Survival of the Twittest
There are very few business / tech / social media news that are bigger than this, except perhaps for Kanye West’s continuing demise (which we already talked about) and the FTX telenovela-grade story (which we may talk about once we actually know how far it goes) — I’m obviously talking about Elon Musk taking over Twitter.
A couple of key elements for context:
Elon Musk is not doubt one of the most successful entrepreneurs of our time (he is at least the wealthiest), although all his businesses so far have had a core technical aspect to them: electric cars, space rockets, solar panels, online payment tools… In other words, he’s pretty good when it comes to tech — the rest is more unclear.
The human factor, when it comes to Musk, is indeed a way murkier topic. As his success became more and more unavoidable, the man’s persona — and behavior — grew more and more atypical, not to say questionable. From naming his kids unpronounceable formulas to promoting freedom of speech to a fault (see: Donald Trump, Kanye West…), to venturing into increasingly conspiracy-led territory starting with Covid and masks… In short, the bigger Musk gets, the more shady he looks.
Twitter, as a platform, has meanwhile had a storied journey, starting with Jack Dorsey’s revolutionary vision and going through several major bumps on the road. My (succinct) belief when it comes to Twitter is that the core product is an amazing and utterly useful tool. It’s no surprise that Twitter is the only social media platform that Google actually tracks: because you can’t edit a tweet (only delete), it has more historical value — and journalists love that. However, Twitter as a full social product never became as polished as Facebook, Instagram or TikTok did at various points in time. It took the team(s) years to setup a decent feed algorithm, I’m not sure how many people actually use Circle and I’m still shocked that my initial thought when I tested out the platform circa 2009 is still valid: it’s missing a catered homepage, a better looking feed, or any kind of intuitive, user-friendly, immersive-enough environment.
As a result of the aforementioned lacks in product development and several governance changes (with Dorsey coming in and out of the building over the years), Twitter never quite developed the way its competitors did. Which means that, although the platform is ubiquitous and now over 15 years old, it was still valued at a couple dozen billion dollars this summer, i.e. pre-market crash. I.e. about as much as Snapchat. Enough said.
That is why Elon Musk took over twitter:
a) because he could: the company was arguably cheap compared to other (major) social media platforms. Even when offering a sizeable premium to buyout the app, the deal was only still around 40 billion, which the richest man on earth could actually afford. Personally. That is in essence what Salesforce’s Marc Benioff did with Time — or Jeff Bezos with the Washington Post, only on a whole new level: instead of buying a news organization, Musk got himself a full on social media platform!
b) because he wanted to: with the libertarian position that the man occupies and the fact that he personally publishes increasingly questionable content, it only makes sense he would want to get his hands on such an open platform. If Musk indeed makes the app virtually unmoderated, letting any and all “opinions” on there, he is effectively validating the more problematic statements, theories and groups that come with them. In an age when Trumpism is all but dead, that entails letting white suprematists, conspiracy theorists and/or Kanye West (and Trump himself) go unchecked. Anything but neutral indeed.
What famously happened when Musk started announcing all that was that advertisers rightfully got scared (having your new car ad next to a Ku Klux Klan tweet doesn’t look all that good) and the company lost a significant chunk of its ad revenue (its biggest income source) overnight. His next move was even more questionable: charge for verified check marks, which triggered more brands leaving the platform — not to mention trolls buying out those check marks and creating ever more chaos. Then you had Trump’s reinstatement poll — and subsequent reinstatement: ironically, the former President — and former troll in chief — has so far chosen to remain on his own platform. In the midst of all that, Musk was seen firing and rehiring massive amounts of the company’s employee force as if he was changing cloud subscriptions in real time. Not a great look — or a sound operating model.
So, what happens now? Anything is still possible, but I see two more likely scenarios:
1) Musk cools down and realizes that Twitter cannot be a no holds barred underground fighting cage, because the crazies will simply push the rest away. And then you’re left with Parler, which his buddy Kanye just happened to acquire. In other words, a fringe website that no moderate would venture onto, except to write an article in the New York Times about. Thus effectively killing Twitter and dilapidating its market value. Musk not being an idiot, despite immoderately loving the attention, he just might be able to gradually reassure announcers and users alike and things would more or less go back to normal — perhaps with a few less rules and few more trolls.
2) Musk keeps on trying to play Iron Man-meets-William Hearst and does threaten the very future of a bona fide digital institution. Whether he sells Twitter back before it completely crashes to whoever will want it (and be able to afford it) or cuts it into smaller pieces Yahoo-style for investment funds to want and dip a (small) toe, we’ll have to see. Given the man’s propensity for changing his mind, that scenario is not purely theoretical.
My guess is still — Musk will figure out a way to make Twitter (2.0) work. And not kill one of the largest apps out there. Then again, all empires fall…