In the News: Twitter was an unprofitable mess long before Elon Musk – he might be its only lifeline

November 30, 2022 | Hamilton, ON
Contributed by Goran Calic

It would be easy to characterize Elon Musk’s approach since taking over Twitter Inc. last month as rash, messy, destructive and unplanned.

While such descriptions would be accurate, they would certainly not be complete.

What we have been witnessing, in public and in real time, is a live demonstration of the way Mr. Musk runs a business.

He has generally managed his other ventures very successfully – especially in terms of growth, if not always in terms of profit. Tesla Inc. continues to build factories and deliver cars and SpaceX rockets continue to supply the International Space Station with materials and astronauts.

It’s important to keep two things in mind while following the Twitter drama: The company was already in serious trouble and Mr. Musk’s style, though volatile, is well-matched to the problems at hand.

Since 2013, Twitter had fallen from the world’s third-largest social-media platform to the 17th. The company had barely innovated during that time, while its competitors had worked hard to reinvent themselves.

Eleven of the social-media platforms with more users are newer than Twitter. Even older incumbents are more innovative. Facebook, for example, has launched Marketplace and shifted its focus to the metaverse. In a fast-paced industry such as social media, it is vital to change and quickly to stay ahead.

If a company decides not to be innovative, as Twitter’s developers had openly acknowledged, the alternative is to be highly efficient. But Twitter, based on revenue per employee, was only 50 per cent as efficient as Facebook.

Read the full article in the Globe and Mail.

Goran Calic

Goran Calic

Associate Professor
Strategic Management

Professor Goran Calic’s research focuses on understanding why some individuals are more creative and some organizations are more innovative than others. His work on creativity in organizations was awarded the 2015 Max Henri Boisot Award.

Leave a Reply

Your email address will not be published. Required fields are marked *

Comment Policy

We generally welcome discussion on our blog posts. However, we reserve the right to edit or delete comments in certain situations:

  • Comments which include unrelated or suspicious links or messages (spam).
  • Comments which are off topic.
  • Comments which attack or threaten individuals or a group of people.
  • Comments which include profanity or messages that would generally be considered offensive or inappropriate by the McMaster community.

This site is moderated by the DeGroote Marketing and Community Engagement team. If you have any questions please email Jared Lenover.