Can Elon Turn the Twitter Ship Around?

We have an emergency podcast. This is not the typical Crazy Ones episode, but there's big news, which means it's time for some big conversation today. Jesse, Sophia, and I are going to be talking about the basically only thing that is definitely on Twitter, but also in most media publications, and that is Elon Musk's acquisition of Twitter and kind of all of the different things and shenanigans that are going on in the background around how he's going to turn the ship around.

This Halloween party I was going to after this metal show on Saturday, And I was dressed for a metal concert, but I think I probably looked like I was wearing costume. And my friend texted me and she was like, Elon's here. And I was like, what? And I show up and she was like, oh, he's over there. And he like disappeared. And then like Jason Calacanis is like standing at the bar by himself, who's like a friend. And I was like, hey. He was like, yeah, we're flying to New York tomorrow to like fix Twitter. Yep. We're Sunday.

The life of Sophia Amoroso, man.

So let's do this thing.

What's up, everyone?

I'm Alex Lieberman.

And I'm Sophia Amoruso.

Yo, this is Jesse Pujji.

And this is The Crazy Ones. So here's the rundown. I'm going to give just a quick chronology of what's basically happened with Twitter over the last several months to get us to where we are today. We're going to play a fun game where if we were in the driver's seat of Twitter, how would we basically run the business? We each only have 90 seconds. to give our answer. And then we're going to just discuss what entrepreneurs can learn from how Elon is going about running this business while also running SpaceX and Tesla and having a lot of other shit going on, like going to Halloween parties with his mom. Quick chronology. March 14th, 2022, Elon reached a 9.4% stake in Twitter. He started accumulating that stake in January. April 5th, Elon took a seat on the board of Twitter. April 10th, he did a quick reversal, said he wouldn't join the board. Also, my sister's birthday. Happy birthday, Sydney. April 14th, Musk offers to buy Twitter for $54 a share or $54.20. The deal is kind of like moving forward and then it goes on hold. There's basically all this debate about spam. Twitter claimed for the longest time that their user numbers are within 5% of it being right or real. And Elon basically started getting whiffs of there being way more spam and bots on Twitter than he thought Twitter indicated. October 4th, it seems like the deal is back on. Elon says he is going to buy the business at $54.20 a share. And on October 28th, so that was last Friday, the deal closed.

Well, and in between those two things, he walked away fully. He said, no, no way, I'm not buying this. They sued the crap out of him because they had agreed to something. And, you know, there's this Delaware Chancery Court, which is a court literally to deal with these specific issues, that basically said he had to buy it.

And did you guys—

that's kind of a crazy part of the story to me.

I didn't think—

did you think it was going to happen?

I did not think it was going to happen. It all just seemed like such an outlandish kind of charade and like Maybe a way to get followers, I don't know, or market Tesla or market anything. You know, that level of news, it's amazing that there's someone rich enough to, you know, upend the news cycle and cause an emergency episode of a podcast like this.

It's the Trump playbook.

Super impressive. Yeah, it's the Trump playbook. And there's a lot of reasons that he could be doing this, and owning Twitter apparently is the reason. But I think we were all a little confused and skeptical of whether or not he was Serious about that.

I just picture what happened.

Trump won the election too, so maybe he didn't actually want to get it. He just eventually had to take it.

You know, it seems like this big legit deal from like the front, but I feel like behind the curtain, the way that I visualize this whole thing is like you have Elon one day like taking a dump in his home and he like hits up his FA and he's like, he's like, yo, Twitter doesn't know what they're doing. Can we just like buy a shit ton of Twitter stock? Like, let me get involved in like Start trying to get them to actually run their business the right way, and it progressively spirals because he's like, "Wow, these people have no idea what they're doing." Then he's like, "Oh shit, I'm buying this thing. Do I actually want to buy this thing?" And then he's like laying in his bed one night, looking at the ceiling, thinking about his Falcon rockets and his production of cars, and he's like, "Yeah, I don't want to run this thing." And then they start talking about like the poison pill and stuff, and he's like, "Shit, I may actually have to run this thing." Yeah, I think—

I mean, but also to take a second, he has been running the Trump playbook and that's not a political comment. It's just Trump learned how to tweet, how to get the media covering him and how to get his name known. And Elon runs the same thing. It was— I had a funny episode myself running this like a few years ago. If you Google Ampush and McKinsey, there's an article by TechCrunch which describes Ampush as the McKinsey of growth marketing. And I literally, like, before the call with the reporter, I was like, many people are calling us the McKinsey of growth marketing. Nobody had ever called us that. Let's be clear. But now everybody calls us that. Like, it's a— and that's exactly like what Trump and Elon— that's like there's a self-fulfilling— use the media, say a thing that everyone keeps remembering until it actually becomes reality. And ever since Trump did it, all the— lots of other people are doing it.

Yeah. Sophia, I know you're not the biggest Twitter user. Do you think this is going to Change your thoughts on the platform? Are you going to be an avid tweeter once Elon turns the ship around?

I mean, for some reason it feels like Twitter is just more relevant all of a sudden. Not that it wasn't before. You guys are extremely relevant and I consume so much information on Twitter. I think finding time to create tweet threads and turn my newsletter into a reel, into a tweet thread, into a LinkedIn post, I got to figure out some kind of what's it called? Generative AI. We gotta get you some peeps. I need some generative AI to deal with that, which is— that's for another episode. I want to use Twitter more. And if Elon Musk is touching anything, and again, I don't— this is, you know, this is all— I have a lot of conflicting opinions about this. But like, I drive a Tesla. I don't know. I'm curious about like rockets in space. Like if this guy takes anything on, he's taking real moonshots. And even if it blows up, it's probably going to be way more interesting than whatever was happening at Twitter.

Well, so let's talk about the interesting stuff. Let's talk about what he's already said they're going to do. And then we're going to be put on the, on the shot clock and talk about if we were in Elon's shoes, what we'd do. So in the last 24 hours, basically it's been, I guess, announced Elon tweeted it and then every publication picked it up that people are going to have to pay $8 a month for Twitter Blue. And basically Twitter Blue is going to get you priority in replies, mentions, and search. It's going to give you the ability to post long video and audio. You get half as many ads that you'll be able to get publishers' content for free. And from Elon's point of view.

And you'll get the blue checkmark. Most important.

I mean, exactly. Yeah. So you're going to get the blue checkmark. And, you know, a large part of the way that he framed this even on Twitter and we can put up the tweet is he's basically— it's like been this kind of war game of like the bourgeoisie and the proletariat. And it's been kind of like this political game of who's the person in Twitter partnerships that, you know, that you can hit up to give you the checkmark. And that's kind of bullshit. Which I, I agree with. Elon also will say this isn't just like a monetization strategy. It's also a strategy to solve what he would call the biggest problem, which is like the spam and bot problem, which if you use Twitter with any level of frequency, you know, it's a huge issue. I don't fully understand how this is going to solve the problem, which we can maybe—

I saw you tweeted that. I think the obvious answer, by the way, is just if you have to pay and your answers, like paid answers, get moved up higher, it becomes more expensive to basically show And so by definition, spam will get pushed down to the bottom unless, you know, unless people start paying a lot of money for it. I think that's—

Sure. But sure. But, but what if, again, 90% of people aren't paying for Twitter Blue? Then you have the vast majority of spam accounts are just mixed in with the vast majority of real accounts.

I mean, the whole idea is to democratize everybody's ability to weigh in on things, to access news. And now we're saying that because there's a few people who have blue checkmarks, which actually helps differentiate people who maybe were more well-known or people that you want to follow when you look through your feed. Maybe that's a service to the end user who's not paying for it, but now you're making everybody pay for it, which seems like really something that only serves the bourgeois elite.

It'll just be very interesting to see how many people actually pay for this. I think it's going to be less than 10%, but it's also all a function of like what's actually bundled in the product that makes it work.

10%, by the way, is what, 20 million people paying $8 a month? That's 2. And that's like, that's like he's grown the EBITDA, he's grown the top line by 50%.

Bumble does that. Like you have to, you know, there's verified accounts and you can search people by verified accounts, but they don't make you pay for it.

Yeah, if it's 10%, it's meaningful users.

It's a better product as a result. It's not something that the user should pay for to have a better experience to reach real people. That shouldn't be our responsibility.

Yeah. Austin Aldred had a really good post where he was like, there should be a gold level where you're paying thousands a month. And he talked about how much value he's gotten from the platform. I would happily pay thousands a month if, especially if it came with more tools and other ways to grow the businesses that I've used.

I think, yeah, total. And to that, like, I don't even Yes, I think you can charge some individuals that, but like, why don't— why not also charge businesses that who have business accounts on Twitter?

I'm sure they will. Let's go. Let's go to the 90-second shot clock, man.

Okay.

Okay.

Okay.

I just want to finish the facts and then we'll go to the 90-second shot clock. So we have the $8 a month for the blue checkmark. People had originally said $20, then Stephen King got really pissed about it. Now it's $8.

Finally, a Stephen King story with a good ending.

That's someone with someone's response to his, his angry tweet about having to I wish I was well-read in Stephen King, so I understood that because I still— I know who he is, but I haven't read one of his books. The other thing Elon did is he's like pulled together this like tight-knit group of advisors to make product decisions. So he has Jason Calacanis, who's been involved, who's now actually has a Twitter email address. I read what—

I ran into Jason. My friend texts me, there's this Halloween party I was going to after this metal show on Saturday. And I was dressed for a metal concert, but I think I probably looked like I was wearing costume. And my friend texted me and she was like, Elon's here. And I was like, what? And I show up and she was like, oh, he's over there. And he like disappeared. And then like Jason Calacanis is like standing at the bar by himself, who's like a friend. And I was like, hey. He was like, yeah, we're flying to New York tomorrow to like fix Twitter. Yep. We're Sunday.

The life of Sophia Amoroso, man.

I guess I grew up— I know his like movements.

Did you're in the room where it happened?

Yeah, he was excited.

He's excited, but he's also just like just like this fast talker who's like yeah yeah game face definitely like yeah game face is a part of game yeah he's working um so yeah J Cal uh yeah I was gonna say you have more of the scoop than us J Cal uh was involved in this he had pictures from Twitter's office David Sachs who was part of the the PayPal Mafia was the COO I believe Of PayPal, obviously knows he was founder of Yammer, CEO of Yammer.

That might be Shreem Krishnan, who runs Andreessen's crypto fund now.

He used to be at Twitter, right?

He was at Twitter and Facebook, and I think TikTok. Like he's an amazing product guy.

Snap. Yeah, he's amazing.

Yeah. So all these people got together, I think, to make some of these big decisions around where the product's going to go, maybe some personnel decisions. Layoffs are coming. Some employees have already been let go. Original murmurings were as high as 75%. Now, the most recent number I've seen thrown around is 25%. Managers have been asked to rate high and low performers in the business. And then the other just kind of big piece to this, which has happened in the last few days, and I think this is a big reason why Elon is in New York right now, I believe, is potential advertisers have been talking about pulling dollars away from Twitter. So IPG, which is one of the large holding companies, $9 billion in net revenue in 2021, told their clients to consider halting spend on Twitter. And so GM has already halted spend. And some of IPG's clients include Spotify, Amex, J&J. So Elon's taking meetings right now to try and calm advertisers from pulling out. Obviously, that's really important. And they lost their call it CRO, Chief Customer Officer, yesterday. So those are the big things happening. Now let's put ourselves in the captain's seat. Jesse, you were the most eager, so we're going to set the clock.

Speaking of McKinsey.

Yeah, yeah. The— what was it? McKinsey.

Tell me when I can start.

Come on.

Okay, I'm set. I'm setting a timer now. One second. Ready? Okay, so you are Elon Musk. It is November 1st, 2022. What's your game plan?

It starts as a math problem, which is I bought this thing for $44 billion. For it to be considered a success, I probably have to exit or take it public at $10 billion or $100 billion. So $100 billion means I have to target making $10 billion in EBITDA, in income, and probably growing at a reasonable rate similar to Facebook to get a 10x multiple. Maybe you could get it away with 6 or 7. And I'm like, all right, I probably have 3 to 5 years to get there before I lose interest or other people lose interest. So I have to make a game plan that's going to get me there, which means like by the end of next year I'd be like, okay, well, right now I think the business is at $5 billion in top line and no EBITDA, negative EBITDA. So I have to figure out a bunch of ways to basically get it to $20 or $30. You know, Facebook has an operating margin of 40%. So let's just say to get to $10, I got to be at like $25 billion in top line and I have to figure out how to get to $25 billion. And so there I'd start to identify what are the fastest, most impactful, cheapest, easiest ways to get there. One way is you have a lot of people and they're getting value. Charge them a subscription. They're already doing that. That's one. Another one would be businesses and how can businesses engage on the platform? I've like with Growth Assistant, we've grown it to millions in revenue from leveraging Twitter for leads. Like how do they get a piece of that? They've got nothing of that, by the way. And so is it, is it business accounts? But there's charging businesses or charging users, charging businesses. And then of course, advertising and advertising. I could go talk forever on advertising.

7 seconds.

Make your— go hire Facebook's best algo person and put them in charge of your ads business. Boom.

Okay. Jesse Musk timer goes. That was solid. So it's interesting how you approached it. You did it from like a very not, not just like reverse engineering the outcome, but a very numbers-based outcome. Which, to be honest, we'll wait till I go. But I don't think that's how Elon thinks about things. He's not like a banker sitting on the 40th floor with a spreadsheet, I don't think. But I think he's both, right?

I think he's more than that than we don't— we think he is.

It's possible.

But yes, I mean, I think the biggest thing that you kind of have to become when you borrow $13 billion and buy a $44 billion business with like 20 of your own. Yeah.

He has a long leash, though. Yeah, but I think the big thing is $10 billion in EBITDA, $30 billion, let's say top line, $30 to $40 billion. We're talking about a business that did $5 billion in '21. So, yeah, you know, you can't just even focus on the core business of advertising, which is still small relative to other social platforms. It's like that has to have jet fuel on it and you need like 3 new lines of business that you haven't created out of thin air. No. And user growth.

I mean, I didn't say user growth, but I'll cheat. Yeah, there has to be a lot of user growth.

Yeah. I mean, just from a user perspective, you know, their main metric is MDAU, MDAU monetized or monetizable daily active users. It's basically anyone who can view an ad on a daily basis. They have 229 million MDAUs. For context, Facebook Their daily active user count, you know, methodology may be a little bit different, is 1.968 billion. So yeah, they— I mean, they're small, relatively speaking, compared to, you know, Facebook, Instagram, even TikTok now. Okay, Sophia, you ready?

Sure.

Okay, one second. I'm setting the clock.

Oh, no.

Okay, Elon, what are you going to do? And we start now.

Well, first, I just wouldn't do it because I don't want to be that guy. I don't want to be a multi-billionaire. I think it makes you weird. It's like, what's left after you buy everything? Nothing means anything. You have yachts, you go to Capri, you go to— you stay at Les Cévennes, and you have like weird polyamorous— it's not weird. Okay, I'm sorry.

It's weird.

But like, it just becomes like, okay, my wife isn't enough. I'm going to get a divorce. Then I'm going to pursue orgies. Like, I'm like, I know these guys. Like, I know these guys. Like, these guys created— like, I'm not going to tell you who. Uh, and it's like, yeah. Anyway, so everything kind of loses meaning. So then it's like, where do you go? Okay, well, the outer frontiers of kink and like what I consider freedom. And then I want to control the media, right?

Are you filibustering right now, Sophia? Talk about Twitter.

Jeff Bezos.

bought the Washington Post and Marc Benioff bought Time. And it's like the people who control the media control like public sentiment. And not that Elon really needs to do that. You know, he has, I don't know how many, a bazillion, over 100 million followers on Twitter. But like, I wouldn't, I wouldn't want to walk in and have to do that. I— why would you pay to turn a company around? Like, I'm also not capable of it, so I can't answer your question. I had a hard time running a team of 250 people. Again, I probably should have hired Jesse or someone from McKinsey or Bain to help me fix that.

Oh, time's up.

Sophia's going to run for Senate next, and her platform will 100% be anti-polyamory.

That's okay. It's okay. It's not cheating.

Well, I just want to clear one thing up. Is you said if given the choice, you wouldn't be a multibillionaire.

Mm-hmm.

Do you, do you actually believe that?

Yeah. I mean, there was a time where my feet didn't touch the ground. I wasn't a multibillionaire, but I was worth a lot more than I am on paper. And every door swung open and everything I wanted I could have at the time, or everything I had time to want I could have at the time. I think it's probably even more dangerous when you're a billionaire who has time on their hands. My God. And I think not— that not having manifested for me in some ways has kind of brought me back down to earth. I've heard, you know, and this doesn't happen to everybody, and I've always been really grounded in a lot of ways, but I also think, you know, it's hard to be— not to be out of touch when you have that much money. I have a friend of mine who has a business that's a unicorn, whether or not it's That or not. It's not direct-to-consumer anymore because, hmm. And I saw her once recently and they had flown private to this destination that I also happened to be at the time. They took the PJ. And I was like, how was your flight? And they were like, we flew private. And I was like, oh man, oh man. I mean, that sounds great, right? I don't really want— I don't want more. It's a problem in my life. And I'm not a billionaire, but I was like, oh, of all the things that would be really great. And she was like, and she's like engaged to a billionaire. So there's that. And she was like, honestly, like, it's the best. I would live in like a $2.5 million house if I could keep flying private. And I was just like, what a trade-off. I'm so glad that's not me. I'm so glad that's not me.

Yeah. What's, what's above first world problems? Wow.

All right, your turn, dude.

Okay.

You want me to set the timer or are you going to set your own timer?

Yeah, you set the timer.

Okay, hold on. This is, by the way, how I get my kids to comply with anything. I'm like, you have to brush your teeth. How much time do you want?

And I honestly, I feel like I'm in debate club right now and I have like my stickies with my point of view.

Did I win?

Ready? You won. I don't know if you won this contest, but you won some contest. Okay. Ready? Ready and go.

Okay.

I have a 6-step plan for Twitter being the greatest super app on planet Earth. Number 1, learn the business. Number 2, avoid catastrophe. Number 3, reiterate the mission. Number 4, create a plan. Number 5, fix the culture. And number 6, execute a plan. First, learn the business. That's what I believe Elon has been doing since he maybe made the crucial mistake of saying he wanted to buy Twitter up until today with meeting with his close council of advisers. A nice thing is that I would say usually 10%, maybe, of people in the business drive 90% of the outcomes in the business.

So he doesn't really—

So he really doesn't have to meet with that many people to know what's going on. The reason he's learning the business is to avoid catastrophe. At the end of the day, you need to know what is important in the business in order to know what a catastrophe looks like. And catastrophe as of right now is people not enjoying the experience of Twitter and advertisers fleeing.

30 seconds.

Reiterate the mission. At the end of the day, Twitter is the town square of the internet. He needs to reiterate that so people know where they're headed. That is what Elon's about. The plan is simple. He needs to increase revenue. He needs to cut costs. How does he increase revenue? Grow advertising. How does he grow advertising? He has more people spending time on the platform and better advertising units. He has to cut costs. He has to do more with less. And Twitter is infamous for literally doing nothing to their product forever. And so I think he has the ability to do that.

That was only— that was 60 seconds. I felt like 3 minutes. How did you do that?

It was 90. I did 90 for everyone.

This whole thing's been 90, Senator.

Excuse me.

Wow.

Wow. She's switching from the dean to the senator.

That much I've never seen somebody filibuster like that before.

Yeah, I'm like, this debate isn't fair.

Let's think about it again before we answer.

Moderator.

Okay. Before we, we finish this thing up, because this is an emergency episode, so we're going to keep it short, is let's just quickly talk about— go around the horn of you have to make money in a new way with Twitter. What's like the most creative way you could find money in the business?

Does it have to be creative?

No, it doesn't.

Cut costs.

I would, I would, I would invest in a Twitter pixel for B2B that would let me measure how many leads I'm sending a person and let me run ads against learning who responds and clicks and converts. Basically replicate Facebook's D2C engine for B2B on Twitter. And like build an ad platform around that. That'd be one of the first things I would do.

And I think Twitter is such a place for thought leadership and maybe on Instagram you can have your link in bio and among many things there, there's some lead gen opportunity for someone to download an info product. But I think Twitter is like the place where people are. And you mentioned lead gen earlier, but a place where if I, you know, I can use Revue and I can have people sign up to my newsletter. That's a few clicks away from someone downloading like a free or paid guide or something that would get them into my universe in a way that's bigger than just reading my tweets and getting them enrolled as someone who understands me as a thought leader. So I think paying for lead gen, for opt-ins, for anything like that would be really unique and probably really smart.

Yeah, I like that. I have 2 quick ones. One is to sell data to hedge funds. So kind of directionally sell what consumers— what consumer sentiment looks like, sentiment around businesses looks like, sell to hedge funds directionally. And then the second is a market— like a market research product. So allow businesses to survey audiences to help inform future products in their businesses.

I love that.

You know, it's basically their version of Google Surveys.

I love it. There's something, by the way, about all these senior-level decision makers and B2B and tech on there more than any other platform that there's got to be some— like, if you could somehow tell me who would want to opt into a meeting for Kahani and then like I opt in to meet them and then we both meet and then they charge me $1,000, I'd have like— I'd pay that.

I mean, this podcast came my Involvement in this podcast came through a DM. Yeah. Opportunities like this don't come through DMs on Instagram. They don't.

That's how I met Jesse also.

TikTok. It's how I met Sam Parr. Like, it's how I've met people who've become really influential in my life. Like, that doesn't happen on Instagram. It's like people who are like, you know, hey, I'd love to send you my new socks and t-shirt. You know, whatever. The opportunities I have on Instagram are like, fine.

I want to see inside of Sophia's DMs.

They're boring.

Socks and necklace.

100% a future episode is we're screen sharing the It's all flames emojis and 100 emojis.

That's what it is.

Let's, let's bring this home. Any lessons that entrepreneurs should take from what we're watching right now with Elon taking over the ship?

Don't try to be that guy because there's only one of those guys.

It's okay if you're not Elon Musk.

Okay?

Yes, it's okay. I mean, he does all these things. I think, you know, what I've learned from, from kind of my little mini, tiny, tiny version of that where I'm running a bunch of different things is you got to focus on one at a time and go really deep and really understand it deeply. That's important. Number 2, or actually probably should be number 1, is, man, you got to have a lot of good talent around you. And so like, that's where it starts. I think he's already doing that with folks like David. I mean, there's people who just otherwise no one could pull them out of retirement or whatever.

Yeah.

That he can mobilize. And you just need that kind of talent. To have any shot at this, then it's like it's like tightly manage every like there he's focus you know it's like great talent focus and then speed decisiveness. The other one I'll just throw out I wrote tweet on this day because it was going through my mind is like people like him don't ask what's correct or incorrect or what's right or wrong in the sense of running a business. They just do what they know and what they want, and I think there's something about entrepreneurs not worrying whether or not it's is this the right course of action? He's like this is just what I know. Like he had to fire the CEO. He's like, I just— I can't work with this guy, right? It wasn't about him being wrong or right. It was just like, I got to do what I— what I know. And I think there's something to be said about that conviction, worrying less about what's right and wrong and more about like what you know and what you want.

Yeah, he feels— he feels like the— like the classic private equity CEO, but for exciting high-growth companies. And what I mean by that is like, you know, there's these private equity CEOs who are put into business after business because They have the playbook in a binder and they have like the network of 5 people they bring into their C-suite and they're perfect for, you know, like 10% growth cash cow businesses. Elon just has that for some of the most exciting businesses in the world.

Yeah.

And the biggest problems he only cares to spend time on the, you know, what he decides are really, really important big problems.

I want to know what's next. What's the next company?

We'll see how this goes. I was going to say it clearly has to be something about polyamory because he has everything else going on.

Yeah, I mean, that dating app does exist. It's called Field.

How do you know?

Yeah, yeah, I have weird friends.

And with that, thank you for watching and listening to The Crazy Ones. We want to hear from you. What do you think is going to shake out with this whole Elon and Twitter thing? Do you think he's going to end up 4xing this business into a company that he can sell for $100 billion in the next 5 years? Shoot us an email at thecrazyones@morningbrew.com. And thanks for watching.