In my last post here, I suggested that Twitter-cum-phenomenon was starting to feel like the Florida real estate market circa 2005 (hype growth of the service far outstripping the substantive value it provides). Given that Oprah focused her show on Twitter yesterday, I thought I should follow up that last post by trying to unpack the riddle of Twitter’s appeal.

Dave Winer wrote this on Scripting.com earlier in the week:

I read Farhad Manjoo’s piece in Slate about Twitter. It’s the best of a class of commentary that says that Twitter is something you can skip if you aren’t interested in periodic 140-character reports on mundane people’s lives. As I read the piece it made sense, so I was left wondering why I was and still am attracted to Twitter and use it, daily.

I set up my first Twitter account (one of 5-6) back in September 2006. It had just launched, but geeks here in San Francisco were talking and blogging about it. I have been an on, then off, then on-again Twitterer, and have asked the same question regularly: “Why am I here? What am I really getting out of this?”

************************

The Twitter team’s web craft (by that, I mean the art of building a seductive and usable service) was what initially attracted me. It has always been a joy to use and is impressively made, in a million very subtle ways.  Understanding what they’ve done well I think helps us to understand the appeal the service has had, even when so many of us have so often said: “I don’t get it.”

Here are the things I’ve particularly admired as a fellow web crafter:

1. Asynchronous Following

At the time Twitter launched, the canonical social media approach was “friending” — a reciprocal relationship. Myspace, Flickr, Facebook, and dozens of other imitative social networks required (and still require, in many cases) this form of relationship. The requirement of reciprocity can feel restrictive, confining, claustrophobic and artificial all at once. Twitter picked the lock on this — first, with a hybridized approach of “friending” and “following” (like subscribing to a blog feed, but in a way that feels much more personal), and then abandoned “friending” altogether.

Asynchronous following allowed Twitter to become a publishing platform, but with the ease and intimacy of a communications service. Celebrities and others could use Twitter to broadcast to their fans and followers, with hardly any effort at all.  Ashton Kutcher can have over a million followers because there is no reciprocity — he doesn’t have to follow them back. And it has allowed those 1 million + Twitterers who follow Kutcher get to indulge in one of the web’s guilty pleasures — lurking and stalking, with a crafty and weird combination of both anonymity (“I’m one of a million, Ashton can’t tell I read that Tweet”) and intimacy (“I’m listed as one of Ashton’s followers!”).

2.  Ease-of-use and the 140-Character Limit

Novelists often talk about the tyranny of a blank piece of paper. That same terror probably keeps blogging from becoming a more popular. Writing is damned hard, it takes time and effort, you have to be committed. Twitter, by sticking hard to the 140-character limit in order to inter-operate with SMS, instantly solved that problem (I don’t think that was a lucky accident; after all Ev and Biz built blogger and saw first-hand the hurdles in front of bloggers).

Suddenly you could publish publicly on the web with less effort than it takes to write an e-mail. The short-form limitation took the pressure off, and leveled the playing field. Yeats, were he on Twitter, wouldn’t necessarily Tweet better than you or I.

3. The Feeling That You’re Not Alone

Last — and for me, by far, most crucially and impressively — were the simple ways the Twitter team visually articulated the notion of “following” on Twitter.  The co-mingling of Tweets you write with those from people you follow was an absolute stroke of genius. It gives the appearance — an illusion, perhaps — that someone is out there paying attention.

It’s instructive to think about this in comparison to blogging. I am typing this post from my very trusty and capable WordPress.com dashboard. To my left and my right are every command and tool I might need as a publisher. But when I hit the publish button, I’ve not a clue that anyone will read this. It goes out to the ether, to a WordPress.com server, and then sits inert in the form of a web page that may or may not ever be seen.

Contrast that to Twitter. Whether I’m writing a Tweet from a client like Tweetdeck or Twhirl, or Twitter.com, not a publishing tool in sight. But I’m surrounded by people. Tweets from people I follow. As soon as I hit enter, my tweet is right there in the stream. I know, intuitively, that people will probably read my Tweet; after all, staring me in the face are short messages from the people I follow. Maybe a few of my 300-odd followers will read what I’ve had to say.

I hadn’t thought about the contrast with the actual act and process of blogging until this past week. And, in the end, this contrast solves the riddle for me.

This UI, and the publishing mechanics of Twitter, are not technical innovations; they are psychological ones.  They give you the visceral feeling that someone out there is listening, that someone is paying attention to you.  Inventions from the community — like the use of “@” for replies, and retweets, have simply reinforced all that.

You don’t get that from blogging –  the notion of an audience feels more abstract; your readers more distant; the perception that you are being heard more attenuated.

************************

In the end, we’re left with a paradox or two. The act of Twittering  sustains — people Tweet because it’s easy, and it gives them the appearance someone is out there, listening. But the substantive value of these Tweets for readers is at best debatable.

The act of blogging feels isolated, silo’d, lonely even — at least compared to Twitter. But the substantive results from blogging can be impressive, useful, even life-changing for the reader.

UPDATE: Virginia Heffernan has an interesting take on Twitter in tomorrow’s NY Times magazine.

Back in early February (2009), there was a very worthy piece by George Packer in the New Yorker, “The Ponzi State” (it’s behind a registration wall, I’m sad to report). The gist of Packer’s piece was that economic growth in Florida required a constant influx of new people.  With very few underlying industries or major businesses, many in the state made their living selling houses or building them.  As long as there was a constant influx of new people with money in their pockets to buy those houses, everyone was happy. House prices went up, more people moved to Florida to buy houses thinking prices would continue to go up, many of them got jobs selling or building more new houses, and so on.

Then everything came crashing down in 2007. Without that constant influx of new people, turns out there was no “there, there.”

That article has been rumbling around the back of my head as I’ve watched the hyper-explosion of Twitter the past couple of months. I’ve been wondering: is Twitter’s growth driven by some underlying fundamental benefit it provides? Or, is it like Florida — dependent on a constant influx of new people to the service? And if the latter, what happens when the growth peters out? Is all this growth and hype just inflating a big “Twitter Bubble?”

I think the answer is yes. And I realize that writing this is complete and utter heresy in the current moment. Hear me out.

I admire Twitter as web craft. It is very, very nicely made. But in general, how much value does a series of 140-character messages really provide? Go look at the feeds for any of the top 100 or 200 Twitterers. How much value is really there? Look hard at your feed for a day — how essential was it to get those Tweets in real-time, really?

At the very, very best, I think you have to conclude the jury is out.  At the very worst, it’s a big, stinking, very perishable pile of inanity — mostly crap, with a very short shelf-life.

So why the hype? Traffic. People — bloggers especially, those in Silicon Valley or the tech industry even more particularly — have realized that Twittering can send traffic.  This is why Jason Calacanis offered $250,000 for one of the 20 recommended user slots on Twitter.  It’s why so many top twitterers include links in their tweets, usually to their own properties. And why so many in the SEO/SEM business have flocked to use Twitter.

So it’s all good, right? Twitter is the new Google, a new fountain of traffic for web properties? That depends on how you look at it, and whether you think Twitter provides some essential, fundamental value. If you question whether it provides much value other than the potential to drive you traffic, the Florida real estate cum ponzi scheme analogy goes like this: people are flocking to Twitter mostly because they believe it has the potential to drive traffic, and as long as people flock in that perception is fulfilled.

The problems start occuring when the growth slows down, or stops.

And this movie, we’ve seen it before. Digg and Facebook got the same (ok, not quite the same) levels of hype in their days of ascendancy, for the same reasons. People thought they could be tamed, harnessed, used as traffic hoses. As growth (or the perception of growth) in traffic from those services decreased, so to did the hype attendant on them decrease, at least among the digerati. But unlike Twitter, one could argue Facebook, and to a lesser extent Digg, provided some more meaningful, underlying value to their end users.

In short, I think it’s arguable there is a Twitter bubble now, just as there was Florida real estate bubble in the early 2000s. It’s being propped up by perception of future, unending growth. A lot of people joining because they believe in the dream — that they can gain a lot of followers, and turn those followers into dependable “viewers” or “buyers” or “believers” or whatever.  And instead of real estate agents, we have “social media consultants,” SEO folks, web designers, entrepreneurs, politicians, and celebrities pitching themselves, or their links. In short, it’s a few million people furiously on the make.

That’s not to say Twitter is worthless, that it has no value. The value is exactly what you’d expect a steady diet of 140-character messages would provide.

Rather, just like Florida real estate at the height of the bubble (and Facebook two years ago), the value is a lot less than we currently perceive. It’s not the next Google. Heck, it’s not even the next YouTube (a company, it turns out, that was underhyped!).

And that the crash might be a hard one.

One of the most over-rated terms in the Silicon Valley lexicon is “Serial Entrepreneur.”

For the uninitiated just visiting Epigonic, the term refers to those entrepreneurs who form, then flip, startup after startup. They are worshipped, especially, by Silicon Valley denizens; seen as safe hands who can produce a steady stream of singles, doubles, and the occasional triple.

But they don’t, generally speaking, create lasting, durable companies. Hewlett, Packard, Moore, Groves, Gates, Jobs, Ellison, Brin and Page — these were not serial entrepreneurs (yes, Jobs did found Next and helped create Pixar, but only because he was forced out of his beloved Apple for a decade).

And if we’re to get out of this crisis, we need more entrepreneurs like that. Ones who can create jobs, at lasting and durable companies. Most startups that get flipped might enrich its founders and investors, but otherwise add little to society.  Name me the start up launched by a serial entrepreneur that still has value, relevance, and strength?

I can only think of one — PayPal. Jury is still out on Skype. I think YouTube will still likely be very, very large and important and relevant in 5-10 years, perhaps it will get added to the list.

Let’s be honest, most startup acquisitions end up being utter failures for everyone but the founders and the investors. The founders, newly enriched, quickly lose their focus and zeal, and the once innovative startup just becomes another cog in the bureaucratic machine. Employees at the acquirer are often resentful of these newly enriched founders, and go out of their way not to cooperate in making the acquisition a success. The supposed catalytic effects to be brought by the startup often fail to appear, having typically been oversold by the startup to the acquiring company.

Sound familiar? I could think of a hundred other examples.

Fetishizing of serial entrepreneurs in the Valley has occurred in part because it’s been impossible for nine years now to make any money from tech startups in the public markets (Google, Salesforce, and a few others excepted). The only reliable way to make money has been to fund, flip, repeat.

To illustrate just how ingrained this mentality is, let me tell a personal story. Two years ago,  7-8 months in to starting Vodpod (and only 3-4 months after the service launched), we got a very nice, very good, very real acquisition offer. I polled a wide array of folks for advice, and almost to a person I heard this: “Sell, take the money, stay at the acquirer for a year or two, and then start over.”

That mentality has to change. With the economic crisis, it probably will be forced change — the fund, flip, repeat model is no longer operative.

But if it’s impossible to have an IPO in the current public markets, or to sell your startup to an acquirer, what are the options?  We need to find a way for mid-size companies to go public again. Reid Hoffman suggested three ways in which the government could help fuel startups the other day; I’d add a fourth  –  enact securities laws and regulatory reforms that would enable a new public market for mid-tier companies. Specifically, something like the AIM in London, targeted at companies with market caps between, say, $100M and $1B, with reporting and legal requirements appropriately tailored to the size of the company.

That might allow more entrepreneurs to focus on building durable, long-term companies, while still satisfying the needs of investors and employees for some liqiduity in the short- to mid-term. Growing companies with $30-50M per year in revenues and some profits could have a path to go public, without the current and very onerous requirements designed for Enron-like multi-billion dollar conglomerates. Some of those companies might thrive, and move on to the big boards. Some might wither. Either way, seems like a better prospect than selling out and withering away. Or doing this so much more inefficiently through an opaque and entirely unregulated secondary market.

If we had this type of market, perhaps that would have been the path taken by Flickr and they might remain a viable, independent, innovative company. If we build such a system, it could be the path taken by current thriving startups like Automattic (WordPress), Digg, or Twitter.

In my last job, I lived and worked from London for three years running the international consumer business for a mid-sized, publicly-traded Internet company that did a lot of work in the mobile space.

So I went to lots of meetings in Finland with Nokia, and outside London and in Germany with Vodafone, and there was always a good bit of fun had at my expense teasing me about the pathetic state of the US mobile phone business. Lot’s of smack talk about how the US was third rate in the mobile space and would never catch up.

Our carriers still lag in many ways, though Vodafone and most European carriers are not all they’re cracked up to be.

But it’s a completely different story as far as the phones go. At the time I was in Europe, no one could touch Nokia. How they’ve lost their way.

With the public unveiling of the Palm Pre yesterday, the three best phones in the world now come from Silicon Valley:

– the iPhone

– the G1/Android

– the Palm Pre

With all the doom and gloom about American mediocrity it’s nice to be reminded people here still know how to build great products.

Now if only we could get the car makers sorted out…

A little over a year ago — sometime last August or September — I started faffing about with Twitter, as early adopters here in SF started to spread the word about it.

I liked it immediately, thought it was perhaps a wee bit twee. But we liked enough here at Vodpod we built a way to let you “tweet” a video from vodpod last December, just weeks after we launched our service. And we spent a great couple of hours dissecting its appeal with some very smart lads, Matt Webb and Jack Schulze.

Twitter really exploded in the Spring of this year, championed by Scoble and getting a lot of attention at SXSW. Funny, though, my interest in and attention to the service waned about then.

So I’ve been delighted to re-engage with it the past week or so. In part, it’s been for prosaic reasons. I saw that Rafe Needelman was doing a Twittercast from Web 2.0, and I’ve been checking out the various AIR (totally loving Twitterific) and iPhone clients and playing with twittering from the road. The Twitter folks get an A+ for their API work, something we’re trying to emulate here at Vodpod.

It’s fun to be back using the service. For my money, it’s a far more interesting than the other hyped up service of the day. In the end, both are really about communication, but there is a richness and layered-ness to Twitter I just don’t find with Facebook. And interesting lesson given how much more complex Facebook is, and how simple Twitter is by comparison.