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Twitter Plans Hundreds More Job Cuts as Soon as This Week

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Re: Twitter Plans Hundreds More Job Cuts as Soon as This Week

#81

Post by iampims »

laluser wrote: post #29
Analemma_ wrote: post #20

Earlier quoted context omitted.

People have answered this before, and what it boils down to is: because they took VC money, and then went public. If you bootstrap a business from nothing and grow it on its own, then sustainable growth and stable profit is fine. But Twitter got VC and IPO money with a promise that it would have Facebook-like growth in return. I think the analogy I saw used was that they promised investors a Porsche and instead deliv…

Are they liable for those promises though? I am legitimately curious to know if they are contractually obligated to grow at a certain rate or be at certain valuation at this point in time.

They aren't liable for the "S-1 promises" as long as they clearly mentioned the risks in the appropriate section.

Their main responsibility at this point is to satisfy the shareholders, and given their limited growth is not an easy feat.

Re: Twitter Plans Hundreds More Job Cuts as Soon as This Week

#82

Post by scottkduncan »

mxuribe wrote: post #35
artursapek wrote: post #6

I've always sort of had this question that continues to feel naive - but I'm not sure I know the answer: why do so many companies feel like they have to grow perpetually? Why can't Twitter just be happy being Twitter, knowing its limits and making a stable profit? Instead it's more users, more VC money, more staff... constantly burning as quickly as possible. There's a ceiling on every business; it's all bound to com…

Not everyone is like a cannonball wanting to burn so hot as to melt themselves. I would also like a patio-11 type of software business; so you're not alone! As far as twitter, they unfortunately took a bite of "poison apple" of public investment, and as such are beholden to investors, so must perform (and grow) to ever more higher levels. What would happen - i wonder - if twitter became private again, or better yet s…

I'm not sure they vision you're describing is the direction private equity would take it, but with the major tech buyers shying away it does seem like a private exit is the most likely way this ends.

John Hempton summed up this view well: http://brontecapital.blogspot.com/2016/10/some-comment-on-tw...

Re: Twitter Plans Hundreds More Job Cuts as Soon as This Week

#84

Post by douche »

vacri wrote: post #32
pmiller2 wrote: post #9

I know this is premature, but I can't help but wonder what the effect of Twitter going under would have on the Bay Area tech scene.

If Twitter went under, modern TV journalism would have a seizure as their source of lazy reaction quotes disappears.

They might have to do some real work again...

Re: Twitter Plans Hundreds More Job Cuts as Soon as This Week

#85

Post by mwfunk »

artursapek wrote: post #6

I've always sort of had this question that continues to feel naive - but I'm not sure I know the answer: why do so many companies feel like they have to grow perpetually? Why can't Twitter just be happy being Twitter, knowing its limits and making a stable profit? Instead it's more users, more VC money, more staff... constantly burning as quickly as possible. There's a ceiling on every business; it's all bound to com…

In the tech industry it seems like growth (or perceived growth potential) is the only thing that matters, profitability far less so (Amazon for example). Growth is what makes stock go up, so investors want to see growth every single quarter or they bail. If a tech company doesn't show growth, its stock doesn't stand still- it'll drop, maybe significantly. For publicly traded companies, executives can be replaced by the board if they don't deliver, and the board is supposed to represent the shareholders' interests (which for the tech industry means maintaining growth to keep the stock from tanking). It's a pretty messed up antipattern in the business environment IMO. The alternative is staying private, and perhaps limiting (or doing without) external investment.

Re: Twitter Plans Hundreds More Job Cuts as Soon as This Week

#86

Post by xapata »

artursapek wrote: post #6

I've always sort of had this question that continues to feel naive - but I'm not sure I know the answer: why do so many companies feel like they have to grow perpetually? Why can't Twitter just be happy being Twitter, knowing its limits and making a stable profit? Instead it's more users, more VC money, more staff... constantly burning as quickly as possible. There's a ceiling on every business; it's all bound to com…

That's the nature of capitalism. If one company is growing faster than another, relative to the cost of their shares, the capital will move to the company that is growing faster until the price has adjusted.

Re: Twitter Plans Hundreds More Job Cuts as Soon as This Week

#87

Post by Buge »

Analemma_ wrote: post #20
artursapek wrote: post #6

I've always sort of had this question that continues to feel naive - but I'm not sure I know the answer: why do so many companies feel like they have to grow perpetually? Why can't Twitter just be happy being Twitter, knowing its limits and making a stable profit? Instead it's more users, more VC money, more staff... constantly burning as quickly as possible. There's a ceiling on every business; it's all bound to com…

People have answered this before, and what it boils down to is: because they took VC money, and then went public. If you bootstrap a business from nothing and grow it on its own, then sustainable growth and stable profit is fine. But Twitter got VC and IPO money with a promise that it would have Facebook-like growth in return. I think the analogy I saw used was that they promised investors a Porsche and instead deliv…

But if they IPO, then the early investors already got their money back. And startups get acquired all the time, also putting an end to investors' growth.

Re: Twitter Plans Hundreds More Job Cuts as Soon as This Week

#88

Post by eldavido »

Overtonwindow wrote: post #31

Something I've never been able to wrap my head around is how does Twitter make money? I mean real money. Not valuation of eyeballs, not VC cash, but honest to God profit? It has always baffled me and I wish I knew what the unicorns say to the VC's when (hopefully) someone asks this question.

Read their SEC filings: https://investor.twitterinc.com/secfiling.cfm?filingID=15645...

If you've never read one of these, you might be surprised how much is disclosed, and in great detail to boot.

Re: Twitter Plans Hundreds More Job Cuts as Soon as This Week

#89

Post by aub3bhat »

AtheistOfFail wrote: post #79
Analemma_ wrote: post #20

Earlier quoted context omitted.

People have answered this before, and what it boils down to is: because they took VC money, and then went public. If you bootstrap a business from nothing and grow it on its own, then sustainable growth and stable profit is fine. But Twitter got VC and IPO money with a promise that it would have Facebook-like growth in return. I think the analogy I saw used was that they promised investors a Porsche and instead deliv…

The issue is one simple item: "When you take someone's money, their priorities are now your priorities" If you can bootstrap your business with 30k and make a 20k profit every month, then why do you need 1 million dollars from investors? When you take the money, it's just a golden handcuff and ties you to that person for the future. If your business lasts longer than 20 years, that may as well be an additional marria…

Because your competitor can raise those million dollars, and eventually your 20k profit per month becomes 20k loss per month.

You can build all your imaginary arguments about magical businesses that make 20k profit per month while being self-sustained with holocracy, cruelty free, authentic, organic etc. etc. But the reality is that doing big things at bigger scale requires huge capital. If you are willing to pass up on it, someone else will take it and gladly outspend / outmaneuver your. You will watch as your paid product will lose to a freemium one, and as you will write "our incredible journey blogpost", commenters here will mock you for selling out / giving up.

Re: Twitter Plans Hundreds More Job Cuts as Soon as This Week

#90

Post by traskjd »

riteshkpr wrote: post #24
artursapek wrote: post #6

I've always sort of had this question that continues to feel naive - but I'm not sure I know the answer: why do so many companies feel like they have to grow perpetually? Why can't Twitter just be happy being Twitter, knowing its limits and making a stable profit? Instead it's more users, more VC money, more staff... constantly burning as quickly as possible. There's a ceiling on every business; it's all bound to com…

"why do so many companies feel like they have to grow perpetually?" -> Capitalism - growth, year over year, leads to higher stock price (market valuation) which in turn justifies higher payouts to ceo's, bonuses to employees... as growth == innovation If you din't keep growing and managed to keep the business profitable (hit the ceiling), then you weren't 'innovating' and should be replaced ... ... that's the mindset…

You need some growth, even if just to battle inflation. Inflation is nibbling away at the value constantly.
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