>This is a great example of how a company was undone [...] , if Twitter went along with their founders vision it could have been much bigger over time

For anyone wondering why parent uses "undone", "could have been much bigger", at a time that Twitter is a household name, the President tweets, people hold public conversations over Twitter, and list Twitter handles instead of their emails.[1]

It's because Twitter is "only" an $11.9 billion company by market cap, whereas Facebook is at $492B or 44 times bigger. I can't think of any other metric by which Twitter isn't a resounding success story.

[1] https://levels.io/hoodmaps/ - Very bottom "I don't use email so tweet me your questions."

As a metric, popularity can be misleading.

Take Hollywood, for example: few things nowadays are as ever-present as motion pictures, but the total box office revenue for 2016 was around $11bn [1]. That's about 19 days worth of revenue for Apple, going by their last quarter [2].

Just because you see it everywhere, or everyone talks about it, doesn't necessarily mean that it's a huge moneymaker.

[1] http://www.hollywoodreporter.com/news/2016-box-office-record...

[2] https://www.apple.com/newsroom/2017/05/apple-reports-second-...

I'm shocked you consider a tiny little $0.8t company like Apple to be a "huge moneymaker". Last year alone, which "hasn't been kind", just the top 25 oil companies made $2.6t in revenue¹: so what you call 19 days of revenue they made every 36 hours; in the year they made enough to buy Apple at its current market cap with its staggeringly high P/E multiple of 17.91, in its entirety 3.2 times. Just because everyone talks about them doesn't make Apple a moneymaker. Get some perspective. /s

Seriously though, I think you're being totally unreasonable. :) $11 billion is huge revenue for movies. That's not chump change.

¹ https://www.forbes.com/sites/laurengensler/2016/05/26/global...

If we get to lump all of big oil into one pool do we do the same for all of tech? The largest oil company, ExxonMobile, had only $3.5b more in revenue last year than Apple. Then again, you don't get to buy things with revenue, you need profit to pay for expensive baubles. Apple made as much profit in their "weak" (Q3) quarter of 2016 as Exxon made all year.

Don't you think you're comparing Apples to Exxons?

The point was that popularity can be a misleading metric.

Twitter might be ubiquitous (a household name, as you said), but just like Iron Man, its popularity is not proportional to its financial success.

Fair enough.

Paul Graham - Founder Control (2010)

http://www.paulgraham.com/control.html

Create a board that reflects the ownership of the company (2007)

http://venturehacks.com/articles/board-structure

I know that's a very comforting line of thought but it rings a bit false. Without the funds from the LPs backing the VCs there would have been no Twitter and no ecosystem of apps to begin with.

I agree it sucks that Twitter shafted its developers, but the LPs wanted to get paid. They don't get into VC to back charities. The VCs are just repping their LPs when they do this stuff.

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.

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.

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...

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.

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.