Twitter’s genius: Five things that made it worth billions


(Kacper Pempel/Reuters)

Curious why a company that has never turned a profit opened for trading Thursday at $45.10 a share and with a valuation of about $25 billion? We explain the ideas that helped it gain 232 million active users:

Twitter embraced streams, not Web pages.

34622photo

No one enjoys waiting for a Web page to load. By using a stream, in which users scroll down to read more tweets, Twitter created a more enjoyable experience.

“Stream-based content naturally flows across different devices and media, from tiny phones to tablets to giant desktop monitors,” wrote Anil Dash in a smart essay on the subject.

Twitter’s stream is a bottomless pit of topics you care about. While traditional media companies such as newspapers and television networks create the same product for everyone, Twitter is tailored to your interests. And it is as useful on a smartphone as a laptop or desktop computer.

The strict 140-character limit.

You can ramble on as long as you want on most Web sites. Twitter’s users must edit their thoughts and get to the point. As attention spans keep getting shorter and we have more and more stories, photos and videos to choose from, Twitter’s emphasis on brevity is refreshing and appealing.


When your customers do work for you, a company is basically having its cake and eating it too. (Ognen Teofilovski/Reuters)

A platform for others to innovate on.

Some of Twitter’s most popular features — replies, retweets and hashtags — were started by users, not company employees.

When a company can get an outsider to contribute a brilliant addition for free, that’s a great situation. Twitter’s employees didn’t need to have all the great ideas required to make their company a success.

Becoming ground zero for breaking news.

As a major news event unfolds, there’s no better place to be than Twitter. The information isn’t always perfect, but there’s no rival for the immediacy.

The plane that landed on the Hudson River is a classic example, as is the man who tweeted about the raid that killed Bin Laden, as it happened:

 

 

Catering to our star-obsessed culture

Facebook began as a two-way street where you couldn’t receive a person’s updates unless they were receiving yours too. Twitter’s follow/follower model acknowledges some relationships are one-way streets. Drake doesn’t care what I have to say, but I can still know what’s happening in his world.

The chance to accrue fame and a huge audience is appealing for any celebrity or person with an ego. That helped draw in bold-face names, which then attracted everyone who cares about celebrities. Now Twitter includes priceless exchanges like this:

 

Further reading: Twitter could be really profitable, but it’s a super risky stock.

Matt McFarland is the editor of Innovations. He's always looking for the next big thing. You can find him on Twitter and Facebook.

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Dominic Basulto · November 7, 2013