On Tuesday evening more than 300 confidential Twitter documents and screenshots landed in our inbox. We said we were going to post a handful of them only, and we’ve spent much of the last 36 hours talking directly to Twitter about the right way to go about doing that. We’ll have more to say on that process in a couple of days.
The documents include employment agreements, calendars of the founders, new employee interview schedules, phone logs and bills, alarm settings, a financial forecast, a pitch for a Twitter TV show, confidentiality agreements with companies such as AOL, Dell, Ericsson, and Nokia, a list of employee dietary restrictions, credit card numbers, Paypal and Gmail screen shots, and much more.
These are the last two documents we are going to share: a subset of the detailed notes from a set of executive meetings that took place between February 12 and June 9, 2009. Much of the information in these notes is either personal in nature (new hires, etc.) or too sensitive to share. What’s interesting of the rest we are posting here with our commentary. These notes include never-before revealed discussions between Twitter and Google, Microsoft, and others, as well as details of product planning, company goals, employee retention, and new proposed terms of service and APIs. Even acquisition targets such as CoTweet and Twitpic are discussed (and sometimes dismissed). It’s important to note that we have been given the green light by Twitter to post this information – They aren’t happy about it, but they are able to live with it, they say (more on why they did that in our later post).
One other caveat – as we’ve said before, these documents are rough meeting notes, not polished documents meant for broad consumption. There are lots of typos and outdated information. But on the plus side, the rawness of it shows the dedication and deep commitment of this team to making Twitter into a world-class company.
Finally, there are some details about partner discussions, particularly around Google and Microsoft, that we are just not going to publish. Twitter has been in negotiations with both companies around a broad set of transactions for months. But we aren’t going to go into great detail about exactly what has been discussed, or Twitter’s strategies toward those negotiations. So while it looks like there is a lot of detail around those discussions below, the most sensitive stuff has been removed.
Let’s start with a key strategy meeting which took place on February 25, 2009. One of the audacious goals laid out in the notes of the strategy meeting is for Twitter to become the first Web service to reach one billion users. The notes are laid out in bullet points with each one reading like a Tweet: “If we had a billion users, that will be the pulse of the planet.” In the meeting itself, Stone tries to put his finger on what Twitter is by calling it more of a “nervous system” than an alert system.
A lot has happened since February. Twitter’s site has gone from an estimated 4 million visitors in the U.S to 20 million, and nearly double that worldwide. However, the notes provide a rare view into the strategic thinking of the company just before it entered its current phase of hypergrowth.
Dealing With Google: Much of the discussion at Twitter meetings throughout the past six months revolved around dealing with Google and Facebook. In a March 13, 2009 management meeting, for example, during a discussion of a search deal with Google, the fear is expressed that “Google would kick our ass at finding the good tweet.” But almost immediately afterwards, someone asks, “Can we do to google what google has done to others?”
In a May 7 management meeting, Twitter’s search syndication strategy with Google is discussed, as is the desire of “every tech company” to gain access to “Hosebird,” an API Twitter is working on to deliver its full stream of Tweets to search partners and others. The attitude towards Google is cautious: “Playing with fire here where we know that Google is building the competitive product.”
But by June 9, things seem to have progressed with Google. After an earlier two hour meeting with Google executives, the Twitter leadership had decided that an “agreement for some period of time makes sense – with our parameters.” But at the same time, they resolved to that Twitter’s own “search results page needs to be great – better than the landing pages on Google.”Company Goals and New TOS/APIs: In that same June 9 meeting, Twitter execs talked about their end of year goals, including a “next gen search results page” and a (much-needed) reputation system which internally is being called “Tweet rank.” The company is also hard at work defining a new Terms of Service agreement which will launch in conjunction with new APIs. These will determine what kind of commercial messages Twitter will have rights to monetize via ads. Twitter wants to “take a far reaching license to the content, with two exceptions (endorsement, content profit), and no opt-out.” Twitter also talked about making its API license “more throttled than ToS.”
Diddy, Marissa, and Microsoft: Another thing that comes through from the notes is just how much everyone has been courting Twitter. The agenda topics for a Twitter management meeting on April 16, 2009 reads like a who’s who of Hollywood and Silicon Valley: Diddy, Oprah, Marissa Mayer, Microsoft, 4Chan. They discuss giving “advisor shares” to entertainer Diddy, a big Tweeter, but also see him as a distraction. “Diddy values his contribution higher than we do,” read the meeting minutes. In an earlier meeting on April 2, other potential advisors discussed included Shaq and Al Gore (presumably both would receive advisor shares as well).
If Diddy was a distraction, Google product chief Marissa Mayer was a “huge distraction” who kept asking for stats on Twitter’s growth. Twitter management decided to give her “a constrained version of growth.” Finally, Microsoft wanted to talk about a deep infrastructure deal (“we don’t want to talk about this right now”) and a “secret project with the x-box.”
Despite the interest and attention, all the Twitter management really seemed to want was to be left alone, even by its own board members. In a May 7 meeting, they talk about how to put off informational meetings in a nice way: “How do we communicate to the Board (and investors) to back off.”
Exchanging Favors With Investment Bankers: On May 26, the Twitter management team discussed choosing investment bankers with the idea that they would engage them “for a year and a half – exchange favors, then use them for the transaction.” It is not clear what “the transaction” is, but it can only be an IPO or an acquisition.
Managing the Message: The minutes of that May 26th meeting also shed some light on how Twitter manages the media. Word had gotten out that a Twitter TV show was in the works, and Twitter decided it needed to “kill the story that “twitter is coming out with a TV show.” The message: there are “many users of Twitter – none are officially blessed.”
Identity Crisis: Let’s return to that key strategy meeting on February 25 (from here on out I’ll try to go chronologically). It is clear from the notes that the company was still struggling to define itself: Some stabs at defining the company’s mission included “Twitter is for discovering and sharing what is happening right now,” and “Twitter makes you smarter, faster, more efficient and more powerful.” Below are excerpts taken from throughout the document.
Acquisition Angst: The meeting took place after acquisition talks with Facebook fell apart last fall, and before similar talks with Google also went nowhere this spring. A lot of the meeting dealt with Twitter’s acquisition angst and trying to decide “What do we want to be when we grow up?” The company has an “IPO Bias,” yet realizes it will “always have to be open to Exits.” The “only type of acquisition we are interested in are ones where we stay in charge.” Perhaps that is what killed the Facebook deal. Twitter management felt that the “Facebook sell always seemed wrong,” that it was “the wrong destiny for Twitter.”
The Facebook Threat: The Facebook threat keeps coming back up. In one portion of the meeting devoted to discussing “How could Facebook kill us?” they list threats such as Facebook adopting real-time search, changing the opt-in options to make status messages public, emphasizing its SMS features, and generally copying Twitter’s functionality and user-interface (all of which have started to happen).
Defensive Strategy: The company also considered how best to defend against Facebook. “Make sure people are happy” is at the top of the list, followed by “cult” and “get more and better developers.” Doing a better job and getting “twitter everywhere” seems to be its best defense.
Real-Time Search: Twitter is clearly concerned about positioning itself against its two main rivals and potential acquirers. In contrast to finding out “what is happening right now” on Twitter, “Google is old news.” Yet during the meeting, the company is clearly preoccupied with search: “Twitter the product is a vehicle for twitter search;” “People don’t use twitter for search; and “Twitter should tell me stuff without me searching for that.”
Financials: The company talks about its financial model, which boils down to generating “$1 per user per year” and going from 25 million users at the end of 2009 to one billion in 2013, with a user being defined as a “unique individual having a conscious twitter experience in a given week.”
Revenue Model: The strategy meeting also covered future revenue models, starting with verified commercial accounts, which is described as the “fastest way to make money without putting a whole organization behind it.” Another benefit to targeting corporate and celebrity users: “Charging more to fewer users is a good model.”
But it is the next business models down the list which start to become interesting. These include Search/Content Ads (with heavy users of the search API being required to run ads), Sponsored Tweets, “Adsense Widgets” (presumably Twitter ads which can run on other sites like Google’s AdSense, and in other apps) and payments.
Getting To One Billion Users: The key to most of these business models is to keep attracting more users, and the company has some creative thoughts on how to acquire them. These include: “Free phones preloaded with twitter,” “TV twitter,” “Kindle,” “Radio,” “Dell, build it into,” videogame consoles, Website widgets, IM networks, and PCs. They also realize the “cost would kill us if we had a billion users tomorrow.”
RSS Is The Enemy: The other expense they are worried about is supporting all of the RSS feeds that are migrating to Twitter. The people who run Twitter definitely don’t like RSS, and who can blame them? The big concerns expressed at the meeting were, “What if all feeds went through twitter: would be expensive,” and “feeds are not unique content.” (They are also too slow, but that is another issue).
March 12, 2009 Meeting (Getting Back to Google): Moving forward to a regular management meeting on March 12, the subject of Google comes up again. Google’s blog search team was scraping Twitter’s site and getting only “60-70% of updates.” They wanted Twitter to hurry up with its Hosebird API so that they could start indexing every Tweet. The plan was to “include microblog content on blogsearch.google.com (which gets less than twitter search).” Already, Twitter made up “90% of the content” on Google Blog Search. As the minutes put it: “We are this product.” There was also talk of including microblog results on the main search page, which would be “the biggest change to google search in years.”
In that same March 12th meeting, Twitter also wrestled with a proposed search advertising partnership with Microsoft. The team was “not ready” and considered this yet another “Distraction.” Worries were expressed that it would strain Twitter’s engineering resources and that any partnership with Microsoft would raise branding issues: “There is going to be a perception that we are dating.” The board was also worried about Twitter “getting into bed with Microsoft.” By the end of the discussion, someone asks, “Why did we start talking to Microsoft in the first place”?
Twitpic, Photobucket, Tweetie: At the same time that Twitter was putting off Microsoft and Google, it was cultivating smaller startups. During that same March 12th meeting, one agenda item was “Twitpic- To buy or not to buy (1).” They decided not to, and the next week in a meeting on March 19, they decided to “bless” a competing Photobucket app called Twitgoo. Twitter also decided “we like Tweetie,” the popular mobile Twitter client in a meeting on March 26th.
Another Acquisition target: CoTweet. More recently, in a June 2 meeting where CoTweet and the need to support commercial accounts came up, the need to partner, buy, or hire came up, as it had in the past. And CoTweet seems to be identified as “another acquisition target.”
Mogees, R.I.P: You can also see what happens to startups that don’t get Twitter’s blessing. Twitter CEO Evan Williams was “not blown away” by micro-payment startup Mogees in a May 7 meeting because “Paypal and Amazon can do this.” Mogees doesn’t seem to be in service anymore.
April 30, 2009, Employee Retention (“Happiness Committee”): Twitter’s management meetings also dealt a lot with how to keep employees engaged. The minutes for an April 30 management meeting talk about recruiting from Facebook and note: “People don’t leave jobs they leave managers,” they “leave situations that are making them sad.” To prevent that from happening at Twitter someone proposed forming a “happiness committee.” That should work.
Nothing Is Free Forever: In that same April 30 meeting, the team talked about licensing Tweets to partners: “We can give people stuff for free but not forever.” There was also a fascinating discussion about how users should be able to opt out of having their Tweets syndicated by other media properties such as TV shows. One idea put forward was that your Tweets can only be syndicated by other people or entities who already have a relationship with you.
Retweeting (A “Disturbance In the Force): Finally, everyone’s favorite subject, retweeting, was brought up in that June 2 meeting. It looks like Twitter is going to adopt it as a formal feature, but Evan Williams is concerned that retweets are “broken” because it becomes “hard to read who authored, people edit what was actually said.” Well, yeah. There’s only 140 characters, you know.