Lean & Mean: Lessons From Twitter

The drama unfolding at Twitter with this takeover is absolutely hilarious. From people pretending to be ex-Twitter employees to US Congressmen and Women pretending to be outraged by all of it. 

The greatest thing in all of this is that most people don't know what they're talking about but they have opinions on it; and social media has empowered that even further in todays day and age. 

It creates hysteria which I think Elon loves and trolls.

There have been mass firings & layoffs at Twitter in recent weeks. 

The same for other tech companies as well which might be proof that most of these companies are filled with too much fat that need trimming. 

Twitter included.

I posted something on Twitter comparing the company to Craigslist. 

According to Statista, Craigslist had over $600MM in revenue last year with just 50 employees. 

Twitter had 7500 in recent weeks and revenue of $5 Billion in 2021. 

So even multiplying Craigslist's revenue and employees by 10x still gets you to 500 employees and the same revenue. 

Now before anyone freaks out. Twitter is a website with code. You need devs, folks to handle server issues, legal, compliance and the finance folks. 

It never needed that many people to make it work. 

But public companies can overspend, issue debt, shares etc. to keep the overhead going. 

Private. That all changes and a site like Craigslist (among many) is proof of that. 

This is the same thing in running any business, trading included and there are lessons to take from this particular situation. 

Lean & Mean Works.

I learned that lesson early in my career, the hard way, a few times.

Unlike the US Government, you can't just spend recklessly like you have a blank checkbook (which they do given Uncle Jerome). 

I saw it happen in a company I took out of bankruptcy a few years ago. 

The prior owners blew through $1.5 million by over-spending, over-hiring and creating an 'atmosphere' (they also had what I call the Ch 7. bankruptcy omen; a ping pong table).

This same thing happened at another company I was consulting with last year. 

But there are lessons from this I want to apply toward trading & investing because at the end of the day it's the same as running a business. 

Grow Slow. 

People say growing fast is the way. It's not. Trading the account slow and steady builds your capital base. That capital base is paramount to getting to where we all want to be; really rich. 

Most Meetings are a Waste of Time.

Twitter probably had too many meetings about nothing to talk about nothing but to pretend they were doing something. Traders do that same thing. Stop going to webinars to talk about nothing and pretend you're doing something. You're either going to trade or you're going to pretend too; the goal is to make money not spend time talking about making money. 

Overhead Kills Cashflow.

Like Twitter's 7500 employees doing who knows what it killed profitability year after year. There's no need for a team that big or as many offices and expenses they had. This same thing happens to traders because they usually trade too many things. They look at 50 different charts and call price targets on things that they have no intention on holding for past 1 or 2 days. Focus on making $10,000 a month trading one thing like S&P E-Mini Futures - just do that. 

I can teach you here.

Then you repeat this. Over and over. 

Business and trading are boring when you do it right. You do the same things day in and day out. 

Slow and steady over and over and that's how you start to cash flow. 

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