Nov 18, 2022 9 min read Independent Thoughts

Billionaire's Remorse

Elon Musk's hubris and the fall of Twitter.

Elon Musk is the wealthiest person in the world. With an estimated net worth of nearly $200 billion and the CEO of cutting-edge companies like SpaceX and Tesla, he is considered one of the most successful entrepreneurs in history. Musk is described as a visionary leader and a captain of industry (multiple industries in this case) by his supporters, while critics consider him a modern-day robber baron with poor leadership skills and a penchant for risky ventures.

This stark contrast between elite business tycoon and insecure eccentric has been on full display for the last few months as the billionaire entrepreneur set his sights on a new target: Twitter. His very public takeover of the highly influential social media platform has allowed for an open window into his management style and decision-making, which has been covered relentlessly in the media and in real time...on Twitter.

Between his grandiose pronouncements and his middling backtracks, his philosophical vision and his trollist impulses, his stoic overconfidence and his adolescent insecurities, Musk's purchase and subsequent leadership of Twitter has been a contradiction in terms. His only constant, it appears, is hubris.

We all remember the Greek myth of Icarus, who fell into the sea and drowned after flying too close to the sun on wings made of wax and feathers. It's a classic metaphor for man’s overreaching of his limits and the dangers of arrogance. For a 51-year old who pioneered the manufacturer of electric vehicles and builds rockets with the dream of colonizing Mars, it would seem that anything was possible.

Named TIME's Person of the Year in 2021, the magazine wrote, "Musk made his money differently than most of today’s famous billionaires. Instead of one amazing idea, he had several good ones. And instead of a bunch of clever, safe investments, he made just a few spectacularly risky ones. The sum total of those bets made Musk the richest private citizen on the planet this year, and their world-altering effects—from privately-launched space missions to an electric vehicle titan that has left the auto industry desperate to catch up."

Perhaps he believed the hype, but this takeover saga may have confirmed what has long been suspected: business success is more about timing and luck than any kind of vision or business acumen. Now, with the company's equilibrium in disarray and the stability of the platform in question, there seems little room left for error. It appears only two options remain. The business will either develop into a sleeker, more efficient version of itself or completely collapse under the inordinate weight of its new owner.

As Twitter's implosion seems imminent, it appears Elon may have finally flown too close to the sun.

The Wings

Founded in 2006 by internet entrepreneur Jack Dorsey, the microblogging site quickly expanded into a popular social networking site, especially during prominent events around the world in which users could post their reactions in real time. Twitter eventually evolved into a news, information, and commentary site utilized by governments, media outlets, and even activist groups to spread the word quickly, becoming what many deemed as the digital equivalent of the public square.

With over 100 million users by 2012 and then surpassing 230 million ten years later, Twitter has grown significantly. But as with any popular social media platform, it also had to deal with the proliferation of misleading or inaccurate information on its site, and content moderation became a top priority. Criticized for its arbitrary policies and apparent bias toward conservative voices, Twitter's actions during the 2016 and 2020 presidential elections and Covid pandemic invited fresh scrutiny upon the company.

It was revealed in early spring 2022 that Musk, a prolific user of the platform with 80 million followers, had acquired a 9.2 percent stake in Twitter, making him the company's biggest shareholder. Set to join the board of directors but then deciding against it at the last minute seemed to telegraph his intention of a hostile takeover.

The weeks-long drama culminated with Musk's $44 billion takeover bid for the company saying that the "social media giant needs to be taken private to grow and become a platform for free speech." The billionaire commented that he did not "care about the economics" of the company and caused an uproar by criticizing Twitter’s top executives for their decisions on what speech should be allowed on the platform.

"Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated," Musk said at the time.

The Wax

Based on his own admissions, Musk's intentions with Twitter were more about free speech than a viable busines model. But it's still a business. Twitter executives had faced questions for years about the prospects for the company’s financials, which relies primarily on digital advertising, and that model has been inconsistent. The company had not turned a profit for eight of the last 10 years.

"Twitter has extraordinary potential. I will unlock it. Since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form," Musk had written in a letter to Twitter's board.

However, once the takeover bid had been announced and Twitter's stock declined, it became evident that Musk had offered much more than the company was worth and accumulated a significant amount of debt from banks and investors to finance the deal. The outspoken critic of Twitter had now inherited its struggling advertising business. Realizing his potential error while gaining an appreciation of the number of fake accounts, Musk attempted to back out of the deal. He was immediately sued by Twitter's board and forced to complete the purchase by Delaware's Court of Chancery.

By the time the deal closed in late October, the New York Times wrote, "The closing of the deal, which followed months of drama and legal challenges as Mr. Musk changed his mind about buying the company, sets Twitter on an uncertain course. Mr. Musk, a self-described "free speech absolutist," has said that he wants to make the social media platform a more freewheeling place for all types of commentary and that he would 'reverse the permanent ban' of former President Donald J. Trump from the service."

At this point, it was widely feared that Musk’s open approach to speech could exacerbate the long-simmering issues of toxic content and misinformation, affecting political debates around the world. Musk now had the ability to reshape the platform and its future was growing opaque. But perhaps more important than the ideological considerations of what Twitter would become were the practical aspects of running a profitable business.

The Sun

As it became increasingly clear that Musk had overpaid for the platform and Twitter's business model was fragile at best, the new owner decided he needed to make some immediate changes to cut costs. But first, he had to reassure advertisers and assuage their concerns about the public safety and security of the network.

According to Politico, in an apparent rhetorical shift, Musk’s promise to change Twitter’s content moderation policies and make the site a bastion of "free speech" was altered to admit that he did not want the site to become "a free-for-all hellscape where anything can be said with no consequences."

In a letter posted to Twitter, Musk wrote that "In addition to adhering to the laws of the land, our platform must be warm and welcoming to all and users should be able to choose your desired experience according to your preferences." Musk wrote that he bought the platform to create "a common digital town square where a wide range of beliefs can be debated in a healthy manner, without resorting to violence."

Following this plea to advertisers, Musk proceeded to layoff half of Twitter's workforce in a cost-saving measure. Most were unceremoniously fired via email while its buildings were locked down to prevent employee access. With a depletion of staff from vital departments, including security and content moderation, many large companies soon halted their advertising amid growing fears that misinformation and hate speech would proliferate on the platform.

Meanwhile, in another misguided bid to raise money, Musk hurriedly rolled out his revision of Twitter’s blue-check system. Previously, a blue check meant that you were in some way a notable figure whose identity had been verified. The new system allowed anyone, including totally new accounts, to get a blue check by paying $8 a month and subscribing to what’s called Twitter Blue.

This predictably led to free-form chaos on the site as brand new accounts impersonated famous celebrities and companies. For example, someone created a George W. Bush account and joked about being nostalgic for killing Iraqis; an account pretending to be the drug maker Eli Lilly said insulin would be free; and a fake Pepsi account said simply that Coke was better.

The new system was immediately cancelled as a frustrated Musk and his team deleted accounts engaged in impersonation or suspending users that poked fun at him for the haphazard rollout. In addition, as Musk tweeted false statements about the health of the business, Twitter employees who corrected him on the platform were publicly fired.

The Fall

Musk's most recent edict to employees was that they "will need to be extremely hardcore" to build "a breakthrough Twitter 2.0" and that long hours at high intensity will be needed for success.

Employees were given until Thursday evening to commit to this new culture or take three months of severance pay. As a result, hundreds of employees have resigned, deciding to quit rather than agree to the billionaire’s loyalty pledge. According to reports, Mr. Musk may have underestimated how many people would leave though he may have viewed his ultimatum as a way to weed out disaffected workers. It's rumored that Twitter’s leadership spent time on Thursday trying to convince "critical" employees that they should stay.

The newly shrunken Twitter now faces numerous questions, reports the Washington Post, including its ability to maintain mission-critical systems, police content on its platform, and remain in compliance with regulatory agreements. Musk also backtracked on a ban on remote work by telling employees they could work remotely, so long as their managers certified they were making "an excellent contribution."

"Every mistake in code and operations is now deadly," a former engineer told the Washington Post. Among those who have left were members of the trust and public safety teams and critical engineering teams. Meanwhile, seven Democratic senators on Thursday urged the FTC to investigate whether Twitter had remained in compliance with a 2011 consumer privacy settlement.

Finally, none of this chaos is likely to reassure either the scores of advertisers who have paused campaigns on the platform or the banks who extended $13 billion in loans to help finance his takeover and are counting on him to pay $1 billion in interest each year.

Which brings us to the ultimate question. Why would this insanely wealthy business owner want to own Twitter? Does he really see some untapped potential in its algorithm? Was his intention to ultimately destroy what is believed to be a powerful, liberal-leaning network? Or was it the over confidence of a former 'Person of the Year' who believes he can fly?

Regardless, yesterday's No. 1 trending topic in the United States was "RIP Twitter".

The current state of affairs can probably best be summed up by one of Twitter's funniest users, 91-year-old Dan Rather, when he wrote, "I remember the old saying, "Better to be thought a fool than to buy Twitter and remove all doubt."

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