What can we learn from Elon Musk, his takeover of Twitter and its downward spiral? Author Ben Mezrich joined host Brett Hendrie to talk about the new book Breaking Twitter: Elon Musk and the Most Controversial Corporate Takeover in History; exploring what businesses - and CEOs - can take away from the ordeal to avoid the same fate. It's a must-listen for anyone looking to better understand how the whims of a single individual can derail even the most powerful of organizations.
What can we learn from Elon Musk, his takeover of Twitter and its downward spiral? Author Ben Mezrich joined host Brett Hendrie to talk about the new book Breaking Twitter: Elon Musk and the Most Controversial Corporate Takeover in History; exploring what businesses - and CEOs - can take away from the ordeal to avoid the same fate. It's a must-listen for anyone looking to better understand how the whims of a single individual can derail even the most powerful of organizations.
Brett Hendrie: It might be difficult to remember a time before Twitter. Founded in 2006, the social media platform began as a text-based messaging service. Anyone could open an account and, in 140 characters or less, tell the world what they were thinking.
By 2021, Twitter claimed more than 360 million active users, had raised over $1.8 billion in its IPO, and had a legitimate claim to being the global town square. With so much influence, it might be hard to imagine that Twitter only made a profit two years out of its 17 year history.
Enter Elon Musk. In January 2022, the Tesla and SpaceX founder had started buying shares in Twitter and quickly became its largest shareholder. By April, Musk had declined to sit on its board and instead made an offer to Twitter shareholders to take the company private again. After a protracted legal battle, the deal closed in October, and Musk was the proud new owner of his very own social media platform, all for the low price of $44 billion.
Since then, it… hasn't been a smooth ride. A little less than a year after acquisition, Twitter was rebranded as X, shedding its name and its famous bird logo alongside many of its advertisers, users and staff. So how did it get this far? Was there method to Musk's madness? And what's the path forward?
Welcome to Visiting Experts Rotman School podcast featuring backstage conversations on business and society with the influential scholars, thinkers and leaders featured in our acclaimed Speaker Series. I'm your host, Brett Hendrie.
Ben Mezrich joins me today to talk about his terrific new book, Breaking Twitter: Elon Musk and the Most Controversial Corporate Takeover in History. Ben's books have sold over six million copies worldwide. Among those are the Accidental Billionaires, which of course covered Facebook's founding, and was adapted into the Oscar winning film The Social Network; Bring Down the House, adapted into the number one box office hit film 21, and The Anti-Social Network which tracks the GameStop stock phenomenon, and was adapted into the film Dumb Money released this fall.
Ben, congratulations on your new book. And thanks so much for joining us here at Rotman.
Ben Mezrich: Thank you so much for having me. Happy to be here.
BH: I wanted to begin by asking you about what drew you to this project. It says it right here in the title the most controversial corporate takeover in history, also a takeover covered in real time in the press.
BM: Yeah, I mean, it's the strangest takeover in history. I would say, I've always been a fan of Elon Musk. I wanted to write about Elon for a long time. I think he's a revolutionary, and previous to him taking Twitter, I would have put him up there with Einstein or Da Vinci or one of these great people who pushed humanity forward.
I was also an avid Twitter user and still am an ex-user. But what I saw happen when he walked through those doors was not just a spiral downward of this incredible brand and company that we all use, but a spiral downward of Elon. And so, I was really drawn to the story because I feel it's the collapse of a great man in some ways. Not I'm not saying it's irreversible, but I'm saying what we have today is a really different guy.
BH: So, obviously, Elon is somebody who had made his mark and physical technologies, cars, rocket ships. What drew him to Twitter? Why did he do it?
BM: Why did he buy Twitter? I really think he went in with these noble aspirations - and they're a little weird, but he truly believes that we're in this window of time where we can get to Mars. And this “woke mind virus” was surging across Twitter, that Twitter was becoming restrictive that it was no longer a place for free speech. And he felt that was an existential problem that if there is no global townhall, which is free and unfettered, we may go back into some sort of Dark Ages. That's really what his motivation was. I mean, listen, he loves the absurd, he loves comedy, he loves memes. And he was playing around on Twitter, and one of his favorite sites got suspended – the Babylon B – for making fun of a trans person. And he got very upset about that. And I think that was the immediate impetus to doing it. But really, he saw this as a mission. He believes the world is a simulation. It's one big video game, and he's the main player. And he thinks, listen, I'm going to go in, and I'm going to fix Twitter, it's going to be easy. And that's why he went in. But it quickly went off the rails.
BH: I definitely want to come back to the simulation later on… but the idea that he could fix it, how much ego was involved there? Because I mean, spending $44 billion dollars, presumably, you know, he still wants it to be financially viable. Right?
BM: Elon is driven by ego, and he's incredibly competitive. And if you read the Walter Isaacson's book and look back in his history, you can see that this competition is an incredible driving force for him, he has to be the center and he has to be the best, and he can't lose. So yeah, I really did think he thought it was as simple as building a rocket ship. It's something you can science away. It's something you can use engineering to fix. But social media doesn't work that way. And I think that's sort of the crux of what went wrong. Is him coming in there as an engineer, and trying to deal with something that isn't an engineering project.
BH: Can you help us understand the whole back and forth with him making the offer, and then trying to back out? Why did that happen?
BM: I mean, it is convoluted, but basically, he offered way too much. He offered $44 million, $54.20 a share, which was a number based on his love of making marijuana jokes for 4/20. And almost immediately, he realized first of all, that he was going to have to sell a ton of Tesla stock. And this upset the Tesla faithful, people who usually are very supportive of Elon. So people were suddenly complaining that never complained to him before. And this scared him.
He also was looking into the financials of Twitter, really, for the first time after he made the offer. And they were not great, but they weren't horrible. It's not like Twitter was going bankrupt. Twitter was nearly break-even at the time. But mainly, he backtracked because of Tesla, because he was going to hurt Tesla. He claimed it was because there were way more bots than he realized, that it was all fake users, that he was being lied to. I don't know if I believe that. It seems like he knew there were bots going into it. Anybody who was on Twitter – I mean, you couldn't avoid it was all over the place.
I think the real impetus was Tesla and the amount of stock he was going to have to sell. So immediately, he said, I don't want to do this anymore. And he tried to pull out of it, he paused it. But Twitter's board realized that this was an incredible deal, it was an amount of money that it would have been wrong for them to try and let him get out of it. So they had to sue him.
BH: And it was happening as a time as tech stocks were going-
BM: I mean, listen, the whole market was crashing, Elon was reading the tea leaves and seeing that he was going to lose a lot of money, that he was going to be put in a horrible position because of the amount of debt he was going to put on this company. It was a bad deal from the beginning. But they wouldn't let him out, then they sued him. Then it became this back and forth, where he was trying to fight this lawsuit to not take over a company, which is really kind of funny. He could have gotten out by paying some sum of money, which in the end probably was the right move because it would have been some billions of dollars or whatever it was but way less than he ended up losing on the deal. But he's decided to go through with it. And so he made the purchase.
BH: It really unpacks that this was sort of an impulse purchase in a way and that, hey, he didn't do the due diligence.
BM: Some billionaires buy yachts or basketball teams. Elon bought Twitter. But he went in angry. That's the other part of the story that's important is because he didn't want to buy it and he was forced to. He walked through those front doors ready to burn it to the ground. I mean, there's a lot of emotion involved here.
BH: Well, there's the scene in your book and of course, we all we saw it in real time – he walks in through the front doors with the sink – “let it sink in.” But then it's chaos at the company, can you paint a picture for us of what happened in those initial days in the first few weeks?
BM: You have to remember, also it was Halloween. So that kind of adds a lot of color to the story because Twitter was having this Halloween party, and everyone's dressed up as vampires and Frankenstein's and stuff, and you have Elon in the next room making lists of people he’s going to fire. He came in scorched earth, he tried to fire everybody with cause so they didn't have to pay bonuses. Then there's a lot of chaos where he's trying to figure out how deep he can cut. He wants to cut all the way. He's got all these engineers from Tesla and SpaceX in the building, and they're basically making all the Twitter engineers show their code. But it's a very chaotic thing because nobody's printing out code. Nobody's even in the building. It's a time of remote work during the pandemic. So people are flying in to give him code, and then they changed their mind. They don't want the code.
But very quickly, he fired a ton of people. And then the story gets really messy because one of the first things he does is he tweets a conspiracy theory about Paul Pelosi, the husband of [Nancy] Pelosi, is attacked in his home, And Elon makes this joke, kind of conspiracy theory tweet about it. And this causes so much chaos. All the advertisers are basically on the run. Ninety per cent of Twitter's revenue came from advertising; suddenly nobody wants to advertise on the site anymore because you've got Elon doing really bizarre things
But then he starts to think the advertisers are leaving because of some sort of conspiracy. The ADL [Anti-Defamation League] and other groups were basically saying to advertisers, “Stay away, this is full of hate speech, let's wait and see what happens.” Which, to me seems very reasonable. You don't want to advertise next to hate speech. You don't want to inspire more hate speech, and you don't want to let somebody profit off of hate speech. So anyways, Elon flipped out and just things got worse from there.
BH: The way he handled the layoffs was really interesting, and it’s so ham handed and insensitive. He got a lot of flack in the media. And ironically, he was one of the first companies in Silicon Valley to do a lot of these layoffs. And people like Zuckerberg at Facebook, or Meta end up doing layoffs and being praised for how humanely they-
BM: Listen, it's never great to fire people. And half of what tech companies seem to do is fire people because they hire too much. And then they fire them all. And they hire too much. And they fire them all. But Elon 's way of firing people was just scorched earth. I mean, people were just fired en-mass online, you know. Every manager was told to give me a list of 80 per cent of your group that I can fire. It was a crazy situation. They got to the point where they fired so deep, that certain things weren't even working anymore. At one point, they fired the guy who had the password to get into the building.
BH: It seems like it clearly killed the morale for the people who were-
BM: Everyone was immediately against him. When he first came in, you know, I spoke to a lot of people at Twitter, there were a lot of hopeful people. Elon has a huge cult following. And a lot of engineers love Elon. He came in not as an enemy, and people loved Elon. I have a scene in the book from a couple years earlier, where he had spoken at an all hands meeting in Houston via satellite. And he was beloved. I mean he was he got raucous applause. He came in and immediately shifted the morale from being in favor of what he was going to attempt to do to seeing him as this tyrant walking through the halls.
BH: One of the things, I really appreciate in the book is that seen at the-all hands meeting, but also throughout your telling the story, not just from Elans point of view, but from the sales executives and the project managers. So as a storyteller, why did you think it was important to bring those perspectives into it?
BM: I'm not trying to take down Elon. And then the story really is this dramatic story that takes place in the halls of Twitter. Elon himself did not want to speak to me, which is reasonable, and other people don't want to talk to me. I wanted to paint a very thorough and engaging picture of what was going on in those hallways. And so, I needed to talk as many people who are in the room as I could, and from the other side, because if you hear it from Elon side, the other people are meaningless. They're non-player characters, it's this video game of Elon’s life. And who cares about all of these other characters?
BH: So your books are true stories, but they have composite characters, they have dramatically realized scenes. Help us position you and your craft within the spectrum of non-fiction.
BM: What I do is, as you say, it's a way of writing a book as if it's a movie. So, I do all the research, I interview as many people as I can, get all the legal documents and get as many source materials as I can. But then when I sit down to write it, I write it as if you're in the room. I dramatize it. If two people tell me what happened in a conversation, I don't have their exact words, I create the conversation based on what they told me. I want it to be dramatic and fun, but still ride along with the truth so that when I you read it, you're really getting a true view of what happened there. Now, Elon himself might read it and say, “This is bull." I'm not just talking to one side, I'm talking to everybody. And I think it's a way of telling a story that is, you know, something that people can really dive into and feel like they're there. And I think that's more important than just getting the facts right.
BH: Well, it certainly succeeds of getting to, I think, the emotional circumstance of the characters that you're following, and really unpacking their psychology in a way that would be difficult for traditional journalists.
BM: I mean, listen, if I was a newspaper writer, I couldn't get away with a lot of the crap that I get away with because it's a different set of rules. And part of the reason people talk to me is because I'm not a newspaper writer, right. The reason I get so many wonderful sources is because they know it's not going to be on the front page of The New York Times. They can say what they're feeling and what they're hoping and what they're doing. And I'm going to write it in a dramatic fashion, and they're going to see it like it's a movie. It's a different art.
There's, there's a big sliding scale of what nonfiction is. You know, I go back to when I published Bringing Down the House, which was about the MIT Blackjack Team that became the movie 21. I remember, nobody knew what to do with me because it was nonfiction. But there were a lot of old-world journalists who were like, “What is this exactly?” And I remember, the Boston Globe had its best seller list. And my book was number two, Bringing Down the House, but I saw it had an asterix next to it. And I looked down at the bottom, and never seen it before it said, contains fictional elements. And I was like, well, that's weird. And then I looked at the number one book on the nonfiction list, which had no asterix next to it was Jon Stewart's fake History of the United States, which had no non-fictional elements. And it was entirely fiction. It was satire. So I don't understand why one is considered nonfiction, which is completely made up and the other one had fictional elements, but there was a star there. We're in a different place now where it's accepted as nonfiction. But it was an evolution to get here.
BH: Help us understand the chain of events that really led to this this downward spiral.
BM: Paul Pelosi tweet is the first one, and it sets all the advertisers on fire and they're all running away. Elon is in New York trying to get advertisers back, and it's not working. The next thing he does is he tries to relaunch Twitter Blue. In the olden days, people who are journalists, people who are scientists, people who were famous people, and some people unfairly would get something called a blue check. And it would mean that person was vetted. He is who he says he is, his tweets were promoted. And so, it made some effort to have intellectual discourse rise, or at least tweets with some level of experience behind them, rise higher than just any other garbage. Elon saw this is completely unfair. He came in and said, “We're going to just get rid of that system. Anybody who pays for it can have a blue check.” He came upon the price of $8 by getting in an argument with Stephen King and decided that it would be $8 for a blue check.
BH: He originally suggested $20.
BM: Twenty was the original one – a month, which nobody was going to pay 20, so now it's eight bucks a month. But he launched it against the will of everyone at Twitter who saw this is going to be horrible situation. And what immediately happened was everyone put up fake accounts with blue checks with [Nintendo’s] Mario giving the middle finger or when Eli Lilly offering insulin for free and an the whole stock cratered like all of this stuff happened at once. I think George Bush tweeted something about killing Muslims – A fake George Bush, not the real George Bush – but you couldn't tell because the blue check was just $8. Now, it was a disaster. And Elon sat there laughing through the whole thing. And then he decided it was a disaster. And he got rid of it. And then it kind of relaunched.
The next kind of big moment for Elon anyways is Dave Chappelle invites him on stage in San Francisco at a concert and we forget now, people used to love Elon. He gets on stage and is booed by the crowd. And this freaks him out because it's never happened in person before.
And that leads to him starting to get very paranoid. He's doing more and more firing. And it eventually leads into basically he gets to a point where he tweets a poll asking, “Should I stay CEO.” And he is fully expecting it to come back, Of course, you should stay CEO, we love you Elon. But the poll comes back more than 50% saying “we want you out, no, you should definitely step down.”
And this hits him very solidly and emotionally. And this was a real massive low point for Elon. And to me, this is the moment where Twitter broke Elon. It wasn't just that Elon broke Twitter; Twitter broke Elon. And he reaches this kind of point of desperation. And through a kind of the series of events, he starts throwing journalists off Twitter, and all this free speech is out the window, all of his belief on what Twitter supposed to be is out the window. He's saying [to staff] if you don't get rid of this guy, you're fired. If you don't go to this guy, you're fired. And dozens of journalists are just chucked off Twitter in the middle of the night. And this is not the way free speech is supposed to work. But it's the way Elon is now running the company.
BH: During that period of time, it really seems like he's leaning more into conspiracy theories, but also just generally more into conservative, right-wing politics.
BM: His shift right, at first, is somewhat joking. He loves funny things, and a lot of conspiracy theories to him are hilarious. So him retweeting them isn't because he necessarily believes in like pizza gate, or whatever it is. He's retweeting it because it's funny and it gets attention.
But as he's attacked more and more by the media and by the liberal press, he turns more and more right wing. He was never a fan of Trump, but suddenly, he's leaning into a lot of that side of the story because he's so angry with the other side of the story.
Elon definitely wanted to solve a problem, but got angry and got upset and pushed farther and farther and farther, and then paid the price for it. Now all the advertisers are gone and there's no revenue and the company is spiraling down financially and Elon is spiraling out of control, making comments that are seen by many people as antisemitic. I don't think Elon is antisemitic, but he's definitely willing to allow antisemitism on the site. And he's also promoted conspiracy theories, knowingly or unknowingly, but probably knowingly, because he knows a lot.
BH: So during that downward spiral, I mean, he's taking all these rash actions, and there's no guardrails. And I mean, we're here at a business school, we have a whole program focused on good governance and the importance of boards. He has no board at Twitter, he's operating on impulse. Do you think that he has thought to himself I need people around me to who can stop me from doing that?
BM: In past he's had that but no, I don't think he wants people around him. He wants to be left free. I think he brought in Lindy Yaccarino for that purpose. Although she's not really a guardrail. She doesn't have any powers. She’s the new CEO and she's friends to a lot of advertisers. She's a big shot and NBC MSNBC, and she was supposed to kind of be the Sheryl Sandberg in the room right? But Sheryl is powerful. And Sheryl went in with a mandate to make sure things run correctly. But I don't think Linda had any of that. I think she came in to be window dressing to make Elon look better. And she's just flailed. So, I don't think that Elon has anyone around him who tells him “This is bad.” I think he's surrounded by people who are his goons. And they run around just loving his worst aspects. And that's been a disaster for him.
BH: But he's there people from the his days of PayPal because-
BM: Lot of conservative voices, Joe Rogan, you know, people who are fun, but they’re not looking out for Elon’s best interests.
BH: You mentioned the whole idea of simulation theory before. And this is a pretty eccentric idea, but it helps us understand.
BM: Well, it's eccentric, and yet it makes sense. The idea is that mathematically, we are most likely living in a simulation. So if you do the math, as societies get more technologically advanced, and you're seeing with AI and what's going on today, we create video games, but we also create simulations. And they get more and more realistic as we get more technologically advanced. And it gets to a point, we don't just make one, we make millions and billions. We make a near infinite number of simulations. And as we get more and more advanced, they will become more and more realistic to the point where it's impossible to tell what's real and what's a simulation. So, you get to a point where you have a near infinite number of simulations and one base reality. So, what are the odds that we're actually in the base reality? It becomes infinitesimally small. And so, the likelihood is, we're not in the base reality, we're in one of these simulations, because that's just the math of it. And we're not just one civilization, there could be infinite number of civilizations. So, if you have an infinite number of civilizations, making an infinite number of simulations, the odds that you're in reality go to zero. And you get farther than that, because, as the simulations progress the individuals in the simulations progress. And so, all of the non-playing characters are also as complex as a real person. So, the odds aren't just that you're in a simulation, but that you're not even the main player in the simulation, you're just a simulation.
BH: But doesn't this really just build up Elon’s ego is being made the main character?
BM: I mean, every wealthy person, super successful person I've interviewed has a little bit of a feeling that the world is designed around them. Because when things happen over and over again that push you forward to the top of whatever you're in, it starts to feel unlikely to you. And in my own career, you know, how did this happen? How did this happen? How am I here? Oh, my God. You don't think “Oh, I worked hard. I deserve it.” You think, “The world is aligning in a way that gets me here.” It's like winning the lottery over and over again, the odds seem so small that that will happen. But Elon has won the lottery again and again and again. So, he starts to think, well, this is all designed around me. And yes, it is an incredibly narcissistic way to look at the world. But it's also somewhat understandable when you look at a guy who's the richest man in the world, right.
BH: And it probably feeds his belief that he can make these impulsive decisions.
BM: He doesn’t care what other people say; they're non-playing characters. And it's not real. And I think he thinks it's a big game that he's supposed to win. And this is how he's supposed to win it.
BH: So where are we now? I've heard interviews with Linda Yaccarino, and with Elon saying, you know, the site's doing great engagement is up so-
BM: Great, no advertisers! It's not doing great. The site, from what I understand, that they themselves valued at less than half of what he bought it for. So, they valued at little at less than $18 billion. Since then, all of the advertisers left, after his antisemitic tweet. And they're trying to get them back. So he just visited Israel in a big show, which was great. I think I mean, people will debate whether it's great, depending on what point of view you have. But in any event, he's trying to sort of put a band-aid on, but then at the same time, he's tweeting, pizza gate conspiracy isn't our core cue, whatever, and on and on. So, he can't control himself, and he's never going to control himself. So the question is will advertisers ever get comfortable with a site like that? I find it unlikely that IBM or McDonald's or whatever, is going to want to have ads next to Nazi content. I just think it's unlikely. So Twitter isn't doing well, they do have moments of high engagement because it's fun. But none of the intellectual class is there anymore. Journalists aren't there anymore. Scientists aren't there anymore. Celebrities aren't there anymore. The super users that used to make the site work aren't there anymore.
Nothing else competes with it yet. So, let's be clear, there is no better site yet than X for what X is. But X is getting worse and worse and worse. And it's becoming this dirty little chat room of this everything app, which he's trying to push, which would be like a banking site or a dating site or God knows what. And I don't see that working, because people don't like Elon, and don't trust Elon beyond his fan base. But then again, his fan base is large, so he could be successful as a company if he leans into subscription of the 100 million people who love him. They'd be willing to pay probably more than $8. And he could probably make something work. But financially, the site's a disaster right now. And as a place for discourse. It's a complete disaster. Nobody can go on that site and say it's as intellectually satisfying as it used to be. There's just nothing there anymore except for hate and anger. And every now and then a moment of clarity. But I mean, the whole Israeli war that's been going on you look through there, and it's just, it's disgusting. If you go through Twitter, now, it's pictures of dead bodies. It's people screaming at each other. It's fake news. It's all geared towards outrage. And that can't function for long. I don't think.
BH: Is he in it for the long haul? Ten years from now is this going to be MySpace?
BM: I believe he knows this is a huge mess. And if he could get out of it, he would. But he will not back away from this fight. So, his goal is to somehow win this fight and move away from it. I think if he could go back to SpaceX and Tesla right now he would. But he can't consider it a loss.
And I don't think that's going to happen. So I don't see a win here. I think there's going to be, you know, kind of a sad, sputtering ending to it, or a competitor will come up, but no one seemed to be able to do that yet.
Twitter's no more. I mean, he's killed it. And unless he goes away, I don't see it coming back.
I could be wrong. I'd love to be wrong, because I love Twitter.
BH: And how about for him?
BM: Well, the man's the richest man there. Although He's not a happy person. Everyone I interviewed described him as the loneliest man they've ever seen. He's alone, working all the time, and he wants to be loved. He so badly wants to be loved. And that's why this struck him so hard is he's not loved because of the actions here. I don't know that he walks away from this super happy about what's going on there I don't know what's going to happen with him. It's craziness.
BH: It's a fascinating story. And, you know, the desire to be loved makes me think of Citizen Kane and Rosebud
BM: There’s a definite feel to that, where it's an epic character, and I think it'll make a great show or whatever.
BH: Well, I'm sure we're going to see it on the big screen at some point.
BM: We actually sold as a television series and we're doing an eight-part series with MGM. So, I'm in the process of finding our Elon right now who's going to play him.
BH: Well, congratulations. When can we expect that?
BM: I would say within our aim would be next fall we'll have a show on the air. But you never know with Hollywood. Now that the [actors’] strikes over we can meet with actors and start casting it.
BH: Well, it’s a fantastic book, real quick read and totally fascinating in terms of everything that happened there. So congratulations, Ben, and thanks so much for being here at Rotman.
BM: I appreciate it. Thank you.
BH: Where can people find you online?
BM: Yeah, so you can find me on X, you know, just @BenMezrich, on Instagram @BenMezrich. You can just find me everywhere. And the book is in all the bookstores all over Canada at the moment. I’m pretty easy to find online.
BH: Excellent Okay. Well, we'll look for you there. And thanks again, Ben.
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