Friday, October 16, 2009

Blogger, Twitter and the rise of Evan Williams

Last month Twitter co-founder Evan Williams took to the company blog to announce the microblogging platform had truly arrived as a major media presence. Williams told the world on 25 September the company had “closed a significant round of funding”. Williams went on to publicly thank the investment firms that were pouring an estimated $50 million into the company: Insight Venture Partners, T. Rowe Price, Institutional Venture Partners, Spark Capital, Benchmark Capital, and Morgan Stanley (who ignored the July advice of a 15-year-old intern who said teens don’t use Twitter). Williams had reason to be happy with the cash influx – it meant investors now value the company at a billion dollars. (photo of Evan Williams by Tyler Howarth)

While Williams will have to share the rewards with fellow founders Jack Dorsey and Biz Stone, it is still likely to leave him an extraordinarily wealthy man. However, it is unlikely however to mean retirement for the gifted 36-year-old. Twitter is the second great idea of one of social media’s pioneers – in the early Noughties he did as much for blogging as he is now doing for micro-blogging.

Williams’ progress is charted diligently in Scott Rosenberg’s evolutionary tale about blogging “Say Everything”. According to Rosenberg, Williams has been involved in entrepreneurial start-up companies all his adult life. He founded and folded two technology companies in his native mid-west that attempted to market CD-ROM guides.

Williams moved to California in 1997 to work for technology book publisher O’Reilly which he called “his first real job”. He left after six months and moved to San Francisco where he met fellow twenty-something geek Meg Hourihan. The pair shared a passion for web development and Williams’ coding skills were matched by Hourihan’s pragmatic head for business. They went into business in late 1998 starting a company called Pyra Labs which started out from Hourihan’s living room.

Pyra Lab’s cluetrain generation aim was to produce ambitious software for group production. They copied the philosophy of Hotmail and Yahoo who realised software tools work best within web browsers. In August 1999, Pyra unveiled a product called Blogger which was a free tool to automatically update a website. The tool was easy to use and would eventually transform blogging into an act of mass democracy.

But Williams and Hourihan had no idea that would happen back in August 1999. In their vision Blogger would be used solely by geeks who had previously coded their websites by hand. When Williams developed the prototype, he had an epiphany. As he later told Rosenberg, “the site changed from an occasional creative outlet that I would do when I had time, to much more of a linked outlet for my brain.” What Blogger had done was to clear obstacles from the path between brain and publication and it was not hard to see others might like this feeling.

Anyone was allowed to come to, sign up for free and use the product to host a blog. Initially it could only be used with person’s own website and domain name. It quickly became popular and by March 2000 the Pyra team was the toast of Austin’s SXSW tech conference. Rosenberg says William’s “off-centre charm” made him a poster-boy for the growing band of bloggers.

Blogger suffered the inevitable growing pains as user numbers lifted through Y2K. Williams and Hourihan attracted half a million dollars of seed capital to hire more programmers and stabilise the business just as the dotcom boom crashed. The company had no revenue but had plans to sell advertising and pro-pay plans with extra features. In September 2000, the company launched Blogspot, its own version of a web-hosted service which married perfectly with the products “one-box-and-one-button” interface. It would prove perfect for Internet novices.

But cash dried up after the dot-com crash. Williams and Hourihan fought increasingly often as their plight became more pronounced. When they got down to their last $60,000 they began forsaking pay and paying bills by credit card. Meanwhile Blogger’s growth was phenomenal. A user list of 2,300 at the start of 2000 had exploded into 100,000 12 months later. Blogger crashed many times as the creaking HP desktop computer used to host the data seized up. On 31 January 2001, Hourihan had enough of failures to attract more capital and quit the company.

Williams posted a message on his personal blog that day that said “and then there was one”. While Williams apologised to his staff for laying them off, he refused to fold Blogger. Fans offered to help and many donated time, money and services. Williams eked by on a meagre budget and the product kept attracting new users. Mid 2001 was his darkest hour. When 9/11 happened, the US (and the rest of the world) looked for forums to pour out their complex emotions. Blogger was a perfect fit and people flocked to the service to vent anger, as well as grieve, offer advice and share their fears.

As a result Blogger had 700,000 users by 2002 and its Pro Service was finally up and running. Williams was now looking at the next problem: how to scale up to a hundred million users. Former employer (and now investor) Tim O’Reilly introduced Williams to Google which had already turned itself into the world’s indispensible Internet search tool. Williams brainstormed ways they might work together but was unprepared for Google’s suggestion they buy the company outright.

At the time Google had no reputation as a buyer of companies but were cashed up and beginning to look at bright ideas across the web. It was obvious Blogger was a very bright idea indeed. The independent-minded Williams wasn’t immediately persuaded. Cash flow was good and he did not fancy becoming a company apparatchik again. But the Google share deal would prove too good to refuse. Following the 2004 Initial Public Offering Williams would have become a multi-millionaire. Despite the megabucks, what really sold Williams was Google could take Blogger to the next level. He sold up in February 2003.

He was taken on as Blogger’s “steward” and began the focus on turning Blogger mainstream. While newer more advanced technologies such as Movable Type and Wordpress attracted the geeks away, Blogger became the tool for web newcomers and Google integrated it with Picasa to allow bloggers upload photos with their posts. It grew from a million users at the time of takeover to one of the busiest websites in the world today with an Alexa ranking of seven.

Williams wasn’t prepared to hang around to watch Google take over the world. After the IPO, he traded in his stock and immediately began work on a new company using his handsome profit. His new tool would go back to basics and allow people to quickly share their blog updates but would be limited to 140 characters. Twitter was born and its early growth mirrored Blogger. This time round the future-proofed Williams could more easily ride out the rough patches. In 2007 he told a conference that starting with tight constraints can help new web businesses win users and grow fast. Rosenberg said Williams had seen that play out with Blogger at a scale few businesspeople ever get to experience. And now he has done it again with Twitter. Now that Morgan Stanley and co have effectively bought Twitter’s IPO, it surely won’t be too long before Williams gets itchy entrepreneurial feet again.


Stilgherrian said...

Both Blogger and Twitter were initially built on a technical infrastructure which was clearly under-powered for the number of users they soon attracted -- in Blogger's case that "creaking HP desktop computer", and in Twitter's a web development and database framework that simply couldn't scale. And in both cases the users were willing to forgive the outages because the service was something they really liked.

There's a message in there somewhere about the idea being more important than the engineering. Or maybe he's just lucky.

Derek Barry said...

I guess scalability is a good problem to have, it means you must be doing something right and your audience is ahead of your expectations.

Therefore it's worth patching up the HP desktop each time it is needed. Disk space is cheap, human creativity less so.