I understand the driving need to prove to people that you are right, which is why I am to some degree sympathetic to Elon Musk\u2019s ill-advised plan to rename Twitter and turn it into his long-dreamed-of financial heavyweight. He wasn\u2019t right when he tried to rename PayPal in 2000 and create an internet upstart in banking; he\u2019s not right now, either. But that isn\u2019t going to stop him from trying to Show Us.<\/p>\n<\/div>\n
Musk says he wants to rename Twitter X, and the Twitter logo has already changed on the app to a Unicode X. There\u2019s some history here with Musk and X: when Peter Thiel defenestrated him from PayPal, it was because Musk wanted to rename PayPal. You are never going to guess what he wanted to change the name to.<\/p>\n<\/div>\n
Musk wanted to change the popular PayPal branding to X<\/p>\n<\/div>\n<\/div>\n
Musk started the business X.com in 1999, which \u2014 reading it now \u2014 sounds like an early version of what Musk is trying to do with the artist formerly known as Twitter: electronic payments, checking accounts, stock trades, mutual funds. About the only thing it\u2019s missing is quote-tweet dunks. If you are thinking, \u201cThis sounds kind of like WeChat,\u201d you are right!<\/p>\n<\/div>\n
Anyway, X was a massively money-losing company, and it merged with Thiel\u2019s Confinity, another massively money-losing company, which had developed PayPal. Musk became the CEO of the merged companies, with Thiel stepping aside. Crucially, however, many of Thiel\u2019s deputies remained, including David Sacks, who is now a VC, podcaster<\/a>, and would-be political influencer<\/a>.<\/p>\n<\/div>\n Musk wanted to change the popular PayPal branding to X, even though customer surveys indicated that wasn\u2019t a good idea. Sacks decided that wasn\u2019t going to happen and was among the architects of the coup that removed Musk, according to The PayPal Wars<\/em> by Eric M. Jackson.<\/p>\n<\/div>\n Credit where it\u2019s due: Sacks made a good call here. Branding is important for consumer products, and making your payments company sound like a porn company is not a great idea. Which is why I am a little puzzled with the rebrand of Twitter; Sacks almost certainly knows better, and he\u2019s involved.<\/p>\n<\/div>\n Musk is discovering the hard way that he\u2019s not very good at running a social media company<\/p>\n<\/div>\n<\/div>\n My colleague and sometimes drinking buddy<\/a> Casey Newton has argued that the X rebrand is, effectively, a way to kill Twitter<\/a>. I disagree that this is just <\/em>an act of cultural vandalism, though it is certainly also that. I think what\u2019s going on is less intentional than that \u2014 Musk probably did not mean to buy Twitter at all<\/a>, and once he was stuck with it, he decided to see if he could use it to address some unfinished business.<\/p>\n<\/div>\n Musk is discovering the hard way that he\u2019s not very good at running a social media company<\/a>. His changes in moderation \u2014 inviting Donald Trump<\/a>, assorted white supremacists<\/a>, and some conspiracy theorist who was posting child sexual abuse material<\/a> to continue using his platform \u2014 have scared the living bejesus out of advertisers, which were Twitter\u2019s main form of income before Musk bought it. Now, there\u2019s a fire sale on Twitter ads because it seems like brands are nervous about appearing next to videos of animal abuse<\/a>, and Musk is also threatening that brands will lose verification if they haven\u2019t spent at least $1,000 in the last 30 days or $6,000 in the last 180 days<\/a>.<\/p>\n<\/div>\n Twitter has never been the most successful social media site, but this is really a new low. So Musk is trying to pivot to something he thinks he knows better: digital payments. After all, PayPal was successful despite Musk and made him pretty rich.<\/p>\n<\/div>\n We\u2019ve talked a little about Musk\u2019s payment app ambitions<\/a> in the past. The so-called super app has been a Silicon Valley obsession for a while<\/a>, inspired by the success of China\u2019s WeChat. These super apps are like rolling together Twitter, Instagram, Slack, Venmo, and your bank\u2019s app. I can see why; our Silicon Valley overlords are obsessed with accumulating power \u2014 money is just how the powerful keep score \u2014 and being the owner of such an app would mean a lot of power.<\/p>\n<\/div>\n Musk has a tendency to try to force his ideas onto people who aren\u2019t interested<\/p>\n<\/div>\n<\/div>\n The reality is that banks \u2014 and with FedNow, the actual Federal Reserve<\/em> <\/a>\u2014 have been keeping up with technological innovations in the US in ways they haven\u2019t done elsewhere in the world, where super apps rose to power. Arguably, JPMorgan Chase is one of the most important tech companies in the world.<\/p>\n<\/div>\n There is also a second thing standing in the way of the super app here in the US: the app stores. Both Google and Apple take cuts of any digital transactions, which is why you can buy cat litter from your Amazon app but not an ebook. The cooperation of both of those app stores would be crucial for any super app\u2019s success, and it\u2019s not guaranteed because such a super app is potentially a competitor to Google Pay and Apple Pay. \u201cBut Liz,\u201d you might say, \u201cisn\u2019t that an antitrust issue?\u201d Yes, my love, it is \u2014\u00a0and given what I have seen so far with respect to app store antitrust cases<\/a>, I don\u2019t like the odds for any super app challenger.<\/p>\n<\/div>\n Seizing the @X handle<\/a> after<\/em> the hasty rebrand, rather than before<\/a>, is part of what seems to be an incredibly sloppy process to try to pursue the super app dream. It\u2019s also in keeping with Musk\u2019s tendency to try to force his ideas onto people who aren\u2019t interested: during Musk\u2019s PayPal days, he tried to push users to upgrade to business accounts on PayPal through an annoying pop-up targeting its most frequent users. The backlash was immediate and intense \u2014\u00a0and though very few people closed their accounts, only \u201cabout one-fifth of our targeted sellers voluntarily upgraded,\u201d Jackson writes.<\/p>\n<\/div>\n Judging from how Twitter Blue has gone, Musk did not learn his lesson here. You need to give<\/em> people a service they want to pay for \u2014 simply taking away the things people have gotten used to and telling them those services now require payment isn\u2019t good enough. There\u2019s more: the basically slap-dash process of becoming X<\/a> is also likely to spook anyone who might be thinking about banking with him.<\/p>\n<\/div>\n Leave aside the technical questions of building a super app \u2014 the technical part\u2019s comparatively easy<\/p>\n<\/div>\n<\/div>\n We are all watching Musk make some very big changes in public very quickly, and the way he has approached even changing the sign on the Twitter offices has not inspired confidence. Like, the cops stopped Musk from changing the Twitter sign<\/a> because he didn\u2019t bother with getting a permit. Even the new X sign launched an investigation<\/a> because it was done in a slipshod fashion \u2014\u00a0and now, it is being taken down<\/a>.\u00a0<\/p>\n<\/div>\n Banking has a long history of financial shenanigans: the good old days of wildcat banking and counterfeiting, embezzlement, creative accounting, fraud, money laundering, you get it. The solution in the US financial system has been regulation, which not everyone appreciates. So we get crypto, which is \u201cfixing\u201d the regulation by dodging it, and the result has been a dazzling array of hacks<\/a> and exploits<\/a>, embezzlement<\/a>, creative accounting<\/a>, fraud<\/a>, money laundering<\/a>, and so on<\/a>.\u00a0<\/p>\n<\/div>\n Banking is highly <\/em>regulated, and it\u2019s highly regulated for a reason, as cryptocurrency enthusiasts have been discovering the hard way<\/a>. Leave aside the technical questions of building a super app \u2014 the technical part\u2019s comparatively easy. The hard part is social<\/em>! Finance is built on a foundation of trust. That\u2019s what those regulations are for! Now take a look at Musk\u2019s behavior with respect to regulations in general and, at Twitter, with respect to the social stuff. Ask yourself, and be honest: is this kind of man someone you trust with your money?<\/p>\n<\/div>\n<\/div>\n