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Back in April 2019, a select and enclosed group of one hundred tech enthusiasts received
an invitation to the private BETA of Byte.
And why would anyone care about Byte? Mainly because its creator is Dom Hofman, one of
the founders of Vine. Yes, Vine, the beloved and very much dead social app for creating
six-second long videos, some of which reached billions of looped views.
With Byte’s Beta launch, some die-hard Vine nostalgics wanted to believe it was coming
back from the dead and had high hopes for it. But the truth is, six months after that
no one knows anything about it and even their website seems abandoned.
No need to say that the bar is set a lot higher now, for a new, unknown player like Byte to
compete with monsters like Instagram with its 1B monthly active users and plus 500M
daily stories. Not to mention big newcomers like Tiktok, who reached 188M downloads from
the AppStore in 2019 Q1. It would require big money and it doesn’t seem like they’re
making it.
So, the diagnosis as of today is that Byte is dead even before having launched and it
is more like Vine’s ghost instead of its rebirth. Looking at their Youtube channel
pretty much summarizes it.
In this episode of Startup Forensics, we’re going to throwback to Vine and dig into some
key aspects of its rise and fall, including Twitter’s acquisition of the company, along
with some product, and competition analysis.
This is Startup Forensics: Vine.
Just in case you don't know, what Vine was it was a video sharing app for six-second looped
videos, that looked like the next big thing back in 2013. Its particular format allowed
for a very unique way of serving video content and chances are you have seen at least a few
memes, gifs or funny videos that came from Vine.
Very soon, it was evident that this video mechanics were driving creators in a particular
direction, more about having fun and being creative within the constraints, and not so
much about journal entries. It became something wilder than it was originally thought of,
according to Hofman.
Still being just a team of three founders with a product in Beta, Vine caught the attention
of Jack Dorsey, Twitter’s co-founder, and CEO. There may have been some pressure in
the air since just a few months earlier, Facebook had acquired that goldmine called Instagram.
So, in October 2012, Twitter acquired Vine for reportedly $30M, before the app had officially
launched. On paper, the move made sense for Twitter, mainly because they didn’t have
any video feature by that time but also there could’ve been a special bond between the
140 characters and the 6-second limitations.
Vine was officially launched in January 2013 on the Appstore and later on Android. Only
six months after, it already counted 13M regular users.
Very suddenly, some viners started stacking followers and views by the millions, creating
a new breed of social media celebrities. That success was merely due to the charm of the
content being produced and there were no successful efforts from Vine to monetize the app. Despite
this, the community and the love for Vine’s concept were growing rapidly, some went really
far into the production and the creation of their six-seconds of fame.
But there was a leadership problem in Vine’s management at the time, reported by various
former employees to different sources. Apparently, there was a reluctance to truly join Twitter
creatively, so the apps never mixed completely and it was never clear how should they mix.
For instance, the Vine team was the only cell working in a small office in New York, while
the rest of Twitter was operating mainly in their San Francisco offices.
Still, Vine kept growing and reached its peak popularity in 2014. Some viners managed to
close deals with brands interested in reaching their millions of followers. But Vine struggled
to monetize the app and failed to provide a solid marketing infrastructure for its creators.
Unlike Instagram, that was thriving and gave a low blow with their video feature release,
in mid-2013.
They introduced 15 seconds long videos and smartly leveraged the numbers of those 16
billion photos that had already been shared in their platform. Some consider
Instagram’s incursion in video to be the true beginning of Vine’s downfall, along
with their lack of effective reaction.
It wasn’t too long before Vine celebrities like Lele Pons or Zack King started taking
their content and followers to Instagram or Youtube. And there was also Snapchat, who
raised a Series C round that same year for $50M and was catering a very similar product
and to the same audience as Vine, at a faster pace.
Former Vine employees have acknowledged they were outrun by the competition in evolving
the product. The six-second feature seemed to be an important limitation to expand the
platform’s reach for other markets and use cases but they stuck to it.
Here is where product management and competition, turned out critical. Let’s talk about Twitter’s
product strategy during that time, in terms of video. Many argue that they never had a
clear direction for the video feature and that it was all over the place. The following
series of events talk about it:
As you can see, just a few months after having acquired and launched Vine, instead of developing
that product branch, Twitter released a native video feature, that allowed to record or upload
30-second videos in the app. This showcased a lack of confidence to creatively bet on
Vine and its format, and a will to stick to more traditional means.
In 2015, they also acquired Niche, a talent agency to connect advertisers with popular
content creators and celebrities. This was an effort to help manage relations between
viners and brands, to provide a more solid revenue structure. Niche was a talent agency,
though they wanted to believe they were a tech company. Remember that WeWork's story.
So their valuation was fatter.
time proved it wasn’t effective enough and it never really took off.
But still, that same year Twitter acquired Periscope, for $86M. Periscope is a live streaming
social app that was booming at the time but never really became the next big thing Twitter
had been looking for. They also pursued some partnership deals for live-streamed events
like NFL games and Bloomberg shows, making it all the more confusing as to where Vine
fit n their video strategies.
These unconnected moves undermined the Vine team’s performance and product development.
Vine executives and employees had been churning out at a high rate since 2013. Dom Hofman
himself left the company in 2014, shortly followed by Colin Kroll, another founder.
Many more left, others came, and the company even remained headless for some time. All
this while the competition was doing their thing and leaving Vine behind.
Only in early 2016, already a few months before passing away, Vine evolved from the six-second
restriction and allowed videos up to 140 seconds long. Wink, wink. But it was too late.
So, finally, in October 2016 Twitter released a very short notice on Medium, announcing
the shut down of Vine. Of course, they didn’t mention all the details and events we have
outlined here but didn’t even provide a reason for the demise. All the millions of
vines produced would supposedly remain on their site as an archive, but that archive
seems to have been lost now.
Most of the OG Vine celebrities had already moved to other platforms like Instagram or
Youtube and had been thriving since. Lele Pons has 37M followers on Instagram and Logan
Paul has almost 17M, as of today. But still, a lot of other viners who had earned a place
there were left helpless and heartbroken.
The love for Vine can still be seen on Youtube. Just go search for things like “funny vines”,
to find quite a lot of compilation videos with several millions of views.
This can be taken as proof that Vine had a rightful place among the big players in the
social media market, but apparently, poor management took a lot of responsibility in
the disaster. Maybe Vine wasn’t meant to be mixed with Twitter or maybe the acquisition
happened just too early for both parts.
Shortly after Twitter’s announcement, Rus Yusupov, one of Vine founders who left the
company in 2015, posted a very straight forward statement: “Don’t sell your company”.
He posted this on Twitter, of course.
But truth be told, Twitter's financials have never been easy and the company has been
known for struggling to survive over time… If we go back to earlier years like 2007 and
2008, we’ll see they even turned down several acquisition offers, including a couple from
Mark Zuckerberg himself. A few years later, then, they considered selling the platform
in different occasions due to financial difficulties and weren't lucky to find a buyer.
Still, they have managed
to keep going and today they even have the blind loyalty of a very… let’s say
influential character…
In conclusion, we can’t really say that Twitter’s acquisition of Vine was its cause
of death, but selling the company was not great. But we can say that having a solid and
happy team with a clear product strategy, based on your strengths and weaknesses, along
with keeping competitors close in the radar; are critical business aspects on which a company
depends, regardless of how basic they sound. You should probably care about these things
before selling your company.