entrepreneur
Twitter and the Evolution of a Business Idea
The images above trace the history of Twitter, the hugely successful (in terms of fame rather than profit at this stage) micro-blogging service.
I first heard about Twitter in early 2007, and opened an account (managing to get my name without any additional numbers etc at that stage!) - but never really got around to exploring it further.
As part of the upgrade to this blog I decided it'd be good to also be able to post regular, small updates - without cluttering up the main blog. So I decided to figure out how to Tweet, and you can now see my Tweets in the right hand sidebar of this blog.
In doing that I became interested, as always, in the genesis of the business behind the service - and here is the story...
The Idea
Everything starts with one person and their idea. In this case the person was Jack Dorsey [PHOTO 1], otherwise known as @jack to Twitter folk.
Here's how he describes coming up with the original idea:
On May 31st, 2000, I signed up with a new service called LiveJournal. I was user 4,136 which entitled me a permanent account and street cred in some alternate geeky universe which I have not yet visited. I was living in the Sunshine Biscuit Factory in Oakland California and starting a company to dispatch couriers, taxis, and emergency services from the web.
One night in July of that year I had an idea to make a more "live" LiveJournal. Real-time, up-to-date, from the road. Akin to updating your AIM status from wherever you are, and sharing it. For the next 5 years, I thought about this concept and tried to silently introduce it into my various projects. It slipped into my dispatch work. It slipped into my networks of medical devices. It slipped into an idea for a frictionless service market. It was everywhere I looked: a wonderful abstraction which was easy to implement and understand.
The Sketch
Jack likes doodling on yellow legal pads, and that's where Twitter first emerged from his head [PHOTO 2].
At this stage his name for the site was 'stat.us' using the '.us' domain suffix instead of '.com' because he thought that was cool! The evolution of the brand name is one of the interesting things about Twitter - morphing through a number of versions, just like the design of teh site itself and the feature set.
But Twitter today isn't that different from his original sketch.
The Detail
Jack worked for a company called Odeo (now called Obvious after it sold the website called Odeo.com). The company was run by Evan Williams, who is a great entrepreneur and may merit his own blog post sometime.
His masterstroke was creating a company that encouraged doodling, pet projects and trying out new ideas, even if it wasn't 'on focus'.
Jack toyed with the Twitter idea some more, and wrote out the list in [PHOTO 3] in early 2006. It's not very clear in the photo, so here's what it says:
casual awareness.
"what are you up to?"multiple entry point to set status
- web
- phone
- sms
- immultiple ways to "subscribe" to status
- web
- phone
- sms
- im3 aspects
- set status
- timeline (collaborative)
- configuration
In a very simple list Jack set out what is still recognisable as the way Twitter works. It doesn't take a 50 page proposal. So far we've seen two sparsely covered pages of legal paper - and we get the idea.
Jack wrote at this time:
The 6th year; the idea has finally solidified (thanks to the massively creative environment my employer Odeo provides) and taken a novel form. We're calling it twttr. It's evolved a lot in the past few months. From an excited discussion and persuasion on the South Park playground to a recently approved application for a SMS shortcode. I'm happy this idea has taken root; I hope it thrives. Some things are worth the wait.
The Prototype
Jack had persuaded Evan to give him the chance to create a prototype of the site, and with help from colleague Biz Stone they created what you see in [PHOTO 4]. It's very basic, but it does the job, allowing teh concept to be tested. In a future blog I want to write a little bit about 'Agile Development', but one of the key concepts is to test the idea as quickly as possible in the simplest way possible. This is what Twitter did.
The Launch
This user interface then evolved into [PHOTO 5] to gain a bit of design and colour (but it's still very basic) - and then into what you see in [PHOTO 6] which is my page on Twitter today.
You can see that it really is an evolution. They get it started as quickly as possible, and then constantly refine it. I really believe that is the best way to go.
But it's rare for entrepreneurs to let the actual brand name evolve, but I think they were right to do so. Talking further about this, Jack says in a recent interview with the LA Times:
The working name was just "Status" for a while. It actually didn
The Lean Startup
Without doubt the challenges for entrepreneurs are intense at the moment - but the opportunities are still there, and those that get their business quickly in the right shape and doing the right (focused) things will come out the other end stronger and more successful.
I've been doing a series of posts on what it takes to achieve this, and in this one I'm looking at the concept of Lean Startups.
'Lean' was developed by Toyota as a way of massively improving their business, and its since been successfully applied in many industries.
So how can you apply the ideas in startups?
Here's a collection of articles you need to read!
http://startuplessonslearned.blogspot.com/2008/09/lean-startup.html
http://venturehacks.com/articles/lean-startups
Here's a slideshow of a presentation on the subject:
And here's an audio podcast of a speech on the subject:
A lot of food for thought here. What are the key ideas you pick up from it all?
Survival - The VC's Advice
The Silicon Valley blogs have been buzzing over the last few days with details of a number of presentations and letters to hi-tech companies by their venture capital backers. These presentations were designed to inform CEOs about the outlook for the economy, and share the experiences and advice of the investors - all with the intention of helping their companies survive.
I'm going to summarise them here, because they give a very interesting and insightful perspective - and some great advice.
Sequioa
Sequia Capital is possibly Silicon Valley's most respected venture capital firm. They've backed many of the web's best-known companies from their first steps.
Last week they held a meeting for the CEOs of their investee companies - with the intention of delivering a short sharp shock.
Here are the slides from the presentation:
The analysis in here is fantastic - and well worth studying in depth. But the key messages are:
- This is not a short term problem. Prepare for tough years rather than months. Don't expect bumper good times to return for 15 years.
- You need to make sure your company is cashflow positive.
- You need to cut costs (but smartly - my addition), reviewing salaries, using commissions and other performance incentives - and using zero based budgeting (more in a later post on this).
- Focus on only the genuinely valuable and likely sales in your pipeline, get rid of the noise.
- Spend every dollar as if it were your last.
Benchmark Capital
This VC firm has lots of similar advice, but it was particularly interesting to read them quoting a CEO they know who went through the dotcom crash...
Recently, I spoke with an entrepreneur who as a CEO during the dot?com crash and oversaw a headcount reduction from 130 to 28 (through two major layoffs), and eventually back to profitability and an IPO. If you think a 10% layoff is tough, imagine laying?off 78% of your employees. It is one of the hardest things I have ever seen anyone do. I recently asked him how that experience has shaped the way he ould advise people on running a startup. He had a list at the tip of his tongue (included now):
1. You don
Survive First - Then Seek To Prosper
The gravity of the economic crisis will not have escaped you. You're probably well aware that there is no quick fix and we're in for a long hard couple of years.
But this doesn't mean entrepreneurs should despair, panic or get out of the game. Imagine if lots of pipes burst creating a big flood - and all the plumbers decided to give up?
It's entrepreneurs that the world is relying on to get out there, run their businesses, employ people, create real value and fix the global economy.
The small-minded managers in big businesses are going to get it all wrong. That's guaranteed. They'll cut spend on marketing, training, product development and quality. They'll run big voluntary redundancy schemes in which the best people will choose to leave because they are the ones that can see opportunities elsewhere - so the big companies will be left with the poorest performers. They will drive cost down, with a short term benefit, but a huge long term price to pay - as well as further impacting the current economic crisis. And they'll have a big payoff waiting for them if they mess up and get booted out.
So we're all relying on you - the big thinking managers in small businesses. You're the ones that actually make things, do things, and serve people.
Entrepreneurs do need to respond to the current situation, ensuring the survival of their businesses - but then they need to be quick to respond to the opportunities that present themselves in any adverse situation.
This will be the time to hire great talent at affordable rates. This will be the time to get great deals from suppliers, and on new equipment. This will be the time to get ahead of your competitors.
Over my next few blog posts I'm going to be looking at the different aspects of the threats and opportunities, what it takes to ensure a business survives - and how to find the new opportunities.
In the meantime here's a summary from the BBC of the events that led to this economic crisis.
A Good Egg
Last week I had the privilege to meet an unusual entrepreneur called Mike Harris. You might not recognise his name, but you'd definitely recognise the names of some of the businesses he started: 'First Direct' and 'Egg'.
Enterprise White Paper: Culture of Enterprise
This weekend I'm continuing my summary of the Government's publication "Enterprise - Unlocking the UK's Talent", which sets out it's research into enterprise in the UK, and it's plans for encouraging and supporting enterprise in the future.
Enterprise White Paper - SME Statistics
Continuing my series summarising and analysing the UK government's Enterprise white paper, let's look at some of the statistics they present that give an insight into the current picture of enterprise in Britain...
Enterprise White Paper - an Introduction
Today I'm reading through the UK government's document "Enterprise - Unlocking the UK's Talent", known as the Enterprise White Paper.
Yes, maybe I need to get out more.
Anyway, I'm going to be blogging about interesting findings as I come across them.
Firstly, they are aiming to achieve:
Invest in a worthwhile startup for $25
In browsing the blog of Saul Klein this evening I saw a post he'd written on Kiva - a micro-lending community to support entrepreneurs in developing countries.
How to be an Entrepreneur
I've just had more news about international versions of my books. An Italian edition of 'How to be an Entrepreneur' is in the works, and will be published early next year.
But don't expect my language skills to come up to scratch to do an Italian version of the Audio CD of the same title!!
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