Profile Of Betaworks

Jenna Wortham, In New York, a Tech Incubator Becomes a Hub of Collaboration

The company was founded by John Borthwick and Andrew Weissman, who worked at AOL in the ’90s.

“I was there when AOL bought CompuServe and Netscape and did the first content deal with Amazon,” said Mr. Weissman, chief operating officer. “You could start to see these new ways pieces of the Internet were coming together.”

He said he watched as one AOL project, MapQuest, gradually lost market share. Google Maps grew faster because it allowed other companies to add information to a map or use the service in other tools. “You could just see that model was going to be big,” “We said, ‘We think this is it, and we want to invest in these kinds of companies.’ ”

A little over three years ago, the two decided they wanted to create their own company aimed at that very idea. Thanks to tools like Amazon Web Services, Twitter and Google Apps, developers could more easily build and scale Web tools.

“We knew there was a big fundamental change happening on the Internet,” said Mr. Borthwick, Betaworks’ chief executive. “And we knew it was going to be social.”

They spent nine months deliberating over how to structure their company before settling on a hybrid of an investment firm and an incubator.

“The venture capital structure is banking on finding that one super-duper winner, and there’s nothing wrong with that,” said Mr. Borthwick. “But our goal is to create a network of companies with lots of connections between them that increases the likelihood of success between all of them.”

It’s not hard to see that spirit at work. The two dozen companies under Betaworks’ umbrella make a point of using one another’s creations and often incorporate them into their own services. At a recent meeting at Betaworks, about three dozen employees of Betaworks and its portfolio of companies crowded into a room, trading feedback, updates and the occasional good-natured zinger about their various products.

Betaworks has developed some Web tools from scratch, like Bit.ly, a URL shortener, and Chartbeat, a real-time Web analytics service. But the company is looking for entrepreneurs who have more than a vision.

“Anyone who shows up with an idea on a napkin, we’re going to tell them, ‘Thanks, but go build a prototype,’ ” Mr. Weissman said.

I find Betaworks to be impressively unorthodox, and more experimental in its outlook that conventional VCs, even the very smart VCs.

I hope that I will be able to twist John’s arm to join me in the fall as a guest of the planned Stowe Boyd Show, once I screw down details (and line up some sponsors).

[disclosure: I am an advisor to Bit.ly, and have a stake in it’s financial success.]

Twitter Is Doing Exactly What Fred Wilson Said

I have been so heads down on the Social Business Edge event (1pr 19, in NYC; being livestreamed at http://www.livestream.com/socialbusinessedge starting at 9:30am) that I hadn’t read the stories about Twitter’s Ev Williams announcing their own URL shortener in in the works.

They have a URL shortener working now, for direct messages, ostensibly as a way to track malicious sites and block them, so this isn’t that new on a technical basis. However, on a business basis it is more of what market watchers all have been guessing at, based on Fred Wilson’s post last week (see Twitter Raising The Infrastructure). He basically stated that URL shorteners were just filling a gap in Twitter’s core functionality.

That suggests that Twitter will try to develop the deep analytics that Bit.ly has built: it is a natural requirement for the media and corporate users of the microblogging service. However, as has been noted by John Borthwick, the CEO of Bit.ly, URL shorteners are not constrained just to the Twittersphere, and even in the Twittersphere on a small proportion of short URLs are generated by the Twitter webpage:

John Borthwick, Bit.ly and Platforms

Twitter.com pretty much stopped using bit.ly to shorten URL’s on Twitter.com in December.    Since last fall the bit.ly team and Twitter have been talking about this transition.    Today Twitter.com represents less than 1% of bit.ly links shortened — when the transition took place in December it was closer to 3-8%, depending on the UX on Twitter.com and the day.   We continue to work with the Twitter team and we are currently figuring out how to get key whitelabel URL’s working on Twitter.com.    The default shortening partnership worked well for a period of time – approximately six months — during a period of hyper growth. Today bit.ly is growing and continues to scale — irrespective of the change in rules last December re: shortening on Twitter.com.

Borthwick goes on to state that start-ups have to be careful about platforms, because although you need to build on them, they are fundamentally unstable and uncontrollable, like tectonic plates. He makes that case that start-ups need to diversify their reliance across multiple platforms. if possible.

John also takes a poke at Fred Wilson’s ‘filling holes’ argument:

Lastly, talk about holes and filling holes in platforms is misleading at best.    Take a list of emerging to mature companies — great companies … Is Groupon a hole in Facebook? Facebook a hole in Google?? Google is a hole in Microsoft???  Microsoft in IBM????  Maybe it’s holes all the way down?    Innovation — building great companies — is about finding, filling and even creating holes.   But entrepreneurs shouldn’t — and most don’t — focus on filling holes in other people’s platforms — they should think about how to build great things — things that in 2010 may be bootstrapped on platforms but great products, products that people love, products that move people to organize their world differently, or to see the world differently.   The slogan “Think different” captured most if not all of what entrepreneurs need.   After 30yrs of personal computing history we have a lot of platform and application history to draw from — Apple understands this very well, so does Google,  same for Microsoft, Amazon, and Ebay.  And yes — once again, the cycle of innovation is turning – great new platforms are emerging and great businesses will be developed on of these new platforms.

Instructive lessons to learn all around. To Twitter, the world may look like a bunch of holes, but Borthwick points out that Bit.ly, at least, is more than a hole to be filled.

[disclosure: I am an advisor to Bit.ly and have a financial interest in the company.]

Twitter Raising The Infrastructure: App Builders Better Run For The Ultrastructure

So, Fred Wilson’s recent blog post (see Fred Wilson Plotting Twitter’s Future) turns out not to have been the ramblings of philosophical market observer: it looks more like the starter’s gun at the outset of a footrace.

He suggested that Twitter might start to fill ‘holes’ in its architecture, holes that may be occupied by other applications built by third parties. Then, the next day, they announced the roll out of a ‘official’ Twitter client for Blackberry, and today, Ev announced the acquisition of Atebits, the maker of Tweetie, the most popular iPhone client:

Ev Williams, Twitter for iPhone

Twitter has been growing by leaps and bounds around the world. Mobile has always been a focus for us—starting with SMS which lead to the 140 character limit. People everywhere should be able to access Twitter without friction or confusion. Careful analysis of the Twitter user experience in the iTunes AppStore revealed massive room for improvement. People are looking for an app from Twitter, and they’re not finding one. So, they get confused and give up. It’s important that we optimize for user benefit and create an awesome experience.

We’re thrilled to announce that we’ve entered into an agreement with Atebits (aka Loren Brichter) to acquire Tweetie, a leading iPhone Twitter client. Tweetie will be renamed Twitter for iPhone and made free (currently $2.99) in the iTunes AppStore in the coming weeks. Loren will become a key member of our mobile team that is already having huge impact with device makers and service providers around the world. Loren’s work won the 2009 Apple Design Award and we will eventually launch Twitter for iPad with his help.

Note there is no fiddle-faddle about the name: they immediately rebranded to ‘Twitter for iPhone’.

And the motivation? People are confused that there is no Twitter branded client, so Twitter has decided to do the right thing and give them one. No mention of the existing players in those niches, and all a week before the developers conference.

Here’s what is happening: Twitter is consolidating its position at the center of the ecosystem it has engendered, and as part of that functionality that is deemed necessary to the infrastructure is going to be built by them, or at least owned by them through acquisition.

The old model had a lot of holes, like search, clients, Url shortening, pictures, and geolocation. These niches had many players trying to establish themselves, creating a rich ultrastructure above the platform:

Twitter started to buy some companies to fill glaring holes (like Summize for search) and they have built some parts of other capabilities (like their own URL shortener for direct messages), but mostly the maps was still a mess.

Now, they have bought Tweetie, built a client for Blackberry, and they are moving toward a new theory of where the platform begins and ends:

Of course there is no saying that Twitter will leave the line there. They are going to have to make their roadmap clear at the upcoming Chirp developer conference, so that third parties can make reasonable investments in new applications without the fear that Twitter will step on their toes.

However, I am making a bet. I am sure that Twitter realizes the value of analytics: the treasure of information about the flow in Twitter can’t be treated as a side show, because it is the show. Therefore, I am predicting that Twitter will build or buy technology to capture all sorts of information — what links are streaming by, who’s using what hashtags, and sentiment about brands — this is enormously valuable. Acquisition of companies like Radian6, bit.ly and a few others would make sense, especially considering the value to large companies, media, and even political parties.

The other ultrastructure niches really make sense as independents. Consider games: they come and go, like hit music, and it requires a big sprawling community of developers. Not a good fit inside a single monolithic company. The same is true with communities, like Stocktwits. And obviously, niche apps.

***

So, Wilson’s shot was heard round the world, and now Tweetie is part of the new Twitter infrastructure.

This won’t mean the end of competition by players like Tweetdeck or Seesmic. These have large and dynamic communities of users. But we have to see how Twitter plays this nesw game. Will they use the same APIs as everyone else, or will they exploit their knowledge and access to the inner workings of Twitter’s technology to make their own offerings faster and more reliable, a sort of Microsoft approach? Will Twitter transform itself into a Salesforce-like platform, with hundreds of integrated offerings, but owning the CRM heart of the platform?

I am sure we will hear these questions at Chirp, and although I won’t be attending (conflict with work on my own event on 19 Apr, Social Business Edge), I will be watching the Twitter stream from the event very closely.

[disclosure: Bit.ly is a client of mine, and I have a financial interest in the company.]

Update on Saturday, April 10, 2010 at 1:01PM

This looks like the weekend’s big tech news story:

Daniel Ionescu / PC World:   Twitter Gets Official iPhone, Blackberry Apps Dare Obasanjo aka Carnage4Life:   Twitter Slaps Developers in the Face and How They Can Fix It Greg Jarboe / Search Engine Watch:   Newspaper Blogs Break Story of Twitter’s Acquisition of Tweetie Marshall Kirkpatrick / ReadWriteWeb:   Why Twitter Buying Tweetie is Great News Stowe Boyd / /message:   Twitter Raising The Infrastructure: App Builders Better Run For The Ultrastructure John C Abell / Epicenter:   With Tweetie Acquisition, Twitter Locks On Mobile Zee / The Next Web:   Twitter Acquires Tweetie. Launches on the iPhone. Mathew Ingram / Fortune:   Twitter nabs top app maker Brad Linder / mobiputing:   Twitter acquires Tweetie, introduces official iPhone Twitter app Dave Winer / Scripting News:   Twitter Week for client developers Mark Evans / Twitterrati:   Tweetie: The Start of Twitter’s M&A Activity? Ben Parr / Mashable!:   BREAKING: Twitter Acquires Tweetie CellPassion:   Twitter acquires Tweetie, to make it the official Twitter iPhone app Dan Moren / Macworld:   Twitter acquires Tweetie developer Atebits Shane Richmond / blogs.telegraph.co.uk:   Twitter buys Tweetie Stephen Bennett / GeekSmack:   Twitter acquires Tweetie for iPhone Kiet Chieng / App Advice:   Twitter Acquires Tweetie, Will Become Official Client On iPhone Jason Kincaid / TechCrunch:   Twitter Acquires Tweetie GigaOm / Silicon Alley Insider:   Twitter Buys Tweetie, Adds Fuel to Developer Fires Rafat Ali / paidContent:   Twitter Makes First Client Acquisition: Buys Tweetie For iPhone Client; What’s Next? Alexia Tsotsis / The Snitch:   Twitter, Now Filling Its Own Hole Peter Kafka / MediaMemo:   Twitter Goes Shopping, Comes Home With Tweetie. Next? Mike Schramm / TUAW:   Breaking: Twitter acquires Tweetie, will make it official and free Seth Weintraub / 9 to 5 Mac:   Twitter buys Tweetie, iPhone app to become free Charles Hudson’s Weblog:   Three Reminders about Platform Businesses (Apple, Twitter, and Facebook) Jay Hathaway / Download Squad:   Twitter acquires Tweetie, hires developer Loren Brichter Rene Ritchie / TiPb:   Tweetie to become official Twitter for iPhone Jim Dalrymple / The Loop:   Twitter buys Tweetie Ray Basile / iPhone Savior:   Twitter Buys Tweetie As Their Official iPhone App Phil Nickinson / Android Central:   Twitter buys Tweetie for iPhone; which Android client would you serve up? Krishnan Subramanian / diversity.net.nz:   Twitter Acquires Tweetie, What’s Next? Jesse David Hollington / iLounge:   Twitter acquires Tweetie, to become official Twitter app Krishnan Subramanian / CloudAve:   Twitter Acquires Tweetie, What’s Next? Scott Beale / Laughing Squid:   Twitter Acquires Tweetie iPhone Client Ben Metcalfe Blog:   Twitter continues on the offensive: now iPhone Federico Viticci / MacStories:   Twitter Acquires Tweetie, Becomes “Twitter for iPhone” Soon Free in the App Store Daniel Kaszor / FP Posted:   FP Tech Desk: Twitter aquires Tweetie, renames it Twitter for iPhone » All Related Discussion

Update on Sunday, April 11, 2010 at 9:18AM

Interesting piece by VC Mark Suster (Twitter’s Acquisition, Chirp & Managing Developer Relationships) on the Twitter Atebits acquisition and what it means.

Fred Wilson Plotting Twitter’s Future

Fred Wilson has written a post about Twitter’s future, one that reads like a market analyst wrote it. The problem is, Fred is one of the original investors in Twitter, and sits on the board, so I have to wonder what this is all about. Is this Twitter policy? Did he pass this by the management there? Is he going public with this a week before the Twitter developer conference to prepare people for a big announcement? Is he attempting to influence policy by taking an argument public?

Fred Wilson, The Twitter Platform’s Inflection Point

Which brings me to the title of this post. I’ve been thinking a lot about the Twitter Platform and Ecosystem recently. I think it is at an inflection point, much like the desktop software and hardware business was in the mid 80s as the desktop platform started to mature.

Much of the early work on the Twitter Platform has been filling holes in the Twitter product. It is the kind of work General Computer was doing in Cambridge in the early 80s. Some of the most popular third party services on Twitter are like that. Mobile clients come to mind. Photo sharing services come to mind. URL shorteners come to mind. Search comes to mind. Twitter really should have had all of that when it launched or it should have built those services right into the Twitter experience.

When you talk to a new user, they want to know how to post a photo to Twitter, they want to know “what is this bit.ly thing?”, they want to know how to get Twitter on their iPhone. Names like Summize, Twitpic, Tweetie make no sense to them. Of course, without Summize, Twitpic, and Tweetie we would not have the Twitter we have today. They and many other third party products and services filled out the holes in the Twitter product and made it work better.

But those services don’t feel like Lotus or Aldus to me. What are the products and services that create something entirely new on top of Twitter? I’ll come back to that question, but one more history lesson, this one recent history.

When Facebook platform launched, we saw a massive number of new products and services launched on The Facebook. But many were slight variations on existing Facebook features (like Superwall) or holes in the Facebook service. As Facebook closed up those holes and enhanced their own feature set, those apps fell to the wayside.

Note: Those Facebook apps that ‘fell by the wayside’ went out of business because Facebook decided to pull that functionality into the core platform. Is that what Twitter is going to do?

As one example, Twitter has rolled out its own URL shortener (http://twt.tl) which is being used in direct messages. Are they planning on replacing Bit.ly?

And then Fred goes on to suggest other areas that are likely to be hot for Twitter application development, presumably after Twitter fills the holes that other. earlier apps filled:

And because Twitter is so open and so lightweight, I am surprised that there aren’t more “new kinds of killer apps” to quote my friend who I started this post with.

Here’s are some places where I think we might see these killer apps emerge:

* Social Gaming - There have been a number of attempts to build social game experiences on Twitter. But I’m not aware of any successes of scale like we’ve had on the Facebook platform. I think we will see it emerge soon.

* Verticals - We have some successes to point to here like Stocktwits for finance and Flixup for movies but this is a wide open opportunity in most verticals and we haven’t seen as much effort here as I’d have expected.

* Enterprise - CoTweet comes to mind as well as the efforts that Salesforce has made to integrate Twitter. This is a huge opportunity.

* Discovery - This is one area where there is a significant amount of effort. Hunch, Listorious, TweetMeme, Cadmus, WeFollow, and MrTweet all come to mind.

* Analytics - While Twitter will obviously be delivering better analytics to its users, particularly its marketing and business users, I believe that there is always a market for third party analytics. Google Analytics is available for free and yet none of the large analytics providers have seen their businesses suffer. There is simply a voracious appetite for information on the Internet. So companies like bit.ly, Radian6, HubSpot, Scout Labs, and others have a bright future.

Again, I don’t know how to read this. Is Fred explaining what is to come? Is he trying to steer Twitter management? No matter what, he is not some dispassionate Twitter user wondering about what might come.

[Disclosure: I am an advisor to Bit.ly and I have a financial interest in the company’s future.]

Update on Thursday, April 8, 2010 at 5:24PM 

Nick Carlson came to the same conclusions I did.

Update on Thursday, April 8, 2010 at 5:30PM

Nick Carlson has more:

Responding to our post, Fred back-tracked, commenting, “that post was my work, not Twitter’s work. While i am on the board of twitter, I don’t work there and I don’t speak for them.”

But Twitter’s third-party developers don’t buy it.

One industry source nicely summarized what many others told us they were thinking, telling us, “Fred is lying to you.  Twitter was aware of his plans.  This was intentional to soften the blow later and provide advance notice.”

One big reason for all the skepticism? Yesterday, plenty of Twitter employees were cheer-leading Fred’s post.

Doug Williams, who helps run Twitter’s platform, tweeted, “Incredibly timely @fredwilson piece that all Twitter developers should read http://www.avc.com/a_vc/2010/04/the-twitter-platform.html.”

Ryan Sarver, Doug’s boss, re-tweeted Fred’s post and then later tweeted it again, asking his followers, “what are your thoughts on @fredwilson’s post? http://bit.ly/aruik7”

Twitter analytics lead Kevin Wheil wrote, “Wow, @fredwilson nailed it:   http://bit.ly/b5RvlO.”

Twitter product guy Josh Elmen wrote, “Great post on platforms and building innovation vs filling holes by @fredwilson: http://bit.ly/bkpqjv.”

A follower of Josh’s replied to that tweet, “I would be terrified reading Fred’s post if I was a hole filler startup. Thanks but now you die!” and Josh answered, “in the history of platforms, hole filling has always been a great place to start, but never a great place to end, right?”

All this cheerleading has Twitter developers very skittish. One of the guys behind one of the very most popular Twitter apps told us:

“It wouldn’t surprise me if they now deem it important to own more eyeballs. I don’t agree with this strategy but, as I said, I wouldn’t be surprised. [Twitter shouldn’t] underestimate the value of the innovation in the long tail. I hope this is not stifled if Twitter appear to be competing.”

We’ve asked Twitter CEO Ev Williams for a response to all this, but so far we’ve heard nothing.