The Luck of Silicon Valley

Elon Musk sends people to outer space; I’m confident he can figure out how to run a simple app run by juveniles.

Let’s talk about the most controversial tech company out there right now, Twitter, and a tech firm that sets the tone for the rest of the industry.

Twitter has undergone an extreme makeover lately.

Not the product, but the staff.

Musk started off by firing half the staff, which later turned into an ultimatum for the rest to either get on board with the new Twitter or accept 3 months’ severance pay out the exit door.

Many left.  

Cutting staff was rejuvenating, maybe not for the employees who were let go, but for a dire need of a mentality change.

Twitter became too corporate and too political inside its office.

Most of the former Twitter staff was utterly useless.

The 10% leftover is really what is essential and like Musk said, he was able to hang on to the “best people.”

Next, he should cut the office space to increase efficiencies or at the very minimum renegotiate the office lease to downsize the square footage by 90%. San Francisco city center is a ghost town now – a relic of its former self.  

Twitter’s big layoff will also act as a feeder strategy for the rest of Silicon Valley to push staff into a leaner and more efficient model.

In a way, Musk is saving the technology sector by offering the blueprint of how to manage a software company.

Silicon Valley needs to fire 90% of staff immediately, maybe even 95%.

Elon Musk noted that Twitter was paying an average of $400 per lunch at the Twitter headquarters in San Francisco.

I know San Francisco is expensive and almost unlivable, but this was the type of extreme activity that was allowed to happen under the past management whose main job was to wait for their monthly paycheck.

It’s no wonder that shareholders were getting screwed.

Although it’s quite fashionable to jump on the Musk hate wagon lately to say how Twitter will go down in flames, I don’t think it’s justified and it appears to be more about sour grapes because many don’t like Musk’s politics.   

Ruthlessly cutting costs is a great tactic for tech executives. Costs are way too high, which is why Facebook let go of 11,000 workers last week.

Amazon just announced 10,000 firings too, and I think they could handle 50,000 firings easily. 

Luckily, positions like Chief Diversity Officer, Chief Ethics Officer, and the managers of middle managers need no replacements at all.

Musk noted that Twitter is losing $4 million per day and these measures will go a long way to fixing that.  

He’s smart enough to find solutions and I wouldn’t bet against him. I can already visualize him picking apart the best slices of Twitter and supercharging them.    

Twitter is a premium asset with unlimited scarcity value. We are just scratching the surface with it.

Where is the end game?

I wouldn’t be surprised if Twitter went public in 5-7 years with a valuation of $150 billion after Musk unlocks the embedded value that is literally everywhere on Twitter.

I would say $150 billion is lowballing him and this company will be worth between $180 billion- $220 billion in the next 7-10 years.

Many people still don’t understand Twitter very well and it’s become even more important than the mainstream media.