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29th July 2011

BizStone@Exeter

‘You need to be willing to die to live.’ Or, to put it in more entrepreneurial terms, ‘in order to succeed spectacularly, you need to be willing to fail spectacularly.’ That was the first maxim from Biz Stone, the co-founder of social networking and microblogging site Twitter, when he visited Exeter College in June.

Mr Stone’s own definition of a successful company, as he described to a fascinated audience in the Saskatchewan Room, was one that could change the world, build a viable business, and have fun while doing it. Mr Stone recently left Twitter to focus on philanthropic activities, but the enjoyment that he took from working on the web site was evident in every moment of his speech. He admitted that from a very early stage he had become emotionally invested in the product; that he wanted to work on it no matter how many people told him it would fail.

That Twitter has changed the world is equally evident. Its 200m users generate 350m tweets (text-based posts of up to 140 characters) and 1.6bn search queries worldwide every day. According to Pear Analytics, 37% of these tweets are purely conversational, while 40% are pointless babble, but nevertheless the way that the world’s news is transmitted, digested, and even created has shifted radically in recent years. When US Airways flight 1549 ditched in New York’s Hudson River in January 2009, Twitter users had spread the miraculous story around the globe approximately 15 minutes before the mainstream media began to report it. When asked whether he had any objection to Twitter being used for trivial posts such as what people are eating for breakfast, Mr Stone argued that not only should people follow whatever interests them, but that regular tweeting of even the mundane makes people fluent tweeters when extraordinary events unfold. Whether natural disasters or political rallies, people are now used to receiving the live accounts of witnesses to news events anywhere on the planet. Twitter has even been proclaimed for facilitating revolutions, including in Moldova, Iran, Tunisia, and Egypt, where the discontent of a vociferous few snowballed into mass demonstrations and activism.

Whether Twitter is truly a viable long-term business is more debatable, with some commentators questioning the company’s lack of revenue. Indeed, during a Q&A session after Mr Stone’s speech, the question ‘how is Twitter going to make money’ was boldly put to him. The answer is that Twitter made improving uptime (the time that a web site operates without outages) its top priority in its early years, ahead of generating revenue. But in mid-2010, after considerable improvements to the infrastructure of the site, Twitter began selling unconventional advertising space. Rather than banner advertisements, Twitter sells the promotion of tweets, trends, and user profiles. In other words, companies can pay to make their Twitter profile more prominent when users browse and search the site, rather like Google’s AdWords. The company made revenues of $45m in 2010, and is projected to earn $150m in 2011. In 2011 a private market auction valued the company at $7.8bn.

In Mr Stone’s speech, he repeatedly spoke of the importance of doing something meaningful, of believing in what you are doing, and of being a force for good. His messages to businesses: that altruism pays compound interest; that the only deal worth doing is a win-win deal; that if you do all right by your customers, your business will do all right too. Beyond that, Mr Stone expressed his belief in the fundamental benevolence of man; that giving people a tool like Twitter allowed them to prove this every day, whether using the web site to overthrow oppressive regimes, to organise relief during natural disasters, or just to share a joke. ‘If Twitter was to be a triumph,’ he said, ‘it was not to be a triumph of technology; it was to be a triumph of humanity.’

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