Why Elon's X won't be America's next superapp
It's all about understanding software, fintech & networks and Elon just doesn't get it
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Honestly - you CAN create a super-app in America, despite the historical failure. We like consolidation, DGAF about monopolies and are phone obsessed.
But it won't be X.
Elon just doesn't really get the 3 biggest pieces:
Software
Fintech
Networks
And that's critical.
(1) On software, Elon’s gone soft
Starting with software expertise, he has basically none. He started Zip2 but he was removed as CEO after seed stage - why does he get credit for this acquisition? Other than Zip2, he hasn't run a software firm with PMF.
Fanboys: hardware success != software success.
(2) With fintech, Elon doesn’t actually excel in finance
What about fintech expertise? Let's talk about his claim to fame - X/Confinity. Again, after a series of early critical fintech mistakes he was removed as CEO within 1 year of founding the company. Why do we credit him with PayPal when he was barely a part of X??
(3) Elon confused net worth with network and he’s breaking everything
Okay now the easy one - Twitter. Nobody can argue this was a good deal - Elon himself said it's 50% of its value post acquisition. And what did we see within a year of acquisition - Elon removed as CEO (this time by himself!). Weird world when that's a good sign.
And now it's all wrapped up in his teenage dream app - X. I get desire to have a new parent name but why kill social network brand value of "Twitter" to do it?! Nobody does that - Meta, Alphabet, Block. They get that network effects depend on brand.
Oh and we’ve got our very own Kendall from Succession shilling our very own Living Plus in real life.
And wow, if this isn't a dagger to Elon as a software biz leader, I don't know what is. He should be nowhere near software. He's can come up with visionary ideas & tackle hardware problems by reducing unit economics. He doesn't "get" software.
If you must have a super-app, at least start somewhere that makes sense…
Twitter isn't even the natural home for a superapp. It's mostly a one-to-many text-based network whereas payments are largely 1:1. There's a reason messaging apps do well for superapps - Twitter isn't that.
If you must, build X. But not on Twitter. & use this logo instead:
Running on fumes?
Do we also actually need to knock Tesla off the pedestal of great companies Elon founded? I always loved my Model 3 and also could 100% attest to this issue with range estimates. And range was one of the main reasons people bought the car in the first place.
And let’s not forget the open secret that is the limited capabilities of Full-Self Driving. Don’t get me wrong - I love the car (the hardware) and the fuel charging network (hardware), but everything else is just objectively not very good.
Everyone who says he's a good business leader - help me understand this! The common refrain is "I wouldn't bet against Elon" but can you in good faith bet ON him right now?
