If Elon Musk's appointment to Twitter's board of directors after acquiring a 9.2 percent stake in the company's stock was surprising, the news Monday that Musk has declined the seat was both shocking and--at the same time--not surprising at all. It's also an important lesson for every entrepreneur, and not just because it serves as a case study in dealing with volatile individuals. It's all about avoiding distractions and staying focused on what matters.
As for Musk, the move was shocking because buying stock in a company, talking to its CEO and board, convincing them to offer you a seat, and agreeing not to try and take over the company, only to decline the morning you're supposed to take it--this isn't the way things are usually done. On the other hand, it's not at all surprising because Musk rarely does anything the way it's usually done.
Look, serving on the board had very little upside for Musk. Most of his influence over the company comes from his massive base of followers, as well as the fact that he's now the largest shareholder. As evidence, Twitter revealed over the weekend that it was, in fact, working on a long-requested edit button, but felt the need to make the point that it didn't do so in response to a user poll posted last week by Musk.
Being a board member, on the other hand, comes with the burden of a fiduciary responsibility to act in the best interests of the company and its shareholders. As in, all of them--not just himself. It seems pretty clear that the wealthiest man on earth isn't particularly interested in regulatory restrictions.
For Twitter, on the other hand, offering a board seat was a stroke of genius. Not only is it better to have an intense critic like Musk on the inside offering constructive ways to make the product better, but the move also had the added benefit to Twitter: Musk agreed not to attempt to take the company over, or to buy more than 14.9 percent of the company's stock.
It also, in theory, would have ensured that the eccentric billionaire wouldn't keep trolling the company on the very platform it built--something that seems to be one of Musk's favorite pastimes, especially of late. That seems to have been a strong motivation for the company, as revealed by the statement shared by Twitter's CEO, Parag Agrawal on Monday:
We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders, was the best path forward.
Instead, however, Musk decided against joining the board. It's not entirely clear why, but it was apparently done with some conversation with the company. My guess is that conversation included a reminder about that pesky fiduciary responsibility and Musk realized it would be a lot more fun to keep his shitposting rights while still maintaining the influence of his "largest shareholder" status.
I point to this final line from Agrawal's statement as exhibit one:
There will be distractions ahead, but our goals and priorities remain unchanged. The decisions we make and how we execute is in our hands, no one else's. Let's tune out the noise, and stay focused on the work and what we're building.
That's an understatement, to say the least. Those first five words might be the most important of the entire message, and they're a valuable lesson for every entrepreneur.
There will certainly be distractions. Twitter's Elon Musk problem isn't going anywhere. He's still going to troll the company. And when he does, he's going to command a lot of attention.
Agrawal is trying to help his team refocus on what actually matters, and not be distracted by whatever comes next from Musk. That's important because Twitter's real problem isn't Elon Musk. I know that's counterintuitive, but I'm serious.
Twitter's real problem is that it has never figured out how to become a good business. That's not to say it isn't important, but it's mostly important to people who spend a lot of time on Twitter. For the vast majority of Americans, Twitter is mostly irrelevant. If that's going to change, Twitter is going to need its employees to not get distracted. Instead, they will need to focus on making it better. Finding a way to make it a sustainably profitable business would also be nice.
The same is true for Musk, who--I think we can all agree--is easily distracted. I suppose when you're the wealthiest person on earth, you can afford for a $3 billion stake in an underperforming social media company to be a distraction. The thing is, there are certainly plenty of things that Musk should be focused on.
For example, Tesla, the company that is presumably Musk's day job, still continues to promise that things like "full self-driving" cars are "coming in the next few months." Or what about delivering the CyberTruck? Tesla's futuristic-looking pickup truck was announced in 2019 and was supposed to be delivered to customers in 2021. That was later pushed back to 2022, and Musk now says he expects them to start rolling off the assembly line in 2023.
Maybe spending a little less time on distractions--like converting Twitter's headquarters into a homeless shelter or dropping the w from the company's name--and a little more time on his day job would help move his promises a little closer to reality.
Lest you think I'm picking on Musk, I'd argue the same thing is true for every leader. It's so easy to become distracted by the shiny new thing. The world we live in is full of distractions, which means it's super easy to lose sight of the main thing. Except, there are people counting on you to not lose focus, and to do the thing you said you'd do. That's your job.