Why MLM Will Kill Twitter (Hint: because They Have a Business Model)

by on 10 December, 2008 - 21:27

by: Karl Long

This post is the culmination of a long experiment with twitter and I have bad news for twitter, MLMs (multi level marketers) will kill it and so will anyone else with a business model that can extract value from exponentially growing network… so any blogger.

So I’ve built up quite a following on twitter, mainly due to my popular T-Shirt blog Tcritic.com and as of two days ago I had 1,800 followers on twitter. Now that’s a pretty respectable number but of course pales into comparison with people like Scoble who has 45,000 followers, and Garyvee with 25,000 followers, or Kevin Rose, founder of Digg with 77,000 followers. And forget about it when Twitter gets mainstream which it will as soon as kids realize Brittney is on there with 10,000 followers and sports fans realize Shaq is there with 18,000 followers . Anyway, the point is i’ve got a pretty small network compared to these guys.

So a couple of days ago I saw a tweet about a competition to win a gift certificate for KMART, all you needed to do to enter the contest is RT (retweet or rebroadcast) that message to your network of followers. Simple idea, so I tried it using $25 Threadless gift certificates (I get $3 to spend at threadless every time I send them business and I don’t need more T-shirts) and posted this (note that I included my name in the message so people would rebroadcast that:

@karllong is giving away 10 x $25 gift certificates for http://threadless.com - just RT this to enter, will tweet the winners

I then had another window open at search.twitter.com searching on my name and watched as people rebroadcast the message, again and again and again. In the end the message was rebroadcast by 500+ people to their networks. The first person to RT this message was CoryObrien who has 1,200 followers so I almost doubled my reach with the first step. From an impressions or click through standpoint I have no idea the actual conversion rate, I had included a link to threadless.com in my original tweet and chose to leave the url long so people could see what the link was.

Luckily I do usually shorten my url’s that I post to twitter using cli.gs because I get ongoing metrics on my links I share and my click through rate is well over 2% for just general FYI links I put out there.

Another interesting aspect of this is that through what was essentially spamming my network with an “offer” I added about 250 new followers, so I increased my network and influence by well over 10%. Those are some pretty good numbers, so I got 250 new followers for $250, and they are also people who like TSHIRTS so will be open to more offers in the future (don’t be scared i’ve grown my network with integrity and substance so i’m not planning on strip-mining my network, I want to create more value

So on to the MLM, well apparently my recent 10% growth in network attracted a deluge of new followers who were not human beings but actually spam bots all promoting a video of Mike Dillard who was going to sell me some “marketing secrets”. And guess what, that spammer is also on twitter and he’s got twice as many followers as me, even his spam bots are getting connected and following each other and gaining perceived influence. Seriously, he doesn’t have any marketing secrets except how to make money from an exponentially growing network. Twitter defeats regular spam accounts with ease, but it’s going to have a much harder time defeating ‘profitable networks’ of people that move in. I imagine with the economy the way it is MLM is looking like a viable option for a lot of Americans.

The problem with spam is that it only needs an incredibly low conversion rate, and some UC Berkley students found out when they hacked the storm botnet it does have a conversion rate.

So what should the Twitter business model be? well IMHO it should be a mechanism to help people value their network, give them a personal rate card essentially so companies can see how valuable and connected some of these people are and let them work with companies they love and believe in. Surely Patagonia should be sponsoring Richard Branson on his latest voyage where he’s live twittering from his boat (who BTW rewarded his 2,000th follower to spend the day with him). Anyway, you get the picture, you could add pro-accounts, real metrics on conversion rates, reach and influence, and who you influence.

BTW not for nothing, but John Battelle with 4,500 followers (author of the book Search) the other day tweeted this:

I can say this: Google is very, very focused on indexing Twitter. VERY FOCUSED. http://snurl.com/774g5 [www_google_com] 5:40 PM Dec 4th from web johnbattelle

and I can concur if you do a search for karllong is giving away 10 x $25 gift certificates for http://threadless.com - just RT this to enter, will tweet the winners

That was only two days ago!

Original Post: http://experiencecurve.com/archives/why-mlm-will-kill-twitter-hint-because-they-have-a-business-model