When Twitter was young: the early years

Steven Loeb · April 19, 2016 · Short URL: https://vator.tv/n/44a1

Twitter started out as twttr, where users could text out messages to their social network

As our readers know, Vator has started a series called: When they were young.

It's a look back at the modest days of startups, how they evolved in their first few years, and what traction they had at the time. In the end, we hope to have a good glimpse into what great startups looked like in their first three years.

Stories like these are always well received, because it reminds us that anyone, regardless of pedigree and environment, can rise above the noise and have great influence. They show us the value of being resilient, persistent and committed. If we can follow their footsteps, maybe we too can have similar success.

Today's segment is on Twitter.

Twitter's First Year ------

Founded: March 2006 as twttr, a product of podcasting company Odeo. The first Twitter prototype was used as an internal service for Odeo employees.

Founders (ages at the time): Jack Dorsey (19), Noah Glass, Evan Williams (24) and Biz Stone (22)

Initial company description: Stone plays a mad scientist in this early video where he explains how the service worked at the time. It initially worked as a text message service, where a person's friends would receive the message via SMS. 

Initial release - less than one month: the first Tweet, sent by Dorsey, goes out at 1:50 PM, on March 21, 2006.

First media coverage - at roughly 4 months:  The full version of Twitter was introduced publicly on July 15, 2006.

Glass is introduced to Om Malik of GigaOm, who writes the first coverage of the company in July 2006. This is how he describes it at the time:

"Twttr has married Short Code Messaging, SMS with a way to create social groups. By sending a text message to a short code (for TWTTR) you can send your location information, your mood information or whatever and share it with people who are on your social-mob! Best part – no installation necessary!"

Traction - at five months: a 4.4 earthquake in Sonona County in August 2006 is one of the first instances of users coming to Twitter to discuss an event as it happens in real time.

Business model - at seven months: Obvious Corp, which was started by Williams, Stone and others from Odeo, acquires the company and its assets, including Twitter, in October of 2006. Williams outlines Obvious' business model thusly:

"As services mature, the goal is to get them to profitability with advertising and/or subscriptions, so they can add to the network (and fund more building)," he wrote. "When justified by growth, resource needs, and desire of the team, we will spin off growing properties to form their own entities (with outside investment). It's not that we're against investors and acquisitions. That model works great for some things—especially once the idea is proven. But we're also not an incubator, with the goal of hatching companies from everything we build. Some things are perfectly worthwhile but don't need to be a company." 

Twitter's Second Year ------

Traction - at one year: Twitter is showcased at the South by Southwest Interactive conference, where it places two 60-inch plasma screens in the conference hallways, exclusively streaming Twitter messages. It helps create a lot of buzz for the service. 

Business model - at one year and one month: Twitter is spun out of Obvious and becomes its own separate company in April of 2007.

First funding - at one year and three months: Twitter takes $5 million in a round led by Fred Wilson of Union Square Ventures, which also includes Charles River Ventures, as well as Marc Andreessen, Dick Costolo, Ron Conway, and Naval Ravikant as angel investors.

The round values Twitter at $20 million.

Business model - at one year and five months: Chris Messina, who is now Developer Experience Lead Uber, is credited with coming up with the very first hashtag ever used on Twitter. It would quickly become a staple of the service.

Traction - at one year and nine months: By the end of 2007, the company later says that users were Tweeting 5,000 times a day.

Twitter's Third Year ------

Second funding - at two years and two months: Twitter raises a $15 million Series B round of funding from Bijan Sabet of  Spark Capital, and Jeff Bezos of Bezos Expeditions, along with existing investors Union Square Ventures and Digital Garage in June of 2008. 

Twitter is valued at $80 million. 

Media coverage - at two years and three months: Vator CEO Bambi Francisco sat down to a series of interviews with Dorsey in July of 2008, where he discussed numerous aspect about the company, including its potential business models and his lessons learned as a CEO.

He also discussed what Twitter was, and how the founders saw it. 

“We've always seen filtering and real-time search as a key component of the product and what we offer. We see Twitter as a real-time repository of state, in addition to a communications tool," he said.

Stone, he noted, also viewed Twitter as a newswire.

"Both for personal news, like, 'I'm eating a hot dog today,' but also for events and for stable news organizations, like CNN or Reuters or AP, whatnot. We found organizations like are breaking news on it and you can mix that in with what your friends are saying and what the plant across the hall is saying," said Dorsey (that remark about the plant has to do with someone hooking a sensor up to a plant, which would then Tweet when it needed water)

"You have people hooking things up to Twitter as well, so it really truly is becoming the status of everything. Which is really exciting.”


Traction - at two years and eight months: Twitter passes one billion Tweets in November of 2008.

At this time Facebook tried to acquire the company for $500 million of its stock, as wellas a cash component, but Twitter pulled out, wanting to see if it could make it on its own. 

Traction - at two years and nine months: By the end of 2008, users were Tweeting 300,000 times a day. The number would grow to 2.5 million in 2009, and 35 million by the start of 2010. 

Third funding round - at two years and 11 months: Twitter raises a $35 million Series C round in February of 2009, right before the company turns three.  Investors include Peter Fenton of Benchmark Capital and Todd Chaffee of Institutional Venture Partners, along with Union Square Ventures and Spark Capital. 

It values Twitter at $250 million.

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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.