Twitter founders: We had a business model we didn't use

Startups need to have a good product first, then the money will come

The fact that you can launch something now without every having to touch and hardware “is a pretty huge advancement,” said Twitter co-founder Evan Williams, adding that, on the other hand, the competition is more fierce than it used to be.

Williams and co-founding partner Biz Stone were speaking at the TC Disrupt conference in San Francisco Wednesday, where they discussed what it is like to launch a company in the current climate.

Today, you have to pay a lot of attention to design and user experience than you did 10 years ago.

“You could really stand out a decade ago by having good design, like, ‘Oh wow, this thing actually looks good and its easy to use. That’s an anomaly in this world because most of the time is spent making the software work. But you have to compete on business, on marketing, on the design and everything else and that just as hard or harder but it takes a different set of skills.”

When asking themselves if they want to invest in a company, Stone and Williams say they ask themselves two things: do we want to see this succeed, even if we are not involved, and can we help make it better?

When asked whether certain products were popular but did not have enough reach because of a lack of a business model, Williams completely rejected the idea, saying it was exaggerated and does not really happen.

“I think that idea is completely overblown in the industry. There are not things that are incredibly popular that can’t make money.”

“It just doesn’t happen.”

People talk about it but you can’t name one where it did, Williams said.

When it came to Twitter, he and Stone actually did have a business model, but did not use it because they had to focus on product first.

“With Twitter, clearly there was a huge business model with Twitter from the beginning. We knew this, but we didn’t choose to focus on it for many years.”

When you have 12 people, you can’t afford to use four people on building a business model, Stone said. You need to build the product first, so once it shows value, then you can have a business model.

Williams admits that this is not always the case. Some businesses should start with a business model, if that works for them as it can actually help to drive growth.

“It’s not like we’re anti business model either, but I don’t think we’ve ever looked at someone and said, ‘That’s amazing, we want it to succeed in the world whether we’re involved or not, but it won’t make money.’ I just don’t believe that’s true.”