When Elon bought Twitter, they had 7500 employees. He fired 50% of their workforce. Another 1200 left after he told them he was going to make Twitter "Extremely Hardcore". Less than 2900 remain.
How can 2900 do the same job as 7500?
Price's Law:
Derek Price, a British physicist, historian and scientist discovered something interesting about his peers. There were always a handful of people who dominated the publications within a certain subject. Being a scientist, he investigated. He found out the following:
50% of the work is done by the square root of the total number of people who participate in the work.
He tested it across different groups and audiences and it almost universally applied. Especially in business.
The square root of the number of people in a company do 50% of the work.
In a company of 10 employees, 3 of them do 50% the work.
Remaining 50% of the work is done by the other 7 people.
These scales too.
Competence grows linearly. Incompetence grows exponentially.
- 10 employees, 3 of them do 50% of the work
- 100 employees, 10 of them do 50% of the work, the other 90 do the other 50%
- 10,000 employees 100 of them do 50% of the work, the other 9,900 do the other 50%
The survival of any business requires the execs to figure out who the most competent and necessary people are in the organization and keep them happy and keep them around. If they don't, Price's law will kill their business.
Elon just has to hope he chose the right people.
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