The E-commerce Leader

[00:00:00] Kyle: as an entrepreneur, making sure that you align like your values and what your checkbook is doing is aligned as a company, I think speaks volumes
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[00:01:01] Michael: So welcome to the show gents, and this is an exciting topic. Moments. Jason, I know you’re a big fan of, I must just to quickly reiterate by the way. And my understanding is the border of Twitter has now agreed to a $44 billion takeover offer from the billionaire Elon Musk owner of space, X, Tesla, boring company, founder of PayPal, I believe originally, or maybe not found out as I’ll get into that, but that’s the sort of history.
[00:01:24] And he’s been buying up shares steadily, and then rather less steadily was offered a place in the board, nearly joined didn’t join left, and then made an offer in mid April, which I believe has now been accepted by the board. So that’s the background. Jason, let’s get your thoughts on this. What are your hot takes?
[00:01:38] How does this impact e-commerce sellers now or in the future?
[00:01:40] Jason: I’m really interested in this whole storyline. Never been a big user of Twitter. I have an account. I think I have 3,500 followers or something like that, but honestly, haven’t used it in years. It’s never been a problem. Social strategy for me.
[00:01:53] But I’ve been following the story closely and I want to take a moment to just point out that I think an interesting observation about this whole thing is what Elon Musk did, which was he saw an underperforming asset that he had an opinion about any purchased it. And this is a running theme or narrative that I continue to talk about with our coaching clients and people in our community, which is, there’s a huge opportunity.
[00:02:18] To purchase assets. And there’s a massive shift in people’s ownership of assets happening because people are retiring. People are changing course businesses are becoming available. And I think what he did is instructive, set aside any details related to Twitter. Just the fact that he found something he thought could be much more optimally run and, had the cash to do it, or, got to cash into it and made it happen.
[00:02:44] So I think that’s the first lesson for us as kitchen table entrepreneurs is look what other people are doing that are. Buying companies buying assets, and learn how to do that. So that’s my first commentary on the topic, and there are more tactical details about Twitter itself, but I think that’s an interesting thing to just point out in terms of what’s happened.
[00:03:04] Michael: Interesting. I know that there’s a fairly objective, make sure that the, I believe there’s share Christ at IPO. So when it went public in 2013 was about $44 a share. I don’t think it’s much better than that now. So objectively speaking, you could argue, it is definitely underperforming in terms of returning, returns to shareholders and, yeah, very interesting.
[00:03:23] Jason: I tried to look for the multiple duty page. What’s the price to earnings multiple that he paid. There isn’t one because they’re not profitable well for goodness sake. I would imagine the first thing is going to do is start to have, now he said, it’s not about money for him, but I can almost guarantee you he’s going to change the system in terms of it just being an operating environment in which they do focus on profitability, so yeah.
[00:03:47] Michael: Yeah, my, my sort of, if you’re looking at very big picture lessons, I would say being obsessed with profitability is also not a characteristic that at least comes across publicly from Elon Musk, but that may be part of his appeal to users, to shareholders. There is a sort of mission sense around him as there is with Jeff Bezos.
[00:04:04] And I don’t think I’d accused you of basis of not being interested in money, but he’s obviously interested in more than just money. Okay. Interesting, Chris. I know you’re a Twitter user. It may be some interesting relationship just with yourself right now. What’s your take on the whole thing?
[00:04:18] Chris: I like the fact that, Twitter is getting a lot more attention.
[00:04:21] I don’t think there’s anything wrong with things becoming more well-known so I think this definitely gonna boost Twitter as potentially the primary go-to social media news outlet. What’s happening. What’s the pulse. What are people thinking about? What’s trending, like to have one place to go, instead of what’s trending on Twitter, Blake.
[00:04:39] Okay, but how much, how big is that kind of thing? I don’t know it’s going to be really interesting. I definitely spend more time on Twitter moving forward. I think it might become more important to have more of a presence, more of a, just being active on the platform. And like I said, it’s not profitable right now.
[00:04:55] And like, why is Musk buying something that’s not profitable? I would make the case that when you get like the billionaire type status and people need to realize must doesn’t have 44 billion in the bank, like you had to secure financing and all this stuff. And neither of us, Jeff Bezos, he doesn’t have billions of dollars in the bank.
[00:05:10] He has billions of dollars worth of assets and stock and ownership of companies and things like that. So it’s not like liquid cash that they’re throwing around, but when you get to be billion, I as someone who’s not a billionaire from the outside looking in, I do think they try to one up each other in terms of look how big and amazing my stadium is instead of look how much cash I have in the bank.
[00:05:32] Look how big and valuable my company is. Look how much, how many users my business has look how like different metrics than just dollars in the bank. Kind of thing that being said, and it’s very similar to Amazon. Amazon doesn’t run that. They don’t necessarily run it, humongous profits and take as much margin or profit as they can with every single transaction and product and service that they offer.
[00:05:54] But they don’t operate in the red. They want to just barely want to be operating. They want to be profitable. They want to basically be not losing money and continue to acquire market share and users and attract, vendors and sellers. And especially in the. The fees are incredibly low. The costs, that I have to pay as an author to get my own books are incredibly low and they do that to attract authors because they want to attract the content because if they have the content and the books and all that on their platform, then they’re going to get the customers, which then they want to offer the lowest prices.
[00:06:22] Students that are like. We can charge way more for this and they’re still going to pay it. No, they want to charge a low. So I, I could see them doing that with Twitter to be like, yes, it’s not profitable. We need to be technically profitable, but not wildly profitable. As long as it’s not losing money and serving a purpose.
[00:06:36] And the billionaires get the flexibility. I don’t Twitter. I was like, I own Amazon. Why on Facebook? That’s the game that they’re playing in one way or another? Not. How much cash do I have in the bank kind of thing. So I do think he has good intentions for it. There’s a difference between intentions and how things play out.
[00:06:54] Like human psychology is different than oh, group, a group, psychology and individual psychology are very different and love to see how it plays out.
[00:07:02] Michael: To Amazon’s point. And by the way, I don’t think Amazon’s ever been one for profit, but it’s run for cashflow. The fact they have a negative cash cycle means that they don’t have to worry about our profit, because, the more they sell, the more cash they have, which is something Jason, I talked about in the deep dive.
[00:07:15] So you’re right. So the obvious things that apply, as you say, Jason to kitchen table entrepreneurs just don’t apply at the billionaire level at all. Sometimes the opposites. So you’ll write sir, to flag that up. Kyle, what are you.
[00:07:25] Kyle: I think it’s, a match made in controversy, heaven. You take a controversial platform like Twitter, and then you take a controversial person like Elon Musk, you put them together in sparks are gonna fly.
[00:07:35] So I think that’ll be interesting. I think in the in-term short-term ramifications for e-commerce sellers, there are zero. Other than the Jason’s point you’re being, you’re aware of underperforming assets or assets that you have a vision. That you want to go ahead and acquire? I think that’s a great lesson to take away.
[00:07:54] In general, like a broader, if you step back a little bit, I think Elon Musk is putting his money where his mouth is. And I think this is a bit of a reaction over the last two years to the dynamic around free speech and his interpretation of free speech being impugned upon by these platforms.
[00:08:11] And to Chris’s point, billionaires like to own the platform. Of choice, for Bezos it’s the Washington post, although they work very hard to try and make it clear when they’re reporting on Amazon, that Bezos owns the Washington post and all that media. And now it’s Elon on Twitter.
[00:08:29] So I think though that putting his money where his mouth is in terms of he is an advocate of free speech and he’s been harping on it for the last few years. And now he’s basically set out, I’m going to put 44 billion up to make sure that platform continues, to uphold that as a standard.
[00:08:43] So I think that’s my biggest takeaway. If we’re in, maybe as an entrepreneur, being aware of making sure that you align like your values and what your checkbook is doing is aligned as a company, I think speaks volumes. And I think that was the biggest takeaway from me.
[00:08:58] Michael: And seeing that people are taking a sort of meta lessons, that the overall behavior, which I think is really helpful actually, and that avoids getting mired in it, as you say that the perfect controversy of Musk and Twitter, that sort of, that’s going to be social media health for some people and thinking this, we’re talking about it on a business-like way, which I think is going to be a refreshing change to what we see over the next few days on Facebook, Twitter, indeed.
[00:09:17] I’m interested in a longer term position of this. So for me, this is a microcosm. A case point, but which could be a trigger point at some point, probably I’m imagining a little bit down the line around the whole relationship between social media and the very special legal position in the United States, which has been emulated by other jurisdictions like the UK European union.
[00:09:36] I’m wondering whether the bubble is beginning to burst for the internet immunity. And it’s really important because they say that section two 30, which. Catered in 1996, which effectively provides immunity for liabilities, for people who offer quotes platforms or quotes a neutral platforms like Twitter, for example.
[00:09:55] That’s been called the 26 words that made the internet. So it enabled search engines, social media, video streaming cloud computing I’d argue Amazon reviews as well because obviously Amazon publishes reviews, which by the way, it can be hugely damaging. Got a friend who had a business that was just about to sell for healthy seven figures, have the entire business taken down by Amazon on the basis of one single comment, which claimed that it was dangerous of, which is almost certainly about a different product based on my conversations with him.
[00:10:22] I’m interested to see what happened. I’ve been deep diving into this today. I won’t bore you with the detail, but at the federal level, there’s been quite a few bills that didn’t get passed into law, but which were seriously debated and especially in 20 18, 19 20 around this. And it seems that a couple of states, including Florida actually passed some laws.
[00:10:40] That sort of mean that this much warranted neutrality is not necessarily any more in law at the state level. And so that’s very interesting to me to see where that goes over the next few years, because I think that. Everything about the internet
[00:10:52] Jason: yeah, that question it’s in simplicity, I think is the platform, the publisher.
[00:10:56] And are they, are they accountable for the content that would obviously turn over the whole system of the internet? But a few other points that I think are really important to point out the practical implications of Twitter being, being overhauled, I guess you could say, taken private and it must did make the comment yesterday that he’s excited about the product develop.
[00:11:16] On Twitter. And let’s just say, and he specifically pointed out of the bots that are problematic. And, and let’s just say he solves the basic problems. What is ending up with is an asset that has primarily been what he described as a town square focused on politics and that kind of an area of emphasis, but what every other social media platform has on everyone is that.
[00:11:42] And I think that’s really interesting to think about. If he solves the, okay, this is the town square and it’s all fair now left and I can both be unhappy or happy or, the politics can do what it does, but that’s not the core totality of the product itself. If he posts puts energy into it being, in the same direction.
[00:12:06] It will be towards e-commerce and that opens up a lot of interesting opportunities. If you think through that vein of, of logic, where that could go, it could be used for interesting e-commerce opportunities in the future. And I would just make the, the argument that I would imagine he will sort through the drama problems on Twitter and the town square fairness issues.
[00:12:31] And then the question is going to be what’s. For it as a product, what will he do with it? And, that, that’s where it gets interesting to me if it runs towards e-commerce, I wouldn’t be surprised. And I think that will create a lot of opportunity. The other thing that I’ll just say is a social media marketer.
[00:12:46] Am I? My first book was, called Pinterest power. Then I wrote Instagram power, with McGraw-Hill and then YouTube marketing power. As an observer of what’s been happening in the social media space for the last three, four years. Here’s what’s been happening. People are disenfranchised with one platform.
[00:13:03] So the counter veiling political party wants to create their own platform. And we’ve had this emergence of these smaller ish type attempts, it’s the parlor or the whatever, there’s so many of these new upstart platform then. A objection to a different platform. It’s like these guys, aren’t cool.
[00:13:24] They’re not fair. So I’m going to go start something different. But as a marketer on these platforms that creates a bifurcation of these platforms. It’s very frustrating. They just keep splitting up and splitting up. And as a marketer, you’re like, oh my goodness. By half, but really start doing the marketing on so many more plans.
[00:13:42] So if anything, my hope is that he actually just consolidates people, collectively back around Twitter, on both the right and the left and say, Hey, this is a fair system for all involved. We’re going to, use it for productive purposes. And people will be like, okay, I’m back into Twitter.
[00:14:02] As Chris immediately went to in his thinking, okay, I’m going to go back into it a bit more. I’m going to re-engage with it. And if that happens for us, and it’s a stronger product at the end of the day for e-commerce operators for, promotional marketing efforts and all that, it’s a real.
[00:14:16] It really allows us to not have to continue to go down these smaller and smaller micro platforms to find customers. So I think those are important object lessons for us to,
[00:14:25] Michael: Just a couple of reactions to that I can jump in. And when, first of all, I love your optimism that people are going to use social media for socially productive, useful things, and that the political parties in the USA will bury the hatchet and meet in the middle.
[00:14:36] I guess that may be possible. I hope you’re right. I’d love to think that could happen. And to your point, so the point of, being on one platform versus the fractioning that you’re talking about, chat a while ago, which I was just revising. Cause we put it up on the amazing FBA, platform.
[00:14:50] Cause I thought it was a good episode where you talked about the fact that Amazon is just too big and that it’s turning into sort of micro markets could be the way forward. And that’s where you see the opportunity for Shopify store owners and so forth. And I wonder if the similar thing is happening in social media, which sadly for you, if you don’t want to be on 25 different platforms, it could be that you have to pick 10 where your audience is that resonates with you.
[00:15:10] I suppose. Certainly a interesting landscape fractional. Brian’s thing. And the other thing, just to pick up on them, as soon as I heard Elon Musk, I’m like, oh, he’s a physical products. Do what’s he doing in digital marketing? But of course that implies to your point. I think that the fact that he will be geared naturally in his blood to e-commerce with physical products, I think, it feels instinctively the right thing.
[00:15:29] Cause I can’t imagine that wouldn’t think of it at least. Yeah.
[00:15:32] Jason: But his origin story was to start as an advertiser. He created, whatever it was called zip to, or add to or whatever. And then PayPal, those are software. Yeah. And then it’s died. Tesla. Tesla is a software company at its origin and in many ways layered on top of the physical.
[00:15:47] So I do think he, he’s got, it does have a background in that regard on the software components of it. Yeah.
[00:15:52] Michael: I would never accuse him on this cause not being capable of sending his hand to incredible variety of things with great competence. Chris or Kyle, open. I think it’ll be really
[00:16:01] Kyle: interesting, I think to see what he does with Twitter as a platform.
[00:16:05] I think if there’s one entrepreneur on the planet that you do not want to, bet against, it’s probably Elon Musk. He’s proven time and time again that he’s got the vision. And I would say the fortitude and the guts to make big plays. And you’ve seen it with space X. You’ve seen the tech.
[00:16:27] And now with Twitter. So I think he’ll definitely have, I think he’ll definitely have a clear vision for the platform. I don’t think he would have purchased it, unless he did. And I think that will make for really interesting conversations. Cause it’s gonna, it’s gonna, it, Twitter’s going to be juxtaposed with Facebook and Instagram and tic talk and it’s gonna be pitted.
[00:16:46] They’re all gonna be pitted against, Twitter, I think the comparison. Moving forward. And I’m really, I’m bullish now. I never paid attention to Twitter, honestly, but it’s just him purchasing that. And here’s the Elon Musk effect. Just him purchasing Twitter provides more focus on it, more conversations about it.
[00:17:07] Like we wouldn’t be talking about Twitter. Show if it wasn’t for that purchase, like Twitter has zero relevance and is diminishing relevance in through social media. But now he’s made it super relevant right now. So I think it’ll be interesting to see what happens.
[00:17:23] Michael: That’s a very good point that this very conversation is in itself.
[00:17:26] Evidence of an effect. Chris, your thoughts?
[00:17:29] Chris: I think there’s so many thoughts. He could go down this road. People have often pointed at the billionaires. You shouldn’t have that much money and
[00:17:36] Jason: like you
[00:17:36] Chris: should tax in the board and all that stuff. And there’s it wasn’t necessarily a quote, but it’s an answer, I I must gave one time.
[00:17:41] I was like, he actually said I’m hoarding resources because I’m trying to make our species and interplanetary species, because we’re not going to be able to live on earth forever. Like there, like he’s trying to solve big problems. And I think that’s a thing that billionaires try to do, especially the ones that are more public figures.
[00:17:57] They’re more willing to. They want to see who solves the biggest problem and be like, and that’s their flex. They’ll be like, I solved the biggest problem. And you solve the biggest problem. You get the biggest reward. So if you can solve the problem of free speech on the internet of building a social media platform, that everybody can trust what you were saying, Jason, like people leave because they don’t trust it.
[00:18:16] If they don’t trust it. Yeah. They go try to do something else. They try to do something else. So if we can have one place that almost as a species that trusts one place to go. That’s a big problem. And if you can solve that problem, you’re going to get big rewards. And those big rewards can be spun into, more companies and more technology and more ways to turn us into an interplanetary species, which.
[00:18:39] That’s a big flex, right? It’d be like, because of me, we have rockets that are reusable and now we have people who are literally born on Mars. Yeah. That’s a big flux, he’s not trying to hoard dollars. So if he sees this opportunity, there’s probably, he sees some kind of way forward and be like, no, I can fix a huge problem with this platform.
[00:18:59] And hopefully you can, and put up or shut up. He might not, this might completely fall flat and you realize this, no, I can’t solve this problem because humans are. Like who knows. Yeah. We’ll see where it goes, but it will be
[00:19:09] Michael: interesting in sync point. Jason, I can feel your heart to come back in.
[00:19:14] So let’s get one from you and then let’s do a round up.
[00:19:16] Jason: Oh yeah. I was just going to propose one other line of thinking that would be interesting and exploration that I haven’t heard anybody go down this path, but this guy plays chess. You want to think, what is he doing? Is there any obvious value that Twitter adds to the Tesla user committee?
[00:19:35] Is there a way in which having installed base of Twitter account holders, benefits Tesla, is there a way in which Twitter in the, dashboard, you know, display of every Tesla. Tesla drivers. I don’t know those, the answers to those questions, but I bet you, people are going to start thinking through that stuff inside Tesla and inside Twitter, the integration of this pool into his ecosystem, if that’s a possibility will occur, I’d imagine, is it valuable for the boring company?
[00:20:04] Is it valuable for normal? I can’t see how it would be valuable for a space X, but maybe for Starlink, those integration points. It’s just think it’s sparks all kinds of interesting, future possibilities that might play forward. As he really gets his hooks into this thing and sorts out the fundamental issues and then thinks through how can it be massively useful for his, ecosystem.
[00:20:28] Of happy customers. Yeah. Yeah.
[00:20:30] Kyle: If I can tweet at my, if I can tweet at my Tesla and have it do things, I’m sold if that was the integration, come pick me up and it just put that and it shows up on the
[00:20:40] Michael: done deal. Yeah, interesting. Just a one time observation, but for me before we wrap up, they’ve had pipes in the past, which were, because I guess the value of it is in data as well as the sort of connection to people.
[00:20:51] Salesforce had a tie up with them a while ago because they wanted the data. I think, Disney obviously found it. Wasn’t a very family friendly environment. They didn’t really want to be associated with it in the end. And maybe if, If, must cleans it up, then that sort of thing could happen.
[00:21:04] But yet it’s just a general point to make is business strategy of integrating one type of asset with a seemingly unconnected asset, but which actually can feed each other as a synergy is another sort of acquisition strategy to your point that you made there earlier. Jason, we also wrap this one up because it is hot takes certainly very hot topic.
[00:21:22] I can see there’s even people wanting to come in and have. Maybe we will do that and teach you, but for the moment we’ll stick to our format. So 32nd bursts from everyone. Final takeaway thoughts on this topic, Jason, you first.
[00:21:31] Jason: I think all of us as e-commerce operators need to ask ourselves the question, what’s the current state of our e-commerce, social media marketing. How does it help our business and is Twitter going to then because of this to be an opportunity for us going forward. So I’d say just, an analysis of what we currently do and how Twitter might play into it.
[00:21:50] Going forward is a wise takeaway for all of us as e-commerce operator.
[00:21:53] Kyle: My takeaway is observe K, keep an eye on Twitter, but don’t chase it. Don’t turn it into is a shiny object and distract you from your current plan on whatever social media plan or marketing gear engaged in, stick to the plan.
[00:22:07] And if it makes sense to re relevantly added in, in the future, then do but for now just observe would be my take.
[00:22:16] Michael: Interestingly, we’re on a different platform, from Twitter, but we’re talking about Twitter and I guess that’s one of the things that, that, strikes me that we had a, a call-in shows slash podcast show about the fact that people are going on Twitter to talk about the fact that Facebook was down.
[00:22:30] So just because something’s a subject of all of. Discussion doesn’t necessarily mean that it is actually somewhere we should be actively at to you. Very good point, but certainly worth considering, as you say, Jason, to review, whether it should be Chris, take us home. Final force.
[00:22:46] Chris: To me, the biggest challenge he’s gonna have to have is, or you will have is making it a trusted platform.
[00:22:51] Just like I said before, if people don’t trust it, they’re not going to purchase products. They don’t trust it. They’re not going to believe the information they’re not. Trust what’s trending is actually trending or is it being pushed that it’s trending. And that’s where there’s potentially a conflict of interest.
[00:23:04] If he’s own Tesla and he’s you know what, I really don’t want my competitors advertising on Twitter. How do you prove that there’s no bias? How do you prove there’s not, preferential treatment given to anybody and you want to go down the road that no one wants to go down. How do you trust it?
[00:23:17] In terms of politics? Person behind it. Elon Musk potentially has the ability, like they call it a kingmaker to play. The president of pig governors, with the amount of control of, and distribution of content information. And that’s why sometimes you say it’s not good for one person to have that much power and control.
[00:23:35] And what billionaires do. Jason said, at the beginning, they buy up a distribution of information and content like newspapers and cable news networks. And now we’re going to social media networks. So it would stress it. Great. If it’s not, if he, I don’t want to say wasted 44 million, but it’s going to have a bigger challenge on his hands.
[00:23:53] It’ll be interesting.
[00:23:55] Michael: Absolutely. There’s no question. It’s interesting to your point. Kyle is either must move at a pretty, almost new. Probably by intention who knows what chess game he’s playing to your point, Jason. So if you enjoyed today’s show and I can see quite a few lessons on this topic, perhaps on surprisingly hot topic on Colin, don’t forget to call it.
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