Twitter’s Future Is a Return to Elon Musk’s Past

Elon Musk's rebranding of Twitter to X, a hoped-for "one-stop-shop" for finance and social media, may have seemed sudden to many. But for those familiar with Musk's history, it was a revival of a long-held dream. In this deep dive originally published one year ago, Every columnist Gareth Edwards uncovers the story of Musk's first attempt to build a financial "super-app" in the late 1990s. It's a tale of ambition, boardroom battles, and ultimate defeat that haunted Musk for over two decades. Gareth meticulously reconstructs the rise and fall of the original X.com, revealing how its collapse shaped Musk's approach to company control ever since. Read this to understand the historical context behind Musk's moves at X and gain insight into the relentless drive that has defined his career. It's a reminder that the past is nearly always prologue—and that some dreams never die.—Kate Lee

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When Elon Musk announced that Twitter would become X—a “one-stop-shop” for finance and social media—many commentators were surprised. The idea seemed to come from nowhere. For those familiar with Musk’s history, however, both the name and the idea would have sounded familiar. 

Musk is usually credited as one of the founders of PayPal. The story of the payments company’s rise and eventual sale to eBay for $1.5 billion is often elided in Musk’s own personal history. But behind that sale is a tale of obsession, ambition, and a series of brutal boardroom coups—one of which was sprung on him by Peter Thiel during his honeymoon—that, in Musk’s eyes, robbed him of both the company he originally founded and a chance to change the world. 

That company was X, and the world-changing idea was to create a “global financial nexus,” as Musk would describe his vision. Throughout his career, it has remained the one great idea that he feels got away. Far from being a surprise, Musk’s Twitter pivot is an attempt to revive, and finally build, that dream.

To understand the future of X, then, it’s critical to understand its past. The rise and fall of X’s previous incarnation—and his first attempt to dominate fintech—has fallen out of his narrative. Though its history may read like an episode of Succession, it has defined Musk’s approach to company control and ownership ever since. Now it seems set to define the future of Twitter as well.

This is the story of X, based on contemporary articles, published videos and interviews with key players such as Elon Musk and Harris Fricker, and books (including The PayPal Wars by Eric M. Jackson and The Founders by Jimmy Soni).

‘The drive of a nuclear submarine’

In late 1998, Harris Fricker, a financial securities expert, received a call from Peter Nicholson, an old boss at ScotiaBank.

“‘I want you to meet this kid,’ [Nicholson] said,” Fricker told the C4K podcast many years later. “So I said, ‘Sure.’ I met the guy and he was incredible. Huge engine. Huge intellect. The drive of a nuclear submarine.”

The “kid” had also worked for Nicholson. As an intern, he had become frustrated that his ideas for high-risk, high-reward deals weren’t implemented by the bank. Although Nicholson hadn’t acted on these ideas, he was impressed with the intern’s drive and intellect, so they stayed in touch. That was almost 10 years ago, and things had changed. The kid, now 27, was about to become a dot-com millionaire for the first time, and he contacted Nicholson to say that he was already planning his next venture. For that he needed someone who knew finance, so Nicholson pointed him to Fricker.  

The kid was Elon Musk.

Musk bombarded Fricker with details of his new plan. Zip2, the online classifieds firm he had founded with his brother, Kimbal, was about to sell, and sell big (in February 1999, Compaq bought it for $305 million). Musk’s share would be just over $20 million, and with it, he told Fricker, he intended to launch something even bigger and more ambitious. Something the world had never seen before.

As Fricker listened, Musk laid out his dream. He wanted to create something that would bring all the financial aspects of a person’s life into a single place, which he referred to as an “online financial superstore.” Here, users and businesses would hold and manage everything: checking and savings accounts. Mortgages. Stocks and shares. Loans. Insurance. It would be a global financial nexus—a mega-app that users would never have to leave.

Fricker was intrigued, but he was also reluctant to leave his multi-million-dollar job to help Musk chase his dream. Musk kept working on him, however, and after Compaq’s purchase of Zip2 was completed, Fricker found himself quitting his job in Canada and heading for Silicon Valley, where he became a co-founder of Musk’s new firm.

“Elon knew nothing about financial services,” Fricker later told C4K. “But with his audacity, and his ability to articulate a vision people would get behind, it was a pretty interesting combination.”

Interesting, it soon became clear, could be both good and bad. Fricker was surprised, for example, to discover that Musk had already become fixated on a name for the company. It would be called X. 

Fricker and others expressed reservations. Banking was about trust and openness, and X hardly connoted either. Musk, however, was laser-focused on using it as the brand. He described x.com—one of the few single-letter domains registered before their use was blocked—as “the coolest URL on the internet” and informed Fricker that he’d already purchased it, giving its previous owner, Pittsburgh PowerComputer, 1.5 million shares of Series A stock in return. X marks the spot for treasure, he told a dubious Fricker and others. That’s how he saw it. That’s how others would, too. Also, it was short and easy to type, Musk said. His decision was final.

Musk’s ability to override the concerns of others at X was based not only on his position as CEO of the startup, but also on the investment he had made to get it going. Although later funding rounds would dilute his share, X began with an investment of $12.5 million of Musk’s own money. As a result, the firm’s culture and goals were almost entirely driven by Musk himself.

It wasn’t long before the relationship between Fricker and Musk began to break down. Fricker and the financial team he’d assembled became increasingly concerned about Musk’s attitude toward regulation and verification. Musk tended to see regulation as a barrier to be eluded, rather than as something through which he needed to carefully navigate, and he insisted that growth mattered much more than inserting impediments that would prevent users from accessing X’s services. 

Over time, Fricker also grew concerned that for all of Musk’s talk to the media, investors, and X employees about his grand plan, the development of actual products seemed to be proceeding slowly. Musk and his developers rejected this suggestion, insisting that the financial side of the firm didn’t understand the rapid release-and-iterate approach they planned to take. But as they headed toward a 1999 debut, Fricker and Musk frequently argued over just what would be launching. By the time X opened its digital gates, in a blaze of publicity in December of that year, Fricker was gone. He arrived at work one morning to find his computer wiped and his access suspended. Musk had fired him.

Despite the turmoil behind the scenes, at its launch X promised some interesting possibilities to those brave enough to entrust their financial lives to the internet. Following Musk’s preference for using third-party software, code, and services wherever possible, X partnered with First Western Bank and Barclays. This enabled the company to offer a form of checking account at launch, complete with bank cards and checkbooks at Musk’s insistence and—via Barclays—investment fund access. 

To encourage initial sign-ups, the company also tried something genuinely innovative for the sector: rather than investing heavily in advertising and marketing, it started paying customers to sign up. As Musk told CBS MarketWatch at the time: “It's a very clean, simple system. There are no minimum balances. You can open an account and receive a $20 promotional offer in your checking account. You can move $8 to your S&P fund, $3 each to your money market and bond fund, and be left with $6 in your checking.”

Musk’s thinking behind this strategy mirrored his approach to financial risk management: move fast, drive adoption, and worry about the consequences later. For all the concern this had caused Fricker and the financial teams within X, it worked. The company’s employees watched in satisfaction as the number of X account holders began to rapidly grow.

X wasn’t the only fintech startup in Silicon Valley that landed on this growth strategy. Another company—at one point based quite literally across the hall from X—was already doing the same thing. That company was Confinity.

The mobile wallet

Confinity was the brainchild of two men: CTO Max Levchin and CEO (and major investor) Peter Thiel. A Ukrainian who had come to the U.S. to study before being bitten by the Silicon Valley bug, Levchin was a talented programmer with an eye for security. He was fascinated with the growing handheld market, and saw a gap for software that would make security and communications between devices easier.

Thiel, meanwhile, was beginning to make a name for himself as a hedge fund manager and investor with an interest in technology. Levchin sought Thiel out, and the two men became friends. Levchin pitched a number of his ideas for PalmPilots—then the popular hand-held device among business users—at Thiel until eventually the investor heard one he liked. PalmPilots now came with an infrared port, which could be used to “talk” to other devices. Why not find a way to use that to send money around? Thiel, who had his own philosophical obsession with how money worked, saw promise in the idea of mobile wallets full of digital money—and the company that would become Confinity was born.

In July 1999, Confinity launched its money-sharing service, which it called PayPal. Members of the press were invited to a launch party where a representative of Nokia Ventures, the mobile company’s investment arm, “beamed” a $4.5 million investment from his own PalmPilot to Thiel’s live on stage. A TV producer, whose cameras had failed to capture the moment, asked them to do it again. 

“No! We cannot do it again!” a frustrated Levchin told him from backstage. “It’s millions of dollars moving from one bank to the other.” 

Most of the attending press, it turned out, assumed the whole thing had been staged. In reality, Levchin and his team had been working for 36 hours to make sure Thiel’s bit of fintech grandstanding would work. Levchin was so tired that he later fell asleep at a table in the middle of the party. The venue staff gently shook him awake in the morning, telling him that everyone had left, but that Thiel had pre-paid for his breakfast.

Like X, Confinity offered a financial incentive for prospective customers: if you signed up, you got $10 added to your mobile wallet. If you then persuaded a friend to sign up, they got $10, too. It wasn’t long before the number of accounts began to grow. Business circles in Silicon Valley became full of people pinging $1 transactions via PalmPilot to colleagues who had yet to register, in an effort to encourage them to sign up.

The killer app

While both X and Confinity fell under the category of financial services, neither firm initially saw the other as a direct competitor. Musk was ruthlessly focused on his goal of making X a one-stop-shop for all things financial. Confinity wanted to help people move and manage money on their hand-held devices. The situation changed, however, when both firms accidentally and independently created the same “killer” app—the ability to send payments from one email address to another.

At Confinity, the realization that this might be the future began to grow even before the product’s official launch. For a while, Thiel had been trying to persuade David Sacks, an ex-McKinsey consultant and friend, to join the company. Sacks asked what the product did, and Thiel explained the idea of “beaming” money. Sacks was lukewarm on the idea, believing the growth ceiling for such a product was low. Almost as an aside, Thiel mentioned that Levchin had also built a way for people to send money to another email address via the website, in case users had left their PalmPilot at work or home.

“Wait,” Sacks said. “That’s the product.” Intrigued, he joined the company on the condition that Confinity explore this avenue further.

Levchin, focused on PalmPilots, remained unconvinced. So did others at Confinity. But in April 1999, a single email triggered a tidal wave of change. 

The email was from a power-seller on a hot startup auction site called eBay. The user explained that eBay did not have a native payment system, so they, and other sellers, had begun using PayPal for all their sales. The pay-by-email function made it so easy to transfer money, so to highlight it as an option and boost their sales, they wanted to include a PayPal logo on their listings. The image on the PayPal website was too big, though, and they didn’t know how to resize it. Was there any chance Confinity could send them a smaller one?

Forwarded by the customer service team to Levchin and the other developers, the email set off a chain of events that revealed just how many eBay users were already using PayPal. To these users, the sign-up offer made adoption of the service a no-brainer. It wasn’t just that transferring money via PayPal was easy. It was the value of the sign-up offer. Most buyers didn’t have a PayPal account, while most sellers did. If the seller could persuade the buyer to set up an account with their referral link, the buyer would effectively save $10 on their purchase, while the seller would make an additional $10 on the sale.

This revelation proved Sacks was right. Wasting no time, Thiel and Sacks persuaded a reluctant Levchin that they had to fully pivot the product. PalmPilots were out. Pay-by-email would be the company’s main focus now.

Over at X, meanwhile, the path to email payments was similar. Musk had identified it as a useful part of his financial nexus, and his developers had duly built it. X’s own sign-up offer also meant that once it was available, X, too, started to benefit from the eBay effect. Unlike the Confinity founders, Musk had no desire to pivot his whole company to this new focus. His eyes remained ever-fixed on becoming the internet’s financial nexus. But pay-by-email was driving usage in a way no other service in the X family was, and Musk recognized that this made it an important part of the company. 

It also made Confinity a rival—one he was determined to beat.

From enemies to lovers

Both X and Confinity realized that in order to succeed, their products would need to benefit from the network effect of users around a de facto standard. Dominating the market early was critical.

Over the next few months, in a cut-throat quest to achieve supremacy, a vicious rivalry developed between the two companies. They became locked in a spending spree in a desperate effort to continue high levels of growth. X increased its signup offer; Confinity responded the same way. While both companies’ user numbers climbed, every one of those customers was costing them—or rather, their investors—money.

Both companies struggled to find a way to make their services generate revenue. For X, few users showed much interest in accessing its other financial services, which was how Musk intended to make a profit. The story was no better at Confinity. Thiel’s assumption had been that users would leave money in their PayPal accounts, allowing Confinity to make money through interest on deposits it held on behalf of its users. This was one of the key reasons the company didn’t charge a fee on money transfers. But the amount of money users were leaving in their PayPal wallets remained worryingly low.

As the year 2000 approached, the financial burn rate at both X and Confinity grew dangerously. Musk didn’t see a problem with this. He wanted to win. He knew X had deeper pockets than Confinity, so its financial runway was longer. Besides, if he wanted more money he’d just go back to the market—indeed, in early 2000 X had already begun the process of kicking off another funding round.

Unfortunately for Musk, he was no longer the sole power behind X. In the quest for funding, X had acquired additional backers and investors during previous rounds that he needed to answer to—most notably, Mike Moritz of Sequoia Capital.

When Moritz brought Sequoia onboard, it was with one stipulation—that Musk step back from the role of CEO. Musk could still drive product strategy, Moritz said, but the company was growing, and it needed an experienced hand on the tiller—especially because there were rumors among investors that X had a culture of coding first, and worrying about regulators and risk later. Moritz warned Musk that a calm and trusted figure at the top would likely be required to attract further investment.

Keen to focus on his grand plan and the technology required to achieve it, Musk saw no harm in Moritz’s proposal. He was still the majority owner of the company, so he felt confident that a new CEO posed no risk to his control.

Musk stepped back from the role of CEO at the end of 1999. In came Bill Harris, a well-respected financial veteran from Intuit. Almost immediately, the value of the appointment became clear. In January 2000 news broke about a security flaw in X that allowed fraudsters to transfer money from anyone’s account with just basic account information. The bug had already been fixed by the time it became public, just as X was trying to complete another funding round. Moritz was right: had Harris not been CEO, many of the investors X was courting would have walked away. Musk was relieved and pleased. He would not remain that way for long.

‘A gun to my head’

As the new millennium dawned and Musk was working to raise new funds at X, Thiel was busy imparting some hard truths to Levchin. It was Thiel’s firm belief that though Confinity had the better product and greater market share, they were going to lose the war with X. Thiel’s reasoning was simple: they were going to run out of money first. 

Looking at the markets, Thiel realized that a tech crash was coming—which would prove to be correct. He was sure that Confinity, like X, could complete another funding round, but he predicted it would be the last major investment both companies would see for a while. They would need to create enough runway not only to allow them to outspend X but also to survive. If both companies stayed at war, Thiel argued, mutually assured destruction would be the only outcome.

With Levchin’s reluctant support, Thiel reached out to X to float the idea of a merger. Given the hatred the two companies had built up for each other, he did not expect a response. To his surprise, he found himself talking to someone who agreed with him: Bill Harris. Harris, too, was desperately worried about the unsustainability of X’s burn rate. He reached a similar conclusion as Thiel: the two companies were killing each other. Yes, X could likely outlast its rival, but not without fatally wounding itself.

The two men met and reached an agreement: X and Confinity needed to merge.

When Musk was told the news, his reaction bordered on the explosive. He did recognize, however, the validity of the arguments being made. He agreed to let negotiations take place, although he insisted on opening with an offer that would see a 92/8 stock split in X’s favor. When Harris and Musk met Thiel and Levchin to present this, Levchin was so angry that he stood up and left. Away from the table, he told Thiel to call the whole thing off. Thiel told him to calm down. Time and investor pressure, Thiel insisted, was on their side. All they had to do was wait, and X would be back with better terms.

Thiel was right. By the end of February 2000, the two sides were looking at a 55/45 merger. Levchin was still unhappy but told Thiel that he would reluctantly accept it. That was the case until, on a visit to X’s offices, Musk told Levchin that Confinity was getting “a f**king deal.”

“My blood just boiled, and so I thought, it’s off,” Levchin remembered later. It took some frantic damage control on the part of Harris and Thiel to get Levchin back on board with the idea. Musk’s contempt would also cost X another five points on the split. Levchin only agreed to sign off if the split was amended to 50/50.

Musk, meanwhile, was now adamant he wouldn’t sign off on the merger at all. His dream was to build a global financial nexus. That wasn’t Confinity’s dream, and he didn’t need its PayPal product to do it. Nor did he feel like Confinity was anywhere close to X’s equal in value. He’d felt a 92/8 split was generous. The idea of a 50/50 one was laughable.

Musk has never hid his contempt for the merger, talking openly about his desire not to see it completed. “I was like, f**k you. We’re just going to kill them,” Musk said in an interview about his attitude after Harris confirmed the new terms.

Musk was confident that this was the end of the discussion. He held the controlling interest in X, after all. What he hadn’t counted on was Harris’s determination to push it through. 

The company’s current funding round depended on the confidence attached to the presence of Bill Harris, and Harris knew it. So Harris went to Musk and told him to sign off on the merger, or Harris would quit. Musk was furious but knew the damage Harris’s resignation would do at that time.

“You’re basically putting a gun to my head,” Musk later remembered telling Harris.

It worked. In March 2000, X and Confinity merged, with Harris as CEO of the new firm, which kept the X name.

Musk takes the reigns again

Harris’s reign as CEO over the newly-merged company was short-lived. Within five months, he was out. Levchin, Thiel, and Musk were all strong personalities, but they shared a belief in the power of paying the customer to sign up. When Harris tried to put an end to this tactic in an attempt to reduce the amount of money the company was hemorrhaging each month, Thiel vehemently disagreed. A rift formed between the two men.

Musk had never forgiven Harris for forcing the merger and spotted an opportunity to act. There were six members on the new company’s board: founders Musk, Thiel, and Levchin; and Moritz, John Malloy, and Tim Hurd, who represented major investors. Knowing Thiel would likely break his way in a vote, Musk enlisted Levchin’s help to stage a coup. They gathered signatures from the development team on a letter of mass resignation and presented it to the other board members at an emergency meeting. If Harris didn’t resign, Musk said, then both he and Levchin would walk, and so would most of the development team.

The ultimatum worked. Harris was forced to resign, and in May 2000 Musk took over again as CEO, with Levchin becoming CTO.

For Musk, this represented the summit of his power at X. He believed it presented an opportunity to refocus the company on his plan to create a global one-stop-shop for financial services, of which pay-by-email was just one small part. Yes, the company was still burning money, but he didn’t believe that he should have to compromise his vision. To save money and help attract new investors, the company needed to streamline its development processes, use more third-party services, and focus on converting PayPal users to X’s other services. 

The PayPal V2 disaster

Musk’s new-found alliance with Levchin barely lasted a month. Before the merger, Confinity and X had pursued approaches to code and infrastructure that were polar opposites. Musk set X up as a Microsoft house, buying and using off-the-shelf products and frameworks to ship quickly and keep his development team small. In contrast, Levchin believed that while it required a lot more people and effort, open-source software and Linux was the way to go. It allowed PayPal to scale and adapt better.

Over the objections of Levchin, Musk ordered that all new feature development on PayPal must stop. Instead, the developers should focus on creating “PayPal V2”: a complete rebuild, from the ground up, using Microsoft products and services.

This decision alienated Levchin and the ex-Confinity developers, who felt that it unnecessarily discarded the Confinity codebase for the sake of conforming to Musk’s preferences. The longer the project continued, the clearer it also became that Microsoft had over-promised about what its products could do at the time. Multiple major issues, including serious memory leaks, emerged during testing. V2 simply couldn’t operate at the level required to run PayPal. It was also taking far longer to rewrite the codebase than Musk had anticipated.

The deadline for implementing PayPal V2 and unfreezing product improvement and development came and went. In an effort to speed things up, Musk offered bonus bounties if key milestones were met. He should have taken it as a ominous sign that, despite their efforts, the development teams couldn’t meet them. Nonetheless, Musk doubled down on his plan over Levchin’s objections. He set a hard deadline at which point PayPal V2 would be rolled out, ready or not. He also decreed that no provision for rollback to the Linux version was to be made. Once live, it would stay live—whether it worked or not.

Laser-focused on the grand plan

In addition to alienating many on the development team, Musk had no intention of letting them focus on the pay-by-email market—or, indeed, of letting PayPal be PayPal. The goal was to create a global financial nexus, so PayPal needed to be subsumed and used to drive the uptake of X’s other financial services. That was the sole value he saw in the company.

To this end, Musk ordered that the paypal.com URL be redirected to x.com and a full rebrand of PayPal begin. The overhaul included the replacing of PayPal’s name with X-PayPal and its logos.

These decisions horrified many on the product and marketing teams, including head of payments Reid Hoffman. They had all become critically aware of what their eBay users—on whom their perceived path to profit almost entirely depended—wanted, and it wasn’t X.

PayPal strategy analyst Vivien Go—who had led a branding survey with users—recalled just how badly X tested whenever focus groups were run. "Again and again, the theme of 'Oh God, I wouldn't trust this website,” she told Jimmy Soni in an interview for his book Founders. “‘It's an adult website' and 'I just wouldn't trust that.’"

Musk ignored the focus group evidence and insisted that they push ahead with the changes.

Running out of runway

The issues with the development, product, and marketing teams were not enough to topple Musk from power on their own. Perhaps ironically, it was the other financial services he was so keen to push that played the final part in his downfall.

From its launch, Musk insisted on a culture of growth over verification for X’s financial services. While this ensured rapid adoption, it meant that minimal checks were being made on fake sign-ups and fraud. Once it became clear that an X account could be opened easily—granting access to debit cards, check books, and credit—fraud became a serious issue.

Ken Miller, who had been brought in to try and help with fraud issues, later recalled some of X’s major problems. “It’s like, ‘Oh cool. First Name: Mick. Middle initial: E. Last name: Mouse. Perfect. Oh, and they sent a transaction for $2,700. Perfect,’” he said. “And we gave them a line of credit.”

These issues weren’t entirely unknown to Confinity pre-merger, but the scale was greater than many had realized. Fraud was also increasing, not decreasing, as Musk rejected almost every effort to deal with it that would have harmed growth.

In the summer of 2000, X’s financial wizard and until then a Musk loyalist, Roelof Botha, discovered that X’s exposure—and likely losses—were even greater than previously thought. Under pressure, Musk had agreed to sunset a number of products in the X range that extended credit to high-risk accounts. The value of the interest on that credit was likely non-existent, as was the chance of ever receiving repayment. Yet Botha realized that both were still being counted as income on which X could rely in the coming months.

Botha took the numbers to Thiel, who was already concerned about the company’s finances. X was burning over $12 million a month and had less than $70 million left in the bank. Its ability to raise further funding was shrinking. A potentially disastrous PayPal V2 rollout, combined with this growing risk exposure, might make it impossible. Thiel decided it was time to act.

The Confinity coup

Just who was responsible for making the first move in what became known as the “Confinity coup” remains up for debate. In most accounts, it was Thiel. Certainly, once it was underway, it was Thiel who ensured it succeeded. Eric M. Jackson, however, who was working at X at that time, claims in his book The PayPal Wars that it was Levchin who made the first move, sounding out Sacks and others before going to Thiel for support.

That its origins are so unclear highlights how many of the key figures within the company Musk had managed to alienate in his brief time in charge. That so many were involved shows how concerned over the future of the company they had become.

Whatever its origins, in early September 2000, a plot to overthrow Musk began to coalesce. The core group of plotters included Thiel, Levchin, Sacks, and, critically, both Botha and Hoffman. In a dark twist, they realized that their best chance of success was to follow the same strategy that Musk himself had used against Harris. They quietly canvassed the ex-Confinity developers and staff thought to be loyal to Levchin, as well as any X staff known to feel that Musk’s grand plan was about to bring the company down. Those staffers were then asked to sign a letter of mass resignation.

The issue, the plotters knew, would be winning a vote against Musk on the board. Thiel and Levchin had votes, but so did Musk, so success was entirely dependent on their ability to convince the others to vote with Thiel and Levchin, not Musk. John Malloy, a Confinity backer pre-merger, was known to be sympathetic, and he was warned about the plot. While he didn’t offer his explicit support, he didn’t alert Musk either, leading the plotters to believe he would vote their way.

This made Mike Moritz the critical board member. If Moritz sided with Musk, Hurd would, too, and that might convince Malloy to vote that way as well. Moritz had to be convinced to vote their way, and he had to be convinced while Musk, with whom Moritz had a positive relationship, wasn’t around to spin the problems the company was facing. Ideally Musk needed to be kept away from the other board members as well.

The plotters realized there was only one day on which their coup would work: September 19. On that day, Musk was due to embark on his delayed honeymoon with his new wife, Justine Wilson. They would be flying to Sydney, Australia to watch the Olympics. In the days before accessible in-air wi-fi, calls, and messaging, the plotters would have a brief window to act in which Musk would not only be unable to find out what was happening, but also to intervene. It would also grant them precious hours to work the other board members without Musk interfering.

The fall of Musk

On September 19, 2000, Elon and Justine boarded a flight to Sydney. Once the plane was in the air, the coup began. Thiel and the other plotters went to Sequoia’s offices and cornered Moritz, presenting him with the issues and securing his reluctant support. Thiel then called Hurd and requested an emergency board meeting over a conference call.

In that meeting, Levchin and Thiel laid out, in detail, all of the problems with PayPal V2, the brand changes, and the financial risks facing the firm. For Moritz, Malloy, and Hurd, arguably much of this was new information. They were not only horrified at the emerging state of the company, but also that Musk had ordered many of these decisions—such as the PayPal V2 code rewrite—without clearing it with the board. With no Musk on the call to offer a defense, the board was left to listen to the plotters’ take on the situation. Before the call ended, they were presented with the plotters’ trump card—the letter of mass resignation. 

Meanwhile in Sydney, Musk was alerted to the ongoing coup by a loyalist. According to Jackson, they were lurking outside the conference room in which the plotters had first gathered and sent Musk an email. Now aware of what was happening back home, Musk spoke to the board by phone. None of these issues, he argued, were important or mattered. Nor, at the end of the day, did PayPal. X had always been about more than just pay-by-email, he insisted. This was all necessary to achieve his grand plan and create a global financial nexus. Musk insisted that if the board held its nerve, they could achieve so much more than simply dominating the pay-by-email market.

Musk was notoriously charismatic when selling investors on his dreams, but Thiel picked the timing of the coup well. Perhaps if his appeals had been in person, Musk could have swayed Moritz and the others back to his side. The full board conducted more conference calls, with Thiel and Levchin nervously reporting progress to the other plotters by relay in the room next door. Musk himself likely soon realized that the only way to save himself at this point was to get to the others, in person, before a final decision was made. He quickly booked and boarded a flight back to the U.S.

It was too late. By the time Musk landed, the decision had already been made. He would be forced to resign, to be replaced by Thiel as interim (and soon permanent) CEO. Nor would there be a CTO role for him to fall back on this time—Levchin retained that. Musk was reduced to a directorship and a seat on the board.

For Musk, robbed of X as both a company and a dream, that was never going to be enough. The decision all but confirmed his departure from X soon thereafter.

The deed is done

“Sneaky backstabbing bastards” is how Musk described the plotters in hindsight to Soni, albeit with more than a hint of sanguine humor. At the time, to Musk’s credit, he recognized that going down with a fight would only bring the company (and his investment) down with him. Thiel pivoted the company to focus entirely on PayPal, discontinue X’s financial services, and address fraud. X—or rather, PayPal, as the company was soon renamed—became a huge success. Its sale, for $1.5 billion to eBay in 2002, granted Musk as a shareholder a far larger payday than he earned for Zip2, jump-starting many of his other ventures. Musk and Thiel would work together again, with Thiel as one of SpaceX’s initial backers, and Musk has always acknowledged that, financially, PayPal’s pivot was a win.

Noticeably absent in any of the interviews in which Musk talks about his departure from X, however, is any acceptance that his grand plan wouldn’t have worked. Lurking at the end of his sentences is always a verbal ellipsis: the suggestion that if the plotters had trusted him, the rewards would have been even greater, and they would have built a financial nexus that would now dominate the digital world.

A future for Twitter

Musk’s fall from power at X is what makes his pivot of Twitter so interesting. That this is a pivot, rather than the grand plan for Twitter all along, is the more likely reality. Musk’s various attempts to make Twitter profitable through changes that have aggravated users and advertisers, and resulted in thousands of sweeping job cuts, are not what you would do if your vision from the beginning is to build a one-stop-shop for anything, let alone finance. If that were the goal, then purchasing a company like SoFi rather than Twitter would have been a smarter starting point. 

All-in-one service platforms require something to persuade people to stick because they need to compete with specialist platforms offering more tailored services. WeChat achieved its dominance in part because the Chinese state desired it to be so. Musk doesn’t have that luxury. Whatever he develops will have to rely on trust to create stickiness, and on that front Musk’s own actions have left Twitter on the verge of the point of no return—potentially breaching the trust thermocline—for some time, if it hasn’t already.

Musk’s actions at Twitter are, at least in part, an attempt to rewrite the way the X and Confinity merger ended. Musk has spotted an opportunity to finally conquer the “what if” that has taunted him. This time he likely feels that there are no pesky investors that can stop him, and he is probably correct. 

His success this time will depend on two things: whether there is any appeal for an all-encompassing app in the West and, if so, whether there are enough people prepared to accept Musk as the force behind it, given his polarizing effect on public opinion and Twitter as a platform.

What is clear is that Musk has begun the hunt for his great white whale once again. Whether it will succeed—or turn into a great white fail whale—remains to be seen.

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Gareth Edwards is a digital strategist, writer, and historian. He has worked for startups and corporations in both the UK and U.S. Follow him on X, Mastodon, and BlueSky.

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