In 2006, I was the director of engineering at Odeo, a podcasting startup notable for birthing a side project now known as Twitter. My major contributions were doing the statistical analysis that showed that our podcasting work hadn’t amounted to a hill of beans* and then not complaining when our most reliable engineer wanted to work on a side project. Still, it was fascinating to be in the building during Twitter’s conception and then to read all of the ways that people misunderstood those early days.

Here are three lessons I learned from Twitter that nobody seems to have caught on to.

1. If people use it, it’s valuable
Have you ever looked at a piece of social software and thought, or worse, blogged, that it was worthless? Here’s a trick for evaluating social software in a way that isn’t going to make you look stupid six months down the road: assume it’s valuable if people are using it. Then try to figure out what value they’re getting.

Even professionals make the mistake of dismissing social software despite active, growing communities. Consider this early TechCrunch article, Dodgeball vs. Twitter, where the author (not Arrington) insists that the way to compare software is feature by feature. Dodgeball won the comparison but within a few months was in the deadpool and now Twitter is part of TechCrunch’s everyday coverage. Why? The features that mattered were defined by social interactions, and each user had their own customized set of features based on the social interactions that were important to them. Dodgeball had more features by the traditional measure, but Twitter had the kind that mattered, loads of social interaction.

I even find that this is a good reminder for myself. I follow a startup advice blog from Eric Ries, cofounder of IMVU. The first time I heard what IMVU did I thought it was laughably stupid. They make 3D chat rooms, (like a mini Second Life without the flying), and make money by selling virtual clothing for people’s avatars. Yet he is able to explain IMVU with a straight face and then seems genuinely surprised when people express skepticism.

Here’s the reason he can keep a straight face: IMVU gets 1.3M unique visitors a month and makes tens of millions of dollars per year. He’s not judging the idea based on opinion, which is where most people get into trouble, he’s judging based on observation. Now, I feel stupid for not keeping an open mind.

2. Product, Team, Market? Team.
This is a fun little debate, what matters most the product, the team, or the market? At the time that Evan bought Odeo back from the investors, our podcasting product was widely seen as a failure. It didn’t have any growth and it certainly didn’t make any money for the investors. Here’s how Bryce at OATV put it:

Rockstar team, smoking hot market, all-star angels — and it didn’t deliver the hyper growth traditional VCs need for their return profile.

Was it the product? A year after Ev bought Odeo back, and after zero updates to the features, Time Magazine listed Odeo as one of their top fifty websites. Today, with a very similar product, Odeo.com is the only podcast directory of note. So the product was fine.

Was it the market? Marc Andreessen argues that the market is the only thing that matters for a startup. I just made the argument that Odeo was a strong product and I’m going to argue below that we had a strong team. Since no other web based podcast directory has proven otherwise, it looks like we were in a weak market. So is the answer that the market matters most?

That would look like the answer if not for Twitter, that pesky side project we launched that has had 10x growth in the last year. Market only looks like a good answer if you’re judging individual products, in this case the odeo.com podcasting directory.

A good team, that listens to its customers, is going to find a good market and put together a good product for that market. Steve Blank calls this process customer development (explained well in his book Four Steps to the Epiphany and in this Venture Hacks post).

We could see that Odeo.com didn’t have enough traction so we went looking for other ideas. You might think it was lucky that we hit on Twitter, and as a specific product, it was. If Jack wasn’t on the team, there would be no Twitter. But the team at Odeo had lots of ideas and plenty of people capable of carrying them out. Of the 19 or so people who contributed to Odeo, 13 had started or went on to start a business or major open source project**.

• Evan Williams, founder of Blogger, Odeo, and now Twitter
• Noah Glass, Audioblogger, Odeo
• Jack Dorsey, founded a courier dispatch startup and Twitter
• Biz Stone, launch team at Xanga, founder of Twitter
• Tim Roberts, co-founded BigStep and founder and CEO of Infectious
• Tony Stubblebine (me), founded CrowdVine
• Adam Rugel, founded 71Miles and Trazzler
• Dom Segoia, founder of DollarApp
• Jeremy LaTrasse, owned a tattoo parlor
• Rabble, co-founded protest.net, co-wrote Icalico
• Blaine Cook, started Starling project
• Dan Cederholm, co-founder of Corkd.com, author of Bullet Proof Web Design, many other things
• Kellan Elliott-McCrea, Magpie RSS, icalico

If Ev hadn’t bet on Twitter he would have bet on something else. Three of the companies above are currently live companies that support their founders and a few employees (Infectious is funded and doing well, Trazzler is funded by the Facebook fund, and CrowdVine is profitable). I chose a vertical route for CrowdVine, but the original idea, social networks for everyone, is an idea that’s nearly as big as Twitter (as evidenced by the size of Ning).

Because of the team, Ev had other options to overcome a weak market. So if you’re looking at it from the perspective of the company, team is most important***.

3. Rails was never the problem
Twitter had well-documented performance problems in it’s first few years. Many people, including programmers, pointed the blame at one piece of Twitter’s architecture, Ruby on Rails.

First, all Rails does for Twitter is serve up web pages. The vast majority of those scaling problems came in the back end, moving status updates around and then storing them in a way that Rails could retrieve them for display. So most people aren’t even looking at the right piece of the architecture.

Today Twitter has a much better performance track record and it still uses Rails to serve web pages. The difference is the backend.

So if the backend was such a problem why didn’t Twitter launch with a better backend or at least get it fixed earlier? That gets at the heart of the problem. I’ve never heard anyone get the blame right for all of those performance problems. They stem 100% from the way that we went about switching from the Odeo product to the Twitter product.

When a company kicks off their first project they do some long term thinking and might cover topics like architecture. But how do you launch your second project? Or fifth (approximately what Twitter was)?

Was it easy for the Flickr team to choose to double down on photo sharing, which initially was just a feature inside of a web-based multi-player game? For us, it wasn’t an orderly process at all. It wasn’t even clear that we were abandoning Odeo. We were running hackathons, which led to a condition where many people had competing ideas (and implementations!) of what our next product should be. But around those hackathons we were still continuing to develop Odeo. Twitter eventually won enough that we pulled two engineers off of the Odeo team, but the rest of us kept plugging away.

If you were thrown into a fight, would you start punching or would you open up your iphone and start browsing web pages about Karate? I’d argue that Twitter was launched in the middle of a fight for what we were going to do next, and any thought for long range planning was completely secondary to getting Twitter launched and proven. Without Rails, we might not have even given Jack time to finish the prototype.

So that’s why Twitter wasn’t ready to scale from day one. However, it took almost two years until it could scale reliably, and that certainly seems like longer than necessary. I think it’s an issue of engineering management. Until the Summize acquisition, there was no true engineering manager for Twitter. I had left before Twitter was spun out****. Everyone was a little wary of hiring middle management again since it was widely seen that we had been hired too early at Odeo. The job of middle management is to promote forward progress, and it took us awhile to figure out that wasn’t what Odeo needed. Twitter did eventually hire a VP of Engineering, but he didn’t pan out.

The result was that Twitter operated for a long time (until Summize was acquired) with a gap in engineering planning, someone who could put together a plan that everyone understood and could work from. They had people who could solve problems in brilliant ways, but they didn’t have someone who could get the entire company on the same page. That gap was just an unfortunate side effect of the jumbled team that emerged post-Odeo. So what’s the right way to change your company’s direction? It certainly had nothing to do with Rails.

* Odeo was eventually acquired and is today the only podcast directory of note. However, as a venture backed concern all we had really managed to build was a site with high page rank. We had terrible numbers on repeat visitors and our experimental features (podcast studio, send me a message, audio commenting) weren’t getting any use. Maybe we could have gone after libsyn’s podcast hosting business, but overall our stats said that if we wanted to strike out in a new direction we shouldn’t feel constrained by podcasting.

** Those remaining six include a former core contributor to Rails, Twitter’s current support lead and people that worked for Apple, Google, and Flickr.

*** The idea that Twitter is the same company as Odeo gets muddied because Ev bought the company back, laid off a chunk of Odeo and reincorporated Twitter as it’s own company. But I’d argue the difference isn’t important here. Twitter was launched and run in the early years by Odeo employees who worked at the same desks and the same office that they had when they were working on odeo.com.

**** People often ask me if I regret leaving, and I don’t. I made a list of reasons that included several that would have been sufficient on their own. Did they need me? Not at first, and I hate being idle. Was I happy? No, I was miserable. Every month I had told my team that what we were going to work on was critically important. And every month it had ended up not being important. It taught me an important lesson about what I want from work, to walk in every day believing I’m doing something important. I ended up with the opinion that the only way I could guarantee that was by owning my own company, hence CrowdVine.

I started listening to podcasts again and have found some amazing episodes that I want to share with people. I’ve also rediscovered why being a podcast listener is so frustrating. Let me share the good episodes first before I start complaining.

Three of these next seven episodes are amazingly good. These are so good that they’re worth listening to over dinner (Sarah and I did actually listen to the two This American Life episodes that way).

Venture Voice // Tom Perkins of Kleiner Perkins – Great history and perspective from one of the most experienced entrepreneurs and investors.

This American Life // The Giant Pool of Money – Explains the mortgage crisis in a way that anyone can understand, even covering CDOs.

This American Life // Another Frightening Show About the Economy – They expand on their coverage of the mortgage crisis to include the credit crisis, including commercial paper. I swear, this is interesting and understandable.

These next four were pretty interesting to me at least. I bet they have things that you haven’t heard before.

Knowledge@Wharton // Google’s Joe Kraus on How to Make the Web More Social – Covers a lot of fundamental trends that effect a business like CrowdVine.

TalkCrunch // Interview With Newt Gingrich About Tech, Elections And American Solutions – If you live in the Bay Area you probably only know Newt through the Clinton impeachment. However, I thought it was interesting to get his policy perspective since I almost never hear local pundits or politicians talk that way.

Entrepreneurial Thought Leaders (Stanford) // Music Artists Go Entrepreneurial – Quincy Jones, MC Hammer, and Chamillionaire discuss social software’s effect on music. They even mention Twitter and FriendFeed. I love how so many hip hop artists take control of the business side of their art so that they can have some measure of independence (it’s like a programmer who rejects corporate safety and venture capital).

USF MBA Podcast // All Things Digital – This is Kara Swisher giving an inside take on the News Corp acquisition of the Wall Street Journal.

Now I’m going to start complaining. I didn’t want to just tell you the titles of seven podcasts that were worth listening to–I wanted to make it easy for you to actually listen. The absolute best scenario would be if I could create a feed that you could subscribe to in iTunes. Then my recommended podcasts could automatically be added to iTunes and your iPod.

First I tried Odeo. They have playlists but the playlists don’t have feeds. So then I went searching for other podcast directories. I remember when I worked at Odeo being unnerved every time a new podcast directory launched. Well, all of the competitors seem to be defunct or in major disrepair.

So then I tried Digg. They have podcasts in their directory that you can “digg” and they offer an RSS feed of your history which includes those diggs. I created a new account so you wouldn’t have my non-podcast diggs (mostly just favors for friends at this point). That produces an RSS feed but the RSS feed doesn’t have enclosures, the information linking directly to the podcast audio file that you podcast player needs to download.

So then I went back to Odeo so that I could at least point to a web based playlist. I would have used Odeo for six of the seven links above but they’ve removed their “add to itunes” buttons. The seventh (USF MBA) is missing from the directory. But I can’t be too harsh about that since they’re still by far the most complete directory.

Who is to blame? I guess I am at least partially. I worked at Odeo. Our flash guru, Ray, was a huge proponent of what he called curating. That’s exactly what I’m talking about here. I don’t have much content to offer, but I can offer my editorial filter. I wish we had solved this problem before we’d moved off of podcasting.

The news finally broke that Odeo was acquired. The new owners SonicMountain have big plans. From the press release:

“A critical aspect of the transaction was the commitment by SonicMountain to retain the integrity and spirit of the Odeo community,” says Evan Williams, CEO of Obvious, LLC. “During the selection and due-diligence process it was important that the buyer be committed to Odeo’s growth and improvement.”

SonicMountain intends to incorporate exciting enhancements to the Odeo community within the next few months. Improvements in content organization, search, discovery, plus podcast hosting of both audio and video are only a sampling of upcoming upgrades planned for the site.

Good. I like seeing the things I’ve worked on do well.

More from TechCrunch and Profy.

I was psyched when Ev announced his plan for Obvious Corp., buy the Odeo assets and run a lean company that can take advantage of rapid/cheap development and the network effects of multiple products.

There’s three trends in the ensuing discussion, all caused by plummeting costs of running a web business. Most people are only paying attention to the first two.

1. The VC world is adapting by offering more seed funding. George Zachary, Odeo VC/Board member, launched a seed funding program called Quickstart that’s aiming to make 50 loans in the $100-250k range. That’s a fortune compared to Paul Graham’s Y-Combinator.

2. Entrepreneurs are adapting by skipping venture funding, acquisitions, and IPOs in favor of running small businesses. 37Signals blows this horn loudest, but I’m partial to photo sharing site SmugMug. Chief Geek Don MacAskill said of a recent SmugMug acquisition rumor:

We love our business, we love our customers, and we love the people we work with. Not only that, but it pays the bills – we’re profitable, with no debt and no investors! Why mess with a good thing?

3. Geeks are finding happiness. That’s my favorite trend. Don doesn’t just think that keeping SmugMug privately owned makes economic sense, he thinks it’s more fun.

Ev said the same thing about the formation of Obvious:

Lastly, for me, I just wanted to create a company that would be as much fun and as fulfilling as possible. Fun in work to me means a lot of freedom, and ton of creativity, working with people I respect and like, and pursuing ideas that are just crazy enough to work. I don’t want to have to worry about getting buy-in from executives or a board, raising money, worrying about investor’s perceptions, or cashing out.

Costs are low so you don’t have to be in somebody else’s debt. Development tools are more powerful. And companies are building the infrastructure that supports the ‘muck’ of doing business online. With massive storage systems (Amazon S3), ad programs (Adsense / FM Media Publishing), and cheap hosting you can focus completely on your customers. A company can easily be two people who are 100% focused on building and polishing features for their users.

As David Galbraith points out, small sustainable business is the natural state for every other professional group.

When I was an architect, you didn’t set up a practice on your own to ‘exit’, you setup to build a company that made a profit and made products that made the environment a better place along the way – a sustainable enterprise. The whole idea of ‘exit’ in the context of building an architecture firm, or a legal or medical practice is preposterous.

Will it work?

Bryce at O’Reilly Alpha Tech Ventures calls the venture reaction “spray and pray”

This is a hits business and we just don’t know who the winners are going to be any more. The old formula was one that they were all comfortable with – get a proven team in a hot market and you’ve got a winner. Then Odeo happened (CRV was the primary backer). Rockstar team, smoking hot market, all-star angels — and it didn’t deliver the hyper growth traditional VCs need for their return profile. YouTube on the other had was a couple of junior guys from PayPal moving into a saturated market which had never really panned out. $1.65B later…

That may be true if you’re a venture capitalist and you require one of the investments to be a gigantic success. But I don’t think it’s true for companies like Obvious that have a parallel products in development (Odeo, Twitter, Hellodeo, Odeo Podcast Studio). It certainly wasn’t true for blog networks like Weblogs, Inc. As Jason Calcanis points out, launching to a network that already has traffic works:

StyleDash.com was the best launch in the history of Weblogs, Inc. thanks to the support of AOL and their traffic machine. The graph below is from SiteMeter which we’ve found is about 5-10% less than our internal stats.

It shows 1.5M pages in month one and almost 2M pages in month two. It used to take us 12-18 months to get a blog to 1M pages… now we start at 1M pages. That’s the power of scale, and that’s been the biggest lesson I’ve learned at AOL: how to build a “scale business.”

Of course the network effect isn’t actually a new idea. John Andrews from the SEO world calls it competitive webmastering (just added that to my vocab):

I am an independent competitive webmaster, and this sounds like what I (and many SEO practitioners) have done for years. I build web properties using the latest technologies and small teams (if I need any team at all). I monetize via subscriptions, advertising, and (affiliate) marketing. I use my sites to support my other sites, following sound SEO principles such as semantic theming and whatnot, for organic search traffic and search marketing. My “network” is my base for launching new sites and new promotions, obviously.

If that’s not inspiring, check out Markus Frind of Plentyoffish.com’s take on where the web is going:

Ebay Created a economy of 750,000 people making a living off its site. Google created a program where a couple of hundred thousand people could monetize their sites. Now thanks to google, huge drops in hardware costs and better software individuals and small companies can build sites that were impossible only a few years ago. At the moment there is no better example then me, if you would have said 3 years ago that someone was doing 600 million pageviews a month out of their apartment with no employees you would have been laughed at. There are thousands of other people who in the past 3 years have used adsense to grow and build large sites. In the next 2 or 3 years we are going to see thousands of these sites run by little groups taking over industries. This is because they will have reached critical mass.

I wonder if we’re in a happiness bubble where instead of chasing IPOs, tech entrepreneurs are chasing happy lifestyle businesses. If we are, then I’m pretty sure it’s early and that there’s plenty of room for the first few hundred thousand people to setup store fronts.

Twitter, the only way that I keep in touch with people, has RSS feeds. I’ve run into a number of people who didn’t want to communicate with me through Twitter because they didn’t want to run up their phone bill. Those people can now go to my Twitter profile page and subscribe to the RSS feed.

Here’s Biz’s official announcement.

I fixed the update mechanism for gemjack and now you can see two ruby gems that Blaine Cook extracted from the Odeo code base.

FakeWeb
A test helper that makes it simple to test HTTP interaction

WeightedSelection
A simple library for obtaining weighted randomized selections (like for web AB testing perhaps).

A couple of weeks back Odeo launched twttr, a service for keeping in contact with friends through text messaging on your cell phone. It’s crack if you have a cell phone and like people. You could get a taste by reading my entries or seeing my entries in the context of my friends

twttr is now the ONLY way I keep in contact with people. Some people would say twttr is just a way to send text messages to a group of friends. I guess that’s accurate, although it doesn’t touch on the effect it’s had on my life. I now hear what my little sister is up to 5 times a day. We used to see each other once a month in order to ask each other, “What’s up?” and find out, “Not much.” That’s pretty much the same story for everyone in my twttr circle.

twttr is the only way that people find out what I’m up to. I’m possibly the most uncommunicative friend ever. Hopefully I make up by being insanely happy to see old friends. The only people who know what I’m doing are on twttr.

twttr compensates for my utter inability to engage in small talk. Whenever people ask me what’s going on I usually can’t remember. Seriously. Now people come up to me and ask something along the lines of “were you just in New York?” or “what’s up with the road rage?” That sort of prompting is a life saver. twttr status updates are by nature extremely cryptic so there’s always plenty of details to fill in once you make it to a real conversation.

Here’s a quick tutorial on getting started with twttr. Sign up here. Add some friends. Up your text messaging plan. When you get started think of it as all-day-journaling from your cell phone.

I’m pretty much mystified by the Techcrunch review and following comments, that group text messaging has already been done (successfully?), that twttr can’t be monetized (users are in contact with the system 10-50 times per day), and that podcasting is dead (deserves it’s own post but in short: continuous-play-of-vetted-high-quality-audio-with-zero-syncing-hassle makes my day )

Ev and Biz have nice things to say about what it is and how it started.

We released a send me a message feature last week (I’ve added a badge at the top of my sidebar). Now Rabble has extended it so that you can embed one right in your webpage. Instructions in his blog post.

Here’s what it might look like:

Now that we’ve finished our first sprint I’ve figured out the answer to my question, “do we need a break between sprints?” Yes.

Our answer included a hackathon modeled after JotSpot’s. Tons of fun. I can’t recommend this enough! Noah made a video so that all the happy details can go online at some point. Here was my entry:

Podcast GMap. I took our podcast data, located it according to host ip, then put it into a google map. Then I added popups with the Odeo player. The data is static, the ip address geo data is spotty, and the underlying podcast data comes from a one time database dump. But what the heck, I had fun. Plus note the gubernator podcast coming from sacramento.

Special thanks to Perl Wizard Rich Gibson and Schuyler Erle for their Google Maps Hacks book.

Everyone else made really awesome hacks. I’ll be sure to call them out as they get released.

Odeo just finished week one of Scrum, our new engineering and product development methodology. In Scrum, development is focused around month-long Sprints with the goal of delivering as much production-ready functionality as possible. It’s a management dream, engineers are constantly sprinting all-out and releasing massive amounts of features. No more worrying about motivation or snickering about herding cats. Engineering at full throttle. Hurray for management.

The top question from Odeo-ers hearing about Scrum was, “How much rest do we get between Sprints?” Normal Scrum methodology finishes the Sprint with a wrapup meeting, then the next Sprint starts with an all-day planning meeting, then it’s back to coding. In our case we’ll also have a weekend between since we’re doing Scrum on a 28 day cycle. So that’s four days of rest (non-coding) one of which is an all day meeting.

I guess that does sound intense.

I’d been thinking of Scrum as a marathon, as a way to keep focus between mile markers. You focus on one goal for four weeks then, take a refill of requirements, then settle in for the next four weeks.

Two problems with that. First, it’s called a Sprint so you’ve got to expect people to get pretty intense about effort and expectations. Second, it leaves engineering almost no time for context switching.

The latter is pretty important to me. We’re a small company. We rely on engineers making smart decisions and contributing feature ideas. Back-to-back sprints clearly doesn’t allow for this. What to do?

I think I may have misread the company mission statement at Corny Content Creation. My channel is all corny jokes. Make some of your own.

Oh yeah, we just launched a big redesign this morning that makes it really easy to create and share audio. Did you know that your laptop probably has a microphone? Anybody can do this.

I made a big move a few weeks back, leaving O’Reilly to be Engineering Director for Odeo.

There were a number of reasons, but mostly it came down to wanting to work in a more focused and intense software environment. It had almost nothing to do with sailing trips.