Why does Twitter owe you API access?

plug.jpgI’m puzzled by the clamoring for unrestricted Twitter API access. Not that people are upset, but that no one seems to ask ‘why?’ and immediately assumes they’re performing some kind of stupid, suicidal maneuver. Twitter enabled access to their underlying data with no guarantees and no prearranged relationship. I can’t help but feel that this is part of the climate of free entitlement that permeates our current startup business environment.

Twitter has yet to make any money.

Yes, yes, I know there are whispered, rumored, brilliant-as-the-sun, business plans, just waiting to be unleashed on the Twitter faithful. Until we see the plan and that plan starts to actually generate revenue, we’re left with a question of incentives.

Without a clear revenue stream, it’s damn near impossible to determine what’s behind this decision. There is a fundamental problem with the current state of Twitter tools and API usage, are the third party incentives aligned with Twitter’s? Before there was synergy because Twitter was doing all it could to grow, and unrestricted access enabled growth. Does it still make sense for Twitter to sacrifice everything for growth? Monetizing their offering, by it’s nature, is a diversion of resources from pure growth. I’d wager that there is increasing pressure to monetize what they have now. Growth without a business plan eventually just become a cost sink.

I hear the rebuttal, “But, but, twitter refuses to even charge money for unrestricted access!”, and you are you surprised by this? How much revenue do you think they could generate that way? What’s the cost in time and energy to support this new batch of elite-member third parties? A startup is all about using your energy wisely. Building a robust, scalable, meter-able, API infrastructure is obviously not what they’ve decided to focus on.

Twitter needs the third parties less than they need Twitter.

It sucks, even though Twitter would not be as successful today if it weren’t for the third party tools and applications, nothing is preventing them from turning them all off tomorrow. Twitter is a for profit enterprise that is holding all the power in these third party relationships. Any Twitter tool or third party application based on Twitter should have factored the risk that Twitter could pull the plug on the API at any moment into their venture. Twitter is under no obligation to provide access. If it’s not in their interest to do so, no amount complaining is going to change that.

The calls that say Twitter will die if they don’t allow unrestricted access to their API are, frankly, bullshit. The argument goes, all these advanced and cool Twitter tools will die without unrestricted access. People will get so annoyed they’ll move to another service.

Really? What people? What percentage of Twitter’s userbase even knows that these tools exist? Watch the public timeline for a while, how many of those people are Twitter power users? If these hypothetical power user people suddenly stopped using Twitter, do you think it’s going to make any significant dent in Twitter’s growth curve, a curve they’re currently in the exponential part of?

These predictions of doom are similar to what happened a few months back. Why didn’t the mass exodus occur when Twitter was essentially broken? The Twitter power users tried to stage a coup, with blog post after blog post proclaiming the death of Twitter. Why didn’t Twitter die when there were dozens of technically superior offerings that accomplished exactly the same thing and were actually usable when Twitter was consistently borked?

These power users may leave for a while in protest, but ultimately they will come back. Why? Because their audience will still be on Twitter.

Is it in Twitter’s best interest to allow others unfettered and unrestricted access to their data? Who knows. Twitter clearly doesn’t think so. Until we know what Twitter’s incentives are and how they plan to make money, we have no idea if this was a stupid or brilliant move. If the historical track record on predicting Twitter’s demise is any indicator, I think people will once again be surprised.

One things for certain, from a business perspective, they don’t owe anyone access.

Comments on this entry are closed.

  • http://coldacid.net Chris Charabaruk

    I totally disagree with the idea that the third party services need Twitter more than Twitter needs them. There are a lot of competitors to Twitter now, and it probably wouldn't be too much work to retarget those third party apps to point at those competitors, instead. If Twitter alienates its ecosystem, its competitors would be glad to support them instead.

    If this has something to do with monetization, though, why deny that fact to Jesse Stay, or any of the other developers building on Twitter's platform? Pretty much any reasoning suggested to Twitter seems to come back with a “nope, that's not why” answer. This isn't a game of 20 Questions, this is business. And when things happen in an irrational manner, business gets bad.

    I hope that Twitter announces its reasoning for why they aren't looking to monetize this, or otherwise use it to their advantage. And soon. Because otherwise, they'll chase away the apps that made Twitter worth using, and when those apps go, the users will follow.

  • http://staynalive.com jessestay

    Twitter doesn't owe us anything. However, we don't have to build or send users to Twitter if we can't build our business on the service. It's that simple.

  • http://mikepk.com mikepk

    I think we have to agree to disagree then. :) Most of these third party applications require a social graph and enough active participation to make them useful. In essence, they're not really useful without Twitter as a foundation. You can argue that there are other services that are technically equivalent. Unfortunately, while they're technically equivalent, they do not have the critical mass that Twitter does. They don't command the same population of users or engagement. That's the power that Twitter has, they have the users and community.

    The problem with monetizing the API access is that it requires a *lot* of work to do from Twitter's standpoint. They have limited resources (as all startups do) which means they have to pick and choose what they want to work on and try to utilize that effort to greatest effect, to get the most “bang for the buck”. It's not that they couldn't generate some money from the API, it's just that monetizing the API means commiting to service level guarantees, building out scalable architecture, reworking / rewriting their existing API, all while not disrupting their current growth pattern (and not allowing too much data to “leak out”, since their value is their community).

    As a last point, it's also not the kind of business that's a “homerun”. VC backed firms are structured to go for the absolute biggest return possible, to be the one in ten ventures that generates the actual returns for a VC fund. I just don't see API monetization as in this class of business model.

  • http://mikepk.com mikepk

    Of course, that's the tradeoff. Twitter gives you access to their social graph, rabid engaged users, nearing mainstream market penetration, and accelerating growth. You either find a way to play their game, with their rules, or you leave it. Only you can decide if access to those traits is valuable enough to live with their restrictions as well as the uncertainty that they can shut you off at any moment. As others have said before, eventually a federated system will likely supplant Twitter, but we're a long way from there.

  • http://mikepk.com mikepk

    I think we have to agree to disagree then. :) Most of these third party applications require a social graph and enough active participation to make them useful. In essence, they're not really useful without Twitter as a foundation. You can argue that there are other services that are technically equivalent. Unfortunately, while they're technically equivalent, they do not have the critical mass that Twitter does. They don't command the same population of users or engagement. That's the power that Twitter has, they have the users and community.

    The problem with monetizing the API access is that it requires a *lot* of work to do from Twitter's standpoint. They have limited resources (as all startups do) which means they have to pick and choose what they want to work on and try to utilize that effort to greatest effect, to get the most “bang for the buck”. It's not that they couldn't generate some money from the API, it's just that monetizing the API means commiting to service level guarantees, building out scalable architecture, reworking / rewriting their existing API, all while not disrupting their current growth pattern (and not allowing too much data to “leak out”, since their value is their community).

    As a last point, it's also not the kind of business that's a “homerun”. VC backed firms are structured to go for the absolute biggest return possible, to be the one in ten ventures that generates the actual returns for a VC fund. I just don't see API monetization as in this class of business model.

  • http://mikepk.com mikepk

    Of course, that's the tradeoff. Twitter gives you access to their social graph, rabid engaged users, nearing mainstream market penetration, and accelerating growth. You either find a way to play their game, with their rules, or you leave it. Only you can decide if access to those traits is valuable enough to live with their restrictions as well as the uncertainty that they can shut you off at any moment. As others have said before, eventually a federated system will likely supplant Twitter, but we're a long way from there.