The Twitter IPO: The Accidental Revolution Hurtles Toward Paydayby
In a memorable 1992 episode of Star Trek: The Next Generation, Picard and crew rescue a marooned member of the hostile species, the Borg. Free from the telepathic link to the rest of his breed, the young Borg develops a sense of individuality and even gets a nickname, Hugh. But first he’s startled to learn that the humans live in relative isolation and silence, without the voices from other members of their species that are persistent inside the minds of every member of the Borg, even when they’re asleep. “Don’t you get lonely?” he asks an Enterprise crewmate incredulously.
This is a shamefully nerdy admission, but I think of that great sci-fi conceit every time I take a protracted vacation from the microblogging network Twitter, and I thought of it again yesterday when the San Francisco company took the momentous step of filing for an initial public offering (alerting the world, appropriately, with a Tweet). Thanks to Twitter, with its endlessly scrolling sequences of 140-character messages, the voices of friends, celebrities, and strangers now flood incessantly across our phones and computers and inside our heads. It’s an always-entertaining source of news, opinion, jokes, conversations, and confession, punctuated every so often by the egregious public misstep. In a sense, Twitter has turned us all into Borg (minus the aggressive tendencies), creating an endless cacophony of human voices that never goes quiet, even in the middle of the night.
The remarkable thing is that it has all seemed somewhat accidental. Speaking broadly, there are two kinds of companies. The first spring directly from the ingenuity of their founders. Such companies as Google, Wal-Mart Stores, and Amazon.com fit neatly into this category. Their creators give old ideas new twists and then, with dexterity on the field of battle, almost single-handedly will their creations to success.
Twitter seems to fall into the second grouping—companies whose the founding idea is strong and original and powers a good deal of the achievement. The initial idea behind Twitter, conceived by Jack Dorsey, Ev Williams, and Co. in 2007 as a side project within the podcasting startup Odeo Corp., perfectly coincided with the rapidly growing use of smartphones, devices with limited bandwidth and screen space. The service then grew despite plenty of uncertainty among its creators about how to transform their powerful idea into a revenue-generating business.
In its formative years, Twitter survived infighting among its founding team, an almost comically unstable technical infrastructure, the emergence of a chaotic secondary trading market for its stock, and its own indecisiveness about whether to support a community of third-party developers. In a cover story last year, we dubbed Twitter “The Company That Couldn’t Kill Itself,” and somehow, even today, it still seems appropriate. Even under the reliable leadership of Chief Executive Dick Costolo over the past three years, Twitter’s central challenge has been to open a window for advertisers without interfering with the energetic conversations among its users.
Over the next few months, as Twitter is required to make its financial details public, we’ll learn more about its progress toward solving these challenges. Can Twitter become a new kind of technology/media company that keeps its users engaged while giving advertisers new ways to sell their wares? Is Twitter succeeding in its quest to make its service compelling for those Internet users who may not necessarily want a new kind of online soapbox? For these users, Facebook may be a more compelling way to stay connected.
Nevertheless, the IPO is likely to pay handsomely for Twitter’s founders, employees, and backers. One need only witness the parade of big brands and celebrities who now repeat their Twitter handles and hashtags incessantly, as a way to publicly identify themselves. In a relatively short span of seven years, Twitter has evolved from a simple experiment into something fundamental, a tool that gives people an unfiltered voice in a near-global conversation.
It even has a crucial feature that the Borg somehow missed: You can turn the damn thing off.