News analysis
Elon Musk BBC interview can’t hide bad governance
Elon Musk sat down for an hour-long interview with the BBC to discuss his time at Twitter. He painted a picture of a stabilising ship; is that accurate?
The infamous business magnate acquired the social media platform in October of last year, and since then, the organisation has faced multiple difficulties.
Musk’s reaction has been a mixture of “stay the course” peppered with occasional, casual, quick admissions of faults. His overall outlook, at least in public, remains optimistic.
However, beneath his rhetoric remains a trail of governance dilemmas.
What were the main takeaways from the BBC interview?
- Musk admitted that buying Twitter was “quite stressful”. Before the sale, he was confident he could fix the platform’s issues. Now, things are less certain.
- He defended the mass layoffs and stricter attitudes towards remaining workers, saying, “If the whole ship sinks, then nobody’s got a job.”
- He suggested that Twitter’s financial fortunes were improving, with advertisers returning to the platform following an initial period of mass hesitancy.
What does Elon Musk envision for Twitter?
Musk wants an “everything app” with free speech as its champion commandment.
The “free speech” angle is already in motion, with drastic cuts in Twitter’s content moderation platform that have set the tone for Musk’s time at the helm.
In addition, he wants the app to be used for every task in day-to-day life. He wants it to become as much a financial institution as a social media site.
Need to get things done? Go to Twitter – that’s his dream.
Is that realistic?
The part about free speech is definitely realistic. All it takes is a hands-off approach, which Musk made it clear he would follow from day one.
The “everything app” idea inspires far more doubt. Musk’s comments to BBC suggest the site is moving in that direction, but the facts might say differently.
What are the facts?
Let’s take advertising as an example.
When Musk cut Twitter’s content moderation, advertisers were spooked about being associated with a surge in hate speech and fake news. Their reluctance translated to significant doubt over the company’s value.
Now, Musk claims advertisers are coming back. However, that may mean little in practice. Insider Intelligence estimates the company’s ad revenue will fall by 28% this year amid mixed consumer attitudes and big brands continuing to show caution.
Jasmine Enberg, the principal analyst at Insider Intelligence, laid it out in a blunt challenge to any future vision for Twitter as an “everything app”.
“The biggest problem with Twitter’s ad business is that advertisers don’t trust Musk.”
Moreover:
Musk said he would sell the company if he found the right person.
It hasn’t even been a year since his acquisition, and while other comments continue to boast excitement about the platform’s future, he admits that if he had an out, he would take it.
It’s not the most confident posture in the world.
Ultimately:
Elon Musk cannot hide bad governance with good rhetoric, and the fallout from his poor governance decisions is still being felt:
- He has spooked an essential source of revenue
- He has angered countless (former) employees with dismissive layoffs and strict rules around remote working.
- He dissolved Twitter’s board – the company’s most important bank of expertise – and hasn’t replaced it since.
This last one is the kicker. Boards are supposed to hold management in check, questioning key decisions and offering insights based on experience and knowledge. Musk doesn’t value this. He goes it alone. That strategy has been far from perfect so far.