Even the wealthiest can’t buy a crystal ball – but if they could, do you think Elon Musk would have gone ahead with the purchase of Twitter knowing what he does now?
None of us know the answer to that either, but when the wealthiest man in the world reportedly loses that title after taking on another company, you’d be forgiven for thinking that he might have given it a miss.
I first wrote about Musk buying Twitter in this column last May, saying: “Whatever Musk’s decisions, we can expect it to follow his disruptive pattern” – and that’s certainly how things have played out so far.
Musk gave us a clue that things would be different when he walked into Twitter’s HQ in October, the day before the deal was signed, carrying a kitchen sink, apparently to make sure the message ‘sinked-in.’
That was just the beginning, of course, and a host of shockers followed that no-one saw coming.
Pretty much immediately, he got rid of key names in the senior management team including CEO Parag Agrawal and Ned Segal, the chief financial officer. Not long after, he sacked half of Twitter’s 7,500 employees including its communications and human rights teams. He also showed the door to a reported 4,000 contractors.
In November, Musk gave what remained of the workforce an ultimatum either to commit to working “long hours at high intensity” and being “extremely hardcore” or else leave with three months’ severance pay.
Whether this was another deliberate culling exercise or not, it resulted in an additional 1,200 employees walking away from the social media platform, leaving around only 2,000 still on the payroll.
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For Musk, it’s all about the money and he made no apologies for that saying that Twitter was losing in the region of $4m a day. That’s a challenge, whichever way you look at it, and clearly changes had to be made. The problem for the platform was that while changes were necessary, having Musk at the helm seemed to create its own tsunami of issues, which only added to the financial difficulties.
With concerns over his leadership from the start, big names such as Audi, Pfizer and General Motors paused their advertising spend on the platform and once a few high-profile brands call your character in to question, there’s a green light for others to follow suit - and that’s a major blow for a company that made 90% of its $5bn revenue in 2021 from advertising.
But, of course, Musk was undeterred. He blamed campaign groups for scaremongering and Twitter is now working with the World Federation of Advertisers on addressing concerns.
If all that wasn’t bad enough, the platform, which prides itself on its engineering prowess, suffered a huge setback with the launch of its premium service, Blue, when people started impersonating brands and celebrities by paying for the blue-tick to make them look authentic. Ironically, the Twitter account for Tesla was one of the casualties. The problem has been solved now, and Musk has since introduced gold and grey ticks to sit alongside the blue. But the history doesn’t read well for investors, advertisers or users who need to know that the platform is, in Musk’s own words, “rock solid”.
Since then, there’s been no let-up in the drama surrounding the social media platform. From Musk suspending the accounts of prominent tech journalists, despite being a free speech absolutist, to running a poll asking Twitter users whether he should step down as CEO of the company. More than 10 million people said yes.
Musk has said that mistakes will be made and lessons will be learned. The problem for him is that, in the meantime, bills have to be paid. His learning curve is not something his suppliers can, or should, subsidise and we are already seeing how that is beginning to play out.
Just this month, there have been reports of unpaid rent on one of Twitter’s San Francisco offices, landing the company with a lawsuit.
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My guess is that Musk will have foreseen much more than the rest of us. He’s never lost his appetite for change before when he’s come up against it and, somehow, I can’t see that shifting now.
- Angharad Neagle is chief executive of Freshwater 海角视频, the Cardiff-headquartered communications consultancy.
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