Twitter App Investors Still Writing Checks: StockTwits Raises a Round

Peter Kafka — Mon, 18 May 2009 10:00:51 +0000

Nope, Twitter still hasn’t trotted out a business model yet–a couple of sponsorships from the likes of an AT&T (T) don’t cut it. And that may or may not be a problem for potential acquirers like Google (GOOG) or Microsoft (MSFT). But it’s a nonissue for a growing number of start-ups hoping to succeed simply by positioning themselves in Twitter’s general vicinity.

Today’s example: StockTwits, a day trader-meets-Twitter site that just raised $800,000 from venture capital firm True Ventures. It’s not a ton of money, but StockTwits doesn’t need a ton of money. The site, which launched last fall with an $800,000 angel round, employs all of four people.

And it’s yet another bet that investor Howard Lindzon has made in Twitter: He’s also put money into bit.ly, a Twitter-centric url-shortner, and Tweetdeck, a useful Twitter client, alongside incubator Betaworks, which in turn invested in the StockTwits angel round. Cozy! (Cozier: Lindzon was an early investor in Silicon Alley Insider, my former employer).

Like all of those companies and just about every other company that’s trying to make money from Twitter, StockTwits doesn’t have any kind of formal relationship with Twitter. It doesn’t need one: If you want to take advantage of Twitter’s data and users, you can just plug right in for free via its open API.

As a wise man once said: “All of [these companies] are part of the burgeoning ecosystem that revolves around Twitter, which powers all of their companies by letting them plug into its data stream. In exchange, all of these companies make Twitter more successful, by bolting on frills and features to its bare-bones service.”

Name aside, StockTwits may be less dependent on Twitter than any of the other Twittery start-ups. StockTwits users employ Twitter to pass along investment ideas, but beyond that, it’s a fairly straightforward stock message board, the kind we’ve seen since the first Web boom.

Lindzon and co-founder Soren Macbeth plan to make money via ads and by publishing newsletters/blogs on behalf of some StockTwits users, (two of whom are already selling their investment advice for $60 a month). Basically, Twitter is a lead-generator for the site.

Come to think of it, that could be a business for the Twitter team. Right?

Here’s a video interview I shot with Lindzon last week in which he declined to hand out any stock tips of his own. Presumably he’ll rectify that today.

[ See post to watch video ]

Another Twitter App Funded: TweetDeck Raises an Angel Round. Next Up: A Business Plan

Peter Kafka — Fri, 16 Jan 2009 12:54:58 +0000

Yes, you can still get someone to invest in a Web start-up with zero revenue. It helps if you can insert the word “Twitter” into your pitch, though.

TweetDeck, a one-man company that makes a very helpful piece of free software that organizes your Twitter streams, is raising an angel round led by Betaworks, the investment company with a hankering for all things Twitter. The round, which hasn’t closed yet, will eventually end up somewhere south of $500,000, I’m told.

When it does, the financing will make 34-year-old programmer Iain Dodsworth a paper millionaire. Nice work for a Brit who built TweetDeck just last June because he was following 30 people on Twitter and wanted a better way to organize their Tweets.

Dodsworth says TweetDeck has been downloaded 250,000 times since then and that users are sending out 120,000 messages a day using the software. That places it above other free Twitter clients like Twitterific and twhirl, both of which are cranking out 80,000 to 85,000 messages a day, according to tracking service TweetRush.

All of them are part of the burgeoning ecosystem that revolves around Twitter, which powers all of their companies by letting them plug into its data stream. In exchange, all of these companies make Twitter more successful, by bolting on frills and features to its bare-bones service.

And no money changes hands at any point: Twitter doesn’t charge for use of its data, and its partners do all their development work for free. That could change at some point. As Twitter casts about for a business model to support its service–it is, famously, just about revenue-free at this point–an obvious solution would be to start charging a fee to the likes of TweetDeck.

No problem, says Dodsworth, who says he’d be happy to pay Twitter, particularly if it gave him even more access in exchange. Oh. And what about his business model? It’s coming, Dodsworth says–he’d like to start selling a pro version of his software, targeting power users and corporations.

That strikes me as a fairly small market, but then again TweetDeck is a very small operation. Dodsworth says he doesn’t plan on hiring any additional help in the near future, even as he preps new features like a version for Apple’s (AAPL) iPhone.

I’ll let him explain himself, via a short video interview I taped with him yesterday–just as soon as the Internet cooperates and lets me post the clip. In the meantime, you can also track Dodsworth on Twitter here or here.

[ See post to watch video ]

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Twitter App Investors Still Writing Checks: StockTwits Raises a Round

Another Twitter App Funded: TweetDeck Raises an Angel Round. Next Up: A Business Plan