Elon's Fascination With X

SpaceX,?xAI, his son?X?(pron: Ex Ash Ay Twelve) and now Twitter becomes?X. That’s a lot of X’s.?

Why? Where did it start. What’s the fascination, and how will it end.

Pre dot-bust Elon sold?Zip2, a web-based Yellow Pages, to Compaq for $300m – netting him around $20m. Later in 1999 he personally invests $15m into his new online financial services startup?X.com, after paying $1.5m for the domain (alongside a cool mil for a new?McLaren F1).

He tells people “X is the coolest URL on the internet”, “X marks the spot for treasure”. And with his new co-founders Harris Fricker, Christopher Payne and Ed Ho they kick off, before very quickly falling into conflict and financial trouble at the fledgling startup. Elon fires Fricker, Payne and Ho depart not long after.

At the same time, literally over the road in Silicon Valley,?Peter Thiel?with his CTO cofounder?Max Levchin?are building?Confinity, which would become a direct competitor to X as the two companies accidentally develop the same email payment product at the same time. Also struggling and bleeding cash Thiel suggests they merge, which they do (ultimately to become Paypal).

From inception it’s trouble.

Elon wants to build an everything financial app while Thiel and Levchin purely want to focus on payments. They agree to focus on email payments and improving PayPal’s initial offerings first. The financial superstore, Elon publicly agrees, would become a “future thing”.

Over the coming months Thiel and Levchin realise that Elon is not on plan. In fact he’s a long way from it, burning $12m per month focusing on X, porting to Microsoft from Linux (which technically could never work), creating risky credit products without identity checks, and behind the scenes Elon is trying to change the name to X-Paypal.

Outwardly the obsession with X as a brand goes down terribly with consumers. Vivien Go on focus group testing said: “Again and again, the theme of ‘Oh God, I wouldn’t trust this website. It’s an adult website’ and ‘I just wouldn’t trust that”

X is on the edge.

With 6 months cash in the bank and tempers fraying, Thiel and key figures beg Elon to abandon his strategy. He refuses. Thiel, Levchin, Botha and Sacks now decide to execute a coup. They gather loyalists and on 19th Sep 2000, as Elon is taking off for Europe on his honeymoon, they make their move. The land-bound board members summon an emergency board meeting by phone just as Elon takes off.

On the call, Thiel and Levchin reveal the issues to financiers Malloy, Moritz and Hurd who had no idea of the depth and devastation. Elon insists that the financial superstore ‘everything app’ is the big prize that they must go for, but the investors side with Thiel and Levchin. Elon is fired and Thiel becomes CEO, ordering the end of X strategy, and to instead focus on PayPal (which ends up selling to eBay for $1.5bn in 2002). Although not directly involved in the success of Paypal, Elon did extremely well financially which seeds subsequent ventures SpaceX and Tesla.?

You can see why X is still firmly imprinted. The big ticket dream that was never allowed to come true. The ultimate X that got away. And why Twitter has become X – (re)birthing Elon’s everything app.

But will it work?

Everything apps such as?WeChat?work in China and other, umm, less-democratic countries where privacy is not precious and govt interventions are frequent. Do we need an everything app? Would you use one? How will it get through multiple regulators? What one killer feature will bring everyone onboard??

Personally I think he’s 20 years too late, holding onto a dream that no longer exists, where there will be no govt subsidies this time. But I’m constantly told I’d be a fool to bet against a billionaire brand with this much political clout. So we will see…

For now I’m going to enjoy the ride as the next Ironman movie is being written in front of our very eyes.?

And what a script!