More Twitter

Elon Musk has made quite the controversy, with his latest actions at Twitter (namely, terminating employment of a large number of employees, terminating the contracts for a large number of contractors, and discontinuing many of Twitter's services). His decisions have been almost universally derided; it seems that the entire internet is against him.

Let's take a contrarian position. Let's assume -- for the moment -- that Musk knows what he is doing, and that he has good reasons for his actions. Why would he take those actions, and what is his goal?

The former is open to speculation. My thought is that Twitter is losing money (it is) and is unable to fill the gap between income and "outgo" with investments. Thus, Twitter must raise revenue or reduce spending, or some combination of both. While this fits with Musk's actions, it may or may not be his motivation. 

The question of Musk's goal may be easier to answer. His goal is to improve the performance of Twitter, making it profitable and either keeping the company or selling it. (We can rule out the goal of destroying the company.) Keeping Twitter gives Musk a large communication channel to lots of people (free advertising for Tesla?) and makes him a notable figure in the tech (software) community. If Musk can "turn Twitter around" (that is, make it profitable, whether he keeps it or sells it) he builds on his reputation as a capable business leader.

Reducing the staff at Twitter has two immediate effects. The first is obvious: reduced expenses. The second is less obvious: a smaller company with fewer teams, and therefore more responsive. Usually, a smaller organization can make decisions faster than a large one, and can act faster than a large one.

It is true that a lot of "institutional knowledge" can be lost with large decreases in staff. That knowledge can range from the design of Twitter's core software, its databases, and its processes for updates, and its operations (keeping the site running). Yet a lot of knowledge can be stored in software (and database structures), and read by others if the software is well-written.

I'm not ready to bury Twitter just yet. Musk may be able to make Twitter profitable and keep a commanding presence in the tech space.

But I'm also not ready to build on top of Twitter. Musk's effort may fail, and Twitter may fail. I'm taking a cautious approach, using it for distributing and collecting and non-critical information.