Editorial
The Gist
- Financial fiasco. Musk overpaid for Twitter by nearly $19 billion, sparking concerns about his ability to manage the platform effectively.
- Policy backlash. Twitter's removal of protections for trans users under Musk's leadership has advertisers and users questioning the platform's safety.
- Superapp strategy. Musk's vision for X Corp involves transforming Twitter into an everything app, but doubts remain about its feasibility and impact on users.
It’s been a few months since I dug into Elon Musk’s takeover of Twitter, in which he spent a total of one week as he and a team of three non-Twitter employees (his lawyer, an investor and the guy who manages Musk’s family office) made momentous decisions about the future of Twitter's business. As part of the initial layoff process to cut costs, Musk fired the CEO, CFO and general counsel and at least half of the total staff. The reality of the situation was that Musk overpaid for Twitter, to the tune of $44 billion, when analysts pegged the value of the company to be just $25 billion.
After the layoffs, many Twitter advertisers began pulling out, with Musk claiming they were leaving due to pressure from activist groups. The more accurate read on it is the companies are concerned about how Musk will handle content moderation among other things and were in a wait-and-see mode. This made sense, given the fact that on April 18, 2023, Twitter quietly removed protections for trans users in its new “hateful conduct policy.” People are speculating whether this move is related to Musk’s strained relationship and personal biases against his own trans offspring who he claims was brainwashed by “neo-Marxists” in college.
“Twitter’s decision to covertly roll back its longtime policy is the latest example of just how unsafe the company is for users and advertisers alike. This decision to roll back LGBTQ safety pulls Twitter even more out of step with TikTok, Pinterest and Meta, which all maintain similar policies to protect their transgender users at a time when anti-transgender rhetoric online is leading to real world discrimination and violence,” said Sarah Kate Ellis, president of GLAAD, the LGBTQ advocacy group.
Even more hairy, Musk is now going to war with a variety of media publications, putting labels on their accounts as being either state-affiliated or state-funded media although he seems to have rolled back this policy as I’m writing this. It highlights the vitriol Musk has for the media.
It’s fair to say that the story of Twitter since Musk’s takeover has had its fair share of drama and intrigue. Many people are rightfully questioning what the future of Twitter will be, and if Musk has a real plan or if he just plans to shoot from the hip as has been his modus operandi thus far.
So, what are Elon Musk’s future plans for Twitter, and is it going to save the platform, or just continue its ongoing death spiral?
X Corp Is Born
On April 18, 2023, Twitter informed its business users that Twitter Inc. is now X Corp. The goal in this name change, according to Musk, is to change Twitter from a town square for posting and messaging to an “everything app” called X. It all sounds very mysterious and exciting, but what is an everything app, also called a “superapp,” and is it really as super as advertised?
Related Article: Will the Musk Takeover Rescue or Wreck Twitter Marketing?
What Is a Superapp?
The concept of the superapp is born out of the mobile-first age. A superapp is an application with a core set of features that serves as a platform for other mini-apps, which can be added and removed as needed. There is no separate app store or marketplace for mini-apps, they are discovered and activated by the superapp user base. In the single superapp, you can shop for groceries, pay rent, fill a prescription or chat with a friend, all without leaving the core superapp environment.
Gartner has said that by 2027 more than 50% of the global population will be daily active users of multiple superapps.
One of the most popular and well-known superapps is WeChat, a Chinese chat service that allows users to text each other, pay utilities, access city services, send peer-to-peer payments and stream videos, never leaving the WeChat experience.
Superapps have never really taken off in the US, but some companies are experimenting, like Uber has incorporated food delivery and grocery delivery into its platform.
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The big difference between superapps and regular apps is superapps will keep all that data for all those interactions across any micro-app that is attached to it. So, whoever owns the superapp, now can make it the center of an individual’s internet experience, controlling all the data and interactions and payments. Wow, I can see why Musk likes the idea of turning Twitter into a superapp, it gives him a lot more power and control over user data and financial transactions.
Related Article: Twitter's New Ad Policy: Verified Checkmark or Subscription Required to Continue Advertising
X – The Everything App
Musk had talked about turning Twitter into a superapp early in 2022. In a podcast in May, he said that superapps “need to happen” in the US and he could potentially “convert Twitter to that.” Musk has said he wanted Twitter to follow the WeChat model.
In June at a Twitter company meeting Musk said, “I think of, like, WeChat in China, which is actually a great, great app, but there’s no WeChat movement outside of China. And I think that there’s a real opportunity to create that. You basically live on WeChat in China because it’s so useful and so helpful to your daily life. And I think if we could achieve that, or even close to that with Twitter, it would be an immense success.”
On his Twitter feed in October 2022, Musk said that “Buying Twitter is an accelerant to creating X, the everything app.” When asked by a user why he didn’t just start from scratch, he replied, “Twitter probably accelerates X by 3 to 5 years, but I could be wrong.” I wonder how he makes those calculations? Or are they just shoot-from-the-hip cocktail napkin type-of-thoughts? One can only guess the workings of Elon’s internal thought-process.
Beyond the bluster some real steps have been taken. Musk created X Holdings to buy Twitter, and in April of 2023, he filed paperwork to fold Twitter into a company called X Corp. He has also been building a payment system in Twitter and has filed the needed paperwork to become a payments processor, so all those future NFTs and cryptocurrency can be paid for. Musk has also started an AI company called X.AI Corp., which now isn’t connected by the X in the name but implies it will be.
The Rubber Hits the Road, Eventually
Right now, X: The Everything App and X Corp. are visions, with little more to anchor them than a vague plan to recreate WeChat in the US. Musk never wanted Twitter, overpaid for it by close to 100%, and is now desperately slashing costs and making sea-change moves on the fly to figure out how to salvage it and his reputation as a tech visionary. Twitter has value so long as there is an audience, and if Musk kills that following, then moving them into an all-in-one payment processing superapp isn’t going to save anything.
Musk has already fired so many people and experts that people wonder whether he can assemble the resources needed to launch X. Musk’s treatment of employees may come back to bite him if he needs to reengage them to save his business. Only time will tell how this very public debacle continues to evolve and/or devolve, depending on your perspective.
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