The layoffs are necessary but temporary. He plans to grow head count to 11k.
He has a plan. It's not a whimsical or egoistical purchase.
He started executing on that plan the day the deal closed. In 2 weeks Twitter will have shipped a major feature ($8/mo subscription). For context: edit feature took Parag more than a year.
The NYT story and numerous hints Musk dropped about his plans for Twitter directly contradict your "private equity playbook" confabulations.
Well, if he had a plan for right after purchase, he does seem to be executing on that plan extremely poorly. He has seemingly no revenue plan except charging his verified users $8 per month (down from the original $20), and it’s not even going to cover the interest rates of the loans he took out. So he has some real catching up to you to really make some money.
You can tell from the riffing with Stephen King that there isn't really a plan beyond "grow revenue". The $8 figure was pulled out of thin-air in response to criticism.
The most brilliant part of his plan is how he is needlessly antagonizing his own advertisers and threatening to send his crazed followers after them.
That is how you grow a business. I'm sure the advertisers will come running to make deals with a man who may or may not lash out at them publicly and send his followers to attack them in the future over any disagreements.
Sure. And he's going to take Tesla private and he's going to run SpaceX from his new HQ on Mars. What did you think he was going to say to investors? "This is a disaster and we're all going to lose our shirts"?
TikTok is projected to have a net revenue of 18B in 2023 (23B in 2024)…and that’s mainly from ads. Mastercard revenue is around 18B. If you think Twitter can hit 26B revenue in 6 years, I have a bridge I would like to sell you.
Well, you are missing the fact that Musk ordered Twitter to reboot its short-form video app Vine. Expect tens of billions of dollars in revenue by 2028!
Let me add to that list:
-- FSD promised Q1-Q2 2017 (never delivered)
-- Model 3 will cost $35,000 (starting price >$45,000)
-- Summoning your Tesla will be available around 2018 (never delivered)
-- No people in the actual Tesla production will be involved (Tesla employs thousands of people in production process. Elon has went back on this)
-- Tesla won't be needing another financing round (~20 more financing rounds happened after this announcement, at an avg of $1b)
-- By 2020 a Neurolink device will be implanted into a human skull (never happened)
-- One million robotaxis by 2020 (never delivered)
and so on and so forth. I dont care for his hyperloop shenanigans ("will never happen" to all of those announcement) nor his Mars dreams, but those are the ones I can think of. There are many more broken Elon promises.
Elon does deliver though. There's no denying that he does deliver good products.
Are the assumptions in this plan really realistic, though? A cornerstone to these numbers seems to be the $12B in subscription revenue from the mysterious Product X with 104M users, hinted to be the ad-free "Twitter Blue" that just launched. (Pricing is pretty consistent as well - $12B in revenue with 104M users implies ~$120/month = ~$10/month.)
Subscription-based social networking has been tried before: that was the revenue model for LiveJournal/DeadJournal/uJournal/SomethingAwful/Flickr/Del.icio.us 20 years ago. People do pay for it - but only a couple percent of people will pay for it, and that was for companies that charged more like $10/year rather than $10/month. Worse, social networking is a network-driven business where the utility of the product increases the more people that are on it, so if a subscription-based business model results in fewer total users, you end up losing out to a free ad-supported model. This was exactly how MySpace and Facebook totally took over from LiveJournal & Flickr.
It's possible that 20 years makes a difference, and the userbase now is fundamentally different from it was 20 years ago. But I wouldn't bet on it - if anything, the masses are less willing to pay for entertainment than they were 20 years ago, because they have less money. I'd chalk this one up to a businessman with lots of money and experience in other businesses entering a business that he knows nothing about and assuming his experience is transferrable.
> In 2 weeks Twitter will have shipped a major feature ($8/mo subscription).
Do you mean that he is planning to increase the subscription price for an existing feature called Twitter Blue? Why do so many Musk’s fans have the urge to constantly exaggerate his impact?
> Cut Twitter’s reliance on advertising to less than 50 percent of revenue
He’s definitely reducing reliance on advertising considering how poorly ad sales are going. So we’ll soon be able to mark that one as a « win » I guess. /s
Here's the reality: Musk has big plans for Twitter. Much bigger that Dorsey's or Parag's plans.
He got multiple billion invested by third party because he convinced them that he's capable of multiplying the value of Twitter.
Here's a NYT story from May detailing Musk plans for Twitter based on leaked deck he presented to would be investors.
Here are things Musk pitched to investors, in May:
- Quintuple revenue to $26.4 billion by 2028
- Cut Twitter’s reliance on advertising to less than 50 percent of revenue
- Produce $15 million in revenue from a payments business
- Increase average revenue per user by $5.39
- Reach 931 million users by 2028
- Have 104 million subscribers for a mysterious X by 2028
- Hire 3,600 employees — after shedding hundreds. By 2025, Mr. Musk anticipates Twitter will have 11,072 employees
https://www.nytimes.com/2022/05/06/technology/elon-musk-twit...
The layoffs are necessary but temporary. He plans to grow head count to 11k.
He has a plan. It's not a whimsical or egoistical purchase.
He started executing on that plan the day the deal closed. In 2 weeks Twitter will have shipped a major feature ($8/mo subscription). For context: edit feature took Parag more than a year.
The NYT story and numerous hints Musk dropped about his plans for Twitter directly contradict your "private equity playbook" confabulations.
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