The Chris Voss Show Podcast – Why Elon Musk Is Failing With Twitter

Elon’s missteps are not only alienating advertisers, even worse, now he’s costing them billions in stock valuations, likely prompting a new slate of lawsuits and damages. He continues to almost daily make snowballing errors into an avalanche of failures of what may become the worst acquisition of all time next to the Time Warner deal. As I wrote about in my new book Beacons of Leadership, I talk about the challenges of taking over companies and pulling them back from the brink of bankruptcy as I have successfully. Why is everything going wrong for Elon? Well its a few things: 1. Operating from Ego. Elon has been operating in an ego state where he believes his own reputation and swagger is impenetrable. Ego got him into this mess. Ego had him into lording around in Twitter to self-indulge his ego to the point of committing to buying it for a figure far beyond its worth at the top of the market. His ego believes he can buy and fix anything and in doing so he convinced himself he could easily fix Twitter and now he’s entered a gauntlet of failures that are compounding. Sadly, many people worship money and people who make money and regard billionaires as infallible business gods. Billionaires assume that their achievements, sometimes involving luck, means they can solve the world’s problems. Books have been written about how many times they fail and actually make the world worse. Most CEOs know you shouldn’t make a brash ego, vanity purchase and the boards are there to regulate that. It appears that many of Elon’s advisors on the deal were some from the political right who may have sought to encourage him to buy it for their interests rather than on the merits of the financials. If you’ve seen the text messages from the deal now released in a lawsuit, it was awful advice he was getting from people willing to sacrifice him for their gain. 2. Overpaying at the top of an economic market with clouds looming. Again overpaying by ego. He contracted to buy Twitter at the top of the market, thinking by ego he could fix anything. Shortly after, market corrections lowered the value of the company. It became clear he was buying a company anywhere 2 to 3 times its valuation. Then he attempted to break the deal and could not. He blindly ignored the coming recessionary conditions coming as the Federal Reserves tightened the economy. Now the scenario looks even worse as all tech companies took a massive stock dive. Most likely if he would have waited till now, Twitter stock price valuation would be around 7-10 billion, meaning he’s now overpaid by 4-5 times the value. 3. NEVER PANIC EARLY. On my podcast, The Chris Voss Show Podcast, we had Apollo 13’s Fred Haise on to talk about the astronauts’ training and survival in the snowballing failures of the mission that had their lives on the line. The title of the book is from NASA’s training: NEVER PANIC EARLY. In his NASA training, it taught them that panicking will escalate problems and even amplify other failures. They go through thousands of hours of problem solving testing to teach them not to panic, but to METHODICALLY, rationally problem solve. Even in the face of death, which is itself a whole new panic potential. Again, from my book Beacons of Leadership, bailing out failing companies is a DIFFERENT skill set than building them. Elon is used to slowly, methodically building, block by block, testing, failing small experiments in a business. Since his usual business’ are startups, it’s all “up,” the sky is the limit, plenty of runway time. Conversely, when you are trying to pull a company out of descent to its death, it’s a much different game, as many times you are up against the wall, out of time, and the gun of bankruptcy is pressed up against your head. Downward spiral is the rule of every day and you can see the ground coming up at you, which is daunting. Usually, your destination is inevitable. You’re just fighting the odds.