Entrepreneurship

Mid-Term Exam
TWITTER: Building a Brand, a Social Tool or a
Tech Powerhouse
Robert Kennedy College

10
TWITTER: Building a Brand, a Social Tool or a Tech
Powerhouse? 201
0

CONTENTS

Contents..................................................................................................................................2

Executive Summary ...............................................................................................................3

Abstract...................................................................................................................................4

TWITTER: The Idea Itself..........................................................................................................5

Entrepreneur or Chance.......................................................................................................5

Vision or Opportunity...........................................................................................................5

Competition or Different Market..........................................................................................6

Growing or Shrinking...........................................................................................................6

TWITTER: The Past, the Present or the Future.........................................................................7

The Past...............................................................................................................................7

The Present..........................................................................................................................7

The Future...........................................................................................................................8

TWITTER: Option(s) and Suggestion(s)....................................................................................8

TWITTER: Earning and Spending.............................................................................................8

Conclusion...............................................................................................................................9

References and Bibliography.................................................................................................10

2
TWITTER: Building a Brand, a Social Tool or a Tech
Powerhouse? 201
0

EXECUTIVE SUMMARY

Twitter is nothing more than an opportunity that has been taken at the right time with the
wrong preparations. The company has the potential to revolutionize the social network, but
they have to adapt or change their vision and core values. Similar do they have to ask one
crucial question for their future: Do Twitter wanting to make an impact and revolutionize
the world, or do they want to offer a service that can be given by many more?

Twitter did to create a new service they only changed the way people can follow (not
communicate). New services are essential for their future. Twitter should rather build
relationships with potential rivals than trying to break them (present tactic), to avoid being
pushed out of the market. This assumption is base don their own figures (proposed 1billion
users) whereas they only have 2.5% at present which indicates that the market is still wide
open.

The vision seems to be the weak driving force, if the vision can be re-evaluated and
adapted, then only will it create more stable and successful opportunities. Attractive
services should be introduced immediately and revenue must be generated as indicated.
The 1billion margin should be revised to a more logic assumption compared to other market
front runners.

Twitter can generate huge revenues if they manage their market growth and service
delivering correctly. The opportunity has already been established, the right formula will
attract the users, generating revenue.

Twitter has the upper hand, they should keep it like such to avoid major disaster and
unhappy investors.

3
TWITTER: Building a Brand, a Social Tool or a Tech
Powerhouse? 201
0

ABSTRACT

This article is only a indication of the evaluation and interpretation of the Author, from the
information given and the researched done. The accuracy of the article can be compared to
those statistics and information. Much more focus was put into SWOT analysis type of
document than a feedback document. The document might come across as anti-twitter, but
this has been the outcome and the conclusion being made by the author based on the
questions asked and reason for it.

4
TWITTER: Building a Brand, a Social Tool or a Tech
Powerhouse? 201
0

TWITTER: THE IDEA ITSELF

Twitter can almost be compared to the Famous Russian Billionaire Roman Abramovich, as
being at the right place at the right time with the right chance (opportunity). The current
‘communication’ era holds so much opportunity and Twitter is one of many who got onto
that wagon. Do we need to want to know what other people or companies are doing all the
time, or is it necessary to ‘stalk’ others because we are not happy with our own lifestyle?

Life is such a rush that we miss out on our daily updates and communication (quality time),
but social networking has changed it. Everyone can be active in their work and still spend
some quality time with friends and staying updated. This is the new social life which the next
generations will have to follow, or is it. Similar to Facebook and Skype, has Twitter been a
minor necessity for a period of time until the world got used to it. It is a good to have but not
a have to have item for the majority of us.

The Idea (Twitter) will suite companies, stock brokers and stalkers in the long run, but the
average Joe will only use it as a social ‘browser’ on a very small scale. This Introduction
indicated a negative view on Twitter but this is the way it seems from a statistical and user
point of view, which will be discussed over the period of this paper.

ENTREPRENEUR OR CHANCE

If one look into the phases up until Twitter one will quickly realized that the Founder and
Entrepreneur Evan William has been waiting for such an opportunity since 1997. He
developed various ideas and created some companies which he sold to major players such
as Google. He had the vision and creativity of a true Entrepreneur.

Entrepreneurs see opportunity that others don’t and they take risks that others think is to
high or unstable without evaluating the whole market. Unfortunately, the idea of Twitter is
not fully original or new. It all started with previous social networking such as MySpace,
Facebook, Flikr, Messenger and MXIT (could be a big thread). All these competitors have
their own unique visions and styles but they all do the same thing – Connecting people in a
real time environment. Twitter was more of a chance than an entrepreneur opportunity, but
only an entrepreneur with the relevant driving force or experience will see and take such an
opportunity. If it wasn’t for that Engineer (Jack Dorsey) at Odeo in 2006, it might never have
happened.

VISION OR OPPORTUNITY

The selection of the word Twitter is maybe the best suitable thing in the whole concept
based on the meaning from the dictionary. The word does have an enormous impact on the
success of company. The vision however was only created at that specific point in time; the
opportunity however has been created years before by the social networking and internet.

The opportunity and vision combined only creates a temporary business opportunity
because this specific idea does not have the substance to pull it through to the end. Being

5
TWITTER: Building a Brand, a Social Tool or a Tech
Powerhouse? 201
0

the first in a specific field does not mean you will be the last. Facebook overtook MySpace in
an instance due to delivering the right services and giving the users what they wanted. It all
boils down to consumer satisfaction and comfort. Twitter is currently highly limited to any of
these categories due to its single focus (present).

The vision seems to be the weak driving force, if the vision can be re-evaluated and
adapted, then only will it create more stable and successful opportunities.

When one look at the future expectations and figures too see if Twitter are moving into the
right direction, one will immediately see that the ambition is way to high compared to
current figures and similar market competitors. To reach 1billion in 5 years indicates a
growth of 195,000,000 users per annum. This can only be achieved if the world has to have
Twitter and not if Twitter wants to have the world (as mentioned). The proposed financial
figures also indicate something off the scale (not logic for a growing company). Having a
$1.1b, net profit from $1.54b of revenue indicates a profit of more than twice the cost of
operating the system. Even though the operating costs will be low compared to revenue, the
closest that one could come to making this seem realistic is when one argue that each user
will contribute $1.54 per annum, but even this sound to little again.

The business revenue models do make sense (b2b, e-commerce and advertising) but
revenue will be highly affected by this. Those who share this ambitious vision will take part
in the investment opportunity ($155m venture capitalists).

This potentially large opportunity will be taken away from Twitter by other (direct)
competitors such as Google Buzz and Idea.com or even Facebook and Flikr if the vision does
not become more realistic (Reality will be the winner).

COMPETITION OR DIFFERENT MARKET

Twitter keep indicating that they are very different from Facebook and that Google is old.
Both these assumptions are highly risky because Facebook is a big brother of twitter with
similar activities and more to offer interface, whereas Google has launched their competition
(Buzz). Twitter is in the same market (seeking for number and users) as the rest and by
distancing themselves is only an indication that they fear their future by giving them an alibi
if it all fails.

GROWING OR SHRINKING

Raising $155m from capitalists is not easy and they must have seen an opportunity (which
was missed with other like Facebook and Google), but this over eagerness can result in
major losses. The problem arises when you look at Google who launched and financed their
own similar product and other networks who adapted a similar way of communication. This
will force Twitter to act quickly to make sure they have a big share in the market to be able
to satisfy their investors. Based on their own proposal it is clear that they do not even have
2.5% of the potential market, which leaves the window of opportunity open for anyone.

6
TWITTER: Building a Brand, a Social Tool or a Tech
Powerhouse? 201
0

Twitter will make a reduced net profit until the 3rd Quarter of 2010 when they expect $53m
revenue. The validity of this information cannot be taken serious when one look at the high
ambiguous figures used in the article. By the looks of all the information given one has to
agree that it looks like Twitter has reached its limits with the current vision and marketing
tools they used up to date. Unless they sell a big share into companies such as Facebook,
Google or Microsoft who has a concrete business model, will they have to make peace with
their current figures and future outcomes? The figures of Twitter have reached a peak in
2009, and expected to decline even more. Selling some rights only assisted them in
generating some income to assist them in adjusting their marketing strategy.

TWITTER: THE PAST, THE PRESENT OR THE FUTURE

THE PAST

The founder never had a business with more than 20 people, neither did he have such a
huge interest and as intense as twitter. This could result in creating troubled times when
they need to shine when the time is right. Twitter refined the social network through
adjusting the method and vocal point (tweets).

THE PRESENT

The need to know what others are doing has played a huge role in this sudden boom. People
need to know things before someone else does and Twitter solved that problem (only until
everyone had the same tool). This indication allowed other networks to adapt or challenge
the opportunity. Twitter has been a sleep with reacting to this sudden boom in 2009 and this

7
TWITTER: Building a Brand, a Social Tool or a Tech
Powerhouse? 201
0

caused them to become ‘boring’. Luckily, the name traveled all over the world and everyone
is familiar with it, but not everyone has the same need to follow people around. Current
financial input will assist in trying to safe their share and monopoly. Twitter will have to sell
advertising space and adding more features to keep the users (who are waiting) busy and
excited. Facebook did this by adding simple games and questionnaires for example.

The biggest marketing problem which Twitter faces is adapting their vision and strategy to
the potential market. This can only be done if they create or adapt a stable Structure and
Operating process as much as changing their values according to their users and market
needs. The major growth in capacity (revenue and employees) should be managed correctly
and timely to avoid problems like over spending or under spending (stay with the trend).
The current market is telling them what to do; one such activity is to enrich their service and
selling services to businesses.

THE FUTURE

Twitter will become a corporate and media tool, more than it will stay a user tool. This will
be a successful marketing model and revenue model for the future. The users want to follow
either celebrities or they would want to follow business news and progress in decision
making. It will be more effective to give business men and journalists the information than
exchanging personal movements (which is similar to Facebook). Twitter can be the reason
for more accurate, effective and sufficient information sharing that will promote business
opportunities and world economy. The majority data will still be due to current service but
the effect will be less.

The question to be asked for the future is does Twitter want to make an impact and
revolutionize the world, or do they want to offer a service that can be given by many more?

TWITTER: OPTION(S) AND SUGGESTION(S)

It is highly recommended that Twitter revise their vision and proposed (ambitious) figures to
make it more attractive and acceptable. Secondly, Twitter should consider (should have
considered) selling a part or whole company to a more stable (concrete) company that could
assist them in staying ahead of their future rivals. One such an example is Facebook and
Google who are busy developing their own similar systems which could push Twitter down
unless they acts quickly.

Selling space and generating revenue is an essential needing to be sure that future
investment opportunities are kept open. Rather build the social industry along your
competition that creating division and loosing your share. Twitter should consider attractive
services like loading of pictures as part of the tweet or instant video conferencing to discuss,
give feedback or inform followers.

TWITTER: EARNING AND SPENDING

8
TWITTER: Building a Brand, a Social Tool or a Tech
Powerhouse? 201
0

The targets set for the future is way too high for a company who has been operating without
any revenue for 4 years. Twitter should develop a very strong marketing tool (some new
service), that will attract and maintain users for the time being. Some revenue and profit
must be generated before investors become intolerable.

Twitter must invest in service delivering not only for the media but also for e-commerce and
businesses, which will create a stable successful income.

CONCLUSION

Twitter has refined the social network and did not expect the sudden interest, this caused
them to be caught of guard, competitors are starting to fill those needs, and services that
Twitter missed. Constant developing and focusing on the user’s needs is the most two
essential needs at this point of time. Twitter is highly ambitious and it is showing that in
their total user figures. Selling a share and changing their management style or vision will
be healthy for their current (proposed) strategy.

Integrating services with rivals will be the success to short term stability and market share.

9
TWITTER: Building a Brand, a Social Tool or a Tech
Powerhouse? 201
0

REFERENCES AND BIBLIOGRAPHY

Multi Authors et al. (1999) Harvard Business Review on Entrepreneurship. HBS Press

Van Aardt, I. Van Aardt, C. et al. (2003). Entrepreneurs and New Venture Management. 3rd ed. Oxford Southern
Africa

Roberts, Micheal. J. (2006) Managing the Growing Venture. Publication, 9-803-137. Harvard Business School

http://www.cnn.com/2010/TECH/01/26/has.twitter.peaked/index.html?hpt=C1

10