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“What’s Your Business Model” Is Not a Stupid Question

October 20, 2008

vcmike

Fred Wilson has a post discussing his quote last week to the effect that the question of Twitter’s business model is “the stupidest question in the world.”

I left a comment for Fred (somewhere way down in the 40s) which I am leaving here as well:

Fred, as an investor in a handful of “Web 2.0” or “Social Media” who have yet to demonstrate a sustainable business model, I share alot of your sentiment, and I tend not to rank revenue generation as the top question/challenge for any of those companies. That said, however, I do think business model is THE question for the sector as a whole. My guess is that when we look back in 5 years there will be a couple large and highly profitable businesses that emerge from the current social media wave and that introduce an important area of online business, just as Google and search did in the first half of this decade. If true, there is a lot at stake in being early to identify the winning companies and revenue models, much more than is at stake in riding the wave of social media services that become popular but not a source of large profits. So while I am with you in terms of your perspective as a Twitter investor/board member, I actually agree with the article that the right question from the bleachers for Twitter (and for other socialmedia startups) is what its business model will be.

2 Comments

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  1. mariamz #
    December 21, 2009

    Agree. I have researched and blogged on social media business models and found this question addressed surprisingly infrequently. Still, now, end of 2009.

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