[falala1]

Not really how VCs work. Each VC is made up of funds. When EV was CEO and Twitter was the size it was, a lot of your fund's success might hinge on one or two companies in your portfolio. Without them exiting, it is hard to raise the next fund. If you can cash out your companies, show a huge return, it gets easier to raise your next fund at favorable terms.

[thrownaway]

You seem to be backing up what I was saying. The VC's LPs want huge returns. The VCs also want huge returns. The Twitter board chose the path it did to create those returns.

[falala1]

I am not backing up what you are saying. VCs want huge returns in a compressed timeline.

This comes at the cost of what is good for the company. Using Facebook as an example, you would sell Facebook when Viacom wanted to buy it for 75MM. Great huge return for investors for such a young company. Can turn around and show your fund had a huge exit. Especially great for a seed fund but terrible for the founder and the employees. Luckily, Zuckerberg had control and could thwart investors desire for a quick sale. [1]

I am totally not against VCs making a return but what I am against is VCs forcing premature exits. We may never know what Twitter could have been if the ecosystem stayed in-tact and they figured out how to monetize the whole thing and kept the user growth trajectory in place.

[1] http://www.businessinsider.com/all-the-companies-that-ever-t...

[hendzen]

The "ecosystem" was on the path to destroying the company. The 3rd party Twitter clients had huge chunks of the Twitter userbase - back in 2010-2011, 20% of Twitter users used EchoFon, 11% used TweetDeck, etc.

If they had let the system continue, one of the clients could have gotten enough market share that they could have simply changed the backend to their own app, and none of the users would have batted an eye. Or Facebook could have bought up 2-3 of them quietly then forced Twitter to sell on the cheap.

It's easy to romanticize the wild-west period of Twitter's API being completely open for all use cases. However, it was, from a strategic perspective, extremely dangerous to the company's future - there's a reason why companies now know to build walled gardens.

[thrownaway]

It seems hard to argue that we outsiders know better that the "twitter-as-a-developer-platform" vision would have turned into a business much larger than what Twitter is now vs. the people on the actual board reviewing the finances. That seems to be what you're arguing. It seems that the people with all the numbers in front of them decided the returns would be better if they ditched the devs and sold brand ads. I'm just saying that's likely logical from the POV of VCs and their LPs.