Joel Libava
This is how the hub and spoke business model can help Elon Musk make Twitter A profit powerhouse. I have two ideas. The first one:
Convert Twitter into a franchise business. Hear me out.
Franchising: The Hub And Spoke Business Model
Here’s how the hub and spoke model would work for Twitter.
The hub is Twitter headquarters in San Francisco.
The spokes would be individual franchisee-owned and operated Twitter offices located in every major city in the world. I’ll give you a moment to visualize it. Need help?
But before I tell you how Elon and his franchisees can make money from my idea, I need to take you back in time.
RK
Here’s a super-short story about a hub and spoke type business you may be familiar with.
Raymond Albert Kroc knew that he had found something special when he saw the McDonald brothers’ amazing California hamburger restaurant in operation in 1954 He recognized the potential of the business and went on to expand it into the global franchise that it is today. That’s right. “The Global Franchise It Is Today.”
See what I wrote about Ray Kroc
There’s a couple things in that paragraph you need to focus on.
The first thing is Ray Kroc “knew he had found something special.”
I’m willing to wager that Elon found something special with Twitter. And that’s why he bought it (hopefully). Plus, he obviously recognized the profit potential of Twitter.
Secondly, Ray expanded it (McDonald’s) into a global empire. But wait.
Ray Kroc was not the wealthiest person in the world in the 1950’s.
Elon Musk is.
That…this changes everything.
Are you with me so far?
How A Twitter Franchise Would Work
It’s simple, really.
Elon and his team would market, then sell franchises city by city.
Franchisees would need to be highly qualified, networked into their local area in a big way, and be willing to hire the absolute best advertising salespeople.
I’m talking about people who are used to making a six-figure income.
The salespeople would be responsible for securing local accounts from companies who want to have local visibility on Twitter.
For example, the Charlotte, N.C. franchisee who owns “Twitter of Charlotte” would have his salespeople target businesses in Charlotte who want to increase their online presence, locally.
I need to pause for a second.
Elon, Since you march to the beat of your own drum (a true entrepreneur), the franchise business model may not be a good fit for you.
The main reason is the FTC, over the years, has instituted a lot of rules and regulations for franchise businesses. And some of those are state specific. If that’s not enough, if you wanted to franchise Twitter globally, each country has specific franchise laws and regulations.
Secondly, it takes a lot of time to design and setup a quality franchise business.
Third of all, some states are called “Registration States.” Twitter would need to go through a lot of hoops to get approved to offer franchises for sale. But there’s another way for you to do this.
My second idea would be for you to open company offices in each city, and hire a Director of Operations (with an equity stake in the business). Just call them satellite offices. You could open thousands of them, and make revenue like I suggest below-in a non-franchise way. Again, this is the hub and spoke model.
A Perfect Example Of A Potential Local Twitter Advertiser
Here’s a company your local Twitter salesperson could target in Charlotte.
Lending Tree is headquartered in Charlotte.
The company offers “all kinds of financial products, including mortgages, auto loans, small business loans, personal loans, credit cards, and more.”
Hey! Are you following me on Twitter? If not, you should, as I share super-helpful information for anyone looking to buy a franchise. Let’s continue.
So the “Twitter of Charlotte” salesperson would call on Lending Tree and offer them opportunities to powerfully advertise their products on Twitter. But there’s more.
The Twitter salesperson (Account Executive) could also suggest placing ads for job openings at Lending Tree.
But since Lending Tree has offices in other cities, ads could be placed in those local areas too. Even if another franchisee owns the area. What? How would that work?
Easy. The ad revenue would be shared between offices, with the franchisee who sold the original account getting 80% of the sale.
And if Elon decided to forego the “Franchising Twitter” route, there could still be a revenue share from office to office. Just not on the franchisee level.
Finally, still using Charlotte as an example, check out all of these other major companies a local Twitter office could easily target there.
Could The Hub And Spoke Business Model Enable Twitter To Become Highly Profitable?
Since Twitter is already an advertising company, I say yes!
The company just needs to become localized, by opening offices (spokes) in every major city in the world. Spokes that branch out from the already powerful hub that is Twitter. It would be quite the powerful combination.
Can you see how Twitter can grow using the hub and spoke model?
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