Futuristic digital man, recovering PR guy, magic beansman, aspiring know-it-all. Chief Strategy Officer at Northern Army. More...

Pissing away resources you forgot you had

One of the core components of any strategic plan is the situation analysis.  It’s the calibration phase of the communications planning process, and forces a methodical documentation of what’s what, both within the company and in the environment it is operating in.  For a startup, the most important consideration is the state of its resources – without resources, the environment doesn’t even enter into the equation.

Of course, the word “resources” doesn’t always mean cold, hard cash.  It takes into consideration the people, the infrastructure, the intellectual property and everything else that it takes to run that business.  Much like a car needs gas, oil and fluids to run properly, a company needs to think of all of these resources.  Running out of one can lead to serious damage.  The problem is, with all of the fixation on sales and the bottom line, many young companies don’t even think of a key resource that is often one of the most important.  That resource is good will.

To an aggressively sales-driven organization, good will probably sounds like more hairy-fairy pseudo business strategy, but in some cases, good will is the sole reason for the success of a company.  Even the most well-funded companies and services can still fail if they run out of good will.

The most heartbreakingly obvious example of this is Twitter.  Here you have a company that has built a technology that, for all intents and purposes, does nothing – it’s merely a system that allows 140-character messages to be passed into a database and then redistributed.  The early popularity of the service caused a small group of passionate users to evangelize the platform, and a small group of passionate developers to create websites, tools and toys that utilized the Twitter API.  For the past month or so, Twitter has gasped under the pressure of its own popularity, causing many users, myself included, to wonder about the future of the service.

Fail Whale

Twitter has reportedly closed close to $15 million in financing, and by all accounts, is strong financial shape.  But that’s not their problem.  Their constant downtime and lack of transparency about it has drained a lot of the good will that made it so popular.  If that wasn’t enough, they were also hit by a small firestorm when Ariel Waldman accused them of not upholding their TOS after receiving a number of hostile, threatening messages on Twitter and getting no resolution from the company, and another when they were accused of blaming their biggest users for the downtime.

Like any business on the web, Twitter faces a lot of competition and the reality that if a significant enough portion of its users migrates to another system, the rest will follow suit.  No amount of VC funding will fix that problem.

In a recent interview with Robert Scoble, one of the users that Twitter was thought to be blaming for its flaky service, founder Ev Williams said “The fact that people are frustrated is a sign that we built something people care about.”

People really do care about Twitter.  It has one of the strongest communities of any business I’ve seen, but throwing away that good will with constant unexplained downtime and unreliable service is as dumb as burning investment money to heat your office. To its credit, Twitter has recently started being more transparent with development issues and downtime, but to most of the community who have come to depend on Twitter as a communications channel, that’s of little consequence.

As of right now, the company has not yet depleated its resources of good will.  Many members of the community regard the downtime with good spirits, referring to the graphic above as the “FAIL WHALE,” or posting spoofs of Twitter’s all-too-familiar “something is technically wrong” images.  The reality is, however, that this good will will only last so long, and then, without warning, Twitter’s loyal and influential fan base will move on to something more reliable – Jaiku, Pownce, Plurk or any other number of ridiculously-named microblogging services that come out in the next couple of weeks.

The lesson here is not really about what Twitter should have done or could do, but their story certainly serves as a cautionary tale.  Small businesses depend on community.  If, as Gary Vaynerchuk says, you’re lucky enough to make one person care about who you are and what you have to say, you’ve been given a gift.  If you’re stupid enough to ignore that gift of goodwill and assume it will always be there, no amount of strategic planning is going to save your business.

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