Protecting Twitter from its own hubris
Twitter created a bit of a stir late last week by cutting off LinkedIn. Ostensibly this was to project a consistent look and feel for tweets as the company adds features like threaded conversations, which LinkedIn didn’t convey. People who have accounts on both services will no longer have their tweets appear on their LinkedIn profile pages. It’s hard to know how much these updates will be missed on the business-minded network, which distinguishes itself by hosting a more focused conversation than “anything goes” Twitter. But the practical effect is that if you want to be heard in both places you’ll have to repeat yourself, unless you choose to do all your updates from LinkedIn, which still feeds one way to Twitter. More likely, you won’t because it’s too much of a bother.
Bad for LinkedIn. Much worse for Twitter.
Twitter’s ability to pipe in to other networks is a big reason for its popularity, and in doing so it has aggrandized other networks. All this has been, to the outside observer, symbiotic: People like to share their tweets everywhere they hang out; networks benefit from all that chatter and Twitter gets its hooks into everything.
In cutting off LinkedIn, Twitter doesn’t seem to be adopting the “first taste is free” business model it has previously practiced. That’s what creates addicts who can then be charged through the nose. Now Twitter seems to be calculating that isolationism is a shrewd business strategy, that it has less to lose by pulling back on sharing agreements than the networks it drops.
I think this is a path to ruin. As I tweeted (of course) after the LinkedIn news: “Twitter’s value is its integration with other networks. Cutting them off is like being on the wrong side of history.”
It wasn’t the first time Twitter had alienated collaborators in a bid to hone its destiny. When it acquired Tweetie two years ago, Twitter absorbed one of its most popular third-party clients. Third-party developers – as Tweetie’s Loren Brichter had been – were chilled. They realized that their free reign was temporary. They helped give Twitter access to a huge pool of customers, but Twitter always held the power.
By making an example of LinkedIn, Twitter has now fired a similar shot across the bow of outside networks.
The trouble is that Twitter, which in a few short years has become part of the fabric of digital life, isn’t immune to the disruptive forces that led to its creation. If it isn’t, it may be felled by its own hubris. As popular as it is, Twitter shouldn’t forget that it’s easy to replicate.
Twitter is about what people say, not about where they congregate. How do you make money on that? Very carefully. So far they seem to be doing modestly well with ads, their primary source of revenue. Bloomberg reported the company expects $1 billion in sales next year. That’s a nice living – but it would pale in comparison with Apple, Google and even Facebook.
And it’s this envy, this profit (or big-profit) motive, that could drive Twitter into a ditch. Rather than live up to social pressure, Twitter’s muse should be 37Signals‘ David Heinemeier Hansson, who advocates just being a sustainable business rather than trying to be the next Google.
There is precedent for this. Craigslist upended the newspaper business by driving the cost of classified ads down to nearly zero. The company famously leaves scads of money on the table by charging only for job listings, not for the ads you list for that garage refrigerator you’re trying to unload. Partly this is due to founder Craig Newmark’s personal do-gooder philosophy. But it has also proved to be a deft business strategy: Nobody has been able to seriously compete with what has become the go-to national site for person-to-person goods and services.
Craiglist makes “enough” to sustain a small operation, run out of a San Francisco Victorian house. As a private company (like Twitter), it’s financials aren’t known. But it seems to make a living rather than a killing. Most important: Nobody’s been able to supplant them, even though plenty have tried.
Try to sell that idea to Twitter’s private investors, who may not be quite so civic-minded. But the risk of doing something more Zuckerbergian than Newmarkian is that someone who does have modest ambitions can make inroads. Combine that with discord among the populace, and you have suddenly painted a target on your back.
Much is said of the network effect, which theoretically keeps people in networks that all their friends are also in. But networks are broken all the time. This is the real story of the social network, in fact: MySpace killed Friendster, Facebook killed MySpace. The mighty fell even though they were far more difficult to replace because of the complex range of services social networks provide, from sharing to various means of messaging.
Twitter isn’t Apple. It doesn’t make iconic (and patent-protected) products. It isn’t Facebook. It hasn’t layered innovation after innovation and enticed nearly a billion people to deposit their lives in a place from which they’d find it difficult, even painful, to move. It isn’t Google. It doesn’t have a search algorithm or any other kind of killer app.
The beauty of Twitter is that it is so elegantly simple. It originally benefited from a laissez-faire philosophy that helped it act in what could be described as the public interest. But now it stirs discontent, and that discontent could inspire competition.
The best advice one might give Twitter is KISS OFF: Keep It Simple, Stupid — Open Free and Fair. You may not make as much as some of the other big boys, but that’s better than becoming a trivia question.
PHOTO: Twitter’s CEO Dick Costolo gestures during a conference at the Cannes Lions in Cannes June 20, 2012. Cannes Lions is the International Festival of creativity. REUTERS/Eric Gaillard