5 Twitter Business Models

Twitter just raised $35 M from Spark, and everyone thinks that Spark is idiotic because Twitter cannot monetize.

While I do not claim to have the definitive answer, here are 5 ways Twitter can make money that they are currently not doing.

1. Contextual Ads

Twitter should scrape all the data and figure out the keywords that people use the most in their Tweets. Then they should sell ads like Facebook that are contextual.

2. Add ads to Tweets

Think SMS + ads.

3. Twitter Gifts

Virtual Goods to friends. When Facebook launched this everyone thought they were stupid ... until they pulled $40 M.

4. Premium Direct Messages

Force people to accept premium direct messages. A lot of people want to contact famous people, if they are forced to accept premium direct messages this can provide huge value to followers and make Twitter a lot of money.

5. Yammer

Make an enterprise package. Copy-and-paste Yammer's business model.

PS. Please stop telling me that Rails does not scale because Twitter did not scale. Twitter is not indicative of the potential of Rails.

Check out Xhibitr

My friends have created a pretty cool fashion startup. Being an engineer, I know nothing about this stuff, but I'm assuming someone out there will like it. Please check it out!

Xhibitr



As a side note, I have no idea who this dude is, haha.

Mobile Web Apps Will Dominate 2010

I just wanted to put in writing that I think mobile web applications are going to dominate 2010.

There is a problem with developing for mobile phones, there is no standard platform to reach the masses. Smart Phones sales are growing at an astonishing 50% on a year-to-year basis, but the market is still heavily fragmented across different operating systems.

One system that is being embraced by some of the larger operating systems is to allow web applications to take the same position as native applications. The Palm Pre has the Web OS which is based completely off of common HTML standards, the Blackberry lets developers wrap Java around web pages so that they can be sold like normal applications, Nokia has announced an app store based on HTML standards, and even on the iPhone, developers can build a simple wrapper for their web pages and hawk them like regular applications.

The implications are huge.

If you want to tracend mobile boundries, start building mobile web applications.

Startup Lessions Part 1

I guess the word is out.

Surprise.

I was making iPhone games.

We have done moderately well since our launch almost a month ago, and now that the storm has finally subsided. I can finally get drunk in my room and write this post about the lessons I have learned thus far. Don't worry, I'll keep this short, only 3 lessons in this post.

Thank you to everyone in Silicon Valley, old and new friends alike, that have helped me get to the point where I am at right now. I feel like I'm at the top of the world, and falling to the center all at the same time. It is exhilarating, I am metaphorically-starving (see bank account), but I would not trade this feeling for anything.

The first lesson that I want to share is, all serious startups should be in Silicon Valley. I have yet to see a single company or person that I have wanted to meet or talk to that isn't in the valley. At any given coffee shop from San Jose to San Francisco you can see at least one or two startups using it as home-base. There is no other place in the world that is as full of innovation and support for innovation than in Silicon Valley.

When we launched we had no idea how to scale Rails. None of the books or blogs on Rails will tell you because the fact-of-the-matter is that most Rails applications will never need to scale. Even when we bumped up to managed hosting at Engine Yard (you guys rock!) we were told that we were producing 10 times the traffic of the other companies at our same hosting level. Incredible as an outsider, insane from someone trying to manage the whole ordeal.

So that is lesson #2, if you are successful, prepare to fail. Everything you think won't break, will break. Different problems appear at different levels of scaling, and all the code you wrote will need to be severely refractored in order to scale to the next level. Using managed hosting was the best step that we took as a startup because scaling has to be approached from all angles, and as a team limited in resources (by definition of a startup) you will have to get all the help you can get. Managed hosting is quite expensive, but it's worth it, if you are serious about building a company.

For those that are wondering how well Rails scales, it scales. If you are interested in the technical high level overview, the path to scaling for any language using a relational database (MySQL) is as follows: shared hosting, dedicated hosting, bump dedicated, split db and app servers, memcached everything, bump # of app servers, bump size of db (RAID 10), and finally sharding. There is nothing unique to Rails that doesn't allow it to follow the exact same path, and at the end of the day, every new startup should jump onto a framework because it will make your life one million times easier. I promise.

Which is my final lesson, number 3 for those counting at home, that I want to share today; use a framework (preferably Rails). If you're penny pinching the maginal differences in hosting costs, your business model sucks and you're going to fail anyways.

Overview
1. All serious startups should be in Silicon Valley.
2. If you are successful, prepare to fail.
3. Use a framework (preferably Rails).

3 Ways To Hack Facebook

I'm not going to talk about hacking Facebook in the malicious sense, but rather I'm going to discuss ways to improve your productivity on Facebook with some simple steps each day.

First off, I'm assuming that you have some form of social life and value friends and people. From that, you should be aware that it is always better to be more connected with people. Therefore, it should be in your best interested to nurture that human connection so long as you can do it without taking too much time out of your day. The following steps will take less than 5 minutes each day, combined.

1. Set a time everyday to give a quick happy birthday wall post to each of your friends that has a birthday. I usually also try to include some way to further the conversation so that I can start a small dialogue with a friend that I haven't talked to in a while. Who cares if you're not close to them, it's always nice to have someone celebrate your birthday. I have started to do this first thing in the morning.

2. Surf status updates and comment on them. People set status updates because they have something to share and always appreciate the responses (just don't make them creepy). Status update comments are the new wall posts, which were the new e-mail.

3. Link Twitter and Facebook together. If you're a Twitter use, you know the power of microblogging. There is no reason why Facebook status updates will be anything less than Twitter updates. If people don't want to see your spam, kindly show them how to block your status updates on the newsfeed. Don't be afraid of letting the web 2.0 savvy you intermix with the regular social life you -- the reason we all love web 2.0 is because there is inherent value to improving communication and human relationships, this transcends just simply being a nerd.

How To Save Microsoft

Last week I had a heated debate with my friend Ben Tseng about how Microsoft is pure evil. While it is always fun to point fingers, I realized that it is probably more constructive to provide a plan to help them help us.

Here are some fundamental problems with the Microsoft model, how it will ultimately destroy them, and what to do now to solve them:

1. Inferior Products

Problem

Almost everything that Microsoft has tried to accomplish in the last decade has been a failure; Zune, Vista, IE, MSN, etc. The only reason why Microsoft is still pulling in huge numbers year after year is because the use of technology is increasing, not because Microsoft is producing good products.

Why it matters

The perfect case study of the effects of moving second, being complacent with inferior products is AOL. AOL moved to broadband too slow, and the once dominant Internet Service Provider is now stuck with a bunch of small fish web properties, hoping to hold onto anything that will keep it from drowning.

Likewise, Microsoft will not have any problems in the next year or five. People are going to buy Vista, people are going to buy Windows 7, but given a larger scope, they will become a GE or a Ford. Its lack of innovation is going to continue to give their competitors (Apple, Linux, Mozilla, etc.) leeway to continually chip away at their critical mass until one day Microsoft is going to wake up and realize that without its critical mass it is just a giant piece of fail.

Solution

The solution is simple.

Move first and push for innovation. Obviously Microsoft does this to some extent, but they need to be more vocal and evangelical. It has some cool technology in its labs (touch table, Seadragon), but nothing that is "game changing" like the new Macbook, iPhone, iTunes, Firefox Add-Ons, etc.

I know that just asking for a company to produce new and awesome products is a ridiculous task. The biggest asset that Microsoft has is its engineers, they're brilliant, let them showcase their brilliance. Here are some suggestions on how to do this:

• Use the Google 20% rule and let engineers work on their own projects for 1 day out of every 5


• Properly incentivize engineers. Microsoft has $9 Billion in the bank, it should give $50 million each year to the best projects. That's less than 1% of Microsoft's total cash to push out a ridiculous amount of "smart" ideas.


• Copy competitors and evolve their products. If Microsoft is bent on moving second, at least copy the good features and evolve the product. The UI of the Zune is archaic and unintuitive. Microsoft search results are a joke. Cash back for buying products, really? That's its big plan to salvage its billion dollar investment in web?

2. Closed Platform

Problem

Windows is a closed source platform. This is the most horrible and stupid decision that Microsoft has made.

Why it matters

There are hundreds of thousands of engineers, brilliant people, working on Linux. Every line of code is peer-reviewed by the best and brightest in the world. There are very few bugs, everything runs smoothly, at least relative to Microsoft.

Microsoft does not make its money from its kernel. Microsoft makes its money from the comprehensive operating systems package. Unless Microsoft disagrees with point #1 and is bent on selling inferior products with legacy support as a core business model, they have to agree that they want to produce a better product for less money.

Linux is a better product than Windows. The Apple operating system is the perfect showcase of this, it built its operating system (OS X) on top of BSD (a unix derivative with an open license to sell commercially). Microsoft can dramatically cut internal costs and development time by simply using a free and better product.

Open source engineers have basically agreed to work FOR F-ING FREE FOR Microsoft, and Microsoft works extra hard to turn them down. That is the stupidest business decisions, ever.

Solution

Microsoft should build its next operating system after Windows 7 using the BSD kernel. On top of this new operating system, build a virtual machine that will run old windows program so it can still have that precious legacy support.

This will open up the gateway of innovation because developers (ie. me) will no longer have to develop for 5 different platforms but rather focus their energy on developing a great application with one method of deployment.

If Microsoft is afraid that it cannot produce a better user experience than its competitors, then it is doomed to fail anyways. This is the only way for to survive in the long-run.

That's why Apple allows you to use Microsoft through Boot Camp. Apple knows that everyone will still opt for the Leapord experience because it is 5 million times more stable and enjoyable.

3. Attitude

Problem

Steve Ballmer is a jackass. He says so many stupid things that do nothing but infuriate and incite hatred. No one likes the company with the upper-hand, Microsoft is the epitome of the technological "man". That makes it inherently uncool, and when Steve Ballmer continually fuels the flames with his loud mouth, it just makes things worse.

Why it matters

Almost 50% of college students want to buy an Apple computer or laptop. This is no doubt a function of how uncool Microsoft has become.

Then the math is simple. Every year more people go to college and buy Apple computers in college, they realize that Apple is superior to Microsoft. Following graduation they will continue to use Apple. Given an infinite amount of time with the same trend, the young in college will be old in the workplace and start making the decisions necessary to change whole IT departments to be predominantly Apple or Linux based since they are better and cheaper products.

Microsoft needs to be more viral.

Solution

Fire Steve Ballmer or hire several aides to make sure he sticks to his talking points.

Microsoft has had some great PR campaigns (I am a PC, the Zune commercials, etc.), but they still need a lot more work. That means dumping Windows into rap videos, setting up college campus events, make cool products, focus more on creative ads like the Apple page-takeovers with similar undertones to their successful video ads.

Conclusion

Microsoft is the perfect representation of the Hare in the old anecdote of the Tortoise and the Hare. It is winning the race so now it is just napping, if it doesn't wake up soon, it is going to be crushed by this next wave of technological innovation.

Today Was A Good Day

I usually try and keep personal stuff out of my blog, but what the heck, I graduated from college today so I think I deserve some leeway. Here are 5 AWESOME things that have happened to me today, and I just wanted to share this with everyone because it's hard to have a good day and I think that we should try and appreciate/share the ones we do have:

1. I graduated. yay.
2. Saw Milk -- awesome movie, thanks Jenny (she bought tickets too!)
3. Thought I had no beer, I was wrong, I had 2 beers! (soon to be none)
4. Our next game is a little sketch, but today there was a NC-17 app approved for the iPhone app store. So that clears our way to launch as well.
5. Charles Hudson posted a new blog post about doing an iPhone gaming conference in nor cal. Yes!!!!

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Edit:

6. Obligatory gangster rap background music.