Elon Musk likes to “go big or go home.” So it should come as no surprise that he was buying Twitter Inc., after news broke that he would tease a bigger ambition for the company: “Buying Twitter is an accelerator to make X, the Everything App,” he tweeted. Done. Musk isn’t buying Twitter just to make it better. He claims a much bigger plan: creating an “everything app” that does everything you need.
The idea itself is not absurd. Many so-called ‘super apps’ have long existed in Asia. For example, more than a billion Chinese citizens use Tencent Holdings’ WeChat to perform all kinds of tasks, from buying groceries to booking dentist appointments, sharing photos with friends or playing video games. use QR code. They can also access government issued identity card through WeChat. “You basically live on WeChat in China. If we can recreate this with Twitter, we’ll have a huge success,” Musk told Twitter employees in June.
You can see why Musk is desperate to copy that Chinese model. If he really wants to grow Twitter’s revenue to $26.4 billion, one way would be to make it part of a platform that hosts a lot of paid activity that it can skim through. WeChat generated an estimated $17.5 billion in revenue in 2021, largely through advertising and cutting back on transactions it processes for things like games, delivery and a thriving market for digital services. More than half a billion people use thousands of mini-apps daily within WeChat.
Singapore-based Grab, which counts SoftBank Group Corp and Uber Technologies Inc as its two largest shareholders, has also been dubbed a ‘super app’ as it brings ride-hailing, food delivery and digital payments all into one. does.
But it’s hard to build a super app. For one thing, Americans make far less mobile payments than their Chinese counterparts. And WeChat’s success as a daily hub came down to its launch at the right time in 2011, when smartphone sales were exploding in China, and then riding the wave of its expanding network influence.
It is now impossible to create a new user base as big as WhatsApp, Facebook or WeChat. It would be like trying to replicate the explosion of New York’s growth in a megacity during the 19th century. The time of boom has passed; The network is stuck.
Silicon Valley has also for years tried to build its own super apps on the assumption that a robust payments platform can power services in the same way that WeChat Pay does in China. But Facebook’s efforts to build out payments services, including a crypto platform called Libra, failed, and while WeChat’s dominance comes largely from Tencent’s working in lockstep with the Chinese government, US big tech firms have been under pressure from US regulators. There is a completely different relationship with and the state: they are facing calls to separate from the MPs.
Slimming down looks like a wise financial strategy anyway. Facebook has shut down several business areas, while Instagram is rolling back features after some criticism that it was becoming too bloated.
If Musk was indeed determined to include a payments platform, he would look to try and buy PayPal Holdings Inc., closing a meaningful loop for himself after co-founding PayPal’s predecessor more than two decades ago. could try. It was named x.com.
Twitter has historically added incremental features to its platform, so a comprehensive payment service would need to be bought and bolted on. But Twitter co-founder Jack Dorsey could already do that when he headed both Twitter and payments giant Square, now called Block Inc.
Why didn’t Dorsey merge the two and create a ‘super app’ defined in this way, when he could? Most likely, because they assumed it wouldn’t work: American consumers weren’t ready for the Swiss Army Knife apps and it would hack even with regulators.
In any case, it’s probably not the best idea for a volatile person like Musk to oversee an app on which millions of people social comment, pay, shop, identify and more. It would give the world’s richest man, who is infamous for his unreliability, a new level of power unprecedented that he and we probably could not have done without.
It’s clear that thanks to Tesla, Elon Musk has a huge fan base around the world, and is an accomplished self-promoter. But they also have a habit of making big promises and not keeping them. So, there might be a good chance that this ‘X’ is just another idea which eventually ends up as well.
Let’s hope
Parmy Olson is a Bloomberg Opinion columnist covering technology.
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