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Costolo, the first keynote speaker at Vator Splash September, shares a few lessons for entrepreneurs
Dick Costolo, who was just appointed Twitter CEO, stepped off the stage here at Vator Splash, where he shared a few entrepreneurial lessons with 400 attendees. After a long week of big news announcements for Twitter, Costolo ran down a solid list of random (but highly useful) tips for budding tech stars in the audience.
1. Have a voice
Costolo’s first lesson, which he seemed the most eager to impart, is to create a personality for your company. For example, even though deal-of-the-day sites are the easiest kind to copy and paste, Woot stood out from the rest by having the most funny and raunchiest descriptions of its daily deals. (Costolo recommends reading the Woot CEO’s post after Amazon acquired his company.)
Looking at Twitter, you see personality shine through every page, right down to the 404 “fail whale,” one of the more entertaining error heralds on the Web. Everyone might have been a little more upset by all those site outages if the 404 page displayed only a cold, faceless message instead of a hilarious giant whale heaved by tiny birds. As a more timely example, Costolo referred to a recent Twitter-created video that “pulls you in because it’s very Twitter-y even though it’s just a video for [the site’s new] interface.”
2. Clean term sheet
Not spending much time on this one but making his opinion clear, Costolo urged entrepreneurs to optimize for a clean term sheet. The standard is to look right at what jumps out--valuation numbers--and skip everything else. But there’s much more to be seen in these business agreements (like participation preferences) and having a clean term sheet is essential to highlighting these other factors.
3. No exit
Everyone always asked Costolo, when he worked at FeedBurner, “What’s your exit strategy?” His response: “I don’t have an exit strategy.”
Now he gets the Twitter equivalent: “When’s the IPO?” His response has changed very little: “We never talk about an IPO.”
He thinks it “moronic” for a business to think in terms of exits (if we do this or that, then maybe Google or Yahoo will want to buy us). Instead, echoing a statement made by Vator’s own Bambi Francisco at the beginning of the night, Costolo believes only passion can drive an entrepreneur to success. Your business grows or it doesn’t, but you can’t constantly worry about exits.
4. Think long-term
Not thinking about exits, however, doesn’t mean forgetting about the long-term. Relating an example from one of his earliest ventures, Costolo described how his company veered from their six-month business plan because one customer asked for one specific feature and backed up the request with the promise of good money. Though the business managed to make quick profits by pleasing this one customer, they shut out a large group of other potential customers by delaying their original plan three months. The company had traded in their vision for sub-optimal results by thinking in the short-term.
5. Launch late to launch often
Twisting the adage to “launch early and launch often,” Costolo advised that companies be patient with their product, even if that means launching late. Once a solid product is released, then the business can focus on launching updates often.
At the same time, Costolo warned against waiting to dump every single new feature on users, an experience that can be overwhelming. Even worse, waiting for absolute perfection before launching could be disastrous because perfection might never come; receiving feedback is key.
6. Don’t revisit decisions
According to Costolo, this is serially successful entrepreneur Mike Cassidy’s number one rule.
“We have open and vocal debate about any decision we're going to make,” explains Costolo, “but once we make that decision, we never revisit it.”
Expressed more succinctly: don’t second-guess. Costolo believes that second-guessing decisions before they have clearly succeeded or failed can be not just faulty but also hazardous to a company. After a few bouts of second-guessing, a business will have great difficulty making any future decisions with confidence.
Nevertheless, every business at some point must experiment and dive into a decision without certainty about where it will lead. Earlybird, one of Twitter’s first strategies for making money, ended up failing "because it wasn’t an awesome user experience." Once the product’s failure was certain, Twitter nixed the feature and duly noted a variety of reasons for its failure (for example, all the deals were United States-centric even though many of the product’s followers lived internationally.)
Stay tuned to VatorNews for a write-up of the second keynote at Vator Splash, to be delivered by Kevin Hartz, founder and CEO of Eventbrite.
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What is Twitter?
Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests.
Where did the idea for Twitter come from?
Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.
How is Twitter built?
Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes.
We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.
How do you make money from Twitter?
There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.
In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet.
At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.
Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.
What's next for Twitter?
We continue to focus on building a product that provides value for users.
We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.