24 ms·
Perhaps Twitter is becoming the golden example of how not to run a business?
by TheChaplain 4y ago
Perhaps Twitter is becoming the golden example of how not to run a business?
- thedailymail 4y agoIt really does seem like a historic moment in business history. I'm strugling to think of a precedent, other than cases of outright fraud, where a prominent firm (= its management) experienced so much negative publicity and self-owning.
- concordDance 4y agoMore than half of that negative publicity is due to the people who make publicity (journalists) having their hang out taken over by a billionaire they hate. No comment on the other half.
- e40 4y agoLiterally everything I have heard about twitter came from twitter or here and it was all negative.
- freeone3000 4y agoYes, Twitter is defined by its users hating it. (This does prove some issues with monetization)
- d23 4y agoHere it is, that tired old argument that’s also used to defend Trump: it’s the biased media. And just like Trump, I can look at Musk’s tweets too and see how obnoxious, narcissistic, petty, and disingenuous they are for myself. In fact, it’s hard to avoid now that he appears to have goosed the algorithm to shove his tweets down everyone’s throat.
- concordDance 4y agoIt's possible for someone to suck AND the media to be biased against them. Just reading Trump and Musk's tweets will tell you plenty with zero bias. And indeed, this is how you can tell that Trump is legitimately a fool and Musk is simultaneously whimsical and stubborn. This does not mean there isn't also an extra bit of anti-Musk/Trump stuff piled on top (in Musk's case the stuff about him inheriting an Emerald mine and lying about his child dying in his arms and in Trump's case the stuff about him being a big anti-LGBT guy).
- d23 4y agoYou said it's "more than half" of the negativity, not "an extra bit." > This does not mean there isn't also an extra bit of anti-Musk/Trump stuff piled on top (in Musk's case the stuff about him inheriting an Emerald mine and lying about his child dying in his arms I guess you're implying the emerald mine stuff is false? Or are you saying it's not a big deal? And re: the child dying in his arms, the media is quoting his wife, who said he's lying. Are they to just ignore a story like that?
- concordDance 4y ago"Half" vs "a bit" is far too big an argument for a hackernews comment section On the rest: He did not inherit an Emerald mine and no reliable source has alleged he did, nor that his father even owned any part in the mine after the 90s, nor are there any reliable sources stating that Musk's father monetarily helped him in business other than a $28k loan he paid back. Heck, they even failed at doing a quick Google to figure out how much a pocket full of uncut emeralds actually goes for (a few hundred dollaras). And yet he's often portrayed as a trust fund kid who was given millions and never worked a day in his life. On the child dying, neither his wife nor he lied: https://twitter.com/justinemusk/status/1595539044217552896 https://twitter.com/justinemusk/status/1595539044217552896 The baby death rattled in her arms but he felt the last heartbeat. When journalists dislike you they will knowingly propagate misleading distortions and myths and will never correct inaccuracies that went against you or promote facts that are in your favour.
- deleted 4y ago
- bakuninsbart 4y agoWhile this is true, it doesn't really seem to damage Twitter as a platform for now. - And it is not as if Musk turned a great profitable business into trash, Twitter never had a sustainable business model.
- zarzavat 4y agoTo be fair, corporate acquisitions do often fall into disrepair and failure. It’s just that usually the company making the acquisition… still has their existing business. When it’s an individual making a botched acquisition, you get to watch the company disintegrate instead.
- ethbr0 4y agoSears.
- derf_ 4y agoWith one memo, Stephen Elop [1] drove Nokia's market cap from its peak of over $57b in March of 2010 to a trough of less than $7b in July of 2012 [2]. [1] https://communities-dominate.blogs.com/brands/2011/08/coining-term-elop-effect-when-you-combine-osborne-effect-and-ratner-effect.html https://communities-dominate.blogs.com/brands/2011/08/coinin... [2] https://www.macrotrends.net/stocks/charts/NOK/nokia/market-cap https://www.macrotrends.net/stocks/charts/NOK/nokia/market-c...
- antifa 4y agoImagine if Twitter actually came out of this fine and then business schools decided to build a generation of "tough guy CEO" MBAs. Or worse, imagine if Twitter continues to plummet as we currently see it, then business schools decide to write history as if it were a success story anyways.
- skeeter2020 4y agoNot sure how old you are but this already happened in the 80's. We also got an entire generation of "Steve Jobs was a successful asshole, ergo asshole => success" MBAs
- KineticLensman 4y agoGerald Ratner who described the products of his own jewellery company as ‘crap’ [edit] he actually said ‘total crap’ and lost £500m.
- spiderfarmer 4y agoSo far it has exposed the real business acumen of Elon Musk. The only company he runs by himself, arguably the easiest to run, is losing him a staggering amount of money in one year. I wonder how he rates his own perfomance.
- croisillon 4y agoLooking into it.
- nxm 4y agoTwitter was doing that before Elon bought them
- halfmatthalfcat 4y agoThey had just recently become profitable before the Elon takeover.
- KoftaBob 4y agoThe way I see it, it more-so shows that his strength is in companies that are heavy on complex engineering problems. Twitter on the other hand, is a company dealing with sociological/societal challenges, being that it's a social network. That takes an entirely different kind of skill set to do well as a CEO for.
- ModernMech 4y agoI don't buy it. Internal reports from SpaceX and Tesla detail Musk's chaotic, capricious management style that they have to spend resources to actively manage. SpaceX is better at it I guess, because he's seemed to have caused far more problems at Tesla with his antics. Either way, he's essentially abdicated his CEO role at both companies, and his chaotic management style is on full display now, which confirms the Tesla and SpaceX reports. But why did Tesla and SpaceX thrive where Twitter is failing? Because the former companies grew up to create processes that contain Musk; whereas Twitter was bought outright, so his blast radius is unlimited there. Twitter has no Musk immune response. At SpaceX when Musk suggests X, where X is... I dunno, an really dumb idea that no one would ever want, the people at SpaceX know how to redirect Musk until he drops it, or they know how to shape it into a good idea. At Twitter, they have no idea how to do this, and so Musk always gets his way, every time. All the people with the skills to turn bad ideas into good ones have left, all the people who tried to manage Musk were fired, so now he's left to his whims. And it shows. If anything, Musk has proven how ceremonial the CEO role is. He has the title CEO of at least 4 companies, and claims 80 hours per week is a full time role. So at best CEO is a part time job.
- okeuro49 4y agoIt seems to me that Musk is moving away from advertisements, to trying to build the first social network that doesn't rely on the user being the product, but rather paying for the product. That's supposedly what tech people root for, but because its Elon Musk, who eschews many of the shibboleths of the Left, people criticise Twitter as a proxy for his political views.
- bhaak 4y agoThis would be a laudable direction to take the company towards ... ... if he didn't start by putting $12.5 billions of debt on the balance sheet after the buyout. Which means that Twitter has to pay $1 billion of interest each year which it didn't have to do before that hostile takeover. How many people would need to buy Twitter Blue to offset the interest alone? ~~125 million users which is about a third of its whole active user base~~ 10 million which is about 3% of their active user base (I can't do maths, thanks supermatt, luckily I'm good looking and can program).
- ed_elliott_asc 4y agoJust to pay off the interest? Ouch ouch ouch
- supermatt 4y ago1bn / $8/m (excluding costs, etc) / 12 months = ~ 10m
- BulgarianIdiot 4y agoAnd so how’s that going?
- draugadrotten 4y agoBuying twitter was never about profiting - at least not the profiting from the company balance sheet. The profit can come elsewhere, by the influence gained from owning and controlling the twitter firehose and recommendation algorithms. In a way, this is Elon buying a newspaper like rich people always did to influence politics, except that he is buying a modern version of a newspaper. Musk bought twitter because it is and was an integral part in social media campaigns for the last few elections. Targeted ads on twitter can reach journalists and politicians, their timelines "for you" controlled by Elon's and they might not even understand that they are being nudged by the content shown in the app. Heck, just by unbanning Trump and allowing MFA Russia on the app, he is moving the Overton window a bit. The proof is in the pudding as they say. How many million people now see Elon Musks personal twitter posts, that did not see them before he bought twitter?
- concordDance 4y agoA year ago it was the golden example of how not to run a business, it's now the golden example of how not to run a tech system/service.
- muyuu 4y agoa year ago it had just lost over US$1B over the running year
- muyuu 4y agoI don't think Twitter is alone in that respect. Twitter is unique in that it was acquired for US$ 44B when it was a business that lost huge amounts of money consistently for years, and the owner intended it to have it run old school style, as in making a profit, but also doing so in such short notice that he dismantled entire branches of the company wholesale. Obviously for people relying on pre-existing services and rates from Twitter, it sucks. But the root problem is that Twitter had not been a sustainable business for a long, long time. One has to wonder how did they even subsist for so long and how much institutional money, not just VC/investor money, and who knows what sort of government/agencies pay-to-play deals made it even possible because the sort of money they cashed in during the only few years they've even been profitable seems absurdly high and they have never replicated that under normal circumstances. With the ad model struggling and institutional ads sort of in retreat, the entire sector is struggling.
- oxfordmale 4y agoNot sustainable? Twitter generated $5 billion revenue in 2021, a 35% increase on 2020 figures and a significant improvement on the 8% and 13% increase the two years before. Cut backs were needed, as advertising revenue would have been significantly down this year, given the economic down turn. However, there was no need to gut the company to make it profitable.
- zpeti 4y ago> Cut backs were needed I mean, you are both claiming cuts were needed and they’re too much. So how much was right? How do you know? You’d do a better job than the people who have access to the numbers? That’s a fairly arrogant position
- oxfordmale 4y agoMost FAANGS have been cutting by 10 to 15%. That trims excess fat without gutting a company. Twitter seems to have a serious cultural problem at the moment, and that is generally a lot harder to fix than to rehire when the growth curve inverses. I am sure Musk had to cut by 50%, if only because Twitter's interest payments are now significant. However, that does bring significant challenges.
- eclipsetheworld 4y agoI'll take the contrarian stance here. During the Morgan Stanley Conference interview, Elon Musk forecasted that Twitter had the potential to achieve a positive cash flow status by the second quarter of 2023. Advertisers are returning to the platform and they just announced their new API monetization plans [0]. The company's strategic direction notwithstanding, Twitter may be a profitable company soon. [0] https://twitter.com/TwitterDev/status/1641222782594990080 https://twitter.com/TwitterDev/status/1641222782594990080
- Kye 4y agoBut which advertisers? It's not enough to get +10,000 people trying out a $10 or $100 ad while rates are low due to low bidding competition. Twitter needs the big advertisers who expect to have someone at the company support their campaigns. The new owner fired the people who did that. Worse, he fired the people who'd spent years earning those advertisers' trust and patience.
- eclipsetheworld 4y agoPerformance-focused advertisers. Growing this segment was already set as a strategic direction for Twitter in 2021, however, Musk's takeover and the subsequent departure of brand-focused advertisers seem to have accelerated these plans [0]. As for brand-focused advertisers, I can see parallels to 2017's "YouTube Adpocalypse" in which advertisers paused their spending due to their ads being displayed before videos containing offensive content. They recovered from it by demonitizing offensive content. Twitter will have to address "brand safety" concerns, however, [0] https://www.wsj.com/articles/have-the-ads-in-your-twitter-feed-changed-theres-a-reason-for-that-1772f9f3 https://www.wsj.com/articles/have-the-ads-in-your-twitter-fe...
- comte7092 4y agoAt this point I’ve learned not to take anything Elon says about the future, especially the near future, at face value. Could it happen? Certainly. Will it happen the way he says it will? Probably not.
- adql 4y ago
- wongarsu 4y agoHe only owns the company for 5 months so far. He seems set on transforming Twitter, and any company looks bad while in the middle of a transformation. I'm not saying Elon is doing a good job, all signs point to the opposite. He probably though so too when he announced to step down from CEO (though that has yet to happen). But if he was doing a good job, it would also be really hard to tell in this phase. I don't think we are far enough into this to draw any good conclusions.
- rurp 4y agoIt's not really hard to tell if he's doing a good job, he's clearly not. Losing nearly half of revenue in only a few months, adding crippling debt payments, stiffing employees on their severance, refusing to pay rent and other services, plus countless other debacles make it clear this is a dysfunctional company. Network effects and resilient architecture can keep a company humming along for some time despite incompetent management, but those resources will get depleted and they are hard to regain.
- SkyMarshal 4y agoMore like, how not to buy a business. Elon basically started with the Private Equity leveraged buyout playbook - borrow money to buy a business, then assign that business the debt used to buy it. But it’s unclear how he’s going to do part 2, which is to either suck enough value out of it to recoup the purchase price before it fails completely, or turn it around and make it more valuable than when he bought it. Right now Twitter needs to drastically increase its revenue and decrease its expenses just to service the new debt load. Hence Elon firing everyone and trying to charge more for every little thing. It’s amazing that Twitter was more or less self-sustaining prior to this, and now it’s not.
- giraffe_lady 4y agoI think it's a mistake to evaluate his success with it in purely financial terms like that. He's proven himself thin skinned, egotistical, and capricious, and is easy to provoke into vindictive & retributive actions even if not in his best interests. I think a big part of why he bought twitter was a sense of grievance, basically that the wrong people were getting positive attention, that people were being mean to and making fun of him and his friends & allies. He wanted to restructure the mechanics and incentives of the platform to better support the people and outcomes he values. I'm not sure whether he succeeded by these terms either, it's still too early to tell I think. But I do think it's an important factor in evaluating whether he succeeded in what he set out to do when buying twitter. And from that perspective "make it good or (let it) die trying" may be an acceptable compromise. He doesn't get the musk-adoration platform he wants, but at least there is no longer the musk-ridicule platform he perceived it to be.
- JohnFen 4y agoRemember, he didn't want to buy Twitter. He pitched it in the first place purely in an attempt to get leverage over the board. He didn't really want to own it. The board called his bluff and said "sold!", then Musk spent a great deal of time and effort trying to wiggle out of the deal. He failed, and now he's stuck with it. Everything he's doing now is trying to minimize the amount of financial damage this debacle will cause him.
- mjr00 4y agoNo, it's the complete opposite: the fact that Twitter has laid off 80% of its staff and is still operating has encouraged execs at other tech companies to push staff cuts. Vanity Fair wrote an article about this yesterday.[0] I do think there are long term-issues with laying off that many employees, but clearly the "if you fire all these engineers the service is going to collapse and stop working" doomsaying was unfounded. [0] https://www.vanityfair.com/news/2023/03/big-tech-layoffs-2023-twitter-meta-amazon-google https://www.vanityfair.com/news/2023/03/big-tech-layoffs-202...
- revel 4y agoTwitter has remained functional largely because all the former employees did their jobs effectively. I've seen what happens when companies lay a tech department to waste and it looks like this. This is a one-way cost reduction program that will forever reduce the quality of workers available to the company. The way this pans out is that in the short term, nothing much happens except deadlines start to get pushed out. As time goes on everything becomes more and more dysfunctional. All progress grinds to a halt; simply treading water created by ongoing churn and operational needs ends up becoming impossible. Next the business tries to get more and more out of the remaining staff until they get fed up with it and leave. Shortly before the wheels really come off, legal and compliance issues will suddenly start ballooning. That's where we are now. Nobody wants to work on these kind of projects -- they do nothing for your career and nobody will celebrate your work -- but they are not optional. Elon seems to have decided simply not to comply with laws he dislikes in regulatory environments where he thinks he can get away with it. This can work for a while, but companies with no internal governance and that regularly flout laws can don't tend to last for too long without making painful changes. Let's see how it turns out. Given the reported state of the company it sounds like he has about a year to figure it out.
- Caldwell-77 4y agoIn cutting its workforce down from 7,500 to 1,800 employees, I wonder what percentage of Twitter's legal/compliance staff were kept on.
- 908B64B197 4y ago
- misssocrates 4y agoPerhaps Twitter will be the golden example of how to run a business like SpaceX and Tesla became after many years of derision?
- dragontamer 4y agoBuy a company for $44 Billion, and now offers equity at $20 Billion valuation? https://www.wsj.com/articles/twitter-offers-new-equity-grants-to-staff-938ee7f8 https://www.wsj.com/articles/twitter-offers-new-equity-grant... The company has lost over half its value in just 5 months.
- misssocrates 4y agoHe overpaid and that was already well known before he even took the reigns.
- dragontamer 4y agoOverpaying by well over double is... a bad business decision. Is it not? Even as bad as the stock market was last year, very few companies lost 50%+ of their value. -------- There's a lot of other decisions that are very strange coming out of Tesla, such as the removal of RADAR and Ultrasonic Sensors. Does Elon Musk really believe he can compete against next-generation companies when he's removing sensors from his cars?
- deleted 4y ago[deleted]
- zaroth 4y agoRegarding the Tesla comments; Radar is back by the way, with an increased resolution that makes it more useful in highways where overhead signs false positive as a collision risk on the old sensor. The ultrasonic sensors IMO were basically worthless. Initial analysis of the new v4 FSD hardware indicates they are adding more cameras - including bumper cameras to cover blind spots that previously would have relied on ultrasonics. It doesn’t seem like HW4 can be retrofit like HW3 was, so it will be very interesting how that all plays out! https://www.teslarati.com/tesla-hardware-4-hd-radar-first-look-photos/ https://www.teslarati.com/tesla-hardware-4-hd-radar-first-lo... https://mobile.twitter.com/greentheonly/status/1625905220432671015 https://mobile.twitter.com/greentheonly/status/1625905220432...
- onion2k 4y agoThe antagonist forces of "Ha! Look how much the revenue fell!" versus "Hmm.. look how much they slashed costs.." means it's really hard to tell how well Twitter will do in the long term.
- deleted 4y ago[deleted]