Twitter IPO Deserves the Hype, If Not the Investment
No matter where Twitter ends its first day of trading – or its first year or decade for that matter – it deserves the hype.
Forget valuation, which is a red herring anyway. Forget the questions about business models, revenue projections, talk of bubbles and complaints about 140 characters. Twitter's emergence as a public company is worthy of a moment to sit back and see the magic of the free markets in this nation and the uniqueness of our American entrepreneurial experience.
Haters gonna hate, and Twitter has faced its share of opprobrium over the years. The idea of 140 characters was too limiting, too much a sign of the decay of our culture, where we sacrifice good grammar and usage for text-like chatter that gets no one anything but a wrap on the knuckles from the nun who taught us in second grade. Strunk and White are turning over in their graves.
Twitter also faced questions about revenue models. Sure, Rihanna and Miley love you, but how do you book revenue on them loving you? And how do you make profit from that revenue in a way that doesn't drive away your user base? Evan Williams, Biz Stone and Jack Dorsey were derided as terrible managers with their heads more in the clouds than in the books.
Yes, seldom is heard an encouraging word about Twitter. That negative buzz has only gotten louder as Twitter approached its bell-ringing at the corner of Broad and Wall. Twitter, according to thousands of tweets from the financial chatterati, isn't worth the price.
Maybe or maybe not. But Twitter needs to be celebrated by entrepreneurs everywhere. This is what hundreds of companies in Silicon Valley, Silicon Alley, Silicon Gulch and anywhere in between want to be when they grow up. Little girls dress as Cinderella because they want to be Princess Kate. Twitter's rise is Cinderella for geeks and innovators and risk-takers. Events like today's market debut are what entrepreneurs dream about, even if, during waking hours, they give lip service to just wanting to solve people's problems or save sea lions. Deep down, they want success and wealth, and that's OK.
Twitter didn't solve a problem. No one lamented how difficult it was to communicate in 140-character constraints. Instead, it started a revolution in communication, allowed us to share information more efficiently and made us call a pound sign a hashtag.
And, while we hear that so few people use it, so the IPO isn't worth the money, we forget that, well, so many people use it. For Christ's sake, @Pontifex is saving souls with it. (And posting selfies, for which the aforementioned second-grade nuns would probably make him kneel on No. 2 pencils for an hour as penance.)
Anyone who has ever started a company knows how hard it is to reach a day like this. You have an idea, build code around it, discard the code you built, throw out one of your founding partners, give up, then come back and write new code. And all that happens before your first venture round.
Then you try to build a real business out of that idea. You face constant rejection and disappointment, from business partners, from potential investors, from your own employees. In some cases, your business plan goes through more costume changes than Lady Gaga, your company looks nothing like you envisioned, there's a lot more strands of hair in your comb, but it is all OK. You fight on, convinced, as only an entrepreneur can be, that you are right and the world is wrong.
And, just sometime, it turns out that you are right about being right, and Twitters are born and flourish. There were so many articles written in 2008 and 2009 about how Twitter couldn't last, not just because it didn't have a revenue model but also because its platform would be overtaken by other, cooler networks with technology that didn't fail so often. How is using Brightkite working out for you?
No, Twitter survived and thrived.
There is also a fair amount of red and white to go with Twitter's signature blue. Twitter's story can only happen in the United States, in a free market that supports and celebrates profit from innovation. We take risks, based on that uniquely American combination of ardent belief in an idea and ravenous desire to get rich. Only in America can Jack Dorsey be a role model. We love rags-to-riches stories, and we don't mind riches-to-fabulous-riches stories either. We value profit, particularly since it allows us not to take treasure baths in our castles on the hill but rather, as in Dorsey's case, to fund and fuel even more innovations like payment company Square.
Wealth and capital fuel innovation here. There will be a fair amount of trickle down as a result of Twitter's public offering. Yes, the founders and early backers will make billions, and other early investors will make millions, but now anyone can make a little money – provided they buy public stock at the right price and, more importantly, sell at an even better price. Risk can be rewarded, in direct correlation to gravity of the chance taken.
That is the beauty of the free markets, and why Twitter should enjoy its day in the sun. Because, hopefully, somewhere between engineering classes at a state college in the Midwest, someone is figuring out how to build a bigger company using just 50 characters.