Venture capitalists tire of Twitter-y start-ups

In addition to these theories, I would also guess that developers have realized that Twitter could simply replicate their feature sets and make their client/service the default choice. This is of course, Twitter’s prerogative, and is also the risk developers undertake when building for a platform they don’t control.

I have no doubt that Twitter wants an ecosystem to thrive around its platform, much in the same way that Facebook wants an ecosystem around its social network. However, as I wrote all the way back in July of 2008, VCs must wise up to the fact that investing in accessories that can be reproduced and easily packaged as part of a core offering may not be the best business strategy.

link: Venture capitalists tire of Twitter-y start-ups – CNET

From the VC Handbook

When a person has no need to borrow they find multitudes willing to lend.

Oliver Goldsmith

re: Hank Williams' How Much Is an Idea Worth, and the Tech Market

Hank-

Replying to:

http://whydoeseverythingsuck.com/2008/10/what-is-idea-worth.html

and


http://whydoeseverythingsuck.com/2008/10/tech-market-failure-of-ideas-not.html

I believe what I said on-list was that success is "1% idea 90% team/connections 9% luck", and that 9% luck figure is important in putting context around my perspective.

A crappy CEO can take a crappy idea, and with a lot of luck hits 10%. 10% gets you prototyped, gets you seed funding, maybe gets you a Series A. It gets you users, it gets you news coverage, it gets you hype and buzz, but none of that constitutes success -- not in real world business terms.

Success is sustainable profitability. Success is a high-value exit. A brilliant CEO can take a crappy idea, mature it, and turn it into a hundreds of millions of dollars acquisition in under five years.

A crappy CEO can take a brilliant idea and get further than 10%, but a crappy CEO is going to result in a low-value exit, or is going to end up replaced, probably after a lot of pain and wasted investment.

The strongest indicator of success is the team, not the idea. Obviously, however, the right idea, a matured idea, a well thought through idea, carries more weight, vastly improves chances of success.

I think we're saying a lot of the same thing here, but I will insist that a subpar CEO can easily ruin the most brilliant, bound-for-success idea, whereas it's much more likely that a killer CEO can make a success out of a subpar idea, or one that needs massaging, maturation, etc. And yes, a slick CEO can BS their way to a limited degree of success -- but not sustainable success, which I think we're in agreement on. My definition of a killer CEO isn't the sales guy with the biggest shovel, but the one with the greatest ability to do the most with the least, make the right moves, and please stakeholders along the way.

"idea = 1%" isn't an exact figure, but it's highly demonstrative of proportionate value.

And yes, the market the past few years has made for some fat and lazy management teams and backers with a plethora of redundancy getting funded. That's inevitable, it happens with every peak. It's those who can stay lean and agile even in fat and happy times that will of course have the greatest chance of sustainable success over the long term.

--Andy Badera

Note: you can, and perhaps should, substitute "management team" or "founders" for "CEO" throughout this piece.

Why Twitter Matters

If Business Week says so it must be so, right?

Quite rightly calling Twitter the "microblogging rage," BW also acknowledges the inescapable "drivel." It's true -- as a lifestreaming-leaning medium, there's plenty of noise (even without considering the Twam.) Plenty of very interesting people have unfortunately unfollowed me due to my own loquacious use of the service.

More importantly, BW touches on some of the bottom line, business-relevant facts of Twitter. Traffic has blown up. Major corporations are using it to enhance their relationship with their customers (Comcast, H&R Block, Hormel) and increase sales (Dell). A rich ecology of third party apps thrives on top of it.

BW also touches on a topic near and dear to the hearts of all Twitterers -- the not-infrequent service outages. Some have blamed this on Twitter's Ruby on Rails platform; the recent departure of chief architect Blaine Cook, Ruby evangelist extraordinaire, has left the question of technological direction wide open.

Twitter's major backer right now is Union Square Ventures; you can find partner Fred Wilson on Twitter daily. With a history of investments including del.icio.us (acquired by Yahoo!) and Feedburner (acquired by Google for ~$100 million USD) and a current portfolio including Etsy and tumblr, you have to think these guys have this thing down.

That said, BW brings up that other favorite Twitter topic -- monetization. What's the model for a microblogging service? The new Japanese-localized Twitter is experimenting with advertising. With the incredible number of third party apps, you'd have to think Twitter begs to go freemium. But the question remains: what the heck IS Twitter worth?

Twitter isn't a fad. It isn't just a trendy toy. It's a tool and a platform that adds value to any business that needs to communicate, whether that's with a community, with clients, with partners, with suppliers or with talent. Twitter is here to stay.

UPDATE: Excellent traffic stats and analysis available at the Compete blog.

Some highlights: