My Opinion

Like many other humans, I have an opinion about how Twitter could significantly increase its revenue. We can start down the discussion with lunch...

The Lunch Problem

It's coming up on noon... where do I go for lunch?

This is a non-trivial problem. It's a choice problem. It's a social problem. It's a commerce opportunity.

Any time there's a choice problem that has social components and commerce, it's an opportunity for Twitter to make money. But I'm getting ahead of myself...

The Choice Problem

There are 25+ lunch spots in walking distance of my office. I've fallen into a rut. I'm at Cassava where I've ordered the curry meatballs. Like I do at least once a week. Why?

Because there are so many choices for food, I'm overwhelmed... and given that I make hundreds of choices every day, I want to reduce the number of choices I make... but I'm frustrated by my food rut.

Having a place where I can get some thoughts on non-rut places would be great.

Then there's the "traveling" issue:

Dear #Baltimore Twitter-folk: what's best place to eat near Camden Yards or Baltimore Penn Station? #stayhungry

The lunch choice problem is huge.

The Social Problem

Then there's the question of who I eat with.

That's something else I'd like to mix up.

In my neck of the woods, the geek population is fairly thin, but the parents of my kids' friends population is non-trivial.

When I'm working in SoMA, the geek population radically higher and I often have to figure out who is around and who I should lunch with.

And sometimes I'd like to hang with someone 2 or 3 degrees separate and learn about someone new and what their perspectives are.

The Commerce Opportunity

So, I want to have lunch... maybe socialize a little... I'm feeling certain degrees of "trying something new" or "trying something known and safe" on both vectors.

This is a commerce opportunity for food providers. They want to sell me food and I want to buy food.

They want to alert me as to the food purchasing opportunities.

All together now...

So, I want a curated flow of information about available food and social opportunities over lunch.

Or maybe over dinner three days from now in Baltimore...

Twitter has most of the raw data to make a personalized, curated "lunch channel" for me.

I get to interact with fellow lunch seekers as well as local restaurants in the channel. But the folks who are in the channel are "shaped" for me. That means it's unlikely that anyone from the swarm of local high school kids are going to be in my channel, even though the channel is called "local lunching".

And the revenue opportunity can be of the "leading to a sale" type... the merchant only pays for the ad if I tweet about the meal...

Sadly, not Foursquare

So far, you might be saying, "gee, this is a variation of Foursquare." Yeah... maybe.

A side note, I'm an investor in Foursquare, but I'm in the "call me when there's an exit" class of investors, not the "yo, Dens, let's talk strategy" class.

Maybe... but Twitter has a lot more data to curate a lunch channel for me:

• My social graph
• My historical tweets (the value of word analysis for curating a channel is huge)
• Much more reach/active users than Foursquare

Yeah, maybe Twitter could buy Foursquare to get extra information to make a "lunch channel" better.

Other Channels

Okay, so if Twitter does a lunch channel and it's successful, is that the end of the line?

No... I think it's a proof of concept.

Stepping Back

Twitter and Craig's List have grown by creating mostly unfiltered streams of information. Both have become household words by allowing a radical form of communication: many-to-many.

Facebook grew by providing people with focused ways to perform common activities: inviting people to parties, updating folks on social status, etc.

Facebook did something interesting in pursuit of revenue: they went back to a last millennium model: advertising. Yes, Facebook has some tools for merchants, but most of Facebook revenue comes from advertising... Mad Men style advertising, except a little more targeted.

Craig's List took the "we're going to charge a very few people a very little amount for the commercial transactions they're engaging in anyway." To my mind, Craig's List expresses the radical reduction in transaction costs that the Internet brought us. The 20-30 CL employees only need a very small amount of the transactions they facilitate in order to thrive. Granted, the CL model does shift certain transaction costs... but I digress.

Twitter has gone for the simple is better than complex model as well as the nearly free and frictionless exchange of information route to grow an astoundingly large community.

Like CL was able to monetize a small subset of transactions without "losing itself", I think there's an opportunity for Twitter to generate revenue by facilitating information assembly and analysis around commercial transactions.

Advertising Isn't Bad, When Done Right

A merchant who proffers information about his/her product to an audience that's interested in purchasing items in the merchant's realm is doing a purchaser a service.

Yes, there are abuses of marketing and advertising. But abuses does not mean the idea of advertising is flawed.

When sellers and prospective buyers enter a channel/room/location of their own will, the value of advertising is high. The advertising gives a prospective buyer the information needed to make a good decision.

Intersecting some advertising with posts from other buyers (prospective and actual) allows a prospective purchaser to engage in a dialog with others in order to learn about the product and make a decision.

This happens a lot on the main Twitter stream... but sometimes the firehose is less than optimal.

The Firehose, not...

There are suboptimalities around using the main Twitter feed for information gathering:

• Echo Chamber: most of the people I follow on Twitter are in my cohort. Sometimes when I'm buying something (like a dishwasher), I want to hear from outside my cohort... but not too far outside my cohort.
• Segregation of Information: When I'm looking for lunch or deciding what movie to see this weekend or deciding on my next car or choosing the music to listen to today, I want information that's segregated from my normal Twitter flow... I want concentrated information about the topic at hand.
• Advertising: I really don't like promoted tweets... unless I care about something... and most of the promoted tweets and Facebook ads I've seen are not something I care about. Put another way, I love the travel ads in the NY Times Travel section, but I wouldn't really like to see any of those ads when I'm reading Motor Trend.

Curated Channels

So, my thought for Twitter and revenue is curated channels.

Each channel is explicitly a place for commerce and thus warrants much higher advertising rates than promoted tweets. Further, there can be a bunch of different "pay to play" revenue opportunities... much like Google's ad bidding.

Each channel is tuned based on geography: hyper-local for lunch, regional for cars, national for dishwashers, international for cloud providers.

The content of each channel is tuned/curated based on my social graph and word analysis of my tweets... thus I'm likely to get more information on hybrids in a "new vehicle" channel than F-150s.

Some channels are about time and place: "who's around for lunch today?" Some are about purchasing events: "I'm looking for a new car." Some are about ongoing events like a news channel.

I see this as an opportunity for Twitter to create discussions and engagement around commercial transactions and deriving revenue from facilitating the discussions. Rather than a 20th century "one to many" advertising play, it's in the core mission of Twitter and doesn't detract from the main Twitter feed.