**Elon Musk’s Ambition for Twitter: Becoming an “Everything App”**
**Challenges and Uncertainty Amid Musk’s Vision**
Elon Musk, CEO of Tesla and SpaceX, has set his sights on transforming Twitter into an “everything app” that encompasses various functionalities, including peer-to-peer payments. To achieve this goal, Musk has obtained essential financial licenses in three states. However, according to insiders, the path ahead is uncertain due to regulatory hurdles, fierce competition from established players like Venmo and PayPal, and the internal chaos within the company.
Under Musk’s leadership, Twitter has faced numerous obstacles, including lawsuits and severe website malfunctions. More than 80% of the workforce has been downsized or resigned, resulting in a lack of engineers with expertise in the platform’s legacy systems. This shortage has impeded efforts to address the platform’s numerous bugs. Moreover, the limited number of engineers poses a challenge to the development of a payments system capable of serving millions of users.
**Musk’s Quest for an “Everything App”**
From the outset of his tenure at Twitter, Musk has expressed his desire for the platform to become more than just a social media giant. He envisions an “everything app” called “X,” similar to China’s WeChat, which combines messaging, payments, and e-commerce. Acquiring regulatory licenses is a crucial first step toward enabling payment services. However, some employees doubt Musk’s ability to successfully navigate the complex logistics, despite newly appointed CEO Linda Yaccarino’s efforts to rebuild trust within the company.
**Musk’s Previous Endeavors in Online Banking**
Musk has long nurtured a vision of establishing a comprehensive online banking institution. In 1999, he co-founded X.com with former Intuit CEO Bill Harris, investing $12 million into the venture. The launch of X.com was initially successful, with over 200,000 signups within two months. However, the company encountered a host of challenges reminiscent of Twitter’s current situation. The computing systems could not keep up with the growing customer base, resulting in website collapses and vulnerabilities to fraud, leading to substantial financial losses. Ultimately, Musk was ousted as CEO, and X.com was renamed PayPal under new leadership.
**Musk’s Refusal to Let Go**
In a recent interview with CNBC, Musk expressed his belief that PayPal is merely a “half-baked version” of what it could be. He has been vocal about his distaste for boards, promptly firing Twitter’s board upon acquisition to avoid a similar occurrence to his ousting from PayPal. He renamed Twitter to X, has a son named X, and even purchased the domain X.com from PayPal in 2017, signifying its sentimental value. Musk has reignited his hopes for building a global payments platform, something he had envisioned over two decades ago.
**First Steps: Regulatory Licenses**
After assuming the role of CEO in October, Musk began the process of obtaining federal and state regulatory licenses, signaling Twitter’s intention to enter the realm of financial services. Michigan, Missouri, and New Hampshire were the first three states to grant Twitter the necessary money transmitter licenses. These licenses allow companies to handle user funds and facilitate peer-to-peer payments without the ability to hold deposits like a traditional bank.
**Can Twitter Compete with Established Players?**
With Twitter likely to be approved as a money transmitter in most states, the question arises whether it can compete effectively against established players like Venmo and PayPal. Stephanie Choo, a general partner at venture capital firm Portage Ventures, believes Twitter would need to be “10 times better” than its rivals to succeed. One way to achieve this could be through rewards systems. However, messaging apps implementing payment services outside of Asia’s “everything app” giants, such as WhatsApp and Telegram, have struggled with their rollout.
**The Global Expansion Opportunity**
Choo suggests that the most exciting version of Twitter’s payments plan would be global expansion. Established players like PayPal and Wise are still grappling with the challenge of building comprehensive networks. The main obstacle to expanding internationally is obtaining financial licenses in individual jurisdictions. Choo proposes digital wallets, likely powered by cryptocurrency, as a sensible path forward.
**Regulatory Challenges and Building a Competent Team**
Welcoming cryptocurrency payments could introduce regulatory challenges for Twitter. Additionally, Twitter would need to establish relationships with banks to facilitate these payments, a task that has proven difficult for crypto-focused businesses. Despite obtaining licenses, the task of building a competent team to develop a payment platform remains a significant hurdle for Twitter. With a current employee count of around 1,400, compared to PayPal’s nearly 30,000 employees, implementation of new features may face inevitable challenges.
**Conclusion**
Elon Musk’s vision of transforming Twitter into an “everything app” faces numerous challenges. While securing regulatory licenses in three states is a positive step, obstacles such as competition from established players, a shortage of engineering talent, and regulatory complexities lie ahead. Whether Twitter can successfully disrupt the payments market and become a global player remains uncertain. Nonetheless, Musk’s determination, coupled with newly appointed CEO Linda Yaccarino’s efforts, offers hope for the realization of Musk’s long-held ambition.
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