The StreamBase Event Processing Blog

Trading on Macroeconomic News

Last Thursday, we hosted a webinar – “Trading on Macroeconomic News” with Need to Know News (NTKN), a subsidiary of Deutsche Bourse Group Company. With pre-built connectivity to NTKN’s AlphaFlash, we demonstrated how a trading firm could easily incorporate low-latency news algo data feeds into their trading systems. In the 50-minute webinar, we built a basic algo that will trade EUR/USD based on the data of non-farm payroll employment report. 

Trading on unstructured or non-traditional data is a topic that is gaining more and more attention. Adam Honoré (@adhonore) at Aite Group reported that 35% of quant firms are now exploring machine-readable news feeds in some way, compared to only 2% in 2008. The development of electronic trading and explosion in data volumes over the past decade play key roles in this phenomenon. Yet, most market participants are still trying to figure out effective and efficient ways of transforming unstructured data into increased profits or prevented losses.

One fund, Derwent Capital has reported success already, announcing a 2% profit from its $40 million dollar fund, with investment strategies based on Twitter mood - derived from a paper published by Johan Bollen and Huina Mao at Indiana University, Bloomington, and Xiao-Jun Zeng at the University of Manchester. In 2009, Zhi Da and Pengjie Gao at Notre Dame and Joseph Engelberg of UNC also proposed correlation between Google Search Volume Index (SIV) and stock prices.

Here at StreamBase, we were one of the first financial technology firms to offer clients a way to connect to unstructured social media content, such as Twitter. Media interest in this area has been high, with coverage from CNBC, the FT, the WSJ, and USA Today; though enabling customers to trading on social media, is really only a small percentage of what we do. The scalability and flexibility of StreamBase CEP makes it a great platform to handle unstructured data in real-time.

Leading economic indicators, such as GDP, consumer confidence index, interest rates and unemployment reports are commonly used for signal generation but a firm needs to make extra efforts to really gain a competitive edge with unstructured data. Simply categorizing news into positive, neutral or negative might not be sufficient enough for effective algorithmic trading. In 2010 we demonstrated how StreamBase can be used with a LingPipe, a natural language processing tool kit that can understand the implications of a news story vs. market expectation.

Although it is rare to see signal generation or alpha seeking strategies solely based on news events, some sophisticated firms incorporate unstructured data and sentiment analysis to develop algos that react to market volatility after a particular news item breaks. 

Processing of unstructured data has relevance not only for alpha-generating strategies but also for risk managers and regulators who could use machine-readable news and sentiment analysis to simulate a firms’ exposure or market fairness under extreme events, for example, the recent downgrade of government credit ratings.

Trading on unstructured data will continue to be a popular topic. If you have any new ideas for using other non-traditional data for trading, please let us know. Below are some additional links which might prove interesting.

Further reading: 

Using Twitter to Predict Stock Market Swings, New York Times

Twitter Mood Predicts The Stock Market, Technology Review

Hedge Fund Will Track Twitter to Predict Stock Moves, Bloomberg

Which Stocks Will Rise? Ask Google, SmartMoney

In Search of Attention, Zhi Da, Joseph Engelberg and Pengjie Gao

Computers That Trade on the News, The New York Times

On IBM, Unstructured Data, and CEP, StreamBase Event Processing Blog

Twitter for those dirty, alpha-seeking strategies, FT Alphaville

Twitter and Trading: A Ripple in the Big Data Wave

In 2009, StreamBase began talking publicly about using CEP with Twitter. The topic sparked a flurry of mainstream media coverage about Complex Event Processing (CEP) on Wall Street on outlets such as CNBC, the Wall Street Journal, and the Financial Times. Even Popular Mechanics named CEP as one of 10 Tech Concepts to watch, along with Fracking and Flywheel Energy Storage! (watch this short video for an introduction to CEP)

Last week, USA Today published an article about CEP and trading on the front page of its Money section: Wall Street traders mine tweets to gain competitive edge. The report covered developments such as: 

• The opening of Derwent Capital, a firm that specializes in news-driven trading strategies, including Twitter
• A report from Adam Honore from AITE group whose two recent reports (on trading strategies and on unstructured data) revealed that interest in unstructured data has jumped from 2% in 2008 to 35% in 2011
• Rich Brown, who talked about how the Thomson Reuters news sentiment engine is more effective than the "quirky and abbreviated language of Twitter"
• Johan Bollen, a professor of informatics at Indiana University, whose research claims an 87% accuracy rate in using Twitter mood measurements to predict Dow stock prices three to four days later
• MarketPsych, a firm that used to run sentiment-based strategies, switched from being a hedge fund to a software provider

The article shows that Twitter continues to be a controversial topic: some tweets are clearly important - for example, the CME Group tweets news about the commodities market and has over 780,000 followers. On the other hand, computer-measured sentiment is just that - one more barometer of what the masses are thinking. Good investment decisions are powered by experience and knowledge, and sentiment is one input of many.

The noise over use of Twitter on Wall Street drowns out the real story, which is why I was quoted in the article that Twitter is "a ripple, not a wave" on Wall Street (and Main Street as well).

The big wave is big data, and Twitter generates just a few buckets of sand in world of big data today. 

In "New Rules for Big Data," the Economist reported that Google processes a petabyte of data an hour. Here's a way to put Twitter in context*: think of a bucket of sand. If every grain of sand in the bucket was 1 byte of data, then:

• The entire work of Shakespeare fills just one bucket of sand (about 5MB)
• A fast financial market data feed (OPRA) fills a beach of sand in 24 hours (about 5TB) 
• Google processes all the sand in the world every week (about 100PB)
• We generate 60% more sand every year

In these terms, all of Twitter generates only a sand castle of quality data a day. While some of that data is very valuable, such as tweets from CME Group (@CMEGroup), most of it simply tells us about mass sentiment.

On the other hand, the debate about Twitter does reveal the opportunity and challenge of big data. The Economist used a quote from Oscar Wilde in 1894 to put that challenge in context - Wilde said: “It is a very sad thing that nowadays there is so little useless information."

So the big ruckus about Twitter on Wall Street reveals the real big story - today's big data challenge.

* Thanks to Rob Doherty at Cloudswitch for sharing Chad Sakac's (EMC) buckets of sand concept, the Economist New Rules for Big Data for sizing data from Google, and @RJMetrics on big data (TED Philly talk) for conceptual description of big data.

The 10 Commandments of Intrapreneuring

(Mark Palmer is the CEO of StreamBase Systems.  Follow him at twitter.com/mrkwpalmer. This post was originally released in 2009, but rewritten in January of 2010)

The American spirit is an entrepreneurial spirit. So it’s no surprise that the recent
economic upheaval has spurred a rash of discussion about entrepreneurship and innovation. Today, for example, the New York Times reported that we are in the midst of a shift where innovation is moving to big companies, and away from small companies. But the article missed the heart of the entrepreneurial matter - it’s approach, not size, that forms fertile ground for innovation.

Size of a company is a specious way to characterize innovation. But is there a better way? Gifford Pinchot's classic book Intrapreneuring analyzed the leading big innovative companies of his day (the book was published in 1985), and his findings have stood the test of time. 

To begin with, he found that big companies, as a group, aren't good at innovation:

You might think that larger organizations would be stodgy in thinking up new ideas, but, because of a wealth of management talent, would be very good at executing them. It turns out, however, that just the reverse is true:  our large organizations are producing large numbers of good ideas but generally are unable to implement them." 

Unfortunately, I think this finding still stands, 25 years later.

But he went on to describe how big companies can adopt the right spirit, hire the right people, and design the right incentives to innovate. A few central points are helpful to review.

To innovate, big companies must form small, autonomous, focused groups. These groups must be incentivized to act like small companies, by adopting the "Intrapreneur's 10 Commandments": 

1. Come to work each day willing to be fired
   
2. Circumvent any orders aimed at stopping your mission
   
3. Do any job needed to make your project work, regardless of your job description
   
4. Find people to help you
   
5. Follow your intuition about the people you choose, and work only with the best
   
6. Work underground as long as you can – publicity triggers the corporate immune mechanism
   
7. Never bet on a race unless you are running in it
   
8. Remember it is easier to ask for forgiveness than for permission
   
9. Be true to your goal, but be realistic about the ways to achieve them
   
10. Honor your sponsors
    

These commandments will seem obvious to entrepreneurs, but they are both rare and threatening in most big corporations.

So if you're the CEO of a big company and you're serious about innovation, what should you promote? First the CEO must check his or her own personality. Not all CEOs are alike. Some personality types are best suited for the "cash cow" part of a corporate lifecycle, and some are best suited for the early stages.  

What are the characteristics of people who can thrive in innovative firms? Pinchot provided a tool for this too, with his breakdown of 19 characteristics of intrapreneurs versus traditional managers. Here's an exerpt from that table, (or download the entire list here, published with permission from the author).

	Traditional Manager	Intrapreneur
Primary Motives	Wants promotion and other traditional corporate rewards.  Power-motivated.	Wants freedom and access to corporate resources.  Goal-oriented and self-motivated, but also responds to corporate rewards and recognition.
Decisions	Agrees with those in power.  Delays decision until gets a feel of what bosses want.	Adept at getting others to agree to private vision.
Time Orientation	Responds to quotas and budgets, weekly, monthly, quarterly, annual planning horizons, the next promotion or transfer	End goals of 3-15 years, depending on type of venture.  Urgency to meet self-imposed and corporate timetables.
Action	Delegates action.  Supervising and reporting take most of energy.	Has a bias for action. May know how to delegate, but when necessary does what needs to be done.
Courage and Destiny	Sees others in charge of his or her destiny.  Can be forceful and ambitious, but may be fearful of others’ ability to do him or her in.	Self-confident and courageous.  Many Intrapreneurs are cynical about the system, but optimistic about their ability to outwit it.
Attention	Primarily on events inside corporation	Both inside and outside.  Sells insiders on need of venture and marketplace, but also focuses on customers.
Risk	Careful.	Likes moderate risk.  Generally not afraid of being fired so sees little personal risk.
Market Research	Has market studies done to discover needs and guide product conceptualization.	Does own market research and intuitive market evaluation like the entrepreneur.sponsors

These are just a few key key elements a culture that's designed for innovation. So many more are critical, including compensation plans, equity structure, organizational structure, and so on. But I find that for people with the entrepreneurial mindset and some experience, those things become obvious.

Since our economic future depends on getting innovation right, both in big companies and small, we're lucky that we already know how to innovate. We just need more companies and leaders that have the guts to get out there and do it.

Press Releases: Dead or Reborn?

A colleague of mine from a press agency asked for my thoughts about a recent study where 45% of respondents said that press releases are losing their relevancy. As the CEO of a company that cares deeply about how my company communicates, and who believes in social media, I've written that I think that old school PR is dead. So it might not be surprising to some to hear that I think most communications professionals have it backwards - again.

Press releases aren't dead, their role is being reborn. Social media is immensely powerful. But that power enables the transmission of misinformation just as it enables the transmission of the truth. A press release is one of the few remaining versions of the truth. 

In the old days of communications, a press release was for the press. Not anymore. Press releases used to be teasers - a tool written by PR professionals and used to get the attention of a writer. This use of a press release is waning in importance. And it's why, as the survey suggests, as many of 97% of press releases sent to media outlets are never acted on. 

New school communications recognize social media as increasingly important sources of opinion. Blog posts use press releases as the main source of the truth.

New school communications are faster. But tweets are ephemeral; press releases are forever. Good press releases are carefully considered - it can take weeks to edit them because they document major milestones and events.The integrity of a tweet is a function of the integrity of the twitter, and some tweeters are twits. Press releases are the official record.

New school communications have brought the "man on the street" into the discussion, which complements a company's view (via the press release), industry commentators, critics, and investigators.

In the new school era of mass opinions, press releases hold more weight than ever before. For example, I work in the financial services industry, and banks are notoriously secretive. Getting a bank to agree to a press release is a big deal. The very existence of a press release is news in and of itself.

Of course, the public is turning to other sources of information. Of course press releases can become over processed by corporate PR filters. Of course old school PR is dead. But press releases are the official record of business, and in the social media era, press releases set the record straight, because they are the record. 

StreamBase & Phase Capital on CNBC: Trading on Twitter

Trading on Twitter: Opportunity, Danger, or Folly?

This week my company issued what I thought was an innocuous announcement - our software now allows applications to process Twitter tweets with an application and analyze the contents of the messages in real-time. A firestorm of debate ensued, and the issue gained mainstream media coverage in the Financial Times, the Telegraph, CNBC,and dozens of others. The debate gives us pause to consider the role of the sweeping adoption of Twitter as a real-time, global information source, and how that information might be used beyond the mostly social nature of Twitter today.

One of the examples we cited for this technology is automated trading on Wall Street, where any of the 16 million tweets a day can be analyzed in real time as a means to inform trading decisions.  Wall Street tends to be an innovator with new technologies, so it’s useful to use it as a petri dish to examine some of the opportunities and issues around Twitter in a business context.

Trading on rumor is a time-honored trading technique.   “Buy on rumor; sell on news” is one of the oldest mantras on Wall Street and Main Street alike.  Any tool that improves the speed or quality of transmitting information is of interest to traders.  Twitter does that.   But be careful what you ask for – lots of the tweets on Twitter are garbage – scam artists and manipulators.  On the other hand, there are thousands of credible sources of information, from the SEC (@SEC_Investor_Ed), to the New York Times (@NYTimes), and even exchanges like CMEGroup (@CMEGroup), which has over 500,000 people subscribed to its tweets about the futures and options markets, and more. 

And beyond any individual source, and probably more uniquely, Twitter allows instant access to the sentiment of the masses.

In the Wall Street & Technology article, Todd C. Mirabella, chief investment officer and principal of New York hedge fund QAT, says one of the uses he has found for Twitter is to help look at market volatility and compare it. "So how we get our information, that's the trick. Twitter can give us information on retail " [Tweeters] are the herd," he says.

For example, anything new that Apple does throws Apple’s stock into volatile gyrations.  The recent launch of the iPhone 3GS set off a rash of Twitter tweets about what the herd thinks – taken together, they can reveal sentiment – good and bad. Getting that feedback a few seconds faster, or a little better can make a big difference in trading returns. 

Business leaders, from CEOs to inventors, use Twitter.  For example, Richard Branson (@richardbranson), the CEO of Virgin, tweets regularly.  Now I’m pretty sure the news in the first tweet about Jimmy Fallon isn’t actionable for trading Virgin stock, but the fact that he’s ordering $2.1 billion worth of new planes might be.

Nasir Zubairi, former product manager for algorithmic trading and FX E-commerce, RBS, put it this way in the Wall Street & Technology article:  "[Twitter can be] the fastest source of news, particularly in reference to trading and algorithmic trading," he says. "News feeds are gaining a lot of popularity. Twitter provides the medium in that people, who are there, experiencing things, are able to broadcast their sentiments to their user base via tweets. This provides lots of competitive advantage to firms with trading strategies."

 

News about world events moves the foreign currency markets as Mr. Mirabella also pointed out.  He’s not yet trading on Twitter but said he sees real use for Twitter in currency trading: "We like to trade in ranges," he explains. "That helps us characterize the extreme edges in any specific currency. We've been trying to follow more individualized Twitter sites to see if we can get extreme views [of Tweeters]. It does give us flavor for what types of ranges we're looking at."

But real use of Twitter has some serious issues.  Technically, it wasn’t built for the kind of quality of service that a robust news source, like Reuters (@Reuters), provides – what happens when Twitter is unavailable?  There are questions about latency of the transmissions – is it fast enough?  Can it be faster?  Authentication and forgery are challenges – there’s a big difference between the real Richard Branson (@richardbranson), and the fake Richard Branson (@sirdickbranson) - who is responsible for the quality and reliability of the information transmitted via Twitter?  Should it be regulated?

And regulatory issues abound, as well.  Trading decisions are moving faster, so regulators have to move more quickly, too.  In December the unfortunate trading run on United Airlines (UAL) (read the story from the Wall Street Journal) stock to drop from $12 to $3 in just 15 minutes only served to remind us how quickly conditions can change in an era of sweeping automation.  The chain reaction was started by an erroneous trading signal from an old story that the Google news crawler picked up from 2002.  How can we guard against these unintended technology-triggered mistakes?

The adoption of Twitter in a social context has been swift, massive, and global.   As technology like event processing makes the content contained in Tweets readily available to business applications, the questions of what to do with this power and responsibility looms large.

Postscript and continued debate (July 1, 2009)

Since this writing, there has been a flurry of response - positive, negative, and vitriolic.  

My favorite coverage was the excellent, balanced story by Melanie Rodier at Wall Street & Technology: Algo Traders Connect to Twitter. She did her homework, including comments by some well-respected people from the trading industry. Read it first.

CNBC's Day-Trading 2.0:  Twitter Takes on Stocks took a day-trader's view on using Twitter to understand market sentiment.  

The Telegraph's coverage, Hedge fund managers betting Twitter will give them an edge in rapid trading also covered the intelligence and military side of the potential use of Twitter.

A spirited message board debate on Server Side was provoked by John Davis (@jtdavis) from OnixS. Like many message board debates, there are rat holes, but there's good stuff there, too.

There was an assertion that StreamBase's announcement of Twitter connectivity is a cheap marketing gimmick. It isn't. This announcement was driven by current and anticipated customer demand, as you can see from our history of connecting to Alpha Trading, Interactive Data, Lime Brokerage, Reuters, other news and data sources of many types, and so on. The article you're reading illustrates the balanced way we're talking about Twitter.  

One blogger, who used to work for one of our competitors, even took the opportunity to predict that StreamBase will be trounced by the "big boys" as they enter our market! To that, I say: "bring it on." Dr. Michael Stonebraker is one of the inventors and thought leaders in event processing, and StreamBase is known as one of the leading businesses in the CEP market, renowned for its performance and ease of use. Are we wary of their deep pockets? Yes. But the big companies have yet to field compelling products - in fact, we rarely compete with them. Furthermore, the "big boys" have not showed signs of innovation and intrapreneurship as I wrote in When Microsoft enters your market:  cause for worry or cause for celebration? And in Innovation: why size doesn't matter, I countered the argument that big companies are the most effective at innovating in a market like CEP. Richard Tibbetts, StreamBase CTO, clarified IBM's recent claims of innovation as misleading in On IBM, unstructured data, and CEP.  Finally, and most importantly, our customer endorsements from CME Group, BNY ConvergEx, BlueCrest, and PhaseCapital and many more say it best - directly from our customer's mouths.

 

27 Twitter Lessons for CEOs

(Mark Palmer is the president and CEO of StreamBase Systems.  Follow him at twitter.com/mrkwpalmer)

I’m a CEO, and I use Twitter.  I started “tweeting,” or using Twitter, as a test a few months ago. When I told one of my board members, he was skeptical, and wondered about my focus. So as I experimented with Twitter, I kept a list of the pros and cons. At first, Twitter seemed like a waste of time - but slowly, my list of pros grew, and my list of cons shrunk. Now, I’m convinced that Twitter is an essential business tool.

I looked, but I couldn't find a list of guidelines for CEOs from other CEOs. So, even though I was loath to spend time writing Yet-Another-Article-About-Twitter, I thought my list might be helpful for someone else. And best of all, it was essentially done.  So here's my list of Twitter lessons for CEOs:

1. The business case of Twitter is compelling.   Twitter, when combined with other social networking tools, deliver measurable business value.  Lots of it.

Since my companies started using social networking a few years ago, (blogging, LinkedIn, Twitter, and so on), we've reduced marketing spend by over 50% and roughly tripled marketing effectiveness (measured by lead generation volume, cost per lead, press coverage, and other quantitative metrics) - at the same time.  We showed the chart at the right at my last board meeting.  Marketing spend is the green area chart in back, and leads are in the bar chart. 

Although these numbers don't lie, they only tell part of the story. Twitter's great, but not if you don't use it right. The rest of these Twitter lessons are about using Twitter effectively.

2. Do use Twitter to transmit values, standards, and ethics.  Peter Drucker said an essential job of the CEO is “to set the values, the standards, and the ethics of an organization.” Social networking helps me communicate my values, standards, and ethics to hundreds of people at once.  It’s like having hundreds of water cooler chats in real-time, from wherever I am - while I’m visiting a customer, speaking at a conference, or meeting with my board. 

For example, when I tweet about the exciting things I see on the road, you can feel our enthusiasm for our customers. When our CTO tweets, we reveal how we think about innovation. Recently I tweeted while I ran the Boston Marathon (video on www.notallceosarejerks.com) for Dana Farber and cancer research, which shows that we care about charity.

Twitter and blogging are unique in that they are intensely personal. With care and attention, it's the perfect medium for transmitting our ethics.

3. Do use Twitter for press relations – As I wrote in press releases: dead or reborn?, I think the old ways of communicating are forever changed. Traditional PR agencies have role, but need to evolve.  Recently I evaluated almost 20 press agencies. They all paid lip service to social media, but in my view only two had it deeply engrained in their culture. PR firms must evolve, or they will die (I didn't hire any of them and brought it in house).

4. Do make the mundane funny and constructive. Great tweets can be about mundane moments.  Zappos CEO Tony Hsieh (@zappos) is a master at it - here are three bad tweets I recently received, and 3 tweets from Tony about the same topics:

• BAD TWEET:  “Having coffee”
• GOOD TWEET:  “Had coffee w/ my mom, told her I gave a presentation @ Tony Robbins conference. She was really excited. In her words: "Wow! Robin Williams!"

• BAD TWEET: “Going into a meeting now” 
• GOOD TWEET: “Visited meetup.com office, met w/ CEO. Thankfully the meetup at meetup did not cause a rift in the space-time continuum”  

• BAD TWEET: “My allergies are killing me!”
• GOOD TWEET: “Taking allergy pills is like having Snow White multiple personality disorder. You go from Sneezy/Grumpy to Sleepy/Dopey/Happy.”

6. Do use Twitter for employee communication – Social networking is like a virtual water cooler, creating a steady, informal stream of communication about market events, customer stories, and the day-to-day developments in the company.

7. Do use Twitter to augment investor and analyst relations. Industry and financial analysts like getting a view direct from the CEO. Blogging is especially good for this kind of communication, and Twitter alerts them that you've got something new to say.

8. Do use Twitter for peer CEO learning. I follow other CEOs to see their observations - the good ones help shine a light on my own day.  I made a Twitter list of the top 50 CEOs here: @mrkwpalmer/top50twitterCEOs, as ranked by Twellow.

9. Do use Twitter to promote rising stars. We recently promoted one of our founders, Richard Tibbetts (@tibbetts) to CTO.  He’s an amazing technologist, and getting him out and speaking is great for us, and great for the industry. Matt Fowles, one of our top engineers, has written some great technical blog entries. Twitter helps raise their visibility, and educate the market.

10. Define your Twitter goals carefully. Signing up for Twitter is easy.  Writing tweets is easy.  But figuring out your goals for tweeting is hard. I already blog, write magazine articles, and speak at conferences, so it took me a while to figure out my list of goals for Twitter.  My main goal, of course, was lesson #2 - to transmit StreamBase's values, standards, and ethics.

11. Do use Twitter to make you a better communicator. Strunk and White's rule: “omit meaningless words” is a great one, and Twitter forces you to omit meaningless words by its very structure - the discipline imposed by 140 characters is a good discipline.

12. Don’t use Twitter for traditional marketing. Some companies seem to think Twitter’s just another vehicle for traditional marketing. H&R Block’s Stacey Gratz, marketing manager, explained: "[On Twitter,] we soon realized that we needed to listen and share, rather than pushing out marketing messages." Read about the H&R Block Twitter case study here.

13. Do use Twitter for thought leadership.  My company, StreamBase, is a leading visionary in an enterprise software market called event processing. The market is still less than $100M, but it's growing, and controversial. In a new area such as ours, education is important, and social networking provides another vehicle to educate prospects and customers. 

14. Do use LinkedIn and Facebook to connect. I have links to my Facebook, LinkedIn, and Twitter profiles on my business cards. (If you liked this article, feel free to connect with me: on Facebook, on LinkedIn, or on Twitter)

15. Do use Twitter to transmit your brand's conscience.  Habit #1 of Bruce Philip's 5 Habits of successful executives is: “[executives are] their brand’s conscience.”  Michael Hyatt (@MichaelHyatt) of Thomas Nelson Publishers and Richard Branson (@sirdickbranson) of Virgin do this well. I think all leaders should establish this direct link to transmit the essence of your corporate brand and culture. 

16. Do listen to Twitter for feedback. Great leaders feed on feedback. But a lot of people shy away from saying too much to "the boss." On Twitter, I'm just like everyone else, so I get unfiltered feedback whenever I want.

17. Do use Twitter to respond to rumors quickly.  Recently, we had to fire a well-known employee, and our competitor started spreading false rumors that we were downsizing.  Twitter helped me stop the rumor mill in real-time.

18. Don’t use Twitter to sell. Tempted to tweet: “Buy my product now for $19.99!”  Don't.

19. Don’t say too much. Sometimes basic stuff like where I am is sensitive. For example, I couldn’t tweet for a whole week because if the competition knew I was in Chicago, I would have jeopardized a sales situation.

20. Remember that content is still king on Twitter. Even though Twitter messages are only 140 characters, the quality of those 140 characters is still king. The link between content quality and business value (lesson #1) is direct.

21. Turn your communications approach upside down. If you've gotten this far and any of this stuff shocks you, start reading. The classic, and first place to start, is: Cluetrain Manifesto (about the book, short form, the entire ebook). Cluetrain was published over 10 years ago, and boldly declared that a “powerful global conversation had begun.” And this was before Facebook and Twitter. 

22. Don’t compete with SpongeBob.  My 8-year-old son, Jack, asked what I was doing one day.  I told him I was tweeting, and told him what Twitter is.  He asked:  “How many people follow you?” 

I said:  “about 1,200.” 

Jack asked: “How many people follow Sponge Bob?”

I looked it up.  “28,000.” 

Jack said:  “Dad - if you tell more jokes, maybe you’ll be more popular.”

I don’t want to compete with SpongeBob.  I’m don’t care how many followers I have.  Neither should you!

23. Don’t tweet too much; don’t tweet too little. I think it’s important not to tweet too much - I recently saw someone who had tweeted 26,000 times – yikes! My rule of thumb is to only put something on Twitter that I find truly remarkable. That happens between 0-5 times a day.

24. Twitter helps keep me informed in real-time, personally, with less effort, and dynamically.  Today one of our engineers asked:  “doesn’t Twitter just give you too much information?”  My response was that it’s the opposite – it helps me cull the information deluge down to the stream I care about.  Currently, I watch Ted Talks, Seth Godin, and David Armano (search on TweetDeck), my favorite industry analysts (@bmichelson), my competitors (you know who you are), my customers (CME Group, and many more), my cousin (@marissapage who’s really, really funny), and my list of other CEOs.

25. Don’t start using Twitter unless you love to communicate, and are willing to stay committed.  It’s hard to get in the habit of tweeting, and CEOs are busy!  Moreover, tweeting well is an art, and takes some thinking.  You have to want to communicate, and be willing to stay committed to creating ideas on your own; you can’t outsource the job, either.

26. Learn how to Twublish.  I used to write byline articles for industry journals. Traditional publishing is static, formal, unidirectional, and controlled by an external editor.  Then I started to blog, connect via LinkedIn, share photos with FlickR, and message with Twitter.  Taken together - and they must be used together - these tools form a new way of publishing - I think of it as "Twublishing."  

To publish with Twitter, or Twublish, involves writing to our blog.  Then I tweet about points in the article on Twitter.  Comments in the blog and direct messages on Twitter help me get feedback on the quality of my thinking.  Often, this leads me to new places, and adjacent topics.  Or I more fully develop the original idea, and more deeply hyperlink the original to new sources I discover.  The feedback deepens the original thought and creates articles that evolve into portals for other information on the same topic.  This post, for example, has links to 30 other information sources about the use of Twitter from a CEO's perspective.  

Twublishing is dynamic, informal, bi-directional, and unconstrained by an editor.  I can mix in video and images.  It's hyperlinked so my thoughts can become portals to other people's ideas that were the building blocks of my own.  And it's temporal - that is, as information changes over time and others respond, I can update or augment the original to refer to the new information.  

Other than the whopping $250 I used to occasionally get for a magazine article, publishing with social networking tools is better in every way.  

27. I’m more aware of why I love my job because of Twitter.  As I was returning from a sales trip, I tweeted:  “Anyone who thinks the capital markets are collapsing should go out and spend a day with the traders – lots of innovation going on out here!”  The act of paying attention to the ironic, funny, shocking, and curious things that happen from day to day makes me more aware of why I love my job.