Tuesday, July 22, 2008

Success factors in executing business models – some tentative reflections about the case of FriendFeed and Twitter.

I read a post from Rebkin where she – among other things - reflects upon how the founders of FriendFeed (FF) and Twitter can afford working with their business without seemingly making any money?

That is an interesting question! I think it is even more interesting to connect that question with the question of success factor to successfully execute business models on internet. A hypothesis is that the chances to a successful execution of a business idea increases when you as a founder have a lot of different forms of resources (Financial, knowledge, connection, social captial, vision etc). Yes, not a particular controversial statement but indeed relevant – especially if we compare the cases of FF and Twitter.

We are now talking about success factors behind executing business ideas on internet - not about the actually business ideas, which have already been proven as very successful. This is a big topic which demands several blog posts. But here is my first tentative reflection of it. The information for my sketchy discussion about FF and Twitter is mainly build on what I have read on Techcrunch.

The important founders of FF are former employees of Google. That explains a lot I think to the FF success. I suspect they got well of from their stay at Google. This gives them leverage and freedom to do new risky things. The stains from the Google brand also help when you as a new entrepreneur want to attract investors. Another factor is the obtained work experience from Google. The design of FF and way of working seems be very much coloured by Google. This has created a service with high quality I think.

Twitter has a great idea but do not seem to have the resources of FF or the work experience in how to execute the idea (even if there also here are former Google employees involved). The execution of the idea was very much dependent on one person – and he dropped of (or whatever) some months ago. Lack of resources can explain why they had too few computer resources to run twitter on – and such circumstances do not help when your service becomes in demand. The lack of experience is well described in Michael Arrington’s post where he imply amateurism. I believe you can see all these factors in the now pending quality of the service. This compared to the FF case.

Tentative conclusions? Resources are crucial in execution on markets where speed to attract a lot of users and monetizing them is everything. If you as an entrepreneur do not posses them yourselves, you can not wait to slowly build them up within your emerging organisation. Instead, you have rapidly to create a network around your business idea where you can access all needed resources.

Finally, FriendFeed or Twitter seems to be the question on everybody’s lips? If I have to choose one of them, it would of course easily be FF. It has much more going for it than Twitter. However, in my world there is not about black and white. Twitter it is fun, sexy, and carless and that is always in demand. On FF it is a little more serious because it is about topics, discussion, and comments - whereas on twitter it is simple more about “what do you do now”. Therefore right now, I think FF and Twitter fills different needs and thereby complement each other. My answer is therefore neither or - it is both!

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