Naturally prompted by the current Twitter situation, I've come to the point where I just have to write down my thoughts.
I have no doubt that Elon Musk is a genius, both of thought and action. He can formulate visions and execute them. He has two truly epic feats under his belt - starting a viable car company from scratch (the first since the 1930s) and bringing about the next generation of space technology and exploration, after a long, long winter. This is definitely not the work of an "emerald mine heir, just investing his money."
He is however not an infallible genius, which is particularly noticeable in areas outside of his core expertise. And that includes social networks. In some sense, it might be the kind of venture least amiable to an engineering, top-down approach. The product is made of a fickle, unpredictable human mass and there are no good instruments or levers to make it do what you want.
The first thing about the whole Twitter situation which really gave me a pause was the fact that Musk had apparently waived due diligence as a part of the $44B takeover bid. This is completely incomprehensible to me. From an M&A perspective, it's like a story of someone who picks up a skank at a seedy dive bar and proceeds to raw-dog her. Incredibly irresponsible. Are you sure you don't want to use a condom? Things might seem easier in the moment, but the potential for future regret is rather alarming! The rebuke I've heard was that Dorsey had already told him all the important stuff anyway, but that's just not how the process works. For one, the due diligence could have given him a way out of the bid (and boy, wouldn't that turn out to be handy...) It's not guaranteed, but rare indeed is the DD that doesn't uncover some sort of irregularity or dubious representation that could have served as ammo in the lawsuit. Secondly, the DD would have mapped out the exact internal structure, external relations, responsibilities and exposures. Even if (or rather precisely because) the plan was to mow through the ranks, this would have been extremely useful to have. If you're going in with an axe, you should at least have a map of the areas you intend to clear-cut. The whaling system deployed by Musk might have been effective at selecting for a combination of competence, drive and vision alignment (and/or desperation) - but that's not the same as critical institutional knowledge. Twitter is vast and something like 80% of the people who knew what went where and why are gone. The sole irreplaceable value of Twitter is in its existing user network - but this is inextricable from the pulsing, living IT snarl containing the accounts and their connections, which is in turn inextricable from the human apparatus building it and maintaining it. With cars or rockets, as long as you have the tech packages, you can always just bring in new competent engineers to continue the work. But there isn't any objective singular blueprint of Twitter. No single person has the whole picture. It's dubious whether it can even be successfully cold-reset. It's just... why go about it that way? Why not put on the condom?
The second incident was the checkmark fiasco: 1. Blow up the old and opaque verification system 2. Concoct an $8/month pay-to-play scheme 3. Discover why the verification system had been there in the first place 4. Clumsily return to a variant of the old opaque verification system. I'm sure the advertisers were thrilled. How am I not looking at an impulsive, poorly though-out spiteful action here? There are people stuck with GIANT PENIS handles to this day...
The thirds aspect is Musk ostensibly sleeping over at Twitter HQ, wildly coding into the night with the bros. The problem is that either his ethos of "You can't put in less than 80 hours a week and expect a thing to work." is wrong or Tesla and SpaceX are getting the shaft here. And the stock price sure seems to indicate the belief in the latter. More than half of the value gone, YOY, as of the time of this writing. And heaven knows what's happening to Neuralink or the Boring Company. Precisely to the degree that Musk is an irreplaceable genius, the Twitter stunt is coming at the expense of projects he himself considers vital for the survival of human consciousness. What are the priorities here?
The further unmentioned elephant in the room is stimulant abuse and, even worse, the attendant lack of sleep. At this point, it would take a lot to persuade me he isn't up to his gills in some Chinese designer hyper-opti-MegaAdderall regimen, which just appears as both the likeliest cause and result of his recent actions and decisions.
The historical parallel I'm most reminded of is Napoleon. Certainly no rando of middling qualities - but also somebody who, past his initial bout of success and innovation, slumped into the belief in his own brand of unerring radical decisions, with well-known consequences.
So I'm out. Not that it should matter to anyone in any practical terms, but my confidence in Elon Musk's process and vision is gone. At this point, it mostly looks like the driver's seat is occupied by erratic hyperconfidence. I'm not expecting Twitter to disappear any time soon, in fact I still consider it somewhat more likely than not that the company will ultimately stabilize. It's not that any single action had caused irreparable damage - but the series of unforced errors, starting with the bid itself, isn't inspiring any future confidence in me. I will not be getting on that rocket to Mars, thank you very much.
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Notes -
Tesla was always bound to drop. It's been wildly overvalued for some time. A big benefit for Musk is that there weren't many shares floating around, which propped up the price, and consistently undermined short sellers. This also helped him reach his targets and earn billions.
With the economy the way it is, Tesla's share price was bound to drop. So Elon 'diversifying' by picking up Twitter might be the best thing to happen, even though he wildly overpaid. (Though it seems like a good chunk of people rolled their shares over, so I wonder how much he actually had to pony up to get Twitter). Anyways, cutting costs at Twitter is dead easy. It doesn't take much to run a social media site. Most social media sites seem to just shovel money into a bottomless pit, most of which does nothing to raise revenues or improve the average user's experience. They simply find ways to spend the money that comes in. It's the Wikipedia cancer thing. Revenues go up, expenses go up.
The core product of Twitter won't change. They don't need to spend $5 billion/year 'improving' it. Most of the jobs at Twitter are useless and can be safely cut. Twitter should be able to run for a tenth (or less) of the cost. Their revenue might drop a bit as premium advertisers pull out. But there are going to be plenty of companies who are happy to swoop in. So Twitter should have no problem making a few billion in revenues. It should be making an easy billion in profit each year (and probably more).
The real money maker for Twitter would be to allow shit like allowing people to subscribe to users (for $x/month), allowing people to 'tip' or give a 'super like' (for $x), allowing users to send subscriber-only tweets. Hell, I'd make twitter users pay to be able to take tips and get subscribers (basically make it so only 'verified' people can get paid subscribers/tips). You'll have lefties falling over themselves to pay Elon the monthly membership fee. And I'd have a premium level that includes a bunch of stats and analytics about followers, engagement, etc.
That could easily bring in a billion. The real money maker is all the people who get memberships thinking they'll convince people to subscribe, and then never getting any subscribers.
Social media (and most tech) sites are bloated as fuck and can withstand a lot of cuts. Most can be monetized to a much greater degree than they currently are. I think one of the most inefficient websites is probably YouTube. The amount of video uploaded everyday, 95% of it that will never get more than a couple views. You could eliminate the vast majority of it by introducing a paltry cost to upload, and you'd make money off those who continued. Imagine the billions YouTube spends on storage each year, especially redundancies. 95% of that cost going to scanning and storing videos that literally nobody will ever watch. YouTube could probably be more profitable than the rest of Google if it weren't for that.
We watched Facebook burn billions on their Metaverse. Companies pouring billions of ad dollars into Facebook, to put ads on people's timelines, and Facebook shovels that into a pit, rather than to their shareholders. Facebook's main source of revenue is the same thing it was 10 years ago. They'd be one of the most profitable companies if they just stuck to the timeline, sold ads, and collected the profits. But for some reason they'd rather shovel money into projects that go nowhere. Just like every other social media company. Most spending is a waste and won't produce value.
Social media companies are ripe for being bought out, stripped down, and turned into profit engines. Especially with the billions in losses on the books which add some value.
One of the few new features in the last 10 years was when they tried to introduce a tip button. It used PayPal and a few other payment systems. Due to the default settings on PayPal, if someone sent a PayPal tip they got an invoice with the recipient's home address.
Needless to say, the "tip button that doxxes you" wasn't a big hit.
https://www.themarysue.com/twitter-tip-jar/
Really they should have just straight up charged $200 a tweet to reply to Trump. People would have paid.
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Are you familiar with the BCG matrix?
Not really. Care to explain?
Basically, a company can classify its products using two axes: their market share, overall market growth. A successful product hits all four quadrants:
small share on a growing market (❓)
large share on a growing market (⭐)
large share on a stable market (🐮)
small share on a stable market (🐶, in the sense being taken behind the barn and put out of their misery)
An unsuccessful one just goes from ❓ to 🐶.
To turn a ❓ into a ⭐, you have to milk your 🐮 and use the money to boost it. You can't just milk your 🐮 and collect the profits, because every product will die sooner or later when its market dries up or is commoditized. That's why everyone is shoveling money into moonshot projects and startups.
Thanks for that!
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