When Michael Arrington of TechCrunch decided to publish confidential Twitter corporate documents obtained by a hacker, I wasn't impressed. It's a bad decision that's hard to justify ethically.

But what's done is done and instead of admonishing him for using a different brand of moral compass, I thought there'd be more value in using the opportunity, no matter how unfortunate, to make some observations about one of the internet's hottest startups.

Lies, Damn Lies and Projections

First up: an internal financial forecast from February 2009. It projects:

  • Initial revenue for Twitter this quarter.
  • $4m in revenue next quarter.
  • $140m in revenue by the end of 2010.
  • "1 billion users, $1.54 billion in revenue, 5,200 employees and $1.1 billion in net earnings" by 2013.

I like Twitter and think there's a good chance that it will have a bright future (at least for the founders and early investors) but internal financial projections like this are a great example of just how disconnected from reality management at hot startups can become.

While projections are always just that (projections), projecting 1bn users and over a billion dollars in net earnings by 2013 is so unrealistic for Twitter as to be tragically laughable. Dreaming big is fine but as far as I'm concerned, entrepreneurs do well to temper their projections with a dose of reality. By putting down these sorts of numbers in even the most informal of internal documents, I think the Twitter team is doing a disservice to itself.

Laziness Breeds Incompetence

According to TechCrunch, access to Twitter's "search product interface" was permitted via a bug that accepted the password 'password'. According to a response by Twitter co-founder Biz Stone:

...this bug allowed access to the search product interface only. No personally identifiable user information is accessible on that site.

That may be so but as TechCrunch's Robin Wauters notes, "the vulnerability speaks to a greater culture of lax security at the startup, and may be indicative of how earlier breaches possibly occurred". I'll go further than that: any development or system administration practice that permits the word 'password' to be used as a password is an example of incompetence.

Clearly, given Twitter's profile and the amount of capital it has raised, it should have no problem attracting talented people. So it'd be unfair to label Twitter's staff as inherently incompetent. In my experience, laziness breeds incompetence even in the best of individuals and groups. So as an organization, Twitter should probably reflect on how it is that a company which has built such an incredible product is apparently losing focus on the little details that can mean the difference between long-term success and eventual failure.

Make no mistake about it: this is not about passwords. It's about attention to detail and maintaining a culture where things are done thoroughly and they're done 'right'.

Twitter's Loss is Your Gain

While I still disagree with Michael Arrington's decision to release the documents he received, hopefully the insights they provide into Twitter's operations and culture will be considered by entrepreneurs as I think they offer some important lessons:

  • Don't believe your own hype. If you're fortunate enough to find yourself in the cat bird's seat as a startup entrepreneur, don't forget that your future isn't guaranteed. If you haven't earned a cent of revenue and you publicly maintain the line that "we're not worried about making money", you're lying to yourself if you put down in writing financial projections that have more than seven digits in them.
  • Always sweat the details. Entrepreneurs at hot startups have a lot to think about. So little details that seem more annoyance than anything else are easy to put aside. There are high-level product decisions to make, media relations to attend to, etc. Those are more exciting things to work on. But in so many industries, it's the companies that do the little things right that build businesses that thrive over the long term. If you don't sweat the details, you risk losing your edge.

Right now, the people at Twitter have an opportunity to achieve the kind of success most internet entrepreneurs will only dream of. Whether that success comes through M&A, an IPO or the development of a profitable private business, I think the Twitter hack and the documents it has brought into the spotlight show just how close Twitter is coming to losing its edge.

Photo credit: carrotcreative via Flickr.

Patricio Robles

Published 16 July, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (1)

Alec Kinnear

Alec Kinnear, Creative Director at Foliovision

Hi Patricio,

This time I have to agree with you: the numbers are wildly optimistic. What on earth would 5200 people be doing at Twitter? Giving pedicures to one another?

Thanks for reposting this. Weak passwords are really a problem. We've taken care of ours, but at the client end, it's an uphill battle.

about 9 years ago

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