Comment by jonahbenton | Hacker News Reader

Comment by jonahbenton | Hacker News Reader

Three quick points- despise Musk as well-

a) sorry to hear the "often repeated..."- a business even one in software is a complex entity in the real world with lots of surfaces and functions. Finance, Sales, Marketing, PR, BD, Enterprise, HR, etc etc all exist for good reasons. Would strongly suggest enhancing mental model to understand those reasons. Will make a person a better eng

b) re the above, if one understands the concept of technical debt, based on the concept of financial debt- Musk is incurring enormous debt in all operational areas right now. Financially beyond what he already put on the balance sheet. Regulators in many countries he operates in are readying fines. Lawsuits are being filed. Poor press relations will make it hard for good news at twitter to emerge and give bad news at any of his other businesses more attention. In terms of corporate relationships, many avenues for revenue, especially enterprise-side, are completely off the table now.

c) in many large businesses I have worked with, they are far more overstaffed with engineers doing the wrong things, and understaffed in areas that would be more meaningful for the business. Very little code is truly part of the asset infrastructure. The vast majority is liability, and engineers writing more of it are just burning good money

Everyone seems to be assuming that Musk is trying to run Twitter as a profitable business.

I don't think he is. I think he wants to run it as a political influence network.

There's ample precedent. Facebook covertly sold its services to Cambridge Analytica, and both the UK and the US have a number of hopelessly unprofitable media outlets that are heavily subsidised to promote far-right views.

Twitter was a popular and effective (if limited) tool for organisation and dissemination on the Left. I suspect severely damaging that to an election-influencing extent is potentially far more profitable to Musk than selling ads.

If that's the case, he doesn't need to care about building a stable self-sustaining business, only about keeping the lights on for the next couple of years.

$44 billion to spite the opposite side?...I doubt it. I know that's like 25% of Musk's current net worth, but that's an outrageous sum to spite people you don't agree with.

TBF a lot of that was overvalued Tesla stock that has since fallen by 70%. It's a common misconception that if you have a net worth of $200B you can buy $200B worth of stuff - it's usually more like "You have 1B shares of a company valued at $200/share". If you went to actually sell those shares, it would tank the price, and you'd end up with far less cash.

The way to think about net worth once you get past the upper-middle-class wage-laborer level is "You have assets that the market currently values at $XB, and you want to trade for other assets valued at $XB, and the true value of the assets you currently hold is $YB < $XB [otherwise you'd hold onto them], and you hope that the true value of the assets you're buying is $ZB > $XB." Under this framework, though, it's possible to come out ahead even if $ZB < $XB, as long as $ZB > $YB. It could be he bought Twitter at an inflated price, but he bought it with Tesla shares and leverage that was even more inflated, and so it still works out.

Probably not spite, but Tesla and SpaceX are exposed to government subsidies and contracts, respectively. If the next elections unlock another trillion in market value for his firms, this bet might look a lot better.

Small nit pick: Musk didn't put up $44 billion. His commitment is about half that, with the rest coming from other investors (e.g., a16z, Sequoia, individuals) and debt issued by Twitter, Inc.

Yeah, fair-

a) agree that control of the pipes means control of the populace, consent can be manufactured, etc. That's pretty intuitive however I have not studied the mechanics of influence enough to have a sense of what can be done with Twitter and how effective it can be on a capital basis to judge whether it is worth the capital, and while the Saudis, eg have infinite money and are definitely opening new large scale influence fronts now (golf, etc)- the actual debt holders in twitter are banks with public balance sheets and they need to be paid. It seems like the min yearly operating budget for twitter as an influence service is $2B- that's real money

b) agree completely that there are innumerable right wing outlets entirely unsustained by eg ads, but many operators like Murdoch, Sinclair, are extremely profitable. So I would think there is a hope/vision it can be both effective on the influence side and also profitable or at least economically balanced

people need to stop assuming even musk knows what he wants to do. my view is he has lacked a clear vision for most of this.

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