I’m not a brilliant internet entrepreneur or much of any kind of entrepreneur, really. I’m not a strategist or business expert or pundit or guru. All I have is guesswork and barely healed stubbed toes and a general feeling around of my way in this online world. However, even with my lack of chops it is hard to imagine a worse way to deal with the purchase of Values of N by Twitter and how they dealt with the aftermath.
I can understand that mostly what Twitter wanted out of the deal was Rael Dornfest. I have been part of acquisitions where one company bought another mostly to get an in-place development team. However, this was at the height of the dot-com boom when hiring was difficult and people were expensive. I sure don’t understand how that makes sense when there are a lot of people looking for jobs, the labor cost is under downward pressure.
What really fails to make sense for me though is why Twitter would acquire a company with working, extant and deployed products and get zero value out of them. Sure, they bought Values of N to integrate the team into Twitter but I Want Sandy and Stikkit are already out there. How does just shutting them down help anything? It creates a lack of trust in cloud based services in general, if a solid and useful service like I Want Sandy can just disappear with a few weeks notice. I’ve already posted about how the only defense ever offered is that the service was free, which I think is insufficient a defense. Being a free service does not relieve a company of its responsibilities in being stewards of their users, particularly when like Sandy they asked to be an essential portion of the workflow of ones life. To say “Hey it was free, what do you expect?” is exactly akin to saying “Hey, you were stupid enough to trust us. What do you expect?”
Assume I was somehow involved with either Twitter or Values of N. This is what I would have wanted to happen with the acquisition:
Step 1: Before announcing the situation, I would have set up an exit path for the users. Dornfest put together some export tools only after public outcry and 1 week into the original 2 week notice. That’s weak tea.
Step 2: I would have informed the users before the general public about the situation. I would have sent it down the actual paths of notification, rather than posting it on the company blog. It should be noted that only today, 3 days before the original shutdown date, has any notification been sent to the users. That’s worse than weak tea.
Step 3: I would have said that effective January 1st 2009 there would be no more free versions of I Want Sandy. New users would get a 30 day trial, all users would effectively be on a trial until Jan 1. After that point, the service would be subscription only. Let’s say $10/month, $100 if you prepay for a year. That could be more or less, but within that general range.
Step 4: For any paid up I Want Sandy users who have a Twitter account enabled, I would turn back on IM access and track for that Twitter account. Both I Want Sandy and Twitter were more valuable when those features were in Twitter, so if you are a paid up user then you get those features back. This gives both Sandy and Twitter a basic revenue model. It might not be huge, but for every 10,000 users of Sandy flipped to paid users that’s $1M/year. I don’t know the user base of Sandy but because of the nature of the service, I’d suspect a higher than usual percentage of users would flip to paid, maybe something on the order of 30-50%. If Sandy had 100K users, I wouldn’t be surprised at all to see 50K pay up. Rael cites the cost of maintenance of Sandy as rationale for the shut down, even if they do no further development. If it had paid users, you could hire cheaper admins and let them baby sit the site.
At that point, the conjunction of Twitter and I Want Sandy would have value above what either has alone. That’s synergy, used appropriately for the actual Buckminster Fuller definition, not the business wonk BS version that has been watered down to mean “anything I like”. The ecosystem of the two services would provide things the components do not. It would be monetized at the point of value creation. It would make Twitter more valuable even when not using Sandy. It would have prevented the hordes of angry users such as myself. I’m ceasing to use Twitter as protest of this stupidity. Once they’ve proven that they don’t care about the users and stewarding their data, I cannot trust them as any part of my communications infrastructure.
As I said, I’m not a business guru but it seems like all of this provides more value to everyone, keeps a valuable service alive in the Web 2.0 ecosystem, increases user satisfaction, and avoids buying a company and keeping the people but disposing of all its value creating assets. Am I just too stupid to see why scrapping I Want Sandy was a better move?