It’s well known in the business world, at least by those who pay attention, that repeating past successes does not guarantee future success. Sometimes it can be a disaster. Elon Musk’s current nightmare at Twitter offers a perfect example.
Musk acquired Twitter (now X) last year for $44 billion with the intention of remaking it into a broader messaging, video, content developer and e-commerce platform similar to WeChat – the world’s largest stand-alone mobile app with more than a billion monthly active users. Musk is known for making bold moves, but mostly reimagining businesses in emerging industries, such as electric cars, space travel and even rooftop solar. Unfortunately for Musk, it’s harder in an established and highly evolving category like social media. Furthermore, Musk’s approach to Twitter (X) violates just about every rule for developing a long-term successful brand.
Goodbye Twitter Birds
Twitter already had challenges before Musk acquired the company. Since then, the problems have multiplied – and many of them self-inflicted. Compared to other social media platforms, Twitter only has about 275 million users, of which the majority (70%) are outside the U.S., and the numbers are rapidly declining. He quickly began compounding the problems by laying off 75% of staff, including much of the content moderation team. Ad revenues continue to decline as advertisers, especially large ones, are leaving or significantly reducing their spend. Moreover, Musk hasn’t paid rent, some vendor bills, or promised employee severance and bonuses, resulting in lawsuits from employees, property owners and others.
Musk’s strategy to turn Twitter into a huge global platform with multiple services? By saying goodbye to the Twitter birds and renaming the company “X”. Why X? Because Musk has enjoyed success with the name ever since his first startup – PayPal, which was originally named X. SpaceX and Tesla (Model X) have also found success by incorporating X as part of their brands.
X’s Barriers to Success
Let’s get to the root of the problem. For social media, X is unappealing and means nothing. Social media is supposed to be friendly, inviting and community building, depending on the target audience – not forbidden. X means stop, or X-rated. The question is, does Musk plan on using X as a temporary name? Certainly, PayPal is much friendlier and more inviting than X. PayPal suggests the product’s function and appealed to a younger target. It’s hard to imagine what X stands for in the case of Twitter and how unappealing it is – as evidenced by the departure of users, not just advertisers. The new logo is black and much more masculine. Twitter was friendly and neutral; and it was inviting, as illustrated by the blue bird icon when it launched and had almost 20 years of brand equity.
Bottom line, X fails to come across as open or friendly, and doesn’t convey growth, evolution or success. As a result, Twitter is no longer perceived as a friendly, inviting or fun to use brand. And to confuse users even more, Musk is inventing a new vocabulary – gone is the “tweet”.
Rebranding / renaming can be a very powerful way to refocus, reposition and grow a brand. If a brand has been stuck, rebranding helps. Some examples include Kentucky Fried Chicken rebranding to KFC to get rid of the “fried” stigma and then using “fried chicken” to reinforce its main entree as a comfort food. FedEx was changed from Federal Express, as people linked it to the U.S. post office, and it was the phrase all their users were using to describe the service. In the tobacco space, Phillip Morris rebranded as Altria to get away from its negative association. Even Aunt Jemima, to get away from the negative associations with the character’s image, rebranded itself Pearl Milling Company.
Rebranding can absolutely help a company transition. X wants to be bigger and better, but the negative associations connected to the current platform, Elon Musk’s erratic behavior and messaging and the lack of advertiser safeguards, are heavy anchors to any brand evolution. Right now, X is driving away much of its audience and advertisers. Not a good start for a company with bold ambitions.
More X Insights
When rebranding, one of the fundamental rules is to transition to what you’re going to be. When you rebrand, it would be better to do so with a major positive new product / service enhancement to showcase what’s in it for the user and advertisers. Lenovo did a great job showcasing innovation when they acquired IBM’s PC business. They reinforced the award-winning innovative legacy of the ThinkPad while bringing in new innovations to reinforce users that they would be a good steward of the brand. Otherwise, you risk losing your audience. In this context, Musk rebranded the company to X too soon.
So far, Musk is breaking all the rules of trying to establish a long-term successful brand. While he may have a master plan, neither he nor new CEO Linda Yaccarino can articulate a clear product roadmap or a cohesive vision. And despite Yaccarino’s assurances, advertisers are still staying on the sidelines and many users won’t return until X adopts clear content moderation and brand policies.
Even if Musk wants to turn X into an new version of the global town square, it won’t happen until he adopts a more strategic approach. He needs to fix the business first, not the brand. While stripping the business down to the studs might ultimately be successful, he needs to focus on the meaning of the brand, rather than the name. Once he defines his brand strategy and creative vision, then he can determine what name would best fit. Regardless, Musk needs to transform X into a fun and inviting platform (however that’s defined). Asking users and influencers to pay for checkmarks and other dumb policy changes only suggests that he doesn’t know what he’s doing.
Hence a smart and thoughtful business strategy can turn bold ideas into reality. Musk needs to be intentional and logical in his strategy. So far it doesn’t seem that he’s given much forethought. It’s all been gut and getting rid of the legacy structure. If he thinks just changing the name to “X” will transform the brand, he’s wrong.
A Catchy Brand Won’t Overcome A Broken Business Model
Successful brands convey what makes your business different. If your business model is broken, the brand won’t have the desired impact. And any marketing messaging won’t change desired consumer behavior. Duplicating the past is not necessarily a recipe for future success.
Musk has made just about all the mistakes you can make when trying to reinvent an established brand. But that doesn’t mean you have to. When reinventing or evolving your brand:
- Think about where you want your business to go and why. Then align your brand with where your model will be in the future.
- Understand your current and future customer base. Identify needs that would attract them to your brand and figure out how to fulfill them in a better way than competitors.
- Make sure your brand conveys imagery and emotion your audience will relate to and engage with. Twitter was friendly and inviting. X conveys neither of these dimensions.
- If your business model doesn’t need to evolve, fix the brand before deciding to change the name.
- Make sure your brand communications differentiate you from competitors in ways that are tangible and appealing to your audience.
Most of all, rebrand for strategic reasons. Is your industry undergoing significant change? Is your business losing relevance with your customer base? Are you looking to leapfrog your competitors? These are valid reasons for a rebrand. You may have others.
If you’re struggling to come up with a strategic approach to a rebrand, reach out to the brand gurus at Bottom Line Marketing. We’ll bring sanity back to your branding process.