Motley Fool Money - The Einsteins of Our Time

Episode Date: November 19, 2023

Did Elon Musk break Twitter? Or did Twitter break Elon Musk? Ben Mezrich is the author of “Bringing Down The House,” “The Accidental Billionaires,” “Dumb Money,” and, most recently, “Breaking Twitter: Elon Musk and the Most Controversial Corporate Takeover in History.” Ricky Mulvey caught up with Mezrich to discuss: Twitter’s impact on Musk’s legacy, The philosophies that drive Einstein-esque founders, And the startup working to “de-extinct” the Woolly Mammoth.   Tickers discussed: TSLA, META, GME, AMC Host: Ricky Mulvey Guest: Ben Mezrich Producer: Mary Long Engineer: Annie Pope, Rick Engdahl Learn more about your ad choices. Visit megaphone.fm/adchoices

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I mean, it's crazy. 90% of the revenue used to be from advertising. And he cratered that. And, you know, Linda Yaccarina's brought in to try and bring that advertising back. And some advertisers has come back. But in general, they value the site now at less than half of what he bought it for. And that's entirely because he chased all the advertising away. And he created all this debt situation.

So you took the company that was near break-even and turned it into a massive money pit. I don't see how you walk away from that with your reputation unscathed. I'm Mary Long, and that's Ben Mesrick, a chronicler of wild true stories and author of books like Bringing Down the House and the Accidental Billionaires. His latest book, Breaking Twitter, tells the story of Elon Musk's Twitter takeover. Ricky Mulvey caught up with Mesrick to discuss how X will impact Musk's legacy, the intentions and philosophies of famous founders, and what the return of the woolly mammoth could mean for mankind. Joining us now is Ben Mezric. His books include dumb money, the accidental billionaires bringing down the house. His latest, it's called Breaking Twitter.

I bet you can guess what it's about. Ben, welcome to Motley Full Money again. Thank you so much for having me. You usually write about people making a bunch of money or beating systems. This one's about a billionaire losing money. Why the switch? Well, you know, I didn't mean to step into this morass, as it were. I was a big fan of Elon Musk.

I thought Elon Musk was like Edison or Einstein. and, you know, he is the guy that Walter Igeson would write a biography about. And then he stepped into Twitter. And to me, it's an unmitigated disaster, not just for Twitter, but the conceit of the book is Elon Musk didn't just break Twitter, but Twitter broke Elon Musk. And so, yeah, it's a, it's a horror movie in some ways. It's an absurd comedy. But it is a disaster as a business.

One of the things that your book talks about that I didn't know before is why musk's like why my entire timeline became Elon Musk in like what was it February of 2020 yeah yeah yeah he got upset so at the Super Bowl Elon tweeted a tweet and then Joe Biden tweeted a tweet and Biden's tweet got a lot more engagement than Elon's tweet and so apparently Elon flipped out and then engineers were called in the middle of the night saying this must be fixed and they boosted the result was a boosting of Elon's tweets by a thousand. So suddenly you could not not see Elon's tweets. It was his site.

And this to me is like a billionaire who buys a yacht. It's not a global town hall. It's not about free speech. It's not about leveling the playing field. All of that noble stuff fell out the window. But you have to remember, this takes place after these series of events that I detail in the book of him getting booed on stage at Chappelle. It's the first time he's seeing.

this animosity in person of him, you know, firing Yol Roth, who is the moderator at Twitter, and then attacking him online and calling him a pedophile, basically, of him then tweeting a poll saying, should I stay CEO? And everybody's saying, no, shocking him. And so this is all a series of events that we get to the point where in the beginning it was this noble idea to save Twitter, and now it's lashing out at the world. Yeah. I, I mean, the noble idea, and I still have a little trouble understanding this, is that humans need to be a multi-planetary species in order to spread consciousness. It's this fragile flame. And I do agree with them.

Civilization is very fragile, and we take that for granted. Yes. And part of the goal is extending civilization as long as possible on Earth so we can become a multi-planetary species. One of those makes sense, which is we need to take care of the environment and build a bunch of electric cars. All right. The second part of that is I'm a little less certain. I think he got called on a bluff buying Twitter. Yeah. I mean, to some extent, you know, he had this idea. You're right. He had this idea that this window is open. If we go back to the dark ages, the window closes and we don't get to Mars. He somehow saw Twitter as the place where everyone is having a conversation and that it was being over-moderated, that it was being overrun by this virus, and that eventually we would lose free speech because of Twitter and we would be. burning witches again. One of the things I appreciated, I don't think there's a product or maybe a symbol or a product that has gone from beloved, not quite beloved, but important and legitimate

to rancid quite like the blue check mark. It's amazing, right? I mean, it was something that he used to complain that people were secretly paying $30,000 for a blue check, right? Now people won't pay $8 for a blue check. He's really devalued the blue check to the point where people are upset that they have one. But you have to have one if you want. your voice to get out there in a bigger way. So it's a really odd situation in which he, he's created a lack of value out of something that used to be valuable. I got to say not. I mean, Ben, you have a blue check. I do. I have to because if you want to use Twitter and you want to promote anything or you want to have a conversation, you got to pay to play. That's what

he's turning it into a pay to play site. And, and that's a problem because when it's pay to play, it's definitely not free speech. Most of the people are not in your position, I would say, where they're authors and they're talking about books. Most people are just trying to get the news. And I think maybe one fundamental mistake that Musk made, and you've talked about this, was that people would just accept what was,

it wasn't even $8 a month. It was like $20 a month. And it was like, well, that's the same price. It reminds me of the arrested development scene where it's like, how much is a banana, $10? And in his case, it's like, what? This is the cost of a place. station. Of course people will pay this.

Right. And we're going to move this to a subscription platform. And now I think they're making like 120 million on subscriptions at Twitter. And they have 1.2 billion in interest payments every year still trying to round up advertisers to bring them back to the platform. I mean, it's crazy. I mean, 90% of the revenue used to be from advertising. And he cratered that. And, you know, Linda Yaccarina is brought in to try and bring that advertising back. And some advertisers has come back. But in general, they value the site now at less than half of what he bought it for. And that's entirely because he chased all the advertising away, and he created all this debt situation. So you took a company that was near break-even

and turned it into a massive money pit. I don't see how you walk away from that with your reputation unscathed. And then add to that that he's retweeting horrible conspiracy theories and things that are borderline hate speech. And he's pushing a narrative that half the country dislikes, and he's fighting journalism and fighting the mainstream media. You know, I think it's the most important story of his career. We'll see. I think 50, 100 years from now, starting the electric car revolution is a pretty strong contender. Yeah, as soon as he gets away from Twitter, as soon as he makes us all forget about Twitter, and he moves back to his cars and his rocket ships, he can resume being the Edison and Einstein of our times.

you're right in that because he's cratered and destroyed Twitter 100 years from now, people will only remember him for Tesla because there won't be a Twitter anymore. But that's unfortunate because I think what Jack Dorsey started was something that really could have been and could still be if Elon walks away from it more important in some ways than any other site. There's nothing like Twitter, Facebook, Instagram, threads or whatever you want to call it. Nothing competes with Twitter in terms of instantly being able to reach people having a global conversation. It's unfortunate that it's going away.

Yeah, Dorsey also, I think, started Twitter on maybe something that became a lie, which was that basically what, this company doesn't need to make money? Yeah, it's a mix of things. I don't know if I would say lie is the right thing. I think his intentions were that it's like a protocol, that it's like texting, that it's not a for-profit company. it just has to make enough money to survive kind of situation. I tend to believe people like Dorsey that their intentions are good.

I like Dorsey. I like Elin to some extent. I like Zuckerberg, even though I've destroyed Zuckerberg, too. In some ways, I think that they're trying to do the right thing and their instincts are good, but they have blinders on because of other reasons. And with Elon, it's because he thinks the whole world is a simulation. he's the main player and everyone else is a non-playing character. So no one else matters.

So no one can talk back to him. Other ideas that come up are not as important as his ideas. And it's very difficult for him to take criticism. Yeah, let's talk about simulation theory in a sec. I love simulation theory. With Dorsey, though, there's a thing. Okay, so the thing where I'm skeptical, lie might be the wrong word,

is anytime there's a billionaire talking about a company and saying it's not about the money. Yeah. Like, in some ways, and I know there are things, and you've talked about it with the GameStop saga, where it's about sticking it's the man. It's not necessarily about the money. If you're starting a company, it's got to be about the money, like at least a little bit, a little bit. Well, I mean, I think it's more about, well, for instance, we go back to Zuckerberg, who I know a lot better than know Jack Darcy. It wasn't about the money.

He really did not start Facebook because of he wanted to make money off of it. In fact, he fought every, every urge of Eduardo and anybody around him to monetize the site because he really, really wanted everyone to be on Facebook. Like that was the most important thing. It's more about megalomania than it is about making money. And I think Dorsey was somewhat the same. I mean, this guy is a philosopher and like, you know, it was a massage therapist. And he was, you know, he's very much floating around in a cloud when he starts this company.

And I think the people around him were more concerned about it making money than him. Of course, he made a ton of money off of it and becomes a billionaire on it. But I do think there's something. to it with some of these guys that it's really not about like i i definitely don't think elon bought twitter to make money i don't think he cared so much about that but it's about the scoreboard for elon it's he can't lose um and it losing money looks like a loss um so it's more about ego and that than it is about you know getting richer i talked to isaac said about simulation theory as well he would say that it's something that musk like entertains and that he thinks

it's funny. There's, there's like a cosmic joke and that this is something that he thinks about, but may not be driving his everyday decision making. Yeah, I mean, we disagree on that. I think that Elon is, like a lot of super successful people, begins to believe that they're this central player in the movie of their life. And we all kind of believe that to some extent. But I think Elon really, really takes to simulation theory. Everything to him is funny. So, you know, that's how he operates. Everything's about humor and memes and entertainment. But I think he truly believes that he's the main player in the simulation and that everyone around him is a non-playing character.

And I really think he takes to that. I think there's logic to it from his point of view and from what's happened in his life. And he takes outsized risks because of it. When you're the main player in a movie, you're not going to fail. The movie doesn't end, right? So you can take really extreme risks knowing deep down that it's going to work out in the end. And I think that, you know, you see him wandering through Twitter, restructuring things, you know, in the middle of the night saying, okay, now we're X. He's 100% acting like he's the main character in the movie.

And I think that it stems from his philosophy. I mean, the X thing wasn't random, though. No, he's been talking about X for a long time. Long, long time. He's always wanted to name it X. and he's been told how bad it is and how it's not going to work. And he was basically, you know, told it was going to look like a porn site. And he doesn't stop because he knows, right?

Because it's his story. And he's going to keep doing it. And I do think in the Twitter escapade, it's the first time where he starts to question because he's literally on stage with Chappelle getting booed for the first time in his life. And he's literally having mainstream media attack him and call him idiot and things like that, which has never happened to this extent before. And he's suddenly presented with the idea, well, maybe, you know, things aren't working. And that's why he ends up locked in his conference room, people, you know, thinking about calling a wellness check on him.

I think this really hits him enormously and emotionally. Yeah. And that's also a, I mean, that is an expression of humanity, right? Like 20,000 people are booing you. If someone says something to him that he doesn't like, eh, that's a non-player character. But when you have just general people booing you and it was really the first time that ever happened to him. It's hard to ignore. And it's a wake-up call. Well, and also, I think there's a part of him that wants to be a stand-up comedian. Yes. I mean, he loved being on stage. Saturday Night Live and he had fine on Saturday Night Live. I think he was funny. He loves being beloved. He loves it. He loves the attention. And it's, it's troubling, I think. And that's also why he's leaned in to the type of people who still love him.

So he's leaned in sort of this right word conspiracy theory group of people that he's promoting on Twitter. And that's why the whole feel of Twitter is shifting in a pretty interesting way around those voices that support him. Yeah, you call him the goons. Well, the goons are his original, you know, his group of people, Twitter called them the goons. People work there called them the dunes. They also called them the flying monkeys from a, from, from, Wizard of Eyes, the people who surrounds himself. Yeah. So you talked to a lot of the employees who stayed there through the hardcore phase. They were there when Elon would argue, I would say

it's pretty clear that it was a little bit softer. Then they went through the hardcore, hardcore phase. One of them, there's a start, I'm not going to spoil it. One of them said that, you know, this was something that I was happy to do. I have no regrets. But ultimately, when you talk to the employees of Twitter now X, did they regret going through the trauma of the Elon takeover? Elon takeover? I mean, it's a mixed bag, but I think, you know, the excitement of Elon. I mean, he's incredibly charismatic. One of the characters they follow closely is Esther Crawford, who was, you know, a product manager, someone at Twitter, who became viral when she posted a picture of herself

sleeping in a sleeping bag under a desk because she took on the new Elon. She was elevated very quickly to a very high level. And I don't want to give it away, but it flames out in some respect. It's not that they regret trying. You know, Elon caused a lot of excitement. There were a lot of people at Twitter who, when he came in, were like, I mean, this is crazy, but this is exciting. This is the richest man in the world. He built SpaceX. He's the genius.

This could work. And unfortunately, it's a mixed bag with Elon, where on the one hand, he drives people to work harder than they've ever worked in their lives. And on the other hand, he can discard them, and he can throw them out, and he can fire them in the room. in really crazy manner. And it's like it's trying to sort of stand on a ship that's being hit by massive waves and may eventually sink. Do you regret that you were on the ship? I don't know.

Some people do. And some people think, well, I took a shot. And unfortunately, it didn't work out. I think one other takeaway I had from your book is that even if you're a genius, it's really hard to make macroeconomic predictions. where when Elon's feeling really bad, he said, quote, the economy is about to experience cardiac arrest, but almost no one understands it yet Twitter will need to drop to the absolute minimum number of employees, end quote.

Maybe like, he's probably right on a long enough timeline, but I think that was heavily influenced on being in like a dark and depressed place. Yes. I mean, he definitely sees the world in very broad, broad and immense dramatic terms. Everything's the most dramatic thing in the world. So it's not that the economy is looking bad. It's that we're about to have full-on economic collapse. And it's not that I need to fire a few people at Twitter.

I need to fire everyone at Twitter. It's always that with Elon. It's extremes. So I don't have a clean transition to this next one. But you have also written a book about Woolly Mammoths coming back. There's no, Elon to Willie Mammoth. Elon to Willie Mammoth. Earth changing, well, no, Earth changing technology.

That's my, that's the transition. There's a startup. It's called Colossal. You've written about George Church, who's one of the scientists who was a part of this. That was in 2017. Six years later. No Woolly Mammoth. Where are my Woolly Mammoth? We're close to your Woollymouth. So Colossus is now funded enormously. Yeah. And actually, Tall, who basically finances Colossus, actually bought the movie rights to Woollie. My book about George Church building the Willie Mammoth. For those of you who don't know, George Church is a great scientist in Boston. He's literally the Einstein of our times.

And his team at his lab is attempting to resurrect the woolly mammoth, to bring the woolly mammoth back to life. They've genetically figured out how to do it. They've figured out that you take an elephant and you splice in the genes using CRISPR for woolly hair and size and the ability to live in the cold. And then you repopulate the Siberian wasteland with woolly mammoths, and it'll actually save the earth from global disaster. It's a really cool story, and it'll be a great movie.

And they are literally working on the woolly mammoth. They've got a lot of funding to bring back not just a woolly, but a bunch of prehistoric species. I think we're going to get there. You know, the timeline is a little longer. I'm like Elon, you know, promising you your automatic car. I still promising your woolly mammoth. It'll...

Timeline is... Why are you confident about that prediction then? Because I hang out with George Church and I hang out in his lab, and they've already got a mouse that can grow willy hair on it. They've already got a womb that can grow a baby from nothing without a parent. They've got everything they need. It's just now a matter of money, which they've raised a lot of. And I really think they're going to get there.

And it's a lot closer than people realize. This is one where I think there's got to be an, I mean, there's got to be unexpected obstacles. To grow the woolly mammoth, it's got to basically what, gestate an Indian elephant? Well, here's the problem is they don't want to kill a whole bunch of elephants. So what they're actually doing is creating a womb that can live out. outside, so it's going to be a factory. So that's what's taking longer. If they were willing to experiment with elephants

and pop them in there, they probably would much faster, but George is a big fan of the elephant and does not want to leave a bunch of dead elephants out there. So they're going farther. It's almost like the space program where you get all of these other things that come out of it. They're going to make, you know, wounds that can work outside of people using the same technology.

What's the deal with the saving the plate, like what, they're eating things on the Arctic No. So essentially, this Russian experiment had been done over a number of years where if you go back to the prehistoric animals that used to live on the tundra, the tundra is a massive ticking tom bomb. It's full of methane. It's full of these gases that when released will just explode the environment. It's going to raise our temperature by something like 15 degrees in a very short period of time. But it turns out that if you unleash things like woolly mammoths, wildebeests, things like that, they trampled down the ground, they eat the vegetation. and they actually create a feedback loop that lowers the temperature. And these Russian scientists didn't experiment in this massive area of the tundra where they put these Yakuushan horses and they would actually drive tanks up and down to simulate woolly mammoths. And they were able to lower the temperature by as much as 15 degrees.

So you actually can bring back this sort of ring around the world of an Arctic kind of level by repopulating it. And what the theory is is that it wasn't, that, you know, the environment changed and the Willie Mammoth died. It was the other way around. The woolly mammoth died and that caused the environment to change. So if you can put not just one, so the goal isn't one Willie Mammoth. The goal is tens of thousands of Willie Mammoths. Heads, massive super herds. What's it? When people come into an environment megafauna tend to tend to have a little bit of a tough time. Well, yeah, we ate them all. We ate them all. We ate the

woolly mammoth out of existence. In fact, we ate so many of them that there was just a small group of them left that had walked across this land bridge to this island and then the land bridge was covered in water. And they were on that island while the pyramids were being built. There were still woolly mammoths walking around this island until a bunch of people built a boat and went over and then ate them. So there's none left. On that happy note, I'm going to move one more, one more topic. I want to hit with you. You've written stories about people cheating in Las Vegas. Cheating. I don't know about cheating. Cheating. Sorry, finding an advantage in Las Vegas.

Yes. Doing advantage play. The casinos would say cheating. Let's call it advantage play. I think there's only been one story in the past like 10 years of a good advantage play story. What was it? The Phil Ivy Baccarat scandal.

The Baccarat scam. Do you think there are any like, do you think with today, with AI, with facial recognition, do you think there's any good advantage play stories left in Las Vegas? Well, I mean, I think you can still do it, but you don't get away with it for that long. So for instance, you can still car. count. You can still put a team together and use what was in the movie 21 and go hit blackjack tables and win. And I have friends who do it. The problem is, is you get identified fairly quickly if you're bringing in any real money. And then, you know, then they'll come over to you

and say, we need to take a walk. Do you know what the limit is? In terms of how much you could make. Yeah, how much, you know, if you're, let's say you want to play. I mean, first of what, you didn't be well capitalized. If you had 10 kids and you had a million dollars in cash, I think you could triple it. quadruple it before you started to get real hurt. But it depends on how good you are in disguising your play. The hard part is not the math anymore. The math was never that hard, but the hard part now with the facial recognition software

and what they're looking for, and because of my book, quite honestly, you have to disguise your play very well. And that's the hard part on a big scale. But as an individual, you can still do well. Learn to card count and hit a casino and you should have a positive advantage. still.

As long as they're not putting the shoe to, what is it, too short. Well, yeah, you got to find decks that it'll dig deep or, you know, play in casinos that don't even use those automatic shoes and things like that. Last question. Ryan Cohen became the CEO of GameStop in September. You have another book. It just became a movie. It's called Dumb Money.

Ryan Cohen becomes the CEO of GameStop in September. Doesn't seem like the meme stock folks are too excited about this. Stock's been down since then. Well, the people are, you know, it's a great point. And I get a lot of people online who are all like, it's still happening. It's still about to happen. The big short squeeze is going to happen. I think that there's still a lot of passion and the retail traders are really a big movement that is really just beginning.

I do also think that there's a lot of shenanigans that go on in the backgrounds, that, you know, there's a lot about that movie, which is pointing out that the playing field is not fair. You want to talk about a rigged playing field. You look at things like these retail stocks, like, you know, GME and AMC and things like that. every time the retail traders are moving a direction, something happens that pulls the rug out from under them. So I do think that there is a massive groundswell of love for GameStop. And I'm hoping that Ryan Cohen can harness it because I think it's a good thing. I think it's a good movement. And I think they do support him a lot. But we'll see if they can make it work in the long run with that company. As always, people in the program may have interests in the stocks they talk about.

and The Motley Fool may have formal recommendations for or against, so don't buy ourselves stocks based solely on what you hear. I'm Mary Long. Thanks for listening. We'll see you tomorrow.