Tesla has famously not needed a massive marketing budget to build its business. And much of that has been due to CEO Elon Musk's ability to garner attention. But one investor who respects the chief executive still thinks his main mode of public interaction -- Twitter -- may be a problem.
Speaking on The Knowledge Project podcast on Tuesday, billionaire investor Bill Ackman said that Musk's spotty record with tweeting, which included touts that he was taking Tesla public and a public spat with a rescue diver he called "pedo guy," make him a less ideal public company chief executive.
"I don't know that Elon Musk has been the ideal public company CEO," Ackman said. "He had a challenging period there with his tweets."
It hasn't quite stopped.
Earlier this month, Musk, who promised ventilators for hospitals hit hard by Covid-19 patients, was criticized for apparently failing to deliver them. He brushed those claims aside on Twitter and said he had tweets confirming the ventilators were received. Those comments came as Musk has made controversial statements about coronavirus and the global shutdowns it prompted.
On Wednesday, Musk tweeted that it's time to "give people their freedom back" with a link to a Wall Street Journal article questioning whether lockdowns work. In a subsequent tweet, he was more forceful.
"Free America Now!" he wrote.
Ackman was quick to note that he admires Musk and says he has "enormous respect" for the chief executive. But Ackman's comments are important.
In one respect, Musk's tweets are a boon for Tesla. He gets all kinds of attention on his Twitter account and almost always creates headlines. It builds billions of dollars in earned media for the company without paying a dime. And Musk seems to have no shortage of things to say.
But it's also the CEO's willingness to say anything that's a problem. As much "good press" as the company gets thanks to his outspokenness, there are too many times when it turns out poorly.
For the average business leader, there's an important lesson to be learned from Musk: Creating a brand around a company's leader is critical, and being able to make headlines is a great way to save on marketing. But an equal measure of restraint is just as important.
Marketing is, at times, all about taking chances. Musk takes plenty. Sometimes, however, his attempts fall flat. As a business leader, try to limit those times when you fall flat.