What Elon Musk is doing on Twitter is what he did to Tesla and SpaceX

Elon Musk was sleeping in the office. He fired employees and managers at will. And he complained that his company was on the verge of bankruptcy.

It was 2018, and the company was Tesla, as Musk’s electric automaker struggled to build its mass-market vehicle, the Model 3.

“It was heartbreaking,” she told The New York Times at the time. “There were times when I didn’t leave the factory for three or four days, days when I didn’t come out.”

The billionaire’s experience with what he called Tesla’s “manufacturing hell” became a model for the crisis he created on Twitter, which he bought for $44 billion last month. Over the years, Musk has developed a playbook for managing his companies, including Tesla and rocket maker SpaceX, through periods of pain, employing shock treatments and scare-mongering, and pushing his employees and himself to put their worries aside. families and their friends to spend all their energy. his mission.

On Twitter, Musk used many of those same tactics to turn the social media company upside down within weeks.

Since late last month, the 51-year-old has fired 50% of Twitter’s 7,500 employees and accepted the resignations of 1,200 or more. Another round of layoffs began on Monday, two people said. He tweeted that he was sleeping in the Twitter offices in San Francisco. And he applied mission-oriented language, telling Twitter workers that the company could go bankrupt if it couldn’t turn the tables. Those who want to work on “Twitter 2.0” must commit to his “hard core” vision in writing, he said.

David Deak, who worked at Tesla from 2014 to 2016 as a senior engineering manager overseeing a battery materials supply chain, said Musk “clearly thrives in existential circumstances.” He added, “He almost creates them to light the fire underneath everyone.”

The similarities between Musk’s approach to Twitter and what he did to Tesla and SpaceX are clear, added Tammy Madsen, a professor of management at Santa Clara University. But it’s unclear whether he’ll find the means to motivate a social media company’s employees the way he did workers whose missions were to get people off gas-fueled cars or to send humans into space.

“At Tesla and SpaceX, the approach has always been high-risk, high-reward,” Madsen said. “Twitter has been high-risk, but the question is, what is the reward that comes with it?”

Musk did not respond to a request for comment.

On Sunday, Musk held a meeting with Twitter sales employees, according to two people familiar with the matter. Then, on Monday, he fired sales employees, they said. Late last week, Musk fired Robin Wheeler, a senior sales executive, they added. Bloomberg previously reported that more layoffs could come.

Twitter is also reaching out to some engineers who have resigned to ask them to come back, the people said. In a meeting with employees on Monday, Musk said the company had no plans for further layoffs, according to one person who attended.

In the companies led by Musk, the pattern of asserting that companies are on the verge of potential bankruptcy has often emerged. At Tesla in December 2008, during the depths of the financial crisis, Musk closed a $50 million investment round from Daimler, he said, “in the last hour of the last possible day or payroll would have rebounded 2 days later.” .

He said the same of SpaceX, once noting that both SpaceX and Tesla had a greater than 90% chance they “would be worth $0” in their early days.

For 2017, Musk said, SpaceX had to perform rocket launches once every two weeks or risk bankruptcy, recalled a former SpaceX executive, who spoke on condition of anonymity for fear of retaliation. In a company driven by the goal of making life “multi-planetary,” the threat of bankruptcy was a motivating factor, the former executive said.

SpaceX has since successfully sent many rockets into space and landed them back on Earth. But Musk has returned to his preferred stick, tweeting last year that if a “major global recession” drains capital, bankruptcy of the rocket maker “wouldn’t be impossible.”

“Only the paranoid survive,” he wrote, quoting Andy Grove, the former CEO of Intel.

An atmosphere of crisis and self-imposed austerity give Musk the cover to make drastic changes and fire top managers or ax large swathes of staff, two former Tesla executives said. It also prepares those who remain to work in extreme conditions to carry out Musk’s wishes, they said.

The approach on Twitter, where Musk fired thousands of employees, “is typical of Elon,” Deak said.

Some of Musk’s former employees wonder if his management tactics will ultimately work on Twitter. Tesla and SpaceX were in the early stages of growth when their boss got the tough language out of him and told everyone they had to go full speed ahead. But Twitter is a more mature company that has been acting inconsistently for years.

Musk’s management techniques are “good startup and growth strategies, but they’re not good for building a stable company,” Deak said.

Musk’s total commitment to a company is often inspiring, but it can also become toxic and breed a culture of fear and scapegoating, said three former Tesla and SpaceX executives.

And for Musk, remaking Twitter is only a part-time job. He remains chief executive officer of Tesla, which he said in court he continued to lead, and SpaceX, where, he said, he focuses on rocket design rather than management.

Musk also leads Boring Co., a tunneling startup, and Neuralink, a brain-computer interface technology company. He stated that his long-term goal is to save humanity by developing technology for space travel or, in his words, “making life multi-planetary to ensure the long-term survival of consciousness.”

Multitasking has become an issue in a lawsuit filed by Tesla shareholders who objected to the salary package that made Musk the richest person in the world. Questioned last week in Delaware by an attorney representing shareholders who accused Musk of neglecting his Tesla duties, the billionaire said his intense involvement on Twitter was temporary.

“There has been an initial burst of activity to retool the company,” he said Wednesday, adding, “I expect to reduce my time on Twitter.”

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