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0 pointspotatolicious13y ago0 comments

> "You don't need to have $1Billion dollars in financing to offer a service like this"

Sometimes you do. We've seen a dramatic amount of "overfunding" of social media startups, and I have a theory why.

When your business model doesn't involve well, actually making money at its core, you end up in a position where you have to staff up massively so you can pursue an enormously vast range of monetization strategies in the hopes of finding something that sticks.

How many people on Facebook do you think are working on the core product - as in the Facebook that end users interact with on a daily basis? How many instead are working on a enormously numerous systems that Facebook hopes would make them monetizable? Ad platforms, billing systems, support systems, analytics systems, etc etc.

So yeah, Twitter as defined as "that thing where you submit strings of 140 chars or less and follow others doing the same" probably didn't need $1bn to get off the ground. Twitter in the "this might actually make money" sense though, probably isn't THAT overfunded.

0 comments

pitchups13y ago

So in other words, they needed $1 Billion dollars in order to have enough money to make money from the $1 Billion dollars?

quanticle13y ago

It's like a rocket. Most of the fuel in a rocket goes towards lifting the rest of the fuel. Likewise, Twitter needs that level of investment to scale to the point where it can make a return on that level of investment.

001sky13y ago

This is a good analogy. But with 800m raised in 2011, arguably when they were close "escape velocity" already, its also a fair point to wonder if destiny could have been any different with less $$$ weighing them down.

potatoliciousOP13y ago

Yeah, it's pretty perverse. I sometimes wonder how many AirBnb's and Squares we could've gotten for the price of Twitter.

fusiongyro13y ago

Sounds to me like the ultimate a posteriori argument.

photorized13y ago

What I always found curious about Twitter, despite its massive concurrency requirements, is how low quality and short-lived the content is. Outside of charting historical trends, there's very little value in mining historical Twitter data - it's only the real-time part that matters. Theoretically, they coould just delete all content older than x days - and I doubt that many would notice.

1bln is funding is unreasonable, both from a technology standpoint (Twitter does go down, btw) and from a "let's figure out a way to monetize this" standpoint.

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