The three business models that make Twitter a billion-dollar business in 12-24 months“. After explaining the three models lightly (In feed advertising , SMS Advertising, Subscriptions), Jason writes:
Bottom line? Ev shouldn’t worry about a business model for another two years. Just build the service to *massive* critical mass. Get to 100M users–which is where the service is headed. If the service gets to 100M monthly users it will be worth a couple of billion.
That’s what I learned at AOL: Once you have critical mass you can’t help but make a fortune. An absolute idiot with 10-20M users can make a ton of money. So, get to tens of millions of users and forget about money.
Game over.
Done.
Running a startup is NOT about revenue anymore–it’s about critical mass. It’s about scale. When you’re playing in the big leagues with unlimited access to capital you shouldn’t worry about revenue BEFORE you have critical mass.*
* Note: if you’re not a player like Ev, and you don’t have unlimited access to capital do not take this advice and focus on building revenue streams.
There are three basic phases to a business:
Phase 1: From idea to release
Phase 2: Release, working out the kinks, building a good product
Phase 3: Monetization
If you get phase 1 and 2 together, where phase 2 includes mass usage, what Jason is saying you do not have to worry about monetization, for the simple fact others would see the potential in your reach and figure out phase 3, the monetization angle.
In general I would concentrate on business, revenues. For every company which succeeds with this game-plan many lose. This isn’t a different game-plan than the basic business model of a VC firm: One out of ten may win.
So should Twitter continue without a business model? All I can say is if I were them I would search for one, experiment, ponder. Putting their heads in the sand believing that everything will be the same two years from now, if that is indeed what they are doing, is an insult to their investors.
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