Twitter Gets Messy Union Square Ventures Startup Rx
By DONNA BOGATIN • Apr 26th, 2008 • Category: DEAL TRACKERBlogosphere Twitter ‘freaks,” are the extreme minority, so suggests a a self-professed Twitter ‘freak,“ Tom Webster. Barely a “rounding error,” is how Twitter activity was characterized by Webster for a presentation on the “podcast consumer” at PodcampNYC yesterday.
Edison Media Research data shared indicates that among the people who have ever downloaded a podcast, MySpace reigns social networking supreme: 25% of podcast listeners use MySpace, 15% are on Facebook, 5% are LinkedIners, but Twitter traction is still a mere “rounding error.”
Twitter had big MTV crossover dreams of cracking the mass consumer market last year: If Podcast fans don’t catch the Twittering fever, however, mainstream Twitter traction will also likely remain elusive.
The patience of many blogosphrere Twitter ‘freaks’ is also wearing thin. Early adopters who threw operational caution to the wind and relied on the free-to-the-consumer cool Twitter app for Web 2.0 “mission critical” operations are now hampered by the not so cool reality of Twitter’s unreliable provisioning “mess.”
In the midst of Twitter’s internal restructuring scramble earlier in the week, I pointed out that Twitter’s scalability challenges contradict Twitter’s own investor–Union Square Ventures–cheerlead for“ viral adoption models” as purportedly “the cheapest way to grow an audience.”
SEE: Ning, Twitter Viral VC Ventures: Startup Loops That Kill
Union Square Ventures partner Fred Wilson continues to promo portfolio company Twitter at his blog, sharing yesterday his “hope” for “more Twitter bots in the coming months” because they are “a great way to run a group on Twitter,” he says.
Howard Lindzon giddily seconded Wilson, offering up his own nefarious suggestion for agitating Twitter crowds:
Man do I see this is a boon for stock guys once again and for promoters to move penny stocks. Think flash mobs to thinly traded stocks.
Twitter, itself, appears to be relatively thinly financed, as I analyzed Wednesday in “Ning, Twitter Viral VC Ventures: Startup Loops That Kill .“
Yesterday, blogosphere rumors flied that Twitter was in search of more “smart money,” fueled by unsubstantiated hearsay published by a man banned by the SEC from the securities industry for life (and a collaborator with the Wilson blog).
WILL Twitters’ investors come to the beleaguered startup’s rescue. Money is NOT the only strategic asset Twitter needs more of at this time and the Union Square Ventures value proposition hails portfolio companies get smarts along with money because they “put experience and networks to work to help portfoilio companies build valuable businesses”:
We will, as a result, be able to quickly identify opportunities to contribute to the development of your company whether you need to round out your management team, connect with a potential customer, or find a strategic partner. Our ongoing, direct involvement will also enable you to react quickly…
Wilson has not reacted to Twitter’s recent woes at all on his blog however, except for a cryptic parable “from messes to successes” retracing so-called “messy” stories of his historical investments, such as:
Geocities, which was our most successful investment at Flatiron, was a total mess in mid/late 1997, about a year after we first invested.
What about the current Twitter ‘mess’? Fred Wilson:
There are a number of companies in the Union Square Ventures portfolio that will go nameless in this post that are currently in various states of mess but doing incredibly well just the same.
How is a startup “mess” defined and what metrics illustrate a startup is nevertheless “doing incredibly well“? Wilson is short on the details and his vague “prescription” for success echoes the familiar VC credo of betting the jockey, not the horse, i.e., “build the team.”
Nevertheless, Wilson asserts:
I am not advocating messmaking with your startup…But I urge all of our companies not to overdo the “operational” thing too quickly. You need to get your act together for sure. But it can and should be a gradual process. You can’t go from mess to success overnight and even when you are a success, your company should still always be just a little bit of a mess.
The Union Square Ventures recommendation is itself a “messy“ one!
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DONNA BOGATIN is the Founder & CEO of STARTUP ALPHA
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