Dave Young:

Welcome to the Empire Builders podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner Dave Young.

Before we get into today’s episode, a word from our sponsor, which is… Well, it’s us, but we’re highlighting ads we’ve written and produced for our clients, so here’s one of those.

[Out Of This World Plumbing Ad]

Dave Young:

Welcome back to the Empire Builders podcast. Dave Young here along with Stephen Semple. And as we record this, it is the morning.

Stephen Semple:

You’re not excited on this one!

Dave Young:

Dude, come on. Come on. It’s the morning of November 4th.

Stephen Semple:

And what happens tomorrow?

Dave Young:

Tomorrow we have a little election in the United States. The topic that Stephen whispered into my ear just as we started was Twitter. Let’s talk about Twitter.

Stephen Semple:

Twitter.

Dave Young:

And I go to Elon Musk. I’m like, oh God. So please, let’s do talk about Twitter and let’s talk about their origins and not their demise.

Stephen Semple:

See, I thought you would be more excited. Because the real driver behind Twitter is a guy by the name of Evan Williams, and he grew up in Nebraska.

Dave Young:

Did he really?

Stephen Semple:

Yes! You didn’t know about that.

Dave Young:

I thought he was a New York City guy. Because he started it with… It was like an emergency alert thing.

Stephen Semple:

Well, that’s one of the things that kicked it in the high gear. But no, he grew up in a farm in Nebraska.

Dave Young:

Where? What town?

Stephen Semple:

Oh God, of course you’re going to ask me that. I don’t know what town.

Dave Young:

Because I know people everywhere.

Stephen Semple:

I automatically assume that you would know this part.

Dave Young:

I didn’t know that. Every Nebraskan knows someone who knows every other Nebraskan. That’s just like, it’s a third degree of separation.

Stephen Semple:

But I figured in a place like Nebraska, everyone would know where this dude was from because of how big Twitter is.

Dave Young:

No, I don’t. Please do tell.

Stephen Semple:

Okay. So the primary driver was Evan Williams, but also Jack Dorsey and Noah Glass and Stone played very, very big roles in the starting of Twitter. But Evan grew up, as I said on a farm in Nebraska, and he wasn’t into sports, but he always knew he kind of wanted to do a business. And because of that, he read a lot of business books. And in particular, he read some marketing books, and he decided he wanted to learn more as he read a book by pretty famous marketing guy named Gary Halbert. And he said, “You know what? I want to learn more.” So he literally drove to Key West Florida and basically walked into Gary’s office and said, “I want a job working for you.”

Dave Young:

I’m telling you, that’s a bit of a drive from Nebraska.

Stephen Semple:

Yeah, it is. It is. So here’s this farm boy from Nebraska showing up at Gary Halbert’s office. And Gary basically gave him a writing assignment, said, “Fine, here, do this writing assignment. See how you do.” And it was so good, Gary actually thought he had someone write it for him. He’s like, no, no, no.

Dave Young:

This is before AI.

Stephen Semple:

Yeah, exactly. Actually, if it was written by AI, he wouldn’t have accepted it. But anyway, that’s a whole different issue.

So Gary hires him, and he works there for about seven months. Learns a whole bunch of stuff and returns to Nebraska. And he returns Nebraska, it’s the early nineties, and he decides he wants to start a website business. So he’s trying to sell websites to local businesses. Now, at this point, he’s in Lincoln, Nebraska. I don’t know whether that’s where he’s from, but that’s where he moved back to.

Dave Young:

That’s the big smoke. Lincoln and Omaha, you’re headed off to the big city.

Stephen Semple:

Okay, so here he is in the early nineties. Remember what websites were like in the early nineties in terms of how many businesses even had that.

Dave Young:

Oh, yeah.

Stephen Semple:

It’s early nineties. He’s trying to sell websites to local businesses, Nebraska and into the farm towns around Lincoln. And guess what? It was not working so well.

Dave Young:

Really? I’m aghast.

Stephen Semple:

I know. I know you are. I know you are.

So he’s not paying the bills. It’s not really working out, and he keeps hearing about all this stuff going on in the Bay Area in the mid to late nineties. He’s scared to kind of make the plunge, and his girlfriend at the time is moving to California, and he decides, what the heck? He would move out to California with her.

Dave Young:

Here’s the side note about Nebraska.

Stephen Semple:

Okay.

Dave Young:

This is the never-ending story. Anybody bright and talented from Nebraska moves somewhere.

Stephen Semple:

Right. Yeah. Since you are in Austin.

Dave Young:

I live in Austin. The state has more law schools and medical schools and dental schools than would ever be needed. It turns out more of those people than you’d ever need in the state of Nebraska.

Stephen Semple:

So you would just basically export them.

Dave Young:

They go somewhere.

Stephen Semple:

So it’s ’97, finds himself in California. And no degree, some experience with basically failed businesses. And he gets a job at a company called O’Reilly Media, and it’s a marketing company writing copy. Of course, you had the experience with Gary Halbert, right? But he discovers that he’s not so good in the working environment. He does good work, but he’s not a good employee. Just sort of one of those scenarios that we often see with entrepreneurs.

Dave Young:

May be a little neuro spicy.

Stephen Semple:

Yeah, probably. Probably. And while he was at O’Reilly Media, he had started his own website, and he started to post his thoughts and essays onto the website. Now, it wasn’t called blogging at the time. It was just something that he was doing.

Dave Young:

Blogging hadn’t been shortened from the word web logging, which was just basically keeping a journal on a website.

Stephen Semple:

And really even at the time, what it was called was personal homepage. So he had this personal homepage, and he even wrote one of his favorite posts, because he was saying not all of them were good. One of them was he did a post on why Amazon should not expand beyond books.

Dave Young:

Oh, okay. Yeah, good advice. Nailed it.

Stephen Semple:

But at the time, it took a lot of coding to publish something, right? You had to do it in HTML and all this other stuff. So he decided to create some software where it would make it easy to publish to a website. Where you could write something, push a button, and suddenly it’s on the top of the website. And for him, that felt this really new and different, felt like this new thing. This whole idea where you could go from thought, to publishing, to it being out in the world was really exciting to him.

So he left O’Reilly Media, and he had met this woman, Meg Horan, and they started to start a business together. Now, he also got hired as a contractor for doing some things on the side, and they started this company called Piranha Lab. But he also continued to work on web logging while he was doing this, because he thought this whole web logging thing could become a product, but in some ways it was almost too simple. And he created a product called “Blogger”, it was at blogger.com. And in April, 2000, he raised half a million bucks. And if we keep mind April, 2000 in the tech world, that was right before the big tech crowd.

So in six months, they’re out of money, because they’ve been giving away the product for free. So in the fall of 2000, things are really tight. Software companies at the time, what they started to do were all pivoting to commerce solutions, because this is how they figured they could make money, is suddenly pivot these things to business products. And they thought about this, Williams thought about this, but he didn’t really want to build that. He was still excited about this idea that anyone in world, this whole blogging stuff, could share their idea for people.

And so they came really close to going out of business, was not able to make payroll. It’s 2001, and he sits everybody down and he says, “I don’t have any money. If we come up with some money, I can pay you.” And so basically everyone left. But he couldn’t imagine himself stopping working on this idea. So he finds himself by himself working on this.

And in some ways it’s like… I heard some interviews with him, and it was kind of interesting because in some ways, it was a very lonely time. But in other ways he found it very liberating, because he could do just what he wanted to do. Didn’t have to explain to anybody, didn’t have to justify it to anyone. And so he’s working on this blogging product, and it’s growing and things are happening. Then September 11th happens. And September 11th explodes blogging, right?

Dave Young:

Sure.

Stephen Semple:

Even with the .com bust that goes on, because all of a sudden people are like, what’s going on? And they’re discovering this whole idea of sharing their own experiences and all this other stuff. And that space explodes. And by 2002, he’s able to start charging for the service. He starts taking ads, because there’s enough traffic that he can take ads. And then he sold the service where you could have this without ads being posted on your blogs. And he launched Blogger Pro. And the space is growing so quickly that in February of ’03, Google comes along and buys the company.

Dave Young:

Yeah. And I think it’s still a product in Google, isn’t it? Yeah.

Stephen Semple:

[inaudible 00:10:34]

It’s a radio show. It allows anyone to have a radio show. We now have a radio show. But Noah keeps arriving on his doorstep saying, “Hey, can you help me with this? Can you help me with this?” And so he finally decides, you know what? I’ll build a company. I’ll build a software platform that’ll basically collect feeds and make it easy to not only publish a podcast, but make it easy for a podcast to be found, make it possible. And so he builds odo.com is the company he starts, and they actually raise 5 million bucks for creating this. And right after they launch, out comes iTunes.

Dave Young:

Okay. Yikes.

Stephen Semple:

Which basically obsoletes them. All of a sudden you’re like, “Well, that was such a good idea, Apple did it.”

Dave Young:

Yeah, Apple thought that was nice. Sure.

Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.

[Empire Builders Ad]

Dave Young:

Let’s pick up our story where we left off. And trust me, you haven’t missed a thing.

Stephen Semple:

And so they’ve got this money. They’re looking for other ideas. There’s a young programmer there, Jack Dorsey, who is working at ODO. And Jack on the side had wrote this installable pod catcher, he called it. And it was a service that could send a message. But what it was, it would send a message to phones, but you could send it to multiple phones at the same time. Again, you got to remember back in that day, if you were doing a text message, it was one text message at a time.

Dave Young:

Right. There’s no broadcast text.

Stephen Semple:

Right. So Jack had created this idea where you could send it out. And the idea to actually come out of this thing that they did called One Day Hackathons. Because when Apple launched iTunes, all of a sudden they were like, “Well, what are we going to do?” So they just basically spent a day, hey, what are things that people have been working on? What’s an idea? And Jack had come up with it, and they already had the idea that it was going to be called Twitter, that had come along with it. Just for whatever reason that fit with it.

Dave Young:

Did they have the bird and everything?

Stephen Semple:

I don’t know. I just think it was, we’re Twittering here.

Dave Young:

I like that.

Stephen Semple:

It would’ve been really easy… This is one of the parts that I found that was quite interesting. It’s a couple of things Williams learned in this, is it would be really easy to dismiss this idea because it was really small. It was small, but felt like the right thing to him. And it felt a lot more important than the metrics. So even when they started rolling it out, it was not catching on the way everyone thought it would be catching on. Because by 2006, there was still only a few hundred on the Twitter side. And when he got talking, when Williams got talking to the investors, because remember, he had $5 million had been invested in it, they didn’t really like the idea. Because again, they’re looking at the metrics, looking at the numbers, looking at metrics. And so basically what Williams did was bought the company back from the investors.

Dave Young:

Wow, okay.

Stephen Semple:

He basically bought ODO for Twitter back from the investors. He said, “You know what? I believe in this idea so much I’m going to buy it from you.” And because what he found was, from a numbers perspective, he couldn’t defend it. But just in his heart, it felt right.

Dave Young:

Sure, I get that.

Stephen Semple:

So he went after it.

And the other thing is, what he also discovered was the folks were far more interested in some other things that ODO was working on, but it’s not where his heart was. And it was not something that he was using. Because even when they developed the podcast stuff, feel as right for him because he wasn’t a podcaster. Where this whole idea with Twitter went to that original idea of you could create a thought, and you could take it out into the world right away.

So it’s the end of 2006, it’s definitely growing. There’s now 60,000 users on Twitter, but that’s still not a big number. And it’s March, 2007, and this is where they sort of get their breakout moment. It’s at South by Southwest. So they’re at South by Southwest. And he feels like, you know what? That is, our audience. People at South by Southwest are the ones who we believe would really love something like Twitter. And what he had noticed from being at previous South by Southwest, people hang out in the hallway. It’s a lot of hanging out in the hallway, a lot of chatting in the hallway, a lot of people trying to connect with each other and sharing ideas in the moment.

And so he thought, well, why don’t we set up screens in the hallway? It would just show the tweets scrolling by. And it would be tweets from one person to another person is what people would be seeing. And that’s what they did, because it was very engaging. There’s a lot of journalists there. There’s a lot of bloggers there. People started talking about Twitter, and that basically hit a tipping point. It went hockey stick following that.

Now, a lot of businesses, because it went hockey stick, they had some scaling issues and things along that lines. And they now also had investors knocking on the door, because now it was this thing. And then there was all sorts of drama. He and Jack Dorsey had a following out. Jack became the CEO, but didn’t have enough management experience. Jack was pushed out. Jack came back later. All sorts of things happen.

In 2008, Facebook approached them to buy Twitter. And I thought this was really interesting, because Evan Williams recommended not taking the buy out from Facebook. And here was his reasons. I think this is really, really good reasons when thinking about selling your business. Why would you sell? Now maybe you just want to sell it, that’s fine. Done with it. You want to move on, whatever. But basically, here’s the reasons why you sell a business: you want to sell it. You’re in trouble. It’s no-brainer money. In other words, it’s so much money, it would be dumb to say no to. But if it doesn’t fit those things, you shouldn’t sell it.

And he looked at it and said, I want to keep doing this. We’re not in trouble. It’s a lot of money, but it’s not no-brainer money, so we shouldn’t sell.

Dave Young:

Sure.

Stephen Semple:

And I thought, when I read that, I thought, that is really good criteria.

Dave Young:

It really is. There’s a lot of small business owners that sell because there’s a feeding frenzy of private equity money out there that… Let’s not go down that rabbit trail. But yes, it ends up being what feels like no-brainer money.

Stephen Semple:

Yeah. But he’s even okay with it. If it’s no-brainer money, take the no-brainer money. But what I love is: make sure it’s no-brainer money. So in other words, it’s not a few million dollars. It’s like life changing.

Dave Young:

Let’s say Elon Musk comes to town and…

Stephen Semple:

And wants to throw, 44 billion is what Elon threw at the company.

Dave Young:

Turns out that’s no-brainer.

Stephen Semple:

That’s no-brainer money. That’s no-brainer money. Now also, by the time Elon came along, Evan Williams had been pushed out of the company. Because there was all sorts of drama around the business, and then of course, Elon comes and buys the company.

Dave Young:

I’m guessing Evan’s doing okay.

Stephen Semple:

Oh, yes.

Dave Young:

I’m thinking he’s probably just fine.

Stephen Semple:

Well, if you think about it, to the point, it wasn’t until they had had that breakout moment. He was the sole owner of Twitter.

Dave Young:

Yeah, Evan sold it. He’s fine. I’m not worried about it.

Stephen Semple:

He’s fine.

Dave Young:

He’s a Nebraska boy. He’ll be good. I got into Twitter so early that I am @DaveYoung.

Stephen Semple:

Wow. Yeah.

Dave Young:

But I never got into it. It was a service that never tickled my interest the way others do. And I don’t know what it is about it, what it was. And I know other people that are just die-hard Twitter people. And I could never Twitter.

Stephen Semple:

You know what? I’m the same. I’m @StephenSemple. And I did it for a little while, and it just wasn’t my thing.

So there’s a couple of lessons out of this I like, but one of the things I’m going to say, I think Elon Musk changing the name to X was a massive mistake.

Dave Young:

Of course.

Stephen Semple:

And here’s how much of a mistake it is. It’s been quite awhile now, and people still refer to it as formerly known as Twitter.

And here’s what he didn’t understand, and here’s what we understand as marketers. The most powerful words are verbs, remembering things. And Twitter became a verb: tweet. What am I doing? I’m sending out a tweet.

Dave Young:

There’s no corresponding word for X.

Stephen Semple:

Well, here’s even the weirder things. The expression was, “I’ve tweeted it out. I’m tweeting something out.” Well, now it’s, “I’m X-ing something out.” Well, if I’m X-ing something out, it means I’m removing it. And we see it. The marketplace is still struggling with calling it X.

Dave Young:

And even using it. I think if there was a viable thing that everybody could just jump onto, they would’ve.

Stephen Semple:

Yeah.

Dave Young:

Yeah. It was pure vanity.

Stephen Semple:

The part that I found that was interesting about this whole thing is, it was this whole idea of feeling that he had that moment of being able to create an idea, share that idea with the world-

Dave Young:

Throw it out there.

Stephen Semple:

…that lived with him through all of these iterations that he went through that just felt so special to him. That’s what he chased down. And there is something magical about that.

Dave Young:

Absolutely. And it’s, you have an idea and you follow it. Right? You follow this passion for a thing that you have, and just keep pulling on that string and see where it takes you. Yeah.

Stephen Semple:

Yeah. And other people comment on it. And it is this interesting idea that he chased down. And the other part that I found was, he chased it down because it felt right. Even though the metrics didn’t support it, it felt right.

And it’s always a hard thing, because how do you know whether the right feeling ends up becoming something? It can be a difficult thing. So I’m not saying completely ignore metrics, but also don’t ignore the feeling.

And then when he went to South by Southwest, I think far too often when people are doing a trade show or whatnot, they don’t have a strategy for the show. What am I actually going to do? Most people are like, “I got a booth. I show up, and I set up my booth.”

Dave Young:

And hope that enough people come by to pay attention to me.

But as you said, he did this because it is what he was interested in. And the thing that South by Southwest allowed him to do was find other people that thought that was a cool idea. They’re out there. They’re out there. Everybody says there’s no such thing as an original idea. The question is: is your idea powerful enough that other people are going to like it as well and want to make it part of their idea? They’re incorporated into their world.

Stephen Semple:

Yeah, exactly.

Dave Young:

And he found those people at South by.

Stephen Semple:

Right. And again, it wasn’t just show up. It was like, what can I do now to engage these people, and demonstrate it, and meet them where they’re at, and do something unique to pull them into my world?

Dave Young:

And show don’t tell.

Stephen Semple:

Show don’t tell. Exactly right.

Dave Young:

Let’s show what people are saying on Twitter. Not just say, “Oh, lots of people are saying lots of things.” No, here’s what they’re saying. Look at this. Yeah. Brilliant. What a fun story.

Stephen Semple:

I thought it was. Yeah. So you see it worked out okay in the end.

Dave Young:

My angst is… I’m not saying all of my political angst is gone, but I’m glad that we didn’t spend 20 minutes talking about us. So, thank you.

Stephen Semple:

You’re welcome. My gift to you.

Dave Young:

See you on the other side of the election, Stephen.

Stephen Semple:

All right, thanks.

Dave Young:

Bye.

Thanks for listening to the podcast. Please share us, subscribe on your favorite podcast app, and leave us a big fat juicy five star rating and review at Apple Podcasts. And if you’d like to schedule your own 90-minute empire building session, you can do it at empirebuildingprogram.com.