Running a business isn’t a cakewalk, no matter what it is. Sometimes, as a mental exercise, I like to try to think about some of the simplest business models in my head, and then explore just how many complications I can come up with that prove this theory.
If, through some colossally impossible set of circumstances, I decided to run a roadside farm stand instead of Hatfield’s best IT firm, I know I’d still have a whole list of frustrations and risks to deal with. What if the weather didn’t cooperate and I end up with a bad crop one year? What if the market shifts and the price I can sell corn is reduced to where I can barely profit? What if my equipment breaks down?
I like to repeat this exercise for jobs of all types, especially when I’ve had a stressful week or a rough meeting. It puts things into perspective that running a business inherently comes with risk, stress, and complications.
Then I tried to run through the complications of running one of the world’s largest social media platforms, while piloting several other major businesses in different industries, and it made me ask the question, “Is Elon Musk insane?”
Elon Musk Bought Twitter, So What Happened?
The point of this isn’t to really determine if Elon Musk is as smart as he says he is. We’re not really going to be making any real observations over his character, and I can tell you with full confidence that if they put me in charge of Twitter, I’m sure pundits would be able to pick apart the mistakes I make. I also know that Musk has some seriously passionate fans as well as some equally passionate critics; that’s going to come with the territory when you are occasionally the richest person on the planet, or if you suddenly own a thing that millions of people use every day.
As a business owner, however, there are definitely lessons to be learned, so I wanted to recap some of the highlights and share a few important tidbits that I think Hatfield business owners could find some value in.
As mentioned, Elon Musk became the owner and CEO of Twitter towards the end of October, after a long would he/won’t he acquisition that was as tumultuous as the lovechild of a daytime television drama and a rollercoaster. Before Musk even signed the deal, Twitter announced hiring freezes, saw top executives leave, and had shareholders file a class-action lawsuit against Elon Musk because Musk moved to terminate his acquisition due to Twitter having “too many fake accounts.”
Say what you will about Twitter—you either love it, hate it, or have no feelings whatsoever, but as a business, Twitter was not in pristine condition when the world’s richest man swooped in to buy it. There were allegations of security issues and misinformation, which is par for the course for any major social network, but where Twitter really stood out is the fact that Twitter wasn’t exactly all that good at making money. It always had the audience and the platform, but according to Statista.com, Twitter has only been able to report a positive net income in 2018 and 2019. Where companies like Facebook and Google are swimming in huge piles of money from advertisers and other initiatives, Twitter’s approach that made it so popular to so many users actually kept it from generating a net income.
In the few months that Elon has held the reins at Twitter, there has been a lot of commotion. Within days, roughly half of its 7,500-person workforce was laid off via email. Days later, Twitter launched, pulled, and relaunched new versions of its subscription service, Twitter Blue, which allows users a few extra features and a verification icon.
Users on the social network reacted by creating fake $8 accounts impersonating public figures, celebrities, and brands. If you are one of the millions of people in the world who never thought Twitter was really that influential, you were proved wrong when one of these fake accounts pretending to be pharmaceutical company Eli Lilly claimed that they would be making Insulin free, and caused their stock to drop significantly.
Yep, a user spent $8 on Twitter and lost a major pharmaceutical company billions of dollars.
That’s the world we live in today, and it is both interesting and insane.
Over the last few months, news about Twitter and Elon has been tumultuous and soaked in drama—you’ve either been following it or avoiding it, and at some points we’re not sure which is better.
What Can Business Owners (Who Don’t Manage a Billion Dollar Social Network) Learn from All This?
Give Your People the Respect and Dignity They Deserve
I think first and foremost, what most of us can take away from Elon is just how quickly stirring the pot can cause chaos. Maybe two years from now we’ll all look back and say “Yep, Elon did the right thing,” but either way I personally think any business leader should be more self-aware of their actions and more cognizant of the people who work for them.
For example, laying off over half of your staff shouldn’t be treated as a stroke of genius that you perform by a wave of your hands or a curt email. As business owners, our employees deserve respect and dignity, and if you don’t provide respect and dignity, eventually nobody will want to work for you. I get that we’re in a period of major tech layoffs all across the industry, but people are what make up your business. You might sell a great product or offer a great service, but it’s the people who you need to cultivate.
Don’t Copycat Bad Ideas
Secondly, and this one threw me for a loop—your competitors will copycat your decisions even if they aren’t popular. Twitter has been so adamant about making Twitter Blue a viable, desirable product (and at this point, it probably won’t ever be that desirable for the masses, and it certainly won’t pull Twitter out of the red). Despite this, Facebook and Instagram are starting to offer similar subscriptions. It almost feels like we’re seeing the end of free social media, although I think that is a little premature to say. There are plenty of alternatives, the only problem right now is that everybody is already on the networks that are misbehaving. Honestly, I’m not quite sure how most business owners can apply this knowledge—if you sell hamburgers and start offering one with peanut butter, maybe your competitors will too, because they think they have an edge?
I think the real lesson is that you should do your own market research before jumping onto whatever bandwagon your competition is trying. Don’t jump off that bridge just because your competitors are.
Ensure You Have In-House Redundancy
We saw this a lot during the first couple months of Elon’s Twitter takeover. Musk laid off a lot of staff, including specialists. He removed people who were in charge of accessibility at Twitter, security, performance, and more.
Usually, larger businesses are pretty good at documenting everything they do and having certain levels of redundancy, but when you remove an entire team dedicated to making sure your product meets accessibility standards and is comfortable to use for people with visual impairments, it could cause a big disruption.
Smaller businesses don’t have the same luxury—you might have a certain process that, while documented, really can only be done by one or two key employees. It might be something small, like processing an order or solving some legacy issue, or quoting one particular type of service. Either way, as a business owner you should see to it that you have redundancy. Even if you aren’t the kind of business owner to wave your hand and cut your staff, you’ll be glad you had a backup plan for when certain individuals take vacations, call out sick, or decide to switch careers.
It’s Impossible to Predict the Future of Twitter
Even if you don’t use Twitter, it’s clearly an influential platform and definitely something that millions of people rely on every day. Maybe the platform does just need this “tough love” and maybe in three years people who never thought they’d be on Twitter will be using it every day. Maybe we’ll see it slowly dissolve like MySpace. It’s hard to say, but we’d love to hear your thoughts!
