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Fred Wilson, a well-known venture capitalist whose firm has invested in Twitter, published a blog post earlier this week that raised eyebrows amongst third party developers who develop on the Twitter platform.

The reason? It sent an ominous message to many of them: Twitter might put you out of business soon.

Wilson explained:

Much of the early work on the Twitter Platform has been filling holes in the Twitter product. It is the kind of work General Computer was doing in Cambridge in the early 80s. Some of the most popular third party services on Twitter are like that. Mobile clients come to mind. Photo sharing services come to mind. URL shorteners come to mind. Search comes to mind. Twitter really should have had all of that when it launched or it should have built those services right into the Twitter experience.

Wilson's post goes on to suggest that "the time for filling the holes in the Twitter service has come and gone". Developers should instead focus on developing "entirely new things that will shape the Internet in the coming years".

The significance of Wilson's post and the reason why it has sparked so much discussion: he sits on the Twitter board of directors. If he thinks there are services that should have been built into Twitter from the get-go and proclaims "the time for filling the holes in the Twitter service has come and gone", it doesn't take a lot of imagination to read between the lines. His post appears to be an invitation to developers, but also a warning.

In responding to questions about his post, Wilson has stated that the post are his opinions and do not necessarily reflect Twitter's official stance. But Business Insider has cataloged a number of supportive tweets from Twitter employees. One from Doug Williams, who is involved with the Twitter platform, goes so far as to state that Wilson's post is "incredibly timely". He suggests all Twitter developers read it. These tweets lend credence to the notion that Twitter is rethinking its relationship with developers.

Currently, Twitter runs one of the most laissez-faire platforms around, at least on the consumer internet. Its hands-off approach has certainly sparked a significant amount of innovation that has benefited Twitter users. At the same time, the fact that Twitter itself increasingly controls so little of the average Twitter experience for so many users leaves it in a tough position as a business. After all, if a non-negligible number of Twitter users experience Twitter through third party products and nearly all of the value-added features that individuals and businesses would be willing to pay for are already being provided by unaffiliated developers, the company is going to have a really hard time realizing its monetization potential.

Twitter investors like Wilson, who have sunk over $150m into the company at bubble-like valuations, certainly know this. Which is precisely why it would be foolish to believe that Wilson's post was merely a reflection of his personal stream of consciousness. If Twitter's potential is ever going to translate to profit, Twitter absolutely has to stop controlling less and less of the user experience, and start controlling more of the user experience.

The challenge for Twitter, of course, is that it would have to renegotiate the terms of engagement with developers to do so. Yet this could irreparably damage its reputation with some of its most prolific developers, who probably aren't going to be thrilled at the prospect that Twitter wants the territory they've already carved out for themselves in the Twitter ecosystem as it exists today. But when push comes to shove, what choice does Twitter have? If it wants to change the third party developer's role in the evolution of its product, it is essentially going to have to pull a bait and switch.

That's rarely a sound business strategy, and Twitter's dilemma highlights just how difficult it is to get developer platforms right. While the developer ecosystem Twitter has built around its core product is quite impressive, Twitter arguably misjudged what its core product would need to include. Whether it can rectify that mistake without a significant amount of collateral damage only time will tell.

Photo credit: taberandrew via Flickr.

Patricio Robles

Published 9 April, 2010 by Patricio Robles

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

2380 more posts from this author

Comments (5)

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Jeff Pesek

Don't know that I personally agree with the reason for the speculation:

 "If Twitter's potential is ever going to translate to profit, Twitter absolutely has to stop controlling less and less of the user experience, and start controlling more of the user experience."


First off, that's an extreme statement (ever/absolutely). And it's short-sighted; if Twitter is a platform, let it be that, and let people decide how they want to play in and build upon it.  At the end of the day, like Google, Twitters largest asset is shaping up to be data, regardless. These investors need to be patient-let it evolve and fully mature!

Twitter arguably misjudged what its core product would need to include.

Misjudged? How about released a revolutionary yet basic product and let the market (devs and consumers) determine where they wanted to take it? And it worked-they took it en masse and sprinted! Why stop now?  If you're going to argue that statement then you're assume that the Twitter team knew all the various features/angles/shapes and forms Twitter would take before/after release; I would ask for evidence to support that arguement.

That said, I sure hope they remain as open as they have been in the past and don't start stepping on the same toes of the developers who have largely made Twitter what it is-whether through functionality or viral PR. 

over 6 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy

Jeff,

On your first point, I don't think my comment is speculative at all. From Twitter clients to URL shorteners, third party developers increasingly control a large part of the core Twitter experience. Fred Wilson's post is an acknowledgment of that, and it's obvious why he thinks this is problematic.

It's easy to say "the value is in the data" but translating that value into revenue is clearly a lot harder than it looks. Exploiting low hanging fruit, such as advertising and paid services, necessarily require Twitter to control more of the user experience. And most successful businesses pick the low hanging fruit before they crack the toughest nut.

On your final point, I don't think anyone expects a startup to fully comprehend how its business will evolve. That would be unrealistic. But the problem is that Twitter clearly launched its platform with a focus more on openness and less on strategy.

Facebook provides a contrasting example here. Wilson's post implies that he would like to see Twitter's ecosystem more closely resemble that of Facebook, but Facebook has been very proactive in guiding its ecosystem's development by tightly controlling what developers can do and how their applications are integrated into the user experience. In other words, from the moment Facebook launched its platform, it had a vision for where developers fit in strategically.

Twitter, on the other hand, didn't do anything similar. Its platform is a free for all. The good news is that developers flooded in and contributed to Twitter's utility and growth, but the bad news is that Twitter lost control of the user experience in the process.

over 6 years ago

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John Hoffoss

If these third-party utilities provide competition that Twitter doesn't want, they have three options as I see them, in order of crappiness (most to least):

  1. Lock the door on developers, pushing a vibrant community to some other platform--probably taking quite a few users along.
  2. Slightly less bad would be limiting what a developer can do, or requiring provision of in-stream advertising or something. Both would be tough to stomach, but better than the yard-sale option 1 would result in.
  3. Start filling those holes and competing with that vibrant community. This puts Twitter in an odd position of competing with businesses wholly running off of their platform, but is probably most in the spirit of Twitter thus far. If Twitter wants control of those gaps, try to provide a better solution and draw the market while still maintaining healthy competition--knowing that they still own and control the platform.
  4. Start acquiring the best, brightest and most-promising Twitter developers and products. If there's been $150 million pumped into Twitter, take on those aftermarket developers, give them the resources to achieve their wildest dreams while expanding and filling the gaps in Twitter's current service. So long as the developers behind apps like Tweetie, Twitterific, etc. maintained some creative freedom, I think quite a few would find that hard to turn down. Or at least I would if I were a developer of Twitter apps...

over 6 years ago

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Eric Larson

I think that twitter can most definitely monetize all the third party support. The key is that more and more services need faster access. Twitter can easily start moving to an AWS model where services can get more data faster by paying. Likewise, clients like tweetdeck could pay to get faster updates for their client. Another option is allowing advertisers an API to clients so clients can offer ads. Twitter would be the primary point of contact while the client authors could potentially make money as well. Given, I doubt it would be enough, but in terms of supporting the third party developers as well as making money themselves, the options seem limitless. Finally, twitter super users could have ways to monetize as well through featured searches and customized aggregation of content such that interesting conversations bubble up to the top. This is analogous to trending and the like, but takes it further and deeper to a point where it is valuable. I think anyone that develops a platform on something like twitter or the iphone is asking for trouble in some senses, but in the case of twitter, the model appears to be there in terms of monetizing all those requests, while keeping its open APIs just that, open.

over 6 years ago

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steve

Been saying about this to people for a good while, with someone elses platform they can change the ball game whenever they want. Same thing applies with large scale cms systems. Can move the goal posts whenever

over 6 years ago

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