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As we’ve mentioned before in our coverage of Twitter’s ongoing evolution, the company is struggling to find a way of transforming itself from being a kind of real-time information utility into a media entity that generates revenue from things like advertising — and the clash between those two visions of what Twitter stands for continues to send ripple effects throughout the social-media sphere. In a post about the implications of these changes, Union Square Ventures partner and Twitter investor Fred Wilson suggests that one of the company’s big problems is that it was too open to begin with, and now has to find a way to close things down. But can Twitter do this without losing a crucial part of what made it such a phenomenal success in the first place? That’s the question currently hovering over the company’s future.
In a recent post on my love-hate relationship with Twitter, I discussed how much I appreciate what the network has been able to provide in terms of being a real-time, open and distributed platform for publishing — and what an important role I think that has played in making us more informed about things like the Arab Spring revolutions, for example, thanks to the crowdsourced journalism of people like Andy Carvin of National Public Radio. But I also said that I hate the fact that Twitter is closing down third-party access by other platforms like Tumblr and Instagram, and that its desire to control more of its network seems to suggest that being open and having a good business are mutually exclusive.
Can you be truly open and still build a business?
Wilson, an early backer of Twitter — and someone who has also written a number of posts in defense of the open approach to community-building and the importance of being free — said that he believes being open and building a business can go together. But he added an important caveat: Being open, the Union Square VC said, is something that should come later and be done gradually, not right out of the gate the way Twitter did it. As Wilson puts it in his post:
“It is better to open up slowly, cautiously, and carefully rather than start out wide open and then close up every time an existential threat appears on the horizon… [Twitter] started out completely open, which allowed anyone to build a third party client, grab a huge percentage of Twitter users, and then threaten to take them away from Twitter. That’s not a sustainable relationship.”
This is Twitter’s dilemma in a nutshell: As we and others have pointed out a number of times, virtually all of the network’s power and growth has come from outside the company itself, in a way that is unlike almost any other significant social network. As Sarah Lacy notes in a post about Twitter’s unlikely success, every one of the important elements of the service — from the @ mention feature to the hashtag, and even the retweet — was developed by users, not the company itself. And now those same features are the ones the company is desperately trying to monetize to justify its financial market value.
In many ways, you could argue that even Twitter itself didn’t realize what the network was capable of until these things started to emerge — and I think they only emerged because the company decided to be as open as possible right from the beginning. It had a fully open API that third-party developers could use to do whatever they wanted, right down to creating a Twitter client that essentially competed with the service. As this problem became more and more obvious, the company started acquiring (and in some cases shutting down) other apps and services, and it has been stepping that behavior up recently.
Twitter is trying to turn back the clock
Doing this is probably a financial necessity in many ways — especially since Twitter is trying to justify all the money that it has taken from VCs over the years, as Hunter Walk of YouTube has pointed out — and so it is likely inevitable. And it doesn’t necessarily have to mean that Twitter shuts out third parties altogether, or clamps down on its network to the exclusion of all others: the company’s co-founder and chief product visionary, Jack Dorsey, said in a recent interview that he sees this process as “shepherding” the ecosystem towards a specific goal rather than shutting it down.
But what if the shepherd is herding the flock towards a cliff, or just fattening them up for slaughter? Mike McCue, co-founder of Flipboard — and a former member of the board of directors at Twitter until he resigned last month — told the Telegraph that he is concerned that Twitter is closing down too much and that it risks losing some of the power it used to have. As he puts it:
“Twitter can be incredibly valuable as an open communications mechanism but, if you close too many things down too quickly… you could easily do a lot of damage to that ecosystem. Twitter was created as an open platform, an open communications ecosystem, and I hope it can stay that way. You have to be really careful not to let money get in the way of that.”
So if Fred Wilson is right and Twitter made a mistake by being too open in the beginning, its current evolution is an attempt to turn back the clock or rewrite history — in other words, it is trying to find a way to undo some or all of the things that made it so powerful and fast-growing in the first place, while still hanging on to the value that being open created, so that it can monetize it. Facebook is also trying to monetize a user base that is built on free content, but it started closed and has become (somewhat) more open over time, which is a completely different challenge.
What Twitter is trying to do is a little like Wikipedia — something that has huge social value but is not a very good business — suddenly shutting down or controlling access to its content and inserting ads into everything. Is such a radical transformation even possible, or will the pressure be too great and cause cracks that rip the network apart in the process, or destroy its original value? We are about to find out.