Twitter’s Vine gamble fails to bear any fruit
WHEN Twitter bought Vine in 2012, it was a threeman company planning an app of six-second videos that had yet to even launch. Still, Jack Dorsey, Twitter’s co-founder who had pushed for the deal, thought he had found the next big thing in social media – an Instagram with video.
Under Twitter’s control, Vine became a place where social media celebrities were minted. Lele Pons, a teenager in Miami, became famous for teaching others how to survive high school’s social gauntlet. Maple, a musically inclined golden retriever mix, reminded the world that dogs are always funnier than humans.
Early use skyrocketed, and it looked like Dorsey’s $30 million bet on the tiny start-up was going to pay off.
It didn’t. Twitter last week announced it was shutting down Vine and laying off its roughly 40 employees in cost-cutting efforts that have included eliminating about 9 percent of Twitter’s total workforce and other belt-tightening measures.
The rapid ascent – and even steeper decline – of Vine is a reminder of a Silicon Valley axiom: Being first to a trend rarely means you will win. And when a little company with a good idea gets acquired, more often than not, what made the little guys worth buying gets lost in the shuffle.
In 2012, video on smartphones was a fairly new idea, and a scary one for people worried about burning through the data limits on their cellphone plans. Vine avoided the problem by setting a six-second limit – long enough to create little narratives more interesting than a single photo but short enough to not devour data.
Dorsey, who is now Twitter’s chief executive, spotted an opportunity in Vine after he was introduced to it by an acquaintance in the venture capital community. Eight months earlier, archrival Facebook had outmanoeuvred Twitter by acquiring the up-andcoming photo-sharing app Instagram. Vine could offer a way to leap past Instagram’s static photos.
Twitter launched Vine in January 2013. Six months later, Vine had 13 million regular users. Three months after that, its total users had tripled. Byrne Hobart, an analyst at 7Park Data, estimated that at the height of Vine’s popularity, roughly 3.64 percent of Android smartphone owners in the US used Vine at least once a month. That may not sound like much, but for a company that had barely existed a year earlier, it was enormous.
The Vine stars, people who took to the app’s six-second looping constraints and used them in unique ways, became internet staples.
But in June 2013, Instagram introduced video to its app, allowing users to record up to 15 seconds. It was an instant threat – Instagram’s network was 10 times the size of Vine’s.
A moneymaking business
Nine former employees and executives, who spoke on the condition of anonymity because they were not allowed to publicly discuss the company, said the impact of Instagram video was felt right away.
Users who already posted photos on Instagram found it easier to stay in that app to post videos, too, instead of using Vine. And Instagram users already had their social connections with other users. If they went to Vine, they’d have to start all over again.
The leadership at Vine tried to rally the troops, according to the former employees. Driven by the prospect of fighting a copycat competitor, Vine’s employees created more tools like importing video and better editing features. More features, the idea went, could mean the creation of more popular Vines, which could in turn bring in more users.
But as that was going on, the executives who ran Vine headed for the door. Dom Hofmann, a Vine co-founder, stepped down in early 2014 without explanation.
Three former Vine employees said his departure was a tough blow. Hofmann had provided the initial vision for the company. The employees said he was less worried about corporate process and more worried about their product.
Other leaders came and left. Colin Kroll, a co-founder and former chief technical officer, was temporarily in charge before Jason Toff, a former Google employee, took over as general manager. Toff left roughly a year later to go back to Google to work on virtual reality projects.
And, as often happens at start-ups, Vine employees balked when they were asked to move to Twitter’s office in New York. Yet many did it anyway.
Leadership turnover, not surprisingly, slowed product development, four employees said, and Vine quickly fell behind the fresher features of its competitors, like some of Instagram’s GIF-like animated photos and trademark filters.
Vine stars also left for more lucrative opportunities at Instagram, which began paying social media celebrities to post to its platform, and for other competitors like Snapchat. Vine and Twitter, which never paid users and did not have Facebook’s deep reservoir of cash, could not compete.
Dick Costolo, Twitter’s former chief executive, took one last shot at trying to turn Vine around. Twitter bought Niche, a social media talent agency, in early 2015, which the company could use to broker deals between social celebrities and marketers who wanted to tap into their large online followings to promote products.
While Niche worked across all platforms like Instagram and YouTube, it was also a chance to make Vine into a moneymaking business for the first time.
Unfortunately for Vine, the attrition in talent meant that there were fewer Vine stars who needed to cut deals, and most of Niche’s talent brokering went to other platforms, like Instagram. While Niche still operates inside of Twitter, it could do little to help Vine.
In the end, Vine proved too expensive to keep running. The app was costing about $10 million a month for infrastructure and employees, according to two former employees. When Twitter began to take stock of its business and decide which assets to trim, Vine was at the top of the list.
Twitter, which has attempted to find a buyer for itself in recent months, will cease support for Vine in the coming months. Previously uploaded Vine content will still be available online.