View from Washington: Musk opts for sunny-side up on Twitter
Image credit: REUTERS/Dado Ruvic/Illustration
The world's richest man is going to buy Twitter and has immediately applied his signature marketing spin – but can it work this time?
He just can’t help himself, can he?
Once Elon Musk said yesterday (October 4) that he will now honour his $44bn (£39bn) offer for Twitter, there came the inevitable tweet.
“Buying Twitter is an accelerant to creating X, the everything app.”
World’s richest man or not, Musk is splashing out a shedload of money – alongside some debt and likely other partners – to buy a company that has a mountain of problems: bots, abuse, misinformation, and an apparent inability to match the revenues of all the other major social media companies, to name but four.
Musk will – OK, likely will – inherit a company where he has demoralised many of the staff, publicly disrespected its CEO, and is regarded warily by many of its real users, especially those who believe he will welcome back The Donald.
Maybe you would go about addressing those issues first. Maybe you would keep your counsel until your first all-hands town hall with employees. But then again, what’s your net worth?
On Planet Elon, the pitch must always be about tomorrow, the sunlit uplands that lie ahead, some way beyond any problems clear and present.
This same love of selling the dream was also there last week as he unveiled the first prototypes of Tesla’s Optimus robot. Neither could hold a technological candle to the work being done by the likes of Boston Dynamics, but the big disruption – alongside some justified kudos due his robotics team for what they were able to deliver just over a year on from last August’s ‘concept’ guy in Lycra – was Musk’s target: humanoid robots at $20,000 a pop attacking a market where $100,000 is the going rate. Eventually.
Then, of course, the approach has long been part of Tesla Motors’ marketing. You don’t just buy a state-of-the-art car; you buy one that you expect to become even more start-of-the-art in the garage thanks to regular in-the-field upgrades.
That said, Musk does have a record for delivery, for showing continuous progress. Tech’s history is full of vapourware merchants. You’d hardly say he was one of those. Just pretty rubbish at peace negotiations and rampantly mercurial.
Musk is also, by all accounts, very good at picking senior managers and engineers who can and have risen to the often surprise targets he sets: it isn’t that uncommon for them to find out what they’re doing next via an off-the-cuff remark at some event. That capacity for delegation, even while he remains the public face of every company he owns, mitigates charges that Musk spreads himself too thinly.
But Twitter does differ from his earlier ventures in an important way. In the past, Musk has either founded companies or, in the case of Tesla, come on board in the early days. Twitter already has millions of fans but also millions of users who use it almost under duress, and millions who do not use it because they think it is a sewer. Most of the world has an opinion; almost all of it knows the brand. And that brand is not there to be built; it needs to be rebuilt.
Yet this is going to be the platform for “the everything app”.
You could say Musk can look to a template for that. Much of China’s population lives on Tencent’s WeChat mega-app which provides social media, e-commerce, payments and so much more. With the US poised to take another major step towards technological ‘decoupling’ from China, there may be a window of opportunity – but not only Twitter is eyeing it. Facebook, Amazon and Google have their own ambitions and already much better infrastructure on which to build the monolithic app (some anti-trust wariness notwithstanding).
Last week’s release of some of the texts Musk exchanged following his initial Twitter bid meanwhile offer little evidence that the mega-app model was foremost in his mind (although there were substantial redactions). Rather, they point to his original publicly expressed concerns that management was not running the existing core business well nor providing the kind of free speech platform he believes Twitter should be.
Next, because Twitter is, if not the public square, then at least a ubiquitous forum, Musk will now find himself likely to be held universally responsible for what happens on it by both the public and politicians. It’s worth noting here that one reason why Facebook has struggled on similar counts is that so much effort has had to be given to defending its leadership, specifically Mark Zuckerberg and the just-departed COO Sheryl Sandberg.
The cold truth is that having gone after Twitter on a whim and then got cold feet, most analysts believe Musk is completing the deal because he almost certainly would have lost his attempt to back out in court and, even if successful, been forced to testify under oath in a way that could have damaged his existing businesses and his own reputation (though he was still set to be legally deposed at time of writing). Maybe he now sees the “everything app” ambition as also his best way forward.
You still would not bet even a fraction of a Dogecoin against Musk turning things around and having the last laugh. But you’d also hesitate to bet against the deal turning into a textbook Harvard Business School example of ‘Be careful what you wish for’.
Selling the dream will likely first involve getting beyond quite a few nightmares. Being upfront about that would have been a better start.
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