Elon Musk put a lot of his fortune into X.com, he had a mere $4 million left in all of the world.
This wasn’t the twenty first century X.com. This was 1999, the peak of the dotcom increase. Musk had simply offered his first startup, a metropolis information web site referred to as Zip2 — PC maker Compaq had wished it for its search engine. Musk made $22 million on the deal. He didn’t play it secure together with his winnings. The 28-year-old South African immigrant splurged $18 million on constructing a fairly much less modest concept. X.com was to be an internet hub for each form of monetary transaction on this planet.
What did “X” should do with finance? When folks suppose X, Musk insisted, they consider treasure. They suppose “X marks the spot.” Musk by no means wavered on this perception, not even when proven mounds of proof that what most individuals actually consider once they see “X.com” is…porn. His blind love led to a boardroom coup that overthrew him as CEO, and ultimately ousted the X identify — changed by PayPal.
Twitter’s hen emblem is useless, changed by X
In the event you, like most of us, are nonetheless puzzling over Musk’s blinkered determination to erase the identify Twitter (and its multi-billion-dollar model id) by scrawling an enormous X over it, the foundational story of the PayPal mafia is the place you begin. There are shocking parallels between that period, now documented in a number of greatestselling books, and this one. It’s all there: the disdain for beloved manufacturers; the impulsive choices that alienated even allies; the grand “the whole lot app”-style imaginative and prescient; and maybe most tellingly, how traders would swoon each time Musk talked about it.
That final half could also be what Musk is relying on now: a determined bid to stoke curiosity, in order that new funding will dig the corporate previously often known as Twitter out of its deepening monetary gap. Or the identify change could also be the results of a quarter-century of stewing over the lack of X.com, which Musk purchased again from PayPal for “sentimental” causes in 2017. Both manner, there are causes to suppose the sting on this cautionary story of hubris is about to strike a second time.
Muskian Historical past X
To be honest to Musk, he was no dummy again then. The latest greatestseller to inform the story, Jimmy Soni’s The Founders: The Story of PayPal and the Entrepreneurs Who Formed Silicon Valley, isn’t shy about Musk’s shortcomings (not like Elon Musk, the 2017 biography that tends in direction of hagiography). However even The Founders paints an image of Musk as a supremely hardworking 20-something whose fascination with finance allowed key insights within the messy course of that created PayPal.
For instance, Musk took an early lead within the on-line funds conflict between X.com and its rival, a startup referred to as Confinity that labored out of the identical Palo Alto workplace house.
Not solely was Musk faster to acknowledge the worth of with the ability to pay by electronic mail (fairly than by beaming it between Palm Pilots, the idea initially championed by Confinity co-founder Peter Thiel), however he paid X.com customers $20 at enroll, whereas Thiel paid $10. Bleeding cash from this competitors, the companies have been pressured to merge in 2000 beneath the X.com identify; Musk can be the biggest shareholder of the mixed firm.
Musk had all of it at this level. Particularly after X.com’s first, lesser-known boardroom coup. This was the place Musk ousted his handpicked CEO, Intuit veteran Invoice Harris, after Harris had accomplished all of the exhausting merger work. Musk took on the CEO function himself. However tellingly, he didn’t notice probably the most priceless factor in his possession was a reputation. The identify for Confinity’s fee app, the identify that eBay sellers had come to like: PayPal.
The Founders goes into depth on the creation of the PayPal identify, and it’s price lingering on the purpose. Thiel’s group employed an expert naming firm that thought-about a whole lot of choices, checked to see whether or not they’d violate emblems, and got here up with a shortlist that included MoMo, Cachet and PayPal. The group took some time to come back round to the latter, however as quickly as they realized it might be a verb — “simply PayPal it to me” — they by no means appeared again.
Elon Musk had Tesla overstate its battery vary. Tesla then canceled associated service appointments.
Whereas X.com garnered 200,000 customers shortly after its launch, not a kind of customers stated “simply X it to me.” Worse, the pornographic-sounding identify had attracted what one early feminine X.com worker referred to as “so many terrible, horrible emails.”
Musk didn’t care. Not solely was he enamored with the way it sounded (and with the coolness of his private [email protected] electronic mail tackle), he thought “PayPal” too limiting. “It could be like Apple calling itself the Mac,” Musk advised Jimmy Soni, the creator of The Founders. X was going to vary the monetary world, so it needed to come at the beginning.
The fee product on the merged firm, he decreed, was to be referred to as X-PayPal. In response to Max Chafkin, creator of the Peter Thiel biography The Contrarian, Musk “requested the advertising and marketing division to remodel the PayPal emblem to incorporate an X,” and was “starting to section out the PayPal identify altogether.”
Crew Thiel fought exhausting in opposition to X. A collection of focus teams revealed “many times, the theme of ‘oh god, I wouldn’t belief this web site, it’s an grownup web site’,” X.com advertising and marketing supervisor Vivien Go advised Soni. “It’s form of exhausting to refute when folks say again and again, nearly in the identical phrases, ‘I simply wouldn’t belief that. That sounds actually mysterious.’”
However Musk was adamant. He handled the belief drawback, then as now, by ignoring it. Additionally then as now, he insisted on engineers rewriting the codebase his manner, and appeared oblivious to the amount of money the corporate was burning. It was all in service to a better imaginative and prescient of X, which he described to keen traders as “the Amazon of economic companies.”
All of this led to the corporate’s second boardroom coup, the one the place Thiel referred to as a gathering to oust his previous frenemy whereas Musk was on a delayed honeymoon together with his first spouse, Justine. That was chilly — however Musk’s intuition was to cowl it up, save face, and hold pushing X.com as the corporate identify, even when he couldn’t win on the PayPal product query.
Take a look at this CNN report from 2001 — through which Musk makes it sound prefer it was his determination to step again, and titles the corporate “X.com, now referred to as PayPal.”
Cease making an attempt to make X occur
Why Musk nonetheless thinks he could make X occur, and achieve this by replacing another iconic brand a quarter-century later, stays a thriller. The world has moved on. The web fee networks of Apple Pay and Google Pay, to not point out Sq., are all most shoppers will ever want.
The “the whole lot app” idea embodied by WeChat has not taken off exterior China; beginning in 2019, Mark Zuckerberg tried to copy WeChat by way of Fb Messenger, which has a far wider viewers than Twitter ever had, and failed.
Musk has provided no particulars on the forthcoming X service, and no solutions to the WeChat query. When challenged by Twitter workers in November about “basic variations” between Twitter and WeChat, in line with the New York Instances, Musk stated the questioners didn’t know what they have been speaking about and moved on.
However it appears extra doubtless that Musk, surrounded by a bubble of yes-men like X.com veteran David Sacks, doesn’t have as agency a grasp on gaps within the know-how market as he thinks. Nor does he perceive, as soon as once more, how a lot mistrust he has sown amongst his person base.
But when Musk’s bullheaded previous is any information, he’ll experience the X idea into the bottom — or at the least, till Twitter goes bankrupt, or he runs out of cash to prop it up, or his fellow traders within the firm get nervous sufficient to oust him.
If this newest twist within the X.com saga leaves the billionaire with simply $4 million to his identify as soon as once more, that irony will likely be too scrumptious for phrases. In that occasion, maybe Musk’s perception that we’re all residing in a simulation will deserve one other look.