[gavinlynch]

1) How do you know how much money it takes or does not take for Twitter to offer it's service?

2) Don't you think it's a little early to compare app.net and twitter? App.net is in it's infancy and is nowhere near the product twitter is

3) What could Twitter have been exactly? How did closing a few API's off prevent it from getting there?

4) Have you ever imagined that perhaps your vision for Twitter and Twitter's vision for Twitter just do not mesh?

[OzzyB]

1) No, but I know that the difference between $50M and $500M+ would change my outlook in terms of who I need to satisfy dramatically.

2) Don't like App.net? Pick Reddit vs Digg, same case. One managed to "get by" with a core team, the other took a ton of money, hired a bunch of folks, made a bunch of promises, and tried to shoehorn their original vision, the one that got them established in the first place, into something completely different. Reddit, makes money and is sustainable -- it just didn't need to make that much money -- as a user that's fine by me, and the reason why Reddit "won". If only Digg was happy to "just" be a $50mill website...

3) Twitter is what it's users/supporters made it to be. Its service/value was understood from the get-go, and in turn, it's popularity grew for that same reason -- ppl understood it's vision and supported by building upon it -- hence cannibalizing your core base by knee-capping your API, probably isn't the best way to go.

4) My vision of Twitter is fine, like many others, I think it's got something to do with SMS-web-mobile-140-characters-distributed-micro-messaging-or-summin? Does it need to be more than that?

[smacktoward]

The wrinkle in #2 is that once you decide to take conventional venture funding (as opposed to bootstrapping, or fundraising through angels, incubators, etc.), you really don't have the option to just be a small, sustainable business anymore. VCs don't want to invest in small, sustainable businesses, they want to invest in aggressive plays that have the potential to blow up into something huge.

According to TechCrunch the only money Reddit ever raised was $100k of seed funding (http://www.crunchbase.com/company/reddit). That's a very different trajectory than Twitter, who (again according to TC: http://www.crunchbase.com/company/twitter) have raised $1.16 billion (with a B) in funding.

Taking in that sort of money raises the stakes dramatically. Nobody loans you a billion dollars to build a $50 million/year business.

[jdbernard]

> Taking in that sort of money raises the stakes dramatically. Nobody loans you a billion dollars to build a $50 million/year business.

That was OzzyB's original point: Twitter should not have taken big VC money. They took too much money. From his first post:

> someone promised the moon to a bunch of financiers and now they have to deliver above and beyond of what Twitter could have been, or should have just been.

[001sky]

Certainly fair questions. Here are some of the data:

1.16 billion of capital and 140 employees

6.0-7.0 billion valuation, estimated

In terms of profit per employee, you're looking at 50 to 100 million to 'break even' at that vauation

So, part of it is the $$ raised and part is the $$ valuation

Is it possible paint yourself into a box, strategically, if you take money at aggressive valuation?

Source: http://www.crunchbase.com/company/twitter

Edit: Headcount data look out of date at TechCrunch. See comment below, this now ~1,000 not 140.

[stevencorona]

Woa woa, 140 employees? You mean over 1000 now. Source: http://www.mediabistro.com/alltwitter/twitter-1000-employees...

[001sky]

Thanks, this is a good catch. I pulled the data from techcrunch (they were out of date, added reference above).

General direction of the comment is distilled, still as follows:

1) valuation is 7x invested capital

2) The invested capital is large, requires large exit

3) This is going to put pressure on the team ($10-15B exit?)

4) Thats a requires lot of $$/head for the team to bring in

[stevencorona]

Not to mention well over 100mil/yr in salaries alone (prob more like 150-170mil with benefits, taxes, and generally high salaries in SF, glassdoor shows avg salary 120-130k)

[photorized]

Re: "how do you know how much money it takes ..."

I don't know how much it takes Twitter (even though it should be relatively easy to find out), but I do have an idea how much it should take.

Twitter presentations suggest 70 million messages per day. 800 tweets per second:

http://www.slideshare.net/raffikrikorian/twitter-by-the-numb...

It's not that much, actually. Some of us have processed 50-70 million transactions per day on a much smaller infrastructure (25..40 AWS boxes) - quite often designed and deployed just days prior to the massive traffic spike, with fancy features like real-time fraud checking etc.

It's not that hard to do what Twitter does. At least, with the amount of financial backing that they have, I don't expect them to be failing in a spactacular fashion periodically.

[ericd]

The reason for the mismatch is that it's not 70 million transactions a day. It's potentially 70 million times the average number of people that access each tweet, which is probably more like 100+, plus all the polling that twitter applications do even when there are no new tweets, as well as all the ancillary stuff that's required to run something like this (spam filtering, API servers, etc).

[adgar]

> the average number of people that access each tweet, which is probably more like 100+

I'm sorry. I really am. I know this isn't Reddit. But...

HAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHHAHAHA

Yes. Yes, on average, a given tweet reaches ONE HUNDRED PEOPLE. Do any of you folks even listen to yourself? Even if you change that to "users" instead of "people," since so many twitter accounts are robots - even then, 100 users on average for every tweet is ABSURD.

> the polling that twitter applications do even when there are no new tweets

Polling with no new tweets is far easier to optimize than polling when there are tweets. So just discount this almost entirely in your roughshod analysis.

> spam filtering

Have you been on twitter? We all get spam and see fake accounts trying to get at us regularly. Try mentioning you're on a diet on twitter and see how many followers you rack up. If they're filtering spam, they're not filtering it well, so I hope they aren't burning too much cash on it.

> API servers

API servers are frontends that use dramatically fewer resources than the work the backends have to do. If Twitter's frontends are costing them much money, again, they're wasting money.

[ericd]

I don't see what's hilariously off about that? If you look at the average number of people that a given real person follows, 100 probably isn't that far off. I'm not saying those are actually read by a human, but associated with that many, sure.

My point was that the grandparent was probably an order of magnitude or more off counting 70 million new messages per day as 70 million transactions per day.

I'm not saying they're doing things well, but it's pretty naive to think that you could build Twitter's infrastructure with <50 AWS instances.

You think the API is a trivial matter of spinning up some front end machines? From that presentation linked to above, they were getting 6 Billion API calls per day, or 70k/sec.

Besides that, all of these numbers are 2 years old, and according to those slides, they were growing at about 10x per year. It has probably slowed, but those numbers may all be much bigger now.