The collapse of Twitter will be a classic case study for MBA students someday. How did a guy who doesn’t understand where Twitter’s value is, gutted the company, and destroyed its brand and integrity get to be so wealthy? He didn’t start Tesla, he bought in when it was young. I’m not sure what his history was with PayPal, and I’m not sure where SpaceX will go. But how could someone who fucked up Twitter so seriously get anything else done?
Inherit an emerald mine and have a mother who’s a supermodel.
Hubris.
More specifically, as recent as three years ago he was very wealthy but not the wealthiest. There was the take-off of Tesla share prices coupled with crazy incentive rewards that Tesla granted him several years before. SpaceX self-values but $125B sounds about right in today’s world. He did turn Tesla into a huge car and battery manufacturer from next to nothing, and outright built SpaceX from the ground up. But his more recent endeavors (Boring co, Neuralink) seem to be less successful although I guess you could argue he didn’t really expect them to be. Twitter is just a dumpster fire that I believe was brought on by his on hubris gained from his earlier successes.
That, and when there is a team of people anticipating your literal next step and making it as pleasant as possible, it’s got to be really bad for your sense of reality after awhile.
It’s the emerald mine one, or so I’ve heard.
A fool and his $44,000,000,000 are soon parted.
Speaking of SpaceX, I betcha the quickest path to a small fortune in rocketry is a big fortune.
It’s easy enough for a very smart psycho to make a fortune. They’re usually highly driven and ruthlessly selfish. The dumb ones become petty crooks. The smart ones become entrepreneurs or CEOs.
The hard part, once you really are living the life of Ernst Stavro Blofeld with secret volcano lairs, black-uniformed henchmen, and all the rest, is to avoid going insane. And once somebody is insane, they do all sorts of crazy pointless stuff. Usually at great expense to themselves. It’s kind of in the job description for “mad scientist / megalomaniac”.
If you recall the descent into madness of Chief Inspector Dreyfuss in the Pink Panther franchise, we’re watching a real-world reenactment in real time. I just hope Elon doesn’t have a death ray that produces twisted wreckage. It’s a good bet he does have a pipe organ someplace, though whether he can play Bach on it is an open question.
Elon hasn’t developed an electric car, or designed a battery factory, or built a rocket, or … He’s recruited people to do that, he’s sold the ideas to investors, he’s probably injected his desires for where the development should go, but then other people have taken time to see if they work.
But he believes he knows how Twitter works based on his own user experience, he’s fired all the people who used to decide what would be tried next and the people left don’t have the clout and/or desire to say “wait a minute”, but they do have the ability to make Elon’s next flight of fancy immediately implemented for all of Twitter’s users.
Musk is a classic case of someone who succeeded beyond anyone’s ability to say no to.
Twitter is not a great example, though. Musk made the original wildly overpriced but innately humorous offer of $54.20 a share just for the lulz, a word he keeps using. He backed off from it almost immediately, obviously intending the deal to be no more than promotion for his richest man in the world can buy any toy persona. He certainly did not expect the backlash or the fact that courts would hold him to his folly. Everything that’s happened since is more ego.
Musk has apparently fired every person who has told him no. That works sufficiently well for him to scream his success; only his enemies talk about the multitude of times that didn’t work out. (Buffalo’s solar battery factory being another example.) Twitter is running on sheer momentum today. It may fall apart but my assumption is that Musk knows there’s no good immediate replacement for 450,000,000 active monthly users. He also knows he needs to answer to no one. The stock was delisted when he took it private. The last listing I found was for $53.91. If the company doesn’t go completely belly-up he’ll do a public tender and laugh in everyone’s face when the stock rises even more.
Thie whole emerald mine thing is imbecilic. Musk’s father had a partial share in a small mine that probably brought in well under a million bucks total. And since Musk’s father is still alive, Elon didn’t inherit anything. Why would he have taken student loans if his family was super wealthy?
Musk put ~$100M into SpaceX initially. Today, his share is worth >$50B. In the last year they put about twice as much mass into orbit as everyone else combined. That’s Europe, Russia, China, the rest of the US–everyone. They aren’t going anywhere.
Your title is completely false: it takes a very large amount of business acumen to build two major companies (Tesla and SpaceX).
However no one is good at everything; and Twitter management is something Musk is not good at.
Musk’s entire strategy is “have lots and lots of ideas, try them all, and profit off of the few that succeed”. Because, let’s face it, his successes tend to be really big successes. If those few really big successes come at the cost of a bunch of failures, it doesn’t matter, as long as the bottom line stays up. Which it does.
It remains to be seen what will happen with Twitter anyway. Musk knows as well as anyone the value of the network effect–that when “everyone” is on some platform, it’s incredibly hard for any alternatives to succeed. It’s why there have been no competitors to Twitter so far. It’s why the only way messages on Twooth Social get any traction is when they get reposted via screenshot on Twitter.
Of course, this has limits, and Twitter is no different. Alienate enough people and you leave an opening. So far, this does not appear to have happened, but then, it’s very early days.
Whether the “gutted” employees represent a real loss also remains to be seen. A few years ago, Musk fired the entire E-staff of the Starlink division because he thought they were moving too slowly. There was great hand-wringing about the future of Starlink and how it must be a complete disaster. Instead, they shipped a couple test satellites in under a year and the full versions shortly afterward, and it’s been a great success since then. Sometimes management actually sucks, or at least is poorly suited to a given position, and a shakeup is necessary.
This is also not to be underestimated. Musk is arguably quite reserved compared to typical venture capitalists, who might expect 90+% of their investments to fail (but the remaining ones to earn >>10x).
Ignorance fighting time … my own ignorance, that is.
Musk has had Twitter for what? Less than two months? And you’ve written your OP as if all that is a fait accompli and that Twitter is done for now, in the present, as I type this post.
Now, of course I had heard “Musk bought Twitter”. Even knew the price ($43 billion). Knew he wanted to re-instate some formerly corn-fielded Twitter users. Heard/read last week that Twitter laid off a bunch of people.
What I hadn’t heard or read was that Twitter is in an unrecoverable death spiral. Yet here in this thread, people are posting like Twitter went belly-up five years ago or something. Like talking in the now about Myspace or Friendster.
So OK … what happened and when did it happen? I ask rhetorically: I don’t expect anyone in this thread to indulge me a long explanation (though I would be much obliged if one were forthcoming). Can I just Google “Musk, Twitter, collapse” or something and get the skinny readily?
And … is Twitter truly kaput? Like within 24 months (or less?), there will be no such entity online?
[Sam Kinison in Back to School]
“Well … is he right?!?”
[/Sam Kinison in Back to School]
It will be difficult to know, to be honest. It’s private now, and thus won’t report earnings. Twitter was already largely unprofitable, and even their revenue per employee was far below competitors like Alphabet (Google) and Meta (Facebook). Is that because of bloat or because Twitter’s avenues for revenue are more limited than the others?
It does seem hard to justify such a large employee count given what Twitter actually does. They aren’t even blowing cash on useless side projects like the metaverse.
Bloomberg Businessweek magazine had an article on Twitter in the October 17 issue, before Musk’s takeover. It includes this paragraph:
After several years of consistent profitability, the company reported a loss in net income in July, as well as a drop in revenue from the same period a year earlier. The next week it announced it was closing or downsizing offices in New York, San Francisco, Sydney, and several other cities, and that came after it had halted hiring and rescinded job offers to some candidates.
Twitter’s problems were part of Musk’s dropping his offer, presumably because he didn’t do due diligence. Who knows whether that was the beginning of “an unrecoverable death spiral”? For sure Twitter has major problems. Everything else is conjecture, including whether Musk’s changes are sensible or idiotic.
Yeah, it does seem that Musk kind of has the Henry Ford problem. He succeeded at one thing, and thinks he understands everything else because of it.
I dunno if Twitter is in a death spiral, but Musk does not seem to be helping in the short term.
Something the world will not forget.
Advertisers are leaving in droves. They won’t be able to make that up by charging eight bucks a month for a meaningless blue check. The Eli Lily incident just makes it that much worse.
Is he good or lucky? Often the most effective change is radical change, but he has done things to Twitter that seem very impulsive without any real vision and without projecting the consequences. And so his revenue is evaporating. It seems he did this with only one stated goal, which he still hasn’t accomplished: restore Trump’s account. So how did the same guy succeed with Tesla and SpaceX?
Short-term pain, long-term gain. This showed up in Reddit’s “programmer humor” recently:
Ok, it’s funny. And embarrassing. And yet, exactly fits with Musk’s management philosophy. He has explicitly told the employees at SpaceX and Tesla that if they don’t occasionally have to add parts back in, then they aren’t being aggressive enough in deleting them.
In other words, improving a product requires simplification. Products grow bloated over time and it takes immense effort to reverse this trend. In large part this is because it’s impossible to be 100% certain that some piece isn’t needed, but if there is a great cost (career-wise or otherwise) for a failure, then no one will make an effort to simplify.
If on the other hand there is a directive that some failures are expected, then simplification can happen. As long as changes can be reversed, you only pay a short-term cost for that failure. But you reap the long-term gain for all the times that it piece really wasn’t needed.
Assuming the post is actually true, what Twitter learned is which 20% of their microservices actually are needed. The cost was a short-term outage for (some?) logins. The result is that they can cut all the services that really were useless.
Anyone that’s worked on a large software project for a long time has at least dreamed of doing this, even if they knew they couldn’t get away with it.