I see trouble ahead. Elon Musk – a sort of brilliant, geeky, man-child – is now the boss of Twitter. Thus, he puts himself in the crosshairs of all sorts of powerful interest groups and bad actors. He is effectively entering politics. Few businesspeople make that transition well because it requires a different mentality and mindset.
Musk is, however, a brilliant businessman. Tesla nearly went bust; yet through tremendous energy and focus, it is now the most valuable car company in the world. The stellar success of this kind could turn anyone’s head. Musk certainly seems pumped up with confidence to take on any challenge. He has even come up with solutions for the war in Ukraine and how to reduce tensions about Taiwan. It all sounds like something that a very bright but overconfident student might come up with.
Twitter is a very different challenge from Tesla. It has responsibilities and requires the talents of an intellectual lawyer to navigate questions that are always nuanced. Being an absolutist about anything lacks humility in the face of a complex world and especially when it comes to ‘freedom’. Absolute freedom is not a defendable position. Freedom, as Karl Popper explained, is “paradoxical.”
Here is an illustration of Popper’s ‘paradox of freedom’. Suppose you want to put a wall around your house. You should have the freedom to do this, shouldn’t you? After all, every woman is the queen of her castle. Maybe that is fine if you are the queen, you own all the land around the castle and there are no other dwellings nearby. But most of us less exalted souls do not live that way. We live cheek-by-jowl with others. If I put up a wall, there is a good chance that it will block the light and access of my neighbours. My freedom is somebody else’s un-freedom. It is why we have planning laws because otherwise, people with power and money would oppress those with less.
Freedom of speech is an even trickier area than planning regulations. As a publisher, you can be held accountable. (The claim that social media are only platforms, not publishers, and therefore not liable, will not stand especially in Europe). Suppose Musk had been in charge when Alex Jones was spreading his cruel conspiracy theories about the Sandy Hook massacre in which children and teachers lost their lives to a deranged gunman. Jones said it was all a hoax, staged by actors. The bereaved parents were harassed by trolls and their lives were made miserable. At the time, Jones was banned by Twitter. But under the leadership of a free-speech absolutist, he could well have tweeted his deranged fantasies. Jones now faces a fine of $965 million – enough to bankrupt most publishers.
At the time of writing, Donald Trump has been let back on Twitter. In America’s fractious politics there is no hotter potato, although there are plenty of others that can pop up at any time – from trans rights to race to abortion. Without moderation (and all digital platforms now employ large numbers of moderators), the issues that roil American politics can quickly descend into a cesspit of misinformation and abuse, with Twitter at the centre of it. Indeed, seconds after Musk’s takeover was announced, an emboldened cast of anonymous trolls spewed racist slurs and Nazi memes.
Musk’s libertarian beliefs are a particular product of American culture. Millions emigrated to the US to escape oppression and persecution so that they could practise their religion and live unmolested by the state. Robust individualism is in America’s DNA and manifested in many ways, from cowboy films to gun ownership to hatred of “Washington.” So, Musk is playing to an American audience. But his message does not travel well. His first tweet, after his takeover, was “the bird is free.” He received an immediate response from Thierry Breton, an EU panjandrum, which said – “the bird will fly by EU rules.” No matter how much he might rail against it, the bureaucrats in Europe tend to win in the end.
Investors in Tesla are dismayed by Musk’s purchase of Twitter. Optimists think that he will realise quickly that he cannot rule from high on complex issues of free speech. It would also take away his energy from his main business. So, he will tweak the rules a bit and leave it to the moderators. Also, tougher regulations may be his friend, especially in Europe, as it will take the issue out of his hands and into those of regulators and lawyers.
But the optimists were wrong about Trump. In 2016, remember, many thought he would get serious and “presidential” when in power. Wishful thinking. Trump may run again and even provoke more violence if he does not win. He may take to Twitter to whip up his MAGA base. Then what does Musk do? He is going to upset a very large number of Americans however he rules. Tesla could become a hated brand for either MAGA republicans or democrats. No wonder investors are anxious. And this is a scenario that is easy to imagine. There are plenty of “unknown unknowns” (in the late Donald Rumsfeld’s phrase) that lie in wait.
Let’s widen the focus from the US and Europe. Tesla sells worldwide and 40% of automotive sales are in China. As relations between the US and China become more fractious, life becomes more difficult for CEOs. You can withdraw from Russia over the war in Ukraine without too much pain as it is less than two percent of the world economy, with not much production. However, withdrawal from China would hurt your business so you have to be “diplomatic’ about it; for example, the treatment of the Uighurs as the CCP is both touchy and vengeful. These issues are difficult enough for any CEO without the added complication of owning something as noisy and uncontrollable as Twitter.
What about fixing Twitter as a business? Plenty of smart folks have wrestled with this problem and failed to dramatically grow revenue. Musk could waste his energies on it. He will cut costs but that hardly adds up to “business transformation.” What about becoming “an everything app” like WeChat? Well, if a lifestyle app like Facebook has not seized this opportunity it seems unlikely that Twitter can, as its “users” use it less and for fewer things.
You don’t have to be a management consultant to spot that Twitter is not “strategically Tesla’s core business.”
My guess is that Elon Musk will live to regret buying Twitter and sell it at a loss. It may be that all he craves is being the centre of attention, in which case owning Twitter will surely deliver that daily ego satisfaction. And he will continue to give journalists plenty to write about – a silver lining for folk like me, but not the investors in Tesla.
But, of course, this article, written on 30/10/22, could already be out of date, such is the pace of modern media, which can make fools of people who write opinion pieces.
Julian Saunders was CEO, Red Cell advertising (a WPP company). He was also Planning Director, Ogilvy, Executive Planning Director, McCann-Erickson and at The Zoo at Google. firstname.lastname@example.org