Hold Fast: Did Twitter Pull Us Through the Recession?
And by Twitter of course, we mean what is known as the realtime web (yes that's now one word). On the heels of the Techcrunch Realtime Crunchup we attended in S.F. last week and approaching the Parisian Le Web next week, a savvy observer might notice that automatically tacking the word realtime on to your conference, blog post, and/or Crunchbase description is an antidote to the stink of media death that threatens our sector. Instead of mourning the loss of old media, the technology industry is running on the fumes of what David Carr called "a fresh, ferocious wave," namely Twitter.
Photo via Life Magazine. Traditional sailor tattoo.
Instead of bemoaning the recent loss of 24,600 jobs at HP (aptly due to a decline in the popularity of printers and ink), we're talking about whether Twitter is the new Walter Cronkite or whether people have confused the death of traditional media distribution with the death of traditional media.
If the chattering classes are their own metric, which increasingly seems to be the case, Twitter and its ecosystem have become the great white hope of an entire industry, from the aspirationally useful marketing people who are now employed as social media consultants to the endless and pointless argument about advertising within tweets. We talk about Twitter so much that the noun/verb "Twitter" was declared the most popular word of 2009.
The glaring mistake that happens with realtime streams is that people confuse communication with product, in this case all the Twitter talk distracted us from a comparatively downward trend in VC investing. Quarter Three results show that venture capital investments are up 14% to 6.1 billion while still evidencing the sting of recession, still down fairly significantly from the $7.2 billion invested in the third quarter of 2008. The recession is about the money and if recent Quarter Three reports can be believed healthcare technology took the number one position in terms of dollars invested, with total funding slipping just slightly to $1.9 billion. While Twitter and its $100M in Series D and $35M in Series C funding were the darling of the investment industry in Q3, the results were nowhere proportional to the conference buzz and parasite cottage industries like Social Media Marketing that have emerged around the platform. Twitter isn't even ramen profitable.
Yet at the Techcrunch Realtime Crunchup earlier this month, "Godfather of Silicon Valley" Ron Conway again emphasized that interest in (most notably by committing to investing in 40-50 start-ups by the end of 2010) realtime is an early sign of the new direction (the new Web 2.0), whether it be geo-streams or real-time search; "The companies we're investing in today are indication of where the market is going. COtweet [1.1M in Series A funding]. Realtime search companies."
Why, if currently dwarfed by healthcare and social networking investment, have realtime streams functioned as a beacon of hope in the recession?
Perhaps this is because realtime is a distribution mechanism for communication instead of a specific product sector. Venture capitalist Andrew Braccia noted at the Crunchup, "[Realtime] is a very popular part of a lot of [start-up] presentations. Existing companies are morphing their businesses to take advantage of realtime information. It has an impact in just about every business that we invest in whether that be in data storage or a lot of the advertising business."
The closest thing our society has got to a subconscious, Craigslist, explains it thus:
Blogger Dave Winer once offered this metaphor for realtime search:
"Think about Twitter as a rope of information -- at the outset you assume you can hold on to the rope. That you can read all the posts, handle all the replies and use Twitter as a communications tool, similar to IM -- then at some point, as the number of people you follow and follow you rises -- your hands begin to burn. You realize you cant hold the rope you need to just let go and observe the rope."
Or you can continue to hold fast, and take a leap of faith that the number of realtime search related job posts on Craigslist will continue to rise.