SEASON 2 - EPISODE 0062 - JUN 14, 2023

Twitter is Still Up

It’s been more than seven months since Elon Musk purchased Twitter. Since then, a reported 80% of the company has been let go, reducing their staff from just under 8,000 employees to around 1,500.

With all that turmoil, many believed that Twitter would fail completely or stop working, but Twitter’s still up!

Today, host Kimberly Rhodes, Jason Fried, and David Heinemeier Hansson sit down to delve into the aftermath of Elon’s controversial acquisition of Twitter, the surprises and lessons learned from this transformative event, and an exploration of the question, how many people do you really need to run your company effectively?

Tune in as they share insights into their own experiences at 37signals and offer valuable lessons for entrepreneurs and business owners on the impact of Twitter’s restructuring.

Listen in as Jason and David discuss the resilience of Twitter, their initial predictions for the company, and the evolving dynamics of company size and efficiency.

Show Notes

00:00 - Kimberly introduces the topic of today’s show, which is all things Twitter, and asks, how many employees do you need?
00:55 - Jason shares that the fundamental point of view is that companies need fewer employees than they think.
01:41 - While there were casualties in terms of job losses, the system of Twitter still works—you don’t need as many employees as you might think.
02:28 - When building a company, the lesson is to avoid hiring more people than necessary.
03:03 - David shares, “Twitter was morbidly obese.” The lesson is clear: Less is more, and lighter teams can move faster.
04:11 - The Twitter downsizing experiment is a real-life revelation.
05:30 - In stagnant organizations, some individuals may have had “bullshit jobs” that did not impact the company or customers.
07:01 - “Representative of the kind of company that Twitter was, I can totally see how they had six and a half thousand too many people.” Plus, a former Twitter employee’s experience highlights the depth of the issue (not a single thing that person had worked on ever made it into production).
09:00 - The primary advantage of being small is speed—it’s just physics—and it’s business.
09:52 - The valuable lessons to be learned from Twitter.
10:24 - One of the most controversial decisions made by Musk that sparked widespread debate and contestation.
11:21 - One of the novel case studies of the entire tech history—reminiscent of when Steve Jobs returned to Apple in 1997.
12:21 - Speaking of Mr. Jobs - how he pared Apple down to the four things he thought Apple needed to be a top-tier company (and got rid of the bloat).
13:24 - Quoting another social media tech titan on Twitter prior to Musk’s takeover.
14:43 - “Imitation is the sincerest form of flattery’—spawning competition and breathing new life into an area that had become stagnant through experimentation.
15:25 - Twitter’s complex challenge—there’s no easy fix for creating a perfect ‘town square of conversation’ and the social media platform poised to unseat Twitter through its radical difference.
17:34 - Even a radical dislike of Elon can’t break the addiction to the network.
18:02 - Starting from 0 followers sucks, and building an audience is hard.
19:41 - Going from 200 to zero is still going to zero. Many networks fail to address the emotional impact of starting over—on HEY, the focus is on the pleasure of writing without analytics.
20:57 - You can find Jason on Twitter @jasonfried and David @dhh. REWORK is a production of 37signals. You can find show notes and transcripts on our website at 37signals.com/podcast. If you have a question for David and Jason about running a business, leave a voicemail at 708-628-7850 or email us with questions to have it answered on an upcoming episode.

Links & Resources

Do you have a question for Jason and David? Send us an email or leave us a voicemail at 708-628-7850.

Transcript

Kimberly (00:00): Welcome to REWORK, a podcast by 37signals about the better way to work and run your business. I’m your host, Kimberly Rhodes. It’s been more than seven months since Twitter’s purchase by the always controversial Elon Musk. And since that time, a reported 80% of the company has been let go, bringing the Twitter workforce from just under 8,000 employees to around 1,500. With all that turmoil, there are many who believe that Twitter would fail completely or just stop working, but Twitter’s still up, which begs the question, how many people do you really need to run your company effectively? Here to talk about all things Twitter and how many employees you really need, 37signals co-founders, Jason Fried and David Heinemeier Hansson. Guys, I know you guys are both active on Twitter. When all this started, not only like the purchase, but all the firings, were you guys on Twitter’s-gonna-fail team or like, eh, they’ll be fine?

Jason (00:55): . Um, well I think our, you know, our fundamental point of view in general is that you, you need less than you think. Now I don’t know what that is and every company’s different and you know, we don’t know the inner workings of, of, of other companies, but I think it’s safe to say Twitter didn’t need 8,000 people and probably didn’t need 7,000 or 6,000 or 5,000 or 4,000 or 3,000. And I don’t know where they actually landed. I’m not sure what they have now, but it turns out it’s, it’s still up, it’s still working. Um, now people can have their point of view on what’s on Twitter, fine, that’s their thing. But the system works and I think it’s a, it’s a really wonderful, um, example of, I mean again, you don’t wanna look at this and like there was, there were human casualties here, obviously, I mean, not casualty casualties, but people lost their jobs.

(01:41): That’s not obviously anything anyone really wants to happen, but I think at the company systems level, you can look at it and go, you don’t need that many people to run something like this. And that’s the lesson. Not lay off your whole staff, that’s not the lesson. Um, not that, you know, people weren’t doing work or whatever they were asked to do, but that you just don’t need quite as much as you think. And we have a company of 80 people, we’ve run this company, um, I think I would say pretty damn well over the past 24 years, um, with a relatively small staff. This is the, the largest we’ve ever been. But I was actually talking to some guy yesterday who works at another company and their engineering group is 125 people. And you look at what they’re doing and look at what we’re doing and, and our whole company is 80 people and you just wonder like, why do they have 125?

(02:28): And that’s just a small portion of their company. Their company has actually thousands of people. And we just look at that and we just don’t, I don’t think we get it. It doesn’t seem to make a lot of sense to us. So I dunno, that’s my general point of view. I think that the big takeaway here is you need less than you think. I think the deeper thing is as you’re building a company, the way I look at this is this is a lesson for people who are building companies also, which is don’t hire more people than you need. Don’t get ahead of yourself. Don’t hire in anticipation of pain, but instead hire when it hurts and keep things as tight and small as you can for as long as you can. I think that’s probably the better way to, to build the right habits.

David (03:03): I’d go even more aggressive. And so…

Jason (03:05): I know you would, so l, I left the opening for you .

David (03:09): Twitter was morbidly obese as a company. It was morbidly obese in comparison to the amount of data that was flowing through the system and the velocity with which it was evolving the platform. And that perhaps more than anything is the real shocker. It’s not that you could take the Twitter that was and operate it with 1,500 people instead of 8,000. It’s that you can take the Twitter that was, basically barely evolving, barely changing anything and turn it into, uh, startup-y feeling thing again, I mean, not a true startup, but they’re trying things at a vastly different velocity than they were trying things before. They’re introducing new features, they’re changing things with such a smaller staff. And I think this really puts the point on not only can you get away with less, but you can go faster if you’re lighter. And I think this is one of the things we’ve held true for so long.

(04:11): When you compare what we do with the staff we have on something like Basecamp to a bunch of the competitors we have in the space, whether you Asana, Monday or Click Up or any of these other very large companies that have well over a thousand employees, and you look at the comparison, you go like, I don’t even know how, and of course I do know how is that weight itself is sort of exponential in terms of slowing down your capacity to move forward. It is so much harder to move forward quickly when you have way more than you need. If you have a a a group of people who are moving with provisions for thousands of people, of course they’re gonna move slower than a group of people of 80 packing relatively light to where they need to go. So seeing that contrast I think is, is just really been revolutionary.

(05:04): And what I appreciate about this experiment is that it’s the type of experiment we so rarely, if ever get to see play out in real life. Normally you’ll have these arguments, oh, could they be smaller, could they be bigger? Are they just right? And it’d just be arguments. It’d just be us going back and forth like, oh, is it one thing or is the the other thing, in some ways similar to what the remote discussion was, like pre pandemic people would go like, well, we can’t go remote you, we can’t, all the creativity. And then you are forced to deal with an experiment that ran in reality. Like are there anyone left who is still claiming that Twitter needs 8,000 people as of May 31st, 2023? If they are, man, they’re doubling down on a bad bet. I’ll tell you that, um, reality has simply shown what was possible.

(05:58): And that’s what’s so fascinating about this whole thing. Again, as Jason says, it is such almost difficult to have that discussion because all the other stuff is going on, because Musk is such a polarizing character, because people actually did lose their jobs. But if you take the last point, losing your job, I do think there’s a worthwhile discussion there to be had about were these actually good jobs are if you’re working inside an organization that’s barely moving, barely shipping, barely doing anything, like are these good jobs for sort of the individual, for the company, for the industry, for everything else? I think there’s an interesting discussion there to be had. I’d argue that a bunch of people inside those organizations had what David Graeber would define as bullshit jobs, that whether they came to work or did not come to work had no impact whatsoever on whether Twitter did well or didn’t do well, whether customers were served or not served, or whether the whole thing was working.

(07:01): And I’d say the reason I say that with such pointed, uh, determination is that we had someone work at our company who used to work at, uh, at Twitter for a while. This is years back, which goes to illustrate how deeply this, uh, rabbit hole is. Uh, this was a designer who had worked at Twitter, I think for two and a half years. That’s like a fair amount of time, shipped nothing, zero, not a single thing that person had worked on ever made it into production. And this was not just a single individual working in like a closet somewhere by themselves. This was an individual working on a team with other people. It is so hard for me to get into like, how can you get to that point that you can have someone work at your company for two and a half years with other people and never ship anything? And once you knew an anecdote like that, which correlating it with other anecdotes seemed to be representative of the kind of company that Twitter was, you’d go like, yeah, I can totally see how they had six and a half thousand too many people.

Kimberly (08:06): Well, and if you think about it, I mean, I’m not a huge Twitter expert, but I don’t really, can’t think of a lot of updates that have happened in the last couple of years, just in general. It’s not like the product has changed or improved drastically where that employee count makes sense.

Jason (08:21): Yeah, I think that that’s the thing that David just said that really hits, I think, which is they’ve made more changes with fewer people in the past six months than they apparently had in the previous six or in the previous two years with, you know, four times the amount of people. That’s gotta say something. And we talk about this, I think it was in rework or maybe it was in getting real, this concept of less mass that in the physical world, the more massive an object, the more energy it takes to change its direction. And this is true in companies as well. The more people you have, the more management you have, the more entanglement you have, the more dependencies you have, the more mass you have. And it’s just a lot harder to move that mass around. When you have less mass, you can move quickly.

(09:00): And this is actually the conversation I was having having with this guy yesterday when he was telling me like, he’s a little frustrated because things aren’t quite moving as quickly as he wished. And I go, yeah, it’s hard to move around bigger organizations. I mean, the advantage to being small primarily is speed. That is the primary actual advantage. It’s speed. Um, and you almost get that, look, three people can sit on their hands for three years also, you can go slow, but the you, you tend not to, you tend to just move at just like the natural state of things and the nature of things when you have a small organization. So that’s what you get for free and then you lose that as you get bigger, you get heavier and slower. That’s just physics and its business. And uh, I think what Twitter showed is that so far at least is that by taking the, the load off, essentially they’re able to move again and whether or not you like the movements, whatever, but like they’re moving.

(09:52): And I think as an observer of business and experiments, like David says, it’s very hard to find these things play out in the real world to actually just sit back and observe objectively. Like, this is interesting to see a company get cut back so quickly and then move so fast and try things out in the public realm. Very, very rare. And so as a student of this stuff, I think everyone should be paying very close attention to it regardless of whether or not they, what they think of the owner or what’s on the platform. Um, but there’s, there’s a lot of instructive, uh, outcomes here. It’s pretty interesting.

David (10:24): And I think what is also fascinating about the changes was it was a renegotiation of what Twitter was going to be as a company, what tasks it was going to have. And one of the things that, um, Musk did, perhaps one of the most controversial things was he said, we’re just not gonna have an enormous content moderation team. Like that whole regime of how the content is being picked over or suppressed or banned or whatever. We are going to take a different direction on that and that’s gonna need far fewer people, which in itself was a experiment, gamble wildly, contested in all sorts of ways. But when I look at the Twitter I use today, and I I do use it differently, like it’s, it’s, it’s fascinating personally to witness this because I’ve had such a mixed relationship with Twitter. I’ve used it so much for so many years.

(11:21): I think I have 65,000 tweets or something completely perverse since 2007 or whatever. And then in the past, uh, two, three years, I’ve totally changed how I used Twitter and, and use it to some extent far less in part because I don’t actually like the dynamics of much of that kind of social media and what we get from that, what the algorithm optimizes for, it optimizes for engagement. And what’s the easiest way to extract engagement? It is through rage and drama and animosity. So you, you can have that perspective of what the system is. And then as Jason say, just look at it from a systems thinking perspective and go, this is one of the most fascinating, novel business case studies of the entire tech history. Of the entire history of everything that we’ve been doing working with the internet, how often have we gotten an opportunity to see something like this?

(12:21): I compared it to when Steve Jobs returned to Apple in 1997, um, shortly after he returned Apple fired 4,100 employees. One of the reasons why they fired that many employees was that a or Steve Jobs came back in, took stock of what they were doing and say, we’re just doing way too much stuff. We’re going slower towards the destination. We want to be a top tier computing brand and whatever. By having all this stuff. I remember famously him doing this thing, do you know what, we need four things. We need a laptop for consumer and for um, business, we need a desktop for consumer and for business. And then he methodically started filling these things out. We got the iBook, that was the laptop for consumer. We got the MacBook, that was the laptop for business. We got the iMac the computer for personal, and I forget what the thing was for, uh, for business. Before that, Apple had all sorts of products, all sorts of things they were chasing.

(13:24): And you like, no, no, no, we gotta cut it back to four things. Then later of course once the machinery was fixed, you can start adding back up. But while it’s drifting, while it’s rudderless, right, it’s not moving in the right direction, the number one thing you need to do is get back to less. You could build it back up. I mean Apple today makes a lot of different products. Some would say perhaps too many, but now they have this well-oiled machine to do it, which is also evident in the, in the employee base. When we talk about like mass, Apple has a lot of mass. I don’t know what the latest employee count is. Um, I think it’s over 200,000 if you count all the employees at the, at the stores as well. But they have a machine where that works, right? Twitter had no machine, it had a headless chicken show for years. Um, this is one of the few times I’d quote Mark Zuckerberg where his assessment of Twitter was, it was a clown car that fell into a gold mine.

Kimberly (14:23): . Well, one of the other things I think we’re seeing for the first time or getting to, you know, kind of observe is competitors coming outta the woodwork. People who are like, oh, Twitter’s gonna fail. So I’m gonna spin up my own Twitter alternative. I’d love to hear your thoughts about that. I know you guys have thoughts about competitors and imitation and, and those things.

Jason (14:43): Well, I mean I think it’s great that people are making new things. Like this is good for everybody. Whether or not things stick around time will tell and there’s no way to know now. But it’s wonderful to see new life breathed into an area that was sort of become, had become very, very stagnant. I mean, Twitter really is an incredibly unique product. There was no competition for Twitter at all really. I mean, nothing else really works like it or had worked like it. And now there’s a few things. Great. I think it’s great. For people who hate what happened to Twitter, well, it spawned some competition, it breathed some oxygen on the fire and now there’s more of it and now there’s more things, more experiments happening. This is a healthy, incredibly healthy outcome ultimately. So we’ll see how it all lands, but so far so good.

David (15:25): Couldn’t agree more. I particularly like the experiment that’s been running with Mastodon because it’s a new way of running it. A bunch of individual little, um, instances that are linked together, but uh, it distributes the content moderation strategy and different instances can try different things. And one of the reasons why I like that experiment so much is because it proves that Twitter has a fundamentally hard problem. That there was not just a clear easy solution that someone could come up with that like ta-da it’s all fixed and now everyone is happy with this, uh, town square for the compensation. Now actually Mastodon found out that if you distribute the content moderation powers, suddenly you uh, prop up a bunch of people who get drunk on power very quickly. And those instances are no better, actually. The other thing I think is interesting is, at least that’s where we are now and it’s obviously very hard to predict where it ultimately ends, competing with Twitter by making like a marginally better Twitter, I think is dead on arrival.

(16:30): Now lots of people are trying, and I could totally be wrong, but I think we’ve seen it enough times in the technology industry that you don’t unseat something like Twitter by being like 5% better, 10% better. No, no, you have to be radically, not just better, but different. If you look at the whole history of all these platforms, the only one in the past whatever 10 plus years that have truly shaken things up is TikTok. And TikTok was radically better at the one thing it focused on this algorithmic, um, serving up a short video, right? No one else had that. And is this asymmetry in the competition that you might look at? Why is TikTok actually competition for Facebook or even Twitter? Well, it is because it’s a social media and people spend their time there instead. So I would put my money on if something’s gonna unseed Twitter, it’s gonna be like a TikToking like thing of what happened to Facebook. It is not Mastodon or Truth Social or there’s like a handful of other ones out there now.

Jason (17:32): And Instagram’s coming out with theirs soon.

David (17:34): Yes, exactly. And I think what you see is for a lot of people who passionately dislike Elon Musk, who passionately dislike Twitter, they’re still as addicted to the original platform as ever. You’d think when you have that much grievances built up, you have so much motivation to actually jump ship and it just illustrates the hard part of a social media platform is not sort of the features, it’s the network.

Jason (18:02): The other thing is, it just, it proves that this stuff is hard. Product market fit is hard. Uh, all the geniuses that are, that are saying he’s doing it wrong and they’re doing it wrong and they, okay, now you do it, it’s actually pretty damn hard. And some of the people doing it have a lot of money and, and a lot of history. It’s hard. This is a really hard thing to do. And uh, this is true in any, in any industry and it’s, it gets, it only gets harder when you basically make kind of the same thing, which is sort of what David is saying. Like all these things are basically kind of the same thing. There’s not enough of a reason for mass numbers of people to jump ship for kind of, sort of the same thing. And I think they also have a problem, which is just shows the network part, which is what David was saying, is like I wrote about this years ago, this idea of the intimidating zero. Zero is, so back when we started publishing years and years and years and years ago, there were no follower accounts.

(18:58): There was, I didn’t know how many people read our blog. You don’t know anything because we didn’t, there was no tracking. Everything now is numbers on it. And so when you’re starting on a new platform and you have 32,000 followers on Twitter or 3,000 whatever, and you switch to Mastodon or Blue Sky or whatever, you see a big fat zero in front of your name and for a while maybe then you have two and then maybe you have eight. And it sucks. It’s intimidating, it’s hard. And you realize what, what you’re leaving is the, is is your audience. And building an audience is incredibly hard, flat out hard. You can see it when you have a big audience on one platform and try to switch to another. It’s very, very hard to bring that over. You can tell your other people, come along. A few percent do.

(19:41): So starting at zero and having numbers of zero all over the place and how many followers you have, I think is a bad idea, a really bad idea. And if I was one of these other platforms, I mean it probably wouldn’t matter because people want to know, but it’s one of these, uh, dead ends that you fall into. Like if you don’t tell people, people like don’t know, like on, hey, for example, hey world are our, we don’t tell you, we do tell you behind the scenes, but we don’t tell anyone how many people are re is reading your blog. It’s just not real. We don’t have analytics, we don’t have any of that stuff. It’s just for the, the pleasure of writing because everyone starts at a bad number, which is zero and it sucks. So anyway, I think that’s another struggle that is underappreciated and I think these other networks aren’t thinking about it well enough because , you go from a few hundred or a few thousand or a few 10,000 to zero, it sucks. It just sucks.

David (20:25): Which is what’s fascinating about these metrics is that not only are they a key ingredient to what makes the platform addictive, it’s a moat, a real moat. And you think like, oh, this is the internet. You can just create another account anywhere. You don’t even have to pay for any of the these platforms. There’s not a payment moat. Um, but the moat of the count of loss aversion, hey, I had an audience. It might be small, it might be 200, but as Jason said, going from 200 to zero is still going to zero.

Kimberly (20:57): Yeah, well I know you guys do not have zero Twitter followers. We will link to your handles in the show notes so people can find you. Thank y’all for chatting with us all about these changes. REWORK is a production of 37signals. You can find show notes and transcripts on our website at 37signals.com/podcast. And as always, if you have a question for Jason or David about a better way to run your business, leave us a voicemail at 708-628-7850 and we just might answer it on an upcoming show.