If you can pay $8 for Starbucks, surely you can pay $8 for Twitter Blue. That’s reportedly what went through X CEO Elon Musk’s head right before he made the decision and tweeted the price into law.
Musk’s market research strategy was revealed in an adapted excerpt from Character Limit: How Elon Musk Destroyed Twitter, a new book from New York Times reporters Kate Conger and Ryan Mac about how the billionaire transformed the social media company. According to the book, Musk made the decision on pricing based on opinions from a close circle of friends and advisors.
A debate on cost. Musk reportedly relied on the advice of venture capitalist David Sacks and his friend Jason Calacanis when setting the price for Twitter Blue, which was previously priced at $4.99. Sacks argued to Musk that the service should cost $20 a month, as anything else felt “cheap” to him.
“Chanel could make a fortune selling a $99 bag, but it would be a one-time move,” Sacks said, according to the Times. “A ‘promotional offer’ may not be the position we want. A luxury brand can always move down-market, but it’s very hard to move up-market once the brand is shot.”
Musk also asked for the opinion of Walter Isaacson, his biographer, on the matter. “You need a really low price point, because this is something that everyone is going to sign up for,” the author said.
One final objection. By that point, Musk had reportedly settled on charging $100 for Twitter Blue. However, that all changed when Jehn Balajadia, his assistant, chimed in during a meeting and said she thought that price was too high
“There’s a lot of people who can’t even buy gas right now,” Balajadia said. As a reminder, at that point it wasn’t too clear what Twitter Blue would offer besides a blue checkmark, which were previously given for free. Balajadia’s objection made Musk pause.
“You know, like, what do people pay for Starbucks?” Musk is said to have asked. “Like $8?”
And with that, the billionaire’s mind was set.
“Twitter’s current lords & peasants system for who has or doesn’t have a blue checkmark is bullshit,” Musk tweeted on Nov. 1, 2022. “Power to the people! Blue for $8/month.”
The price that made no difference. While the price of Twitter Blue, now called X Premium, might seem like a small detail in the tale of Musk’s takeover, Musk believed he could convince millions of the site’s users to pay for the subscription service. As such, it’s notable that such an important part of the X CEO’s plan to revitalize the site was decided on the fly.
And two years after Musk’s takeover, it’s clear that convincing people to buy subscriptions to X was a lot harder than he thought it was. X doesn’t report its number of paid users, but an estimate from last Novemberput the number of X Premium subscribers at between 950,000 to 1.2 million—less than 1% of the platform’s users.
Image | Daniel Oberhaus (modified) and Xataka On
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