TWITTER

Nick Halstead wrote an interesting post yesterday about Twitter's intention to limit API calls to 20,000 calls per hour. Nic Brisbourne also chimed in and both tend to be in agreement that this is really the only revenue model that makes sense.

While I agree that all signs point to Twitter taking this option, I don't think it is the best move. Charging app developers for API calls will inevitably stifle innovation on the platform, much of which has been the reason for Twitter's overwhelming success and adoption. I also think that many of those 'here today, gone tomorrow' Twitter apps have contributed as much to Twitter going mainstream as some of the longer-lasting andrecently-funded client apps because of the hype and general interest they offer non-early adopters who otherwise often fail to see any interest or immediate value in the service.

So how should Twitter make money?

I have believed for some time that Twitter (or a tool like Twitter) could be a killer enterprise application for which major brands would pay large subscription fees. BUT, not in the way Yammer is marketing itself as a domain-specific corporate messaging solution.

The holy grail of marketing is getting as close as possible to your consumers to hear exactly what they are saying about your brand. Twitter is in a unique position both to supply incredible insight into brand perception and enable consumer brand engagement along similar lines to FreshMinds' FreshNetworksventure. There is a killer market research app in this data, for sure.

But perhaps the greatest potential for tools like Twitter in the enterprise is in customer support. Although many don't like the inevitable invasion of big brands on Twitter, it could have a significant benefit to us as consumers. A small tweak to the Twitter Direct Messaging service could route a customer support query directly into a customer service centre (Twitter charges for Enterprise integration via the DM service perhaps on a per-request AND annual subscription basis). Not only would the consumer potentially have MUCH IMPROVED access to Microsoft, Apple or whoever it is but the enterprise would have a ready-made customer engagement system that can make intelligent use of historic data for customer support efficiencies and future insight.

In summary, anything Twitter does to stifle innovation from a developer point of view is unwise and charging for API usage fits into that category. On the other hand, Twitter has the eyes and ears of a growing number of super-valuable early-adopters with whom big businesses SHOULD be interested in communicating better.

BUSSINESS IT ONLINE(BIO)

I'm hoping you've seen today's announcement that Business IT Online (BIO) has extended its range of offerings for small businesses to include an online office supplies shop.

By adding a fully-stocked e-commerce site to BIO's offering, we can now justifiably call the site a one-stop-online-shop for small business services.

So, why did we do it? Why did we do what nobody else has done (to my knowledge, anyway) and release an e-commerce site alongside our web-based software applications for small businesses?

Here are some reasons why:

1. Because our vision for BIO has always been for it to be a 'one-stop-shop' solution.

While those with plenty of loose change may opt to shop with specialist suppliers and pay a premium for specific services, those that are looking to save usually look to the likes of supermarkets and one-stop-shops for savings on price and efficiency. This is confirmed by excellent performance from supermarkets relative to the broader retail sector since the recession hit hard.

Small businesses are relatively cash and time poor. The more tools, web sites, applications and services required to perform their day-to-day activities, the more inefficiencies that are introduced into their lives. Inefficiencies hurt small businesses. BIO's objective is to reduce these inefficiencies and make the running of a small business easier by offering integrated services on one site.

2. Because e-commerce is good business.

Nic Brisbourne recently referred to projections from Forrester that 2009 will be a good year for e-commerce. There is still plenty of room for growth in e-commerce over the coming years as more and more people realise the benefits of shopping online.

There are a good number of ways for us to innovate in what is a relatively tired area of retail and while many of the large industry incumbents are battling to win blue chip accounts and managing a lot of costly inventory, we intend to provide an outstanding service for SMEs.

3. Because we are revenue-funding the business.

Web 2.0 is full of businesses that have successfully raised millions of pounds in funding for their Internet ideas. Some of these are pre-revenue and many of them are pre-profit.

While the VC-funded Web 2.0 bubble has been exploding, with mixed results for investors, we have beenbuilding a business that uses sales to fund growth. So far, we've successfully combined a subscription model with an advertising model and now we're adding a third revenue-stream to the site to further bolster sales in the form of e-commerce. Revenue-funding might be less sexy. But it works.

TRAGEDY

Sometimes we don't do ourselves any favours in the IT industry. We were looking at a couple of website hosting providers' websites today and spotted this quote. It HAS to be well-placed in the all-time buzzword bingo hall of fame. But what does it mean?

"The virtual datacenter OS addresses customers’ needs for flexibility, speed, resiliency and efficiency by transforming the datacenter into an “internal cloud” – an elastic, shared, self- managing and self-healing utility that can federate with external clouds of computing capacity freeing IT from the constraints of static hardware-mapped applications."

TRICKS

Today’s post by Paul Fisher that highlights conflicting headlines on what is likely to happen to inflation in coming months, by journalists at the FT and BBC, got me thinking about ‘experts’.

I agree with Paul’s assessment that, “the only consistent theme is that no-one really knows what’s going on”, but have to confess to being disappointed by the reality of it. After all, we put a lot of faith in our nation’s political and intellectual leaders to both steer us away from and, when necessary, get us out of, trouble. It would appear this trust could well be misplaced.

Which brings me back on topic.

It is very easy, when running your own business, to defer to business advisors. You admire their wealth, confidence, connections and wise owl glint and when they stand up in front of a lot of people, they talk with conviction.

CAUTION.

“You should do this…” is a statement that costs an ‘expert’ nothing but could cost you everything.

Be very wary of making important business decisions off the back of ‘advice’ from ‘experts’. They do not know your business as well as you. You are the most knowledgeable person on the planet on that topic.

ONLINE BUSSINESS

It is the last full day of Web Mission in San Francisco and after a fantastic Drink Tank party, hosted by Michael and Xochi Birch(the founders of Bebo), I wanted to reflect on what has been a once-in-a-lifetime opportunity.

Firstly, a huge thank you to the hosts, organisers and sponsors. Oli Barrett and James Lawn from Polecat have worked hard to make the trip a fantastic success. Thank you to Susan MacTavish Best, the Birch's, the British Consulate in San Francisco, Oracle, Orrick, UKTI, G2i, the Technology Strategy Board, Google, Microsoft and the Plug and Play Tech Center for hosting and / or sponsoring elements of the trip.

So what have I learned?

Number one: By some freak of nature, clouds don't form over San Francisco. I have no idea if prevailing meteorological conditions can contribute to an entrepreneur's likelihood of success, but if they can, well, that explains Silicon Valley.

Two: The UK is producing some seriously impressive entrepreneurs. These are not businesses that are yet to work out how to make money. Some of the guys on this trip are running businesses that are making millions of pounds in turnover and highly profitable too. Some are running their second, third, fourth and fifth businesses, and many are under 35. They are very smart, highly motivated and extremely well-connected people.

Three: There's a formula for a Silicon Valley start-up. Billion dollar businesses are not treated as an outlier. They are expected, and seemingly cast from a moulding process that has been refined and perfected over decades. Sure, the chances of success are still small but far less time is lost in the setup process and far more time is spent connecting with communities (of entrepreneurs, investors, prospects and like-minded individuals). It's Plug and Play (as the fantastically impressive Plug and Play Tech Center exemplified).

Four: Ask for help. Ask concisely and ask the right people. It's characteristically British to keep our challenges to ourselves. As a culture, we absorb pressure and internalise our worries and stressors. Here, they network like crazy and then use that network with ruthless efficiency. Keep emails short and to the point (without the waffle) and people will help you out.

Five: Network like crazy. It doesn't always have to be in the energy-sapping way that us Brits network (beer in hand, foot in mouth). Everybody knows everybody out here and one discussion can, and often will, lead to very interesting opportunities. In many ways its a numbers game too. Not every meeting will yield a strategic alliance or major contract but some will.

Six: You need to regularly take time out from running your business. Whether it be for a week to the epicentre of your industry, or merely a long weekend's brainstorming, we all need to look at the big picture without the daily intrusions and challenges of business operations.

Seven: I agree with Mark Prisk, MP for Hertford and Stortford (who is in SF with us), when he says, "...as I watch the news of the US car industry bailout, I can't help but feel that, rather than focusing on older failing sectors, we in politics need to help the next generation to start, grow and prosper". Well said Mark. That's what Web Mission is doing and it's a great start.