A Look into the Future of Finance and Social Media
In an interview from last July 2023 with Zuby, Elon Musk shared his vision for X. Elon explained that X is not just a social media platform, but will become an all-encompassing financial services company that aims to greatly improve the way money and information are exchanged.
The current financial system is slow, insecure, and expensive. X will address these issues by creating a real-time, high-security, cost-efficient database for money. This would be achieved through the use of advanced engineering and technology and the elimination of redundant systems like bank branches and ATMs.
By focusing on efficiency, security, and cost-effectiveness, Elon believes X has the potential to become the major player in the global financial system, possibly accounting for half of it. This will be a significant shift from traditional banking as we know it, as X would operate faster, and more securely.
As we look forward to 2024, it is clear that Elon is on the fast track to revolutionizing the way we handle money and information. With Elon’s ambitious vision and dedication to the best technology, the future of finance and social media is closer than we may think.
Enjoy this part of the interview with Zuby
Zuby: 𝕏 is something you’ve been having in mind for a long amount of time.
Elon: Yes, 20 years.
Zuby: Tell me the story about 𝕏.
Elon: Way back in the day the idea was for X or X dot com to be an all-encompassing financial services company or, kind of like, in an information theory way, to be the most efficient database for the information that is money.
The way that money currently works is, from a practical standpoint, it’s still mostly run on mainframes. that is, it’s still a thing with banks, and it is mostly written in COBAL, it is still mostly batch processing. So actually, the financial system is very slow. it’s not secure. You’ve got all these heterogeneous complex databases.
So, if you have a real-time, margins database, that’s just, like fundamentally more efficient. And it does not have all of the expenses of bank buildings all over the place, and bank branches, and ATMs, which are increasingly kind of redundant. You can operate way more efficiently.
And so, essentially, if done right, X would serve people’s financial, needs to such a degree that, over time, it would become maybe half of the global financial system.
Zuby: Wow
E: Or some big number, I’m not sure what the number is, but pretty big. It would be, by far, the biggest financial institution. But, like I said, not really in the way that people are used to thinking about banks.
Just the most efficient database for the thing that is money. With the least amount of fraud, everything is real-time, and if it involves money in any way, it can be dealt with seamlessly in one location.
In addition, we’ve got this, sort of, social media outlet, which is also information. Its people share information of various kinds, whether it’s text, videos, pictures, voice.
*pause* (Elon gazes into thought for a long moment)
Elon: And so both money and what we call social media, are really information exchange.
And so there’s potential there to make a product that is really quite compelling, like, combines all these things, simplifies people’s lives, and is more cost-efficient for the average person. you’ll have a minimum number of fees and whatnot. So I think there’s a lot of potential to create, kind of, the ultimate App, system, website, whatever.
My thoughts
Elon moves fast. He has made improvements in how we think of energy production, energy storage, and transportation. Elon has completely overturned the antiquated space flight system of one-time-use rockets. Elon is a force of goodness for the earth and all humanity. When he talks about our stumbling, cumbersome, antiquated financial system I envision weighted lines of code in COBOL. I see the huge levels of breaches of security and I know, in my heart, that Elon is right. We all need a better system to handle money. If the man who is building Starship is doing this, I am all for it. What shakes me is the ability he has to envision what will work best for people. There is a look in his eye, and a pause in the interview, where you just know… we’ll see this come to pass.
Gail Alfar, author. Exclusive to Gail Alfar. All Rights Reserved. My goal as an author and podcaster is to support X and Tesla (the most American vehicle manufacturer) and Elon Musk in both making life better on Earth for humans and becoming a space-fairing civilization.
FOR MEDIA USE ONLY News media is welcome to use my material in connection with a story or article. By downloading any content I create, you understand and hereby agree and represent that: (1) you are a member of the news media; (2) use of the content is in connection with a story or an article appearing in newspapers, periodicals, digital publications or television; (3) all images and rights thereto remain the property Gail Alfar.; and (4) use of the image is not for publication covers, advertising, promotion or otherwise for commercial purposes. Furthermore, use of any and all images and content appearing on this page must each include the notice “Courtesy of Gail Alfar” Use of materials copied from this website is at your own risk. You must obtain prior written consent from Gail Alfar for uses that exceed the above parameters.
Elon Musk tweets a meme about Dogecoin and Twitter
Welcome back to my weekly blog! All my articles seek to document the ongoing story of how Elon Musk is transforming Twitter for the better. There were a lot of exciting changes this past week and I’ll try to summarize all of them for you!
Twitter Verified Organizations went Global
The Recommendation Algorithm AND Community Notes are open-source on GitHub
Elon Musk talked live on Twitter Spaces (transcript)
Dogecoin Logo Appears on Twitter! (update 4/7/23 doge logo disappeared)
Twitter sign Becomes Titter!
“If Twitter can be the least imperfect place to find the truth on the internet, then I will consider that we have done a good job.” – Elon Musk
Twitter Verified Organizations became available globally
Twitter Verified Organizations are how organizations and their affiliates can distinguish themselves on Twitter. Twitter allows the Verified Organization to fully control vetting and verifying accounts they’re affiliated with.
To connect people with accounts affiliated with the organization, each account features an affiliate badge on its profile with the organization’s logo. It is easy to find these accounts because they are featured on the organization’s Twitter profile.
Twitter’s beta program included sports teams, news organizations, financial firms, Fortune 500 companies, and nonprofits. Now Verified Organizations is rolling out globally to all interested businesses, nonprofits, governments, and multilateral organizations. But there was one organization that loudly protested Twitter’s new offer, that was the New York Times.
New York Times
The New York Times decided to forgo any type of verification leading to dramatic news stories across the internet and funny comments from Elon Musk. The New York Times drama only served as free advertising for Twitter’s new Verified Organization program.
Twitter seeks to gain the trust of the people, and one way to do that is to open-source codes.
GitHub and Twitter Transparency
Now there are two source codes available to all on GitHub!
The goal of our open source endeavor is to provide full transparency to you, our users, about how our systems work.
We’ve released the code powering our recommendations that you can view here (and here) to understand our algorithm in greater detail, and we are also working on several features to provide you greater transparency within our app.
Some of the new developments we have planned include:
- A better Twitter analytics platform for creators with more information on reach and engagement
- Greater transparency into any safety labels applied to your Tweets or account
- Greater visibility into why Tweets appear on your timeline
With so many changes happening, Elon Musk spoke on a LIVE Twitter space on April 1st.
Live Conversation with Elon Musk on Twitter Spaces
April Fool’s Day brought many pranks and also a delightful talk with Elon Musk LIVE on Twitter Spaces!
Here is a transcript of the highlights of the conversation:
“We’ll be adding in the ability to do voice DM. Through DMs, you’ll be able to speak to someone through a voice chat or a video chat. So if you’ve got a DM group and you want to turn that into private Spaces or an audio chat or a video chat, you can do so. I think it would be kind of cool to have a conversation with someone else without having to give away your phone number. There’s some pretty insightful people at Twitter talking about Twitter being like “Trust” as a service and really that is kind of what we’re going for. It’s to try to be the most trusted place on the internet in a world where so many people and entities and governments are trying to influence you and in a lot of cases try to trick you with information that isn’t true. Where can you go that is the most trusted, or where is the information you can actually count on? Which is not to say that Twitter is perfect, but if Twitter can be the least imperfect place to find the truth on the internet, then I will consider that we have done a good job.” – Elon Musk
Dogecoin Logo Appears on Twitter!
Dogecoin logo appears on Twitter. Image courtesy @cb_doge on Twitter
On April 3, people started noticing a Dogecoin logo had replaced the blue bird logo in the top sidebar area of Twitter (and it appears in other places too). Elon Musk has always liked Dogecoin, “the people’s currency.” He has mentioned it is more fun because it has dogs and memes. (update 4/7/23 the sneaky little doge disappeared and was replaced with the twitter bird logo)
The playful and sly-looking character of the Shiba Inu dog is delightful to many people, especially to children! Artists and fans of Dogecoin (including Elon Musk) reacted with joy and celebrated with creating memes. I’m sharing a few examples below! Elon is always ready for humor, and the next day he pulled another prank!
Twitter sign Becomes Titter
On March 5, an image was shared by @softwarejameson on Twitter. A photo (see below) showing the Official Twitter HQ Building was shared and the “W” in the sign was covered up! This was verified by other videos.
Fans all over the internet began to meme and comment on how Elon was making good on a promise last year when he asked in a survey, “Delete the w in twitter?”
Fans create AI Art for Twitter and Dogecoin
Doge and Twitter are perfect for each other. Image Courtesy @itsALLrisky One of the best collabs all year, Twitter and Doge. Twitter Bird over X. Unknown artist.Image Twitter HQ with the W taken out. Courtesy @softwarejameson on Twitter
Gail Alfar, author. Exclusive to What’s Up Twitter – April 6, 2023. All Rights Reserved. My goal as an author is to support Twitter 2.0 and Elon Musk in both making lives better on earth for humans and becoming a space-fairing civilization. I write these articles, I will not use AI of any form to write them, they are time-consuming and I appreciate the opportunity to do this.
Twitter was the big topic at Morgan Stanley’s TMT Conference this last week and Elon Musk talked for about 45 minutes. This article captures his insanely inspiring and at times humorous talk. My favorite part of his talk was about Twitter advertising and how he plans to make it a resounding success! Don’t miss this amazing talk!
Highlights:
Mission of Twitter
News happens in real-time on Twitter
Should Twitter have a public relations department?
GOOD INFO! Why advertising on Twitter has incredible potential
Community Notes: combatting misinformation across a broad spectrum and the rigorous pursuit of truth
Proactively reducing child exploitation on Twitter
Advertisers on Twitter enjoy brand safety
A healthy national dialogue on Twitter
Freedom of speech: hearing what you don’t want to hear
Twitter won’t always be a fractal rube goldberg machine
Twitter’s cash flow
MUST READ! The incredible value of advertising on Twitter and how Elon Musk will make sure it happens
The everything app is going to be x.com
Image Courtesy Twitter, Inc.
MISSION OF TWITTER IN THE WORDS OF ELON MUSK
Morgan Stanley: How would you describe the mission of Twitter 2.0 under your ownership?
Elon Musk: The goal is to have Twitter be the best source of truth, the most timely and accurate source of truth, even if the truth is something we don’t want to hear or unpleasant or whatever but have it be timely and accurate and really where you can understand what’s going on.
And not just, ‘is something true or not?’ but what is the narrative?
The thing that I think most people probably don’t appreciate is that the media controls the narrative. So there are many things that could be talked about in the world but only a few things can fit on the front page.
But Twitter doesn’t have a limitation like that, so the public can control the narrative and the public can inform themselves as to what the narrative should be. That’s really a big deal. It’s a forum for citizen journalism or a forum for the public to get together and communicate in a way that was never possible before, so you can really know what’s going on.
I think that it’s really going to be essential for a functioning democracy. What is the bedrock of a functioning democracy? It has to be free speech and a level playing field.
That’s why it’s the First Amendment. It was the first thing they did, it was like, ‘we’ve got to make sure freedom of speech’ and why did they do that? It’s because where they came from there wasn’t freedom of speech, and once you lose freedom of speech you don’t get it back.
That’s why we must protect it at all costs.
MS: (paraphrased) Where are you on the core principles of Twitter: Authentic, informative, entertaining, accurate, brand safe and democratic?
Elon Musk: I think some of these are a little at odds, but brand safe I think really means like ‘where advertising is displayed’ or the advertiser gets to choose what material is near that advertising.
If its some sort of… like a train accident or a war scene, then probably a family-friendly brand is not going to want to advertise right next to that.
Or it can’t be like, ‘here’s a bleak war scene, would you like to buy a hamburger?’ it would be like, awkward, you know? So that’s understandable you want to put advertising next to content where it makes sense. But the content in general needs to be authentic and informative even if it is controversial or jarring. I think people need to be able to choose, to some degree, what content they want to see.
Of course on Twitter you can. But really we want it to be the fundamental place you go to, to learn what’s going on and get the real story. The truth, the whole truth and it’s going to be more than, hahaha, I’d like to say nothing but the truth but that’s hard, (laughter) there’s going to be a lot of BS there too. There are going to be lies, for sure, but you want to have the truth and you want to bubble up the truth and be able to sort of sort out… you really want truth with the least amount of error.
TWITTER IS WHERE THE NEWS HAPPENS
MS: How can the media catch up? If they’re on Twitter they can be seeing these tweets and posting them. If they’re not on Twitter is there no way to catch up? Like how does the traditional media and citizen journalism and 50,000 tweets on an important subject, how do those intersect and how does the media catch up.
Elon Musk: Well, I’m sure many of you use Twitter.
Everything on Twitter is happening in real-time.
So if you contrast that to what’s happening in a newspaper, they have to learn the information, propose an article to their editor, get it approved, write the article, get it edited, figure out which day it’s going to get published on, and so the thing that happened is being reported on 3-4 days, sometimes a week late. And if it happens on a weekend then it’s at least 3 days.
You know ChatGPT was huge news for several days on Twitter before there were any news articles about it in major publications.
So when thinking about investing in things, you want to have information that is as timely and accurate as possible, there’s no better source than Twitter for that.
SHOULD TWITTER HAVE A PR DEPT?
MS: Paul Graham has said how important accuracy is on Twitter he said you should be ‘default skeptical’ of any news story about Twitter and assume its default wrong because not only some journalists have an agenda but the source has an agenda and it’s so easy to go through the chain of inaccuracy or outright falsehood. Is he right about this and how can accuracy about Twitter and about you be conducted by the traditional media if at all? Would a PR department help, which you famously don’t have?
Elon Musk: No, PR departments… no the right name for PR is propaganda. Maybe we should have a VP of propaganda, I think that’s more honest, and also a VP of witchcraft. (laughter) Those would be two great ones.
If you pick up any given newspaper and read the whole thing and say, ‘how many of those stories are positive about anything at all?’ Almost none.
So if something is newsworthy it is going to have a negative slant, whether it is positive or not. There’s like something in journalism that, they’ve been trained to basically never write a positive story about anything. Once and a while you see a puff piece but it’s rare.
So anything that’s newsworthy will get written about, anything that’s written about will go through a negativity lense and so you therefore have a bizarrely negative view of the world if you draw your information from newspapers. This is simply a fact.
THE SMARTEST PEOPLE IN THE WORLD USE TWITTER, POTENTIAL FOR AD REVENUE IS HUGE
Elon Musk: So on Twitter, you can get a much more balanced positive-negative situation, it doesn’t have that bias quite as much. There’s probably still a little bit of negativity bias but much less so. I’m not sure what the legacy media does, I mean at this point, really.
Twitter is, by the way, the #1 news app in the world. So in terms of what people download for news, it’s #1. There are 500M active users. 250M daily users of which I’d say there are probably 180M significant daily users, where it’s a meaningful amount of time.
The average amount of time people spend on Twitter of that 250M is about 1/2 an hour or so. The thing I think that is most interesting is about 120M to 130M hours of human attention per day on Twitter, every single day on average. I think it comes to an interesting point which is, it’s startling how poorly monetized that is because you have to say, how valuable is that attention? 130M hours of human attention per day, of people that read.
So these are generally the smartest people in the world, the most influential people in the world, and you have 130M hours of their time per day, that’s a lot! Currently, Twitter makes about 5 or 6 cents per hour of that time. I think this is poorly monetized (laughter).
MS: Paul Graham’s 1/2 hour of attention is worth more than that, haha!
Elon Musk: Like, if I’m spending 2 hours a day on Twitter, whatever ads are coming through are getting my, or yours or everyone in the room’s attention, your time is incredibly valuable.
The thing is, we need to actually serve ads that are relevant and useful and I think as we do that we can probably at least get it like 15 cents an hour or 20 cents an hour, a quarter? I think the actual potential here for Twitter revenue is gigantic.
And it’s going to be a win-win situation which is if you are served advertising that you find timely and relevant with products and services that are useful to you, that’s good for you and good for the advertiser. Advertising in the limit of relevance is content.
COMMUNITY NOTES: COMBATTING MISINFORMATION ACROSS A BROAD SPECTRUM
Morgan Stanley shared how Community Notes, a fact-checking by the power of the people on Twitter can be used to combat misinformation in 6 examples:
Correcting government misstatements
Correcting candidate misstatements
Adding context
Debunking conspiracy theories
Correcting misstatements about companies
COMMUNITY NOTES AND THE RIGOROUS PURSUIT OF TRUTH
Morgan Stanley asked how Community Notes can be used without being hijacked by either side of an issue or political spectrum.
Elon Musk: There’s a White Paper on Community Notes that I recommend reading, in fact, I’ll tweet it out so that people can have easy access to it because it’s really quite a clever idea. Think of it like page rank for pages as applied to people, which is that as people build credibility in how they review notes, they build up enough credibility to actually write notes.
Those notes are then rated by others, and depending upon the credibility of the people rating your notes, your credibility score gets affected. In order to be a notes contributor, you have to be a verified person. And it takes a while to get there; when you just start out, you will start off with no credibility score.
We actively look at any attempts to game the system and shut them down. If they’re determined to be not real people or if they seem to be brigading because there are deliberate attempts to manipulate Community Notes. We also make the Community Notes source code open and available, so you can basically see everything.
You can see exactly how Community Notes is calculating things, and what changes are made to Community Notes and we’ll keep iterating and the goal is to have truth with the least amount of error.
There’s always like, ‘What is truth?’ Does someone really aspire to the truth? If they really aspire to the truth they must acknowledge that there is some probability that what they think is untrue.
If somebody thinks that what they say is true with 100% probability, there’s a 100% probability they are lying. Truth must acknowledge error, where you aim to minimize the error over time, that’s what Community Notes is. I think also, once someone gets Community Noted, they think twice about being dissected in the future. You start getting noted a few times, and you think ‘Uh, oh!’
The important thing is that anyone can be noted, including me, and in fact, I wanted to make a note of being noted. The point is that if I can be noted, anyone can be noted, including advertisers. We’ve had a few cases where the advertising wasn’t accurate and it got noted.
This, I think will be very helpful in truth in advertising. The goal is rigorous pursuit of the truth, aspirationally the whole truth, and the least amount of untruth.
TWITTER IS DOWN > 50% LESS HATE SPEECH THAN PRE-ACQUISITION
PROACTIVELY REDUCING CSE ON TWITTER
Elon Musk: Yeah, I’ve repeatedly said to the trust and safety team at Twitter that the #1 priority, which will always be the #1 priority no matter what, is ensuring that children are safe on Twitter, that there’s no child exploitation. So that is #1 priority always and forever.
The #1 priority, which will always be the #1 priority no matter what, is ensuring that children are safe on Twitter, that there’s no child exploitation. So that is #1 priority always and forever. Elon Musk
Elon Musk: What I’ve been told is that we’ve done more to eliminate [CSE material] on Twitter in the last four months than what has been done in the last ten years. It will continue to be our number one priority. A 100-fold reduction in CSE search patterns is pretty gigantic to say the least. It’s the absolute number one priority.
HOW ELON MUSK WILL MAKE ADVERTISING ON TWITTER A SUCCESS
Elon Musk: With respect to brand safety, it really depends a lot on the brand.
By the way, Disney is a major advertiser on Twitter worldwide. Apple is one of our biggest advertisers. But Disney of course does not want to have one of their ads next to things that aren’t appropriate for a family audience.
But there are other products that are kind of more R-rated if you will, so they’re more comfortable with advertising being in the equivalent of like a R-rated movie or something like that. So brand safety depends on what brand you’re talking about. Is it a family brand or a less family brand?
Advertisers can actually adjust what content they are comfortable having their advertising appear next to. The same is true on TV. The advertising that you’ll see at 7 pm is different than the advertising that you’ll see at midnight. We have the same functionality on Twitter, so it’s truly up to the advertiser where they want to put their content.
But I think by far the most important thing is if the advertising is effective. That it is relevant and that it moves the needle for a company. Advertising relevance is the most gigantic thing. This is going to sound totally bizarre but Twitter did not consider relevance in advertising until 3 months ago. In fact if you use Twitter for a long time, you should ask ‘how many products have you bought off Twitter?’ Probably zero! (laughter) Judging by the laughter, probably zero. And your time is incredibly valuable.
MS: Flamethrower, no one bought a flamethrower?
Elon Musk: Haha, its possible that they might have bought things from content-based tweets because the content that’s recommended is reasonably relevant but the advertising has not been.
So as we shift towards advertising being relevant and timely, as I said, advertising that is relevant and timely is content. The time of 130M person-hours of the smartest people on earth is insanely valuable. Historically, with advertising being mostly irrelevant, we’ve been wasting peoples’ time and that’s not good. Going forward, Twitter will have very relevant and useful advertising.
There will be a massive increase in revenue because it is now useful. So I’m very optimistic about the future. It’s been a very difficult 4 months, but I’m optimistic about the future.
TWITTER AS A DEMOCRATIC PLATFORM FOR ALL
Elon Musk: I think the objective reality for anyone looking at Twitter for a long time was that Twitter had a massive thumb on the scale on the left side. Twitter would ban and suspend accounts on the right 10 times more than on the left.
This is naturally what you would expect, frankly, because we are in San Francisco, which is deep deep blue. So, Twitter was controlled by the far left.
So the natural thing that would happen then was the suppression of moderates, not just suppression of the right but even suppression of moderate voices.
But that’s not conducive to a healthy national dialogue. In order to have a healthy national dialogue, you have to represent the whole country, and you have to represent everyone in other countries too. That’s the only way to have a Town Square.
FREEDOM OF SPEECH IS WHEN YOU HEAR WHAT YOU DON’T WANT TO HEAR
Elon Musk: Yeah, there were disproportionately more accounts unsuspended and un-shadowbanned on the right because Twitter had a huge thumb on the scale in favor of the left.
But if you say, ‘Have we been suspending accounts on the left? Have we been shadowbanning accounts on the left? No, no we haven’t.’ No, because exactly what I said we were doing which is to make it an even playing field and you know something is Freedom of Speech when you’re hearing speech from someone you don’t like and you don’t like what they’re saying. Otherwise its not free speech.
And if you don’t have that ability, then sooner or later that suppression of speech is going to be turned on you. It is a good sign if you’re seeing people you don’t like say things you don’t like.
That is a good sign, not a bad sign… provided you can say your piece too! I think this is fundamental. The reason I did the Twitter acquisition was not because I thought this would be some lucrative goldmine, and in fact, it has been arduous and difficult with being dumped on [by mainstream media] every day.
That’s not the most fun thing in the world. But if we do not have a strong foundation of free speech, I fear for the future of our civilization. We must have this. That’s why I did it.
“if we do not have a strong foundation of free speech, I fear for the future of our civilization. We must have this. That’s why I did it.” Elon Musk
FIXING THE FRACTAL RUBE GOLDBERG MACHINE
Elon Musk: The codebase is like a Rube Goldberg Machine and when you zoom in on one part of the Rube Goldberg Machine there’s another Rube Goldberg Machine and then there’s another one!
That’s what I mean by the fractal. As you zoom in there’s another fractal and another fractal and a fractal Rube Goldberg Machine. It’s quite difficult to keep this thing running and then also difficult to advance the product because it is really overly complex. We’ll make what appears to be a small change somewhere that then causes massive disruption. For example, yesterday we made what we thought was a small change, we want to be in full disclosure including gruesome details.
There was what was supposed to be a small change to 1% of the Twitter user base ended up being a catastrophic event to 100% of the Twitter user base. We don’t have enough time to go into the details but there was a Boolean flag in the Twitter front end that should not have been there.
I’ll give you an example. At one point there was a problem with Twitter Spaces where suspended users were able to join conversations even though they were suspended and so we temporarily turned off access to Twitter Spaces which then made anyone who is using the Twitter Android App unable to like a tweet.
Now how those things are connected is not clear, haha. So if you had an iOS app you could like tweets, if you’re on the Web app you could like tweets but not if you had an Android app because of Spaces. So there’s a lot of work behind the scenes and simplifying the code base, getting rid of extraneous features and enabling Twitter to evolve more rapidly in the future but it requires a lot of cleanup.
MS: You’ve grown users despite this lean engineering team and you cut out a data center.
Elon Musk: Yeah, I think on balance we’re doing okay. Just to give you a sense of where things were at the close of acquisition on October 29th, Twitter was tracking to a negative 3 Billion dollar a year burn rate and had 1 Billion in the bank. That’s a pretty dire situation.
If 2023 had been a normal year, Twitter would have done something on the order of 4.5 Billion in revenue and 4.5 Billion in cost, roughly break even, but when you add 1.5 Billion of debt servicing to that and a massive decline in advertising, some of it cyclic, some of it political, but call it at roughly a 50% decline in revenue, you’ve got over 3 Billion dollars negative.
Twitter has some revenue that’s not advertising-based, data subscriptions and what-not, but in the absence of action, Twitter would have had 6 Billion in costs and 3 Billion in revenue so minus 3 Billion and there was 1 Billion in the bank, so it would have gone bankrupt in 4 months.
Immediate and drastic action had to be taken, which was. We actually have now cut the non-interest burn to roughly 1.5 Billion. So we’ve got 1.5 Billion of debt servicing and 1.5 Billion of expenditures. We went from 3 data centers to 2, and reduced our cloud expenditures significantly, while at the same time having the fastest product evolution in Twitter’s history. So overall, not bad.
There have been a few bumps along the road obviously but this is to be expected. And now I think we have the opportunity to grow it into something quite spectacular. We had the highest total user minutes in Twitter history. The real number to care about is actually not the MDAU (Monetized daily active user) but its user time. How many total user hours per day do you have? That’s the real figure of merit because one could for example go to 300 Million daily active users but if they spent less time on the system cumulatively that would actually be a downgrade. How much human attention are you worth?
That’s why I think the really profound thing is what Twitter has is roughly 130 Million hours of the smartest most influential people on earth, every single day. There’s nothing else that has that. I mean there are social networks that have more users but they do not have the smart, influential people, they don’t have you!
MS: After doing the math, Twitter is EBITDA (earnings before interest, taxes, depreciation and amortization) profitable today and then you’re looking for break even after debt services. when do you get to cash flow break even?
Elon Musk: Well its EBITDA profitable but the “D” is quite big! (laughter)
MS: When do you get to cash flow break even after that “D”?
Elon Musk: This is where we need to focus on the “E” part. (laughter) Yeah, I hope we pay taxes. So like I said, we’re getting to the point where we’re close to having the total expenditures for the company excluding debt roughly equal to the debt. I think we’ll be there in Q2.
I defintely don’t want to count chickens before they’re hatched or jinx it or anything but I think we’ve got a shot at being cash flow positive next quarter.
THE INCREDIBLE VALUE OF ADVERTISING ON TWITTER AND HOW ELON MUSK WILL MAKE SURE IT HAPPENS
MS: Twitter has great advertiser value with 147 Billion global impressions of the World Cup 2022 conversation.
Elon Musk: What I say to advertisers and brands is ‘use Twitter yourself and believe what you see on Twitter, not what you read in the newspapers.’ Because what you see on Twitter is the real thing, and what you read in newspapers is not.
And I’d like to thank Mark Read and WPP for their support and publicists and others that have stuck with us like Disney and Apple.
MS: When do you introduce performance-based advertising and scale it?
Elon Musk: Performance-based advertising is really just advertising that is relevant, in fact we should realistically have zero nonperformance-based advertising.
We want advertising that matters, people’s attention is precious. We should not serve them ads that are annoying or irrelevant or strident or ugly.
It was interesting you should mention White Lotus, I was talking today with David Zaslav, it was great, and he was like, ‘Why can’t we put a White Lotus trailer every time someone mentions White Lotus on Twitter?’ I’m like, ‘Absolutely!’
So one of the super-obvious but profound things that we’re doing is enabling keyword advertising so that can the keywords, like ‘White Lotus’ and if somebody mentions White Lotus, you put the White Lotus trailer there. I mean, that sounds very obvious.
We don’t need advanced AI for this one (laughter). It’s sort of just google Adwords that apply to tweets and the home timeline and replies and everywhere else because you often have sort of long, deep conversations with people going on talking about movies, TV, products and whatnot and that’s the perfect opportunity for advertisers to provide their message.
You know, if I think about something, for example, like Starlink, which does advertise in various media you want to advertise to users in a region that are not already saturated. So Starlink tends to be saturated in urban areas but it is not saturated in rural areas. So what Starlink would like to do is say, ‘Please show the ad to rural users with a slow connection. And the simple message is, ‘Do you want faster internet for less money? Click. Probably you do. Twitter needs to be able to do a simple thing like that. And it will. It is already able to do that, we just haven’t fully rolled it out. So I think we’re around 20%-ish but by the end of this year, almost all advertising should be reasonably relevant.
I think there’s also an opportunity here to really improve the relevance of advertising using AI based on the tweets, views, and likes.
You can actually populate a parameter space and then you can take an ad, and even if you say nothing about that ad, after its dropped in the Twitter system and it has 10,000 views, you populate the parameter space of the ad and then you correlate the user parameter space and the ad parameter space and then you don’t need to do any demographic targeting because you could be like, say its a gardening ad or you could be 20, 30, 40, 70 years old, any sex, whatever, it doesn’t matter.
What matters is you like gardening and that’s the ad that should be shown. I think we can get away from the ad targeting by age range and sex in favor or targeting by interest. A lot of this demographic targeting was done coming from a TV or newspaper era where you don’t have interaction with the user, you just have to kind of guess because it’s a one-way street in TV. But on Twitter it’s not a one-way street, there’s continuous interaction. I think we can have a profoundly more useful advertising experience.
THE EVERYTHING APP: X.COM
MS: Tell us about your vision for X, the everything app.
Elon Musk: I think it’s possible to create a very powerful finance experience basically. Paypal is kind of like a halfway version of what I think could be done in payments and finance. You want to be able to send money easily from one account on X / Twitter to another account effortlessly with one click. You want to be able to earn interest on the money, you want to be able to have debt so your interest can grow negative. Basically, I think it’s possible to become the biggest financial institution in the world just by providing people with convenience and payment options. We don’t have time to go into detail here except if we just make the app more and more useful, people will use it more and it will be great. I mean, you’ll see!
MS: The Tesla team is nice and built out, the Twitter executive team is perhaps a bit leaner. Maybe there’s a meme that’s accurate.
Elon Musk: He does have a black turtleneck, haha! Do you need anything more? I don’t think so. (see header image of this article for picture of Elon’s pet dog as the CEO of Twitter)
MS: So when does that Twitter management team have that bench like you showcased at the Gigafactory?
Elon Musk: Well I think it takes a lot of time to build a strong management team. We built the Tesla management team over 20 years. I think Twitter is an easier problem than Tesla by a long shot. But it will take some time to build the team, probably a few years.
X / Twitter HQ enjoys a lovely afternoon as a San Francisco Cable car passes by. Image Courtesy Roxanne Productions, Inc.
Gail Alfar, author. Exclusive to What’s Up Twitter – March 10, 2023. All Rights Reserved. My goal as an author is to support X / Twitter 2.0 and Elon Musk in both making lives better on earth for humans and becoming a space-fairing civilization.
Credit to cb_doge for the creation of the header image.
Contribute to Gail’s coffee fund, and buy her a hot coffee!
whatsuptwitter.com 