Why Elon Musk's Approach That Led Tesla's Success Doesn't Work on Twitter

[Asia Economy Reporter Jeong Hyunjin] "Should I step down as Twitter CEO?"

Elon Musk, CEO of the social networking service (SNS) Twitter, posted this question directly on Twitter on the 18th (local time). It was a tweet posted after Tesla's stock price plummeted while he was focused on Twitter, causing him to lose his position as the 'world's richest person,' and after facing global criticism for blocking journalist accounts. It is interpreted as a measure he proposed to confront the crisis head-on after nearly two months of bold moves following the acquisition of Twitter.

[Image source=Reuters Yonhap News]

◆ How Did Musk CEO Make Tesla and SpaceX Successful?

The reason Musk CEO mentioned even resigning as CEO is because the situation at Twitter, which he acquired nearly two months ago in October, is still chaotic.

On the same day, the U.S. economic media Business Insider published an article analyzing why Musk CEO, who has successfully led Tesla and SpaceX, is facing difficulties at Twitter. Lynette Lopez, a reporter for Business Insider, said that Musk CEO has a so-called 'playbook' that he used over several years to build companies from Tesla to SpaceX, but this model is not being applied to Twitter.

According to Lopez's analysis, the conditions of Musk CEO's playbook are ▲ entering fields with little competition ▲ setting global or seemingly impossible goals ▲ securing government subsidies ▲ excessive labor by employees. He analyzed that this method was applied to most of the companies he currently owns and has shown growth based on it.

Elon Musk [Photo by Reuters Yonhap News]

According to the report, when Tesla and SpaceX started their electric vehicle and private space exploration businesses, there was almost no competition. As a result, these companies secured time to develop new technologies and had the leeway to develop technology again even if they failed. A representative example mentioned is Musk CEO's failure when he tried to build a car factory with only robots without workers. Eventually, Musk CEO accepted a production process that included workers.

In addition, by setting global problems or seemingly impossible goals, they receive subsidies from the federal or state governments. Instead of producing clear results, they identify government needs, set goals, and receive funding for pursuing those goals themselves.

Tesla received subsidies and grants from state governments such as Nevada and New York during the years-long process of converting internal combustion engine cars to electric vehicles. SpaceX also receives support in the space exploration field through collaboration with NASA. Musk CEO's other company, The Boring Company, is also working hard to secure government subsidies in the U.S. and Canada.

◆ Twitter and the SNS Market - Different Company Situations

Lopez evaluated that Twitter is a company that is the exact opposite of these conditions. The SNS market is large and crowded with companies that have abundant financial resources, making it already a fiercely competitive market. Twitter is analyzed to have influence but is relatively small in scale. Also, with growing concerns about a recession, technology stocks are being hit, so there is no time to endure failure.

[Image source=AP Yonhap News]

At the same time, unlike Tesla and SpaceX, which make contracts with the government and receive support, SNS platforms are more likely to face sanctions. Since Musk CEO announced the Twitter acquisition, he has consistently emphasized pursuing 'freedom of expression,' but after suspending an account that tracked his personal private jet and then blocking journalist accounts, regulatory authorities immediately expressed concerns. He set goals but released policies that contradicted them one after another, causing confusion and facing government pressure.

Furthermore, Musk CEO initially demanded overtime from employees after the acquisition, which led to mass resignations. Lopez evaluated that Musk CEO made employees work by emphasizing solving problems such as the climate crisis and traffic congestion, but this approach did not work at Twitter. After the acquisition, Musk CEO carried out large-scale layoffs and sent emails asking remaining employees if they would endure intense and long working hours, but unexpectedly many engineers refused, and he reportedly tried to retain them.

"I will follow the results of this survey." Musk CEO has made a kind of bet, putting his CEO position on the line. Attention is focused on whether he will actually follow the survey results in his future actions. Bloomberg reported that five hours before the vote ended, the 'Yes' response rate was 56%. Musk CEO stated that even if he steps down as Twitter CEO, no successor has been decided at this time.

This content was produced with the assistance of AI translation services.