Todd Dagres on Twitter's (Eventual) Business Model

I was talking yesterday with Spark Capital founder Todd Dagres... and I asked him if the rumors were true that he has begun Twittering. (Spark is the lone Boston investor in San Francisco-based Twitter, having recently participated in the company's $35 million fourth round.)

It's true, but his Twitter identity is tough to find. (It's here.)

A pithy sample post: "Lots of coats and ties in the room. Ties = bear market."

I asked Dagres why he'd started using Twitter (though others at his firm blog, he has never been a big blogger), and when we'd hear about Twitter's business model.

"I tried it because I wanted to see what all the fuss was about," Dagres said. "This thing is growing about as fast as I’ve ever seen anything grow before. Now, I’m addicted to the stupid thing. I follow Shaq and a few other people who’ve got interesting insights." That would be Spark colleagues Bijan Sabet and Santo Politi, and Jonathan Seelig from GlobeSpan Capital. (While at Battery Ventures, Dagres was an investor in Akamai Technologies, which Seelig helped start.)

Dagres says that Spark and Union Square Ventures are the two biggest shareholders in Twitter.

"We think it’s kind of funny to listen to people [in the press] talk about the lack of a business model," he said. "We know how we’re going to do it, and we’re very confident about how we’re going to do it, and it’s not necessarily in our interest to tell people how we’re going to do it. There is a biz model that has yet to be implemented. Of course, I can't guarantee it’s going to work."

Dagres continued, "All of a sudden there will be some changes that won’t undermine the experience or the virality -- but it will be pretty obvious how we’re going to moentize it."

Twitter hasn't generated any revenue thus far. Dagres said that changing that situation was definitely a project for 2009. But "we’re in no rush right now," he said.

Isn't it nice to fantasize, amidst the current economic gloom, that you work for a company that is under no pressure to start bringing in revenue any time soon?

"Calgon, take me away....."

Catching up: Sunday's column, Tuesday's panel, Tonight's talk

- Last Sunday, I wrote about Cinital, a start-up that moved from Cambridge to Hollywood to try to improve the way TV shows and movies use "green screen" technology. From that piece:

Ordinarily, it's hard to tell what live actors will look like once these digital backgrounds are laid in; that work, called "compositing," is usually done afterward by visual effects specialists. But the concept behind Mack's company is to mix the actors and the backgrounds in real time, so the director can see what the final shot will look like by glancing at a high-definition monitor - and reduce or eliminate the costs of all that laborious, after-the-fact compositing.

Mack's Cinital system could be used on as many as 20 TV productions and a handful of feature films this year, says Sam Nicholson, chief executive of Stargate Digital, a South Pasadena, Calif., visual-effects firm that bought the first system. One of the first projects to which Cinital contributed is NBC's new made-for-TV movie "Knight Rider," which airs next month.

Here's the video:



- Tuesday we had a discussion about venture capital in 2007 and 2008 at the Vilna Shul on Beacon Hill, organized by Doug Levin (who writes about it on his blog.) While no one was optimistic about where the economy is going this year, all three felt confident that going long -- investing in start-ups over five or six or seven years -- is still a good strategy. Larry Bohn said that his firm has placed some big bets in video, and doesn't see General Catalyst doing much more in that space, but he did predict the end of Microsoft's domination of the software world (Bill Gates retires, and everything goes to hell.) Jonathan Seelig from Globespan seemed very interested in how all of the "data utility" services we get at home, like voice, Internet, and TV, will be bundled and managed and marketed going forward. I think one of our audience members recorded the event, and I'll link to it once it's up. (Update: Chris Herot has some notes.)

- Tonight I'm giving a talk about the past, present, and future of the innovation economy here in New England -- and some of the challenges we should all be working on. While it's sponsored by the HBS Association of Boston, you don't have to be an HBS alum to go. (Just register as "Other Alum Guest.")