all kinds of activities and behaviors that the creators of the service never intended. Twitter makes its innovative network for short, asynchronous public communications available via an API for anyone to extend.
If you think about it, Twitter extends short messaging (SMS) style communications to the web and does it in an open way that anyone can build on top of it. I think we’ve only begun to see the kinds of things that can be built on top of a messaging system like this.
After Facebook, I think Twitter is the most interesting API that people are building to these days. Here is one person's list of the top 10 Twitter apps and here is the fan-created wiki with even more. The breadth of activity in the Twitter ecosystem is astounding. Open systems that support emergent behavior are way more likely to become platforms and we are excited by the possibilities of new consumer facing web platforms.
And this is why we are so excited about our investment in Twitter. We reached out to Evan Williams, Jack Dorsey, and Biz Stone, the co-founders of Twitter, earlier this year and told them if they ever decided to spin Twitter out of the Obvious Corporation incubator it started in, that we'd like to be an investor. The timing was fortuitous as they were thinking of doing exactly that. We put together a financing that will allow them to scale the service and connect it to more places.
As we stated when we made our investment in Delicious,
The question everyone asks is "What is the business model?" To be completely and totally honest, we don't yet know.
The capital we are investing will go to making Twitter a better, more reliable and robust service. That's what the focus needs to be right now. We'll have plenty of time to figure out the business model and there are many options to choose from.
We are thrilled to be part of a company that is building a new form of communicating on the web. We hope you will join Twitter and participate in this new medium along with us.
July 25, 2007 02:27 PM, By Fred Wilson
Tags: communications investment messaging twitter
Comments (40)
Great to see. I love Twitter and am the belief that there's lots of biz model opportunities - though I imagine it will get scooped up by a larger player before one is decided on. Such strong community combined increasingly solid, paradigm shifting functionality makes a sound looking investment to me. Look forward to seeing what you all can do together.
Posted by Marshall Kirkpatrick , July 26, 2007 09:27 PM
Congrats on funding Twitter. I think the service has moved to a business focus in recent months which is great.
Posted by Allen Stern , July 26, 2007 09:35 PM
Here's my two cents. For Twitter to successfuly win over its competitors, it needs to provide users with Desk-top version(like MSN) which automatically RSS feeds friends update at bottom of PC screen(like Bloomburg financial news service).
Why need this? Users are lazy... (BTW, I'm a MIT graduate too, preparing a new startup...which is "SPAM-FREE" email service provider...)
Posted by Jin Park , July 26, 2007 09:38 PM
Thanks for supporting good social design!
Posted by Jeremy , July 26, 2007 10:06 PM
I love Twitter. Great investment!
I would just add that photos are another form of communication (in a sense) that is part of the internet conversation (flickr is public and social). 1000 words and all that...
Posted by Mark Collier , July 26, 2007 10:06 PM
Yep, I scheduled 10:15 for my every-other-day "congrats" comment here. Great news. Great technology. Lots of possible business plans... Great investment. Good luck growing the company huge.
Posted by Fraser , July 26, 2007 10:14 PM
Big fan of Twitter. Great pick!
Now we will be investing more in Twitter API integration.
Brij
http://www.onemoreidea.org/why-twitter-matters/
Posted by Brij , July 27, 2007 12:33 AM
Outstanding news. Looking forward to seeing where Twitter goes from here.
Posted by Mike D , July 27, 2007 12:55 AM
Congratulations Fred, CRV and the rest of the team. A great product and a great team of investors
Posted by Nik Cubrilovic , July 27, 2007 02:17 AM
Twitter is a new form of communication, just like cell phones, email and blogs. Perfect fit, congrats.
Posted by Emre Sokullu , July 27, 2007 02:34 AM
Twitter goes with right investors.
Posted by Jason Vu , July 27, 2007 05:36 AM
Congratulations ! Looking forward to see a Twitter Intranet/Extranet Edition !
We really need that kind of application for corporate communication purpose
Posted by Jeremie Berrebi (Zlio.com) , July 27, 2007 06:19 AM
Not convinced yet - will it make it out of the tech-elite? No business model? There must be something - can you really get funded without any idea on monetization at all?
Sounds like circa 1999?
Posted by Chris Hamoen , July 27, 2007 08:17 AM
Fred, you're a role model.
Posted by Dhrumil , July 27, 2007 08:29 AM
Twitter is a solid investment because it clearly has three main ingredients for success: experienced, passionate team; large and obvious market need, and the barrier to entry is their fast growing user base and first mover advantage.
All of that might sound very bubble 1.0, but "building a community" is much different than "capturing eyeballs" and the economics are much more favorable for the former.
Congrats to all parties.
Posted by Marc Nathan , July 27, 2007 08:43 AM
@Dhrmil,
What market need is Twitter exactly solving? The ability for me to tell "my network" that I left a meeting to grab a cab? To document my every thought and movement to the masses? I'm not sure I see it catching on beyond the tech elite. But I can be convinced.
In addition, I haven't seen anyone really prove that communities are profitable ventures, other than scooping up VC funding.
MMT
Posted by MMT , July 27, 2007 08:57 AM
Is it usual from a VC not to understand the business model but still put money inside a start up????
Posted by jm , July 27, 2007 09:06 AM
This is a variation of what I posted on Twitter last night. You may not be my friend on Twitter, but any investor friend of Twitter like you is a friend of mine. Twitter has built a great community despite technical failings. So a stable technology platform plus a robust community will equal monetization. Congratulations and thanks.
Posted by Cathleen Rittereiser , July 27, 2007 10:09 AM
I sure wouldn't want my kids on Twitter, telling the world where they are and what they're doing at this moment.
I'm sure burglars, rapists, stalkers and kidnappers will all thank you for your investment.
Posted by Mother , July 27, 2007 11:13 AM
Twitter is an interesting idea. However, I question the ability to monetize Twitter. Why would people use twitter when they could use an IM or other form of communication. Is there really a practical application for a system that lets people send a 140 character or less message? I find it difficult to believe that business people or professionals would use Twitter instead of another form of communication.
While the idea is very unique and the technology is great, Twitter almost seems like a company using technology just to use technology.
Posted by Matt , July 27, 2007 11:21 AM
Would love to see an answer to Marc Nathan's comments (8:43 am). What market need is Twitter solving? Where is the 'large and obvious market need' beyond novelty?I've used it to post, but see it more as a second life product - never a core app. Eventually, a waste of time.
Posted by MC , July 27, 2007 11:41 AM
So I've asked at least 10 people I know who are not in the tech industry if they've ever heard of Twitter, and they said no. Figures.
Twitter is interesting, but not groundbreaking, and not market-spanning. I'm not exactly sure how Twitter's appeal will jump from the technical audience to the non-technical audience, aka, from the .01% it currently enjoys to the 99.99% it doesn't, and then how it's going to scale from a $0 revenue business to a 7-8-9 figure revenue business. Not to mention the lack of a barrier to entry (Pownce) indicating that Facebook or Myspace could spend a week and blow Twitter's house in.
Posted by Mike Rundle , July 27, 2007 11:57 AM
Twitter's creators have plenty of money so why do they need more money before they can come up with a way to make money, because now they will have to earn even more money to justify this investment.
Posted by paul , July 27, 2007 01:42 PM
Mother, you should monitor your child's internet activity and not let them on twitter (but anyone's updates can be set to private - it would be nice to have more control over what is public and what is private).
Matt, while there certainly are a lot of tech savvy people on twitter, just set up twittervision. You'll see a wide range of people using it in many different ways.
Many people will never use twitter (or try it and stop using it), but there are a lot of people not using it now who may in the future (especially with resources to make it better).
Posted by Steve Rhodes , July 27, 2007 01:53 PM
Congratulations. I use Twitter and find it fun, and I agree that provides a "platform for banter." The question is whether banter is an interesting form of public communication or just minutiae that is interesting only to your friends. A good way to think about online communication is to imagine off-line analogies: email replaced the written, posted letter, blogging allowed anyone to become an essayist/pampleteer, texting allowed friends to quickly communicate while on-the-go. Twitter allows us to make our high-velocity chit chat public? Not sure if that's a clear value-add in terms of quality of human communication, or just puts more quotidien content out there for people to sift through. Either way, it's a very interesting place to be and a very cool investment. Congrats again.
Posted by Lucas , July 27, 2007 02:06 PM
I just signed up as result of finding this article thru a post on PaidContent.org. I was constantly asked if I wanted to display secure and unsecure data as I navigated from page to page (sometimes twice between one page). There were other interface and usability issues that certainly had me wondering if my benefit was worth the hassle of completing the information. However, it looks like a great way to stay connected and after having read a lot about the service over the last year, I'm looking forward to trying it out.
Posted by Roy , July 27, 2007 02:15 PM
Excellent. Twitter is a great community, communication tool, connector and discovery channel. I've never been happier to be called a TWIT!
Posted by Jeff Sass , July 27, 2007 03:27 PM
This will exit well but what's the utility, business model?
Noah
Posted by Noah Robinson , July 27, 2007 03:39 PM
Reply to: MMT
Here's the value I find in twitter.
I run a raw food blog called We Like It Raw. I have a twitter where I not only update my where abouts, but I often talk about what I eat and various health tips that can be easily digested.
So far the response has been awesome.
I know, especially through the use of APIs, that people fill continue to find very useful and exciting ways to continue to use twitter.
Posted by Dhrumil , July 27, 2007 06:40 PM
"Would love to see an answer to Marc Nathan's comments (8:43 am). What market need is Twitter solving? Where is the 'large and obvious market need' beyond novelty?I've used it to post, but see it more as a second life product - never a core app. Eventually, a waste of time."
There are numerous uses that a lot of twitters above have touched on shallowly. For me it provides one layer that makes it "killer."
The same way I ping my entire network when a major event happens (for example let's say a layoff) and say "Here's what's going on in my life, if you're able and so inclined - I'd love your help in moving forward productively." That use is understood, I'm making a plea for help from my network and providing them the information they need to help me. This is seen in more desperate situations for the most part (again, a layoff is a good example).
Twitter allows me to apply this same openness to much of my life, and receive and give more to my friends by following the information on their life. It's different than a blog, email, or other communication method because it provides for Banter (spot on Fred) and is pushed to your network.
My example is weak, but stick with me:
i.e. - If I twitter "trying to find a good barber in Denver before my meeting - Yellow Pages SUCK!." My friends can see this and within my network maybe .5% has a recommendation. I'm not going to email spam my friends to get this benefit, it's not important enough.
I could post it in a passive medium (facebook, blogging, w/e) but what are the odds that any of those .5% will see it in time? With Twitter, it pushes it to my friends actively, but not in an intrusive way (email). A loose acquaintance sees this, and twits me back suggesting his favorite place when he lived there. I look good, and he has helped me. I get to repay the favor when someone is looking for something I know well.
This also extends to interactions... "bored at 22nd and Mission" can lead to a quick call from me. "Hey I'm in the area, wanna grab a quick cup of coffee?"
It works for me like a cross between IM and Txt messaging. You can ignore it like IM if you're busy, it's as convenient in off-line life as SMS, but it's also got the added value of Network.
I think it was a good bet to make, Great job USV and CRV.
Posted by Tyler Willis , July 27, 2007 06:48 PM
We also have 100+ twitter applications and services listed in our "Twitter Forge".
Twitter Community and Forums
http://twittown.com
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Posted by Atrogeloult , September 5, 2007 10:22 PM
Greatings from Rome
Innovatorieuropei.com (www.twitter.com/innovatoriEU), the italian web2.0 think tank is also in Twitter.
It is a great tool with a huge outlook.
Posted by Massimo Preziuso , October 16, 2007 09:06 AM
May be cliche, but to understand Twitter, you have to think outside the box, cause Twitter was built outside the box.
Understand Evan Williams' thinking... let's make a super-simple interface, release a super-simple API, ask "What are you doing?" and let everyone else figure out what can be done with it. And the hundreds of apps built with it, and the hundreds of different ways people are using it, prove for a successful formula.
Some people use it for media headlines, as a micro-blog to get info out between their long winded blog posts, simple communication, get a constant stream of twitter posts from an event, as I did this week with the Web 2.0 summit. In my company, you can pull your twitter posts right into your social network, so you can see where someone is traveling to, when, stuff they're doing on the road. It's a blog for people who don't blog.
I think building small, simple, and slim apps and interfaces and opening up as a platform is the future of the web.
Posted by Ian Winscom , October 19, 2007 01:32 AM
Dear Sir,
INVITATION TO PRIVATE INVESTORS FOR PARTICIPATION IN THE DEVELOPMENT PROJECTS AND CONTRACTS IN THE FEDERAL REPUBLIC OF NIGERIA
We write to introduce to you our organization and to invite you to invest in our country the Federal republic of Nigeria.
HERALDIC Ltd. is a limited liability company registered in Nigeria with its International office contact in Italy.
Our company has been given the mandate to source for investors to participate in the ongoing socio – economic development projects in Nigeria.
The 2008 fiscal year ‘s budget of N29.8 trillion, about ($257.791 billion) has necessitated
the need to work with private partnerships to augment government spending and for proper supervision of the projects.
However it suffices to say that this is not an open bidding but that which requires a one to one introduction to the project managers.
Your team would be required to travel to Italy to firstly have a meeting with our international representatives where all contract modalities will be discussed and to indicate your areas of interest in specific projects and investments, prior to a schedule travelling to Nigeria with the undersigned for the initial discussion with the government officials where subsequently a proper proposal and presentation of your portfolios would be submitted prior to the award of the contracts. A prompt response would enable us facilitate a quick an and firm appointment with our contacts for your organization. Investors have been flocking Nigeria since the budget was presented, especially as most of the contracts would be awarded by the end of the 1st quarter of the year.
please find below an overview of the available projects and what is required of you.
we urge you to consider investing in a country with boundless opportunities, a contemporary haven for investors.
while we look forward to a prompt and positive response, we thank you for your very kind consideration and co-operation.
For immediate communications, please send your response through this email addresses: james.heraldic.oje@gmail.com +39 347 3945104.
OVERVIEW
The 2008 budjet speech presented by the President of the Federal Republic of Nigeria, His exelency Umaru Musa Yar' Adua, reiterated the need for private partnerships and investors to facilitate the execution of the projected contracts worth N29.8Trillion ($257.791 Billion) planned for the 2008 fiscal year.
The budget made huge provisions for reforms and improvement of physical infrastructures, particularly in construction of roads and major highways nationwide, Housing, Energy and Defence.
The capital expenditure projected for the Transportation sector is over $1.02 billion.
BREAKDOWN.
$1.36 BILLION - Defence/MOD/Army, Airforce & Navy.
$6.30 Billion - Highway construction & Rehabilitation.
$51 Million - Survey, Mapping & Georgraphical Information services.: $138 Million - Water transportation
$879 Million - Air Transportation.
$169 Million - Information & Communication.
$84 Million - enviroment Housing & Urban Developement.
AGRICULTURE AND WATER RESOURCES
$1.02 Billion - Procurement of Tractors.
ENERGY
The Energy sector is the most crucial project with an allocation of $1.21 Billion for power transmission and rehabilitation of key power stations and streetlights nationwide. This portfolio would most probably offer the juicest contracts thereof.
As earlier mentioned, This initial visit is to determine if the business terrain would be favourable and to introduce your organisation to our government for the initial contract and negotiations.
If any contract is afterwards awarded to your company by the committee, a 25% mobilization fee would be paid upfront to your company immediately for the commencement of any project awarded to you.
In your response to this invitation, kindly indicate your areas of interest, which would be forwarded to the committee incharge of the project sectors.
While we look forward to doing business with you, we must emphasize the urgency of a quick response as ivestors have started signing contracts and agreement with the Government already.
Very Truly Yours,
John Brett.
HERALDIC LTD.
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