Biz Stone, co-founder of Twitter, may have dropped out of college but the former art school student is one of the most successful entrepreneurs of this decade. GQ magazine’s Geek of the Year was back on campus this afternoon at Oxford’s Saïd Business School – but it wasn’t to brush up on his business skill-set.
The technology entrepreneur was promoting his new book – although for much of the 50-minute session the focus was on how he took Twitter from a silly idea into a social media juggernaut worth about $40 billion. Twitter, whose stock price has been volatile, has surged nearly 170% since its $26 initial public offering in November.
The company’s 140-character micro-blogging site has amassed 225 million active users, who send some 500 million tweets each day. Twitter employs 3,000 geeks in offices around the world.
The website has also stirred controversy. Twitter was censored in Turkey this year and in China, where citizens use alternative social media service Weibo, and Iran it is blocked completely. Twitter also caused global outrage in January when it unveiled new plans to allow country-specific censorship of tweets.
It has not, however, stopped Twitter from becoming one of the most popular social media networks on the planet. It has not dampened Biz’s confidence, either. The star of the Oxford show spoke with a relaxed coolness befitting a man who helped turn the website from a fledgling start-up into a goliath.
He told an audience of MBA and other students that to be a successful start-uper, you need to develop an idea before trying to secure capital. For technology start-ups, huge amounts of funding are often required to even launch a product.
“The key for Twitter was we didn’t just start out with an idea and then raise money based on the idea – we built something that had momentum and then we went out looking for capital,” said Biz. “That is a much easier way because you can say: look what we built; if we have some more money we can hire more engineers and grow it 100 times faster.”
“I always advise start-ups to build something first, even if it’s as ghetto as it can be, just get something out there… it’s much easier to raise money if you do that,” he added.
Be A better CEO
Many MBA students have begun turning toward entrepreneurship. But the majority still produce start-ups which fail in their early stages. Biz said that he has seen many things fail because of a lack of communication.
“At least half if not more of the role of a CEO is communication, and being able to make sure that everyone – the board, the investors, the employees – are constantly being communicated with, and everyone is on the same page every single day,” he said.
Biz also said that philanthropy will be the future of marketing. Many small businesses struggle to make their voices heard. Social media sites like Twitter are often a useful way to reach customers, with a constrained budget.
A New Marketing Strategy For Entrepreneurs
But the Twitter co-founder and current CEO of Jelly, a mobile app which helps people find answers to queries through photos and maps, suggested a more useful marketing strategy may be giving capital away to good causes.
“Philanthropy is the future of marketing, because people are attracted to a higher level of meaning. They want to be a part of something more meaningful,” said Biz.
He added: “Your customers will want to choose you over your competitor because they’ll feel like just by purchasing this product they’re doing something good. They feel a sense of worth and meaning.” Biz added that it will also be easier to attract talent – a key stumbling block identified by entrepreneurs when expanding small businesses.
Twitter is increasingly being used to predict market behaviour, and to predict how stock markets will react. Social media-miners like MarketPsych serve up reams of big data to hedge funds, giving analysts real-time reflection of popular sentiment.
A report by academics at four leading universities, including the University of Manchester, found that gauging the investing public's mood can be a predictive mechanism for the stock market.
Biz admitted it was “useful”, but only to a degree. “I think it fits along with this whole big data stuff that’s very popular… so I don’t see why you wouldn’t add Twitter in there. [But] I wouldn’t rely on it exclusively because it’s not perfect,” he said.
Pivoting Your Start-Up Idea
A hot topic on everyone’s lips was pivoting – changing entrepreneurial strategy. Even though Twitter has been beating its revenue targets, eyebrows have been raised about user growth, which has slowed 6% quarter-on-quarter by the last earnings statement in April. The company’s share price has also fallen 40% so far this year.
Biz’s career trajectory has been nothing if not changing. After leaving art school, he worked at a design company, before moving into web design and eventually onto Google.
He suggested that if he had not changed career paths, he ultimately would not have co-founded Twitter. “I started out as an artist and I guess now I’m a business man,” he quipped.