Let’s just say he wasn’t the only 12-year-old who hated prep school and programmed video games on the Vic-20 or the Commodore 64 back in the 1980s.
Our paths diverged early. From a pure cost-benefit or financial standpoint, he made better choices. As Musk made his first millions and moved on to PayPal and Tesla and SpaceX, I went to law school and spent a few years practicing law.
However, I learned something from that experience that made clear why Musk’s deal with Twitter was doomed from the start.
Let me illustrate with two very short stories:
The first story is about something that happened to me when I had to travel to a very remote area one night while working on a legal case, and found myself stranded there with no way home. My solution was to go on Craigslist, find the cheapest used car in the area, and buy it immediately for a few hundred dollars in cash.
- Key detail: It took an hour to fill out and sign 15 pages of sale and registration documents, then just 20 minutes to drive home.
The second story is about what happened earlier this year, when Musk revealed belatedly that he had acquired 9 percent of Twitter’s stock, which led to an agreement for him to get a seat on the Twitter board.
- Key detail: These types of “stand-still agreements” often run dozens or even hundreds of pages. But as I reported back in April, the agreement Musk and Twitter signed ran only three paragraphs. Just 241 words.
By way of comparison, this article is about 800 words. It tells you something if a deal to buy a banged up car for $400 runs so much longer than a deal to become a board member at one of the most influential social media companies runs less than one.
Look, here’s the brutal truth that nobody wants to admit. It has two parts:
- Great deals get started when innovative people get excited about what can happen.
- Great get done after detail-oriented people get real about what can go wrong.
Part 1 is brilliant. It’s fun. But Part 2 is also necessary: all the contemplation and negotiation, and the tedium (sometimes) of putting it all in writing–pages upon pages of agreements.
It leads to people making jokes about how, the first thing we should do is kill all the lawyers. But if you want to get things done in this world, you need both kinds of people: the innovators to come up with the ideas, and the detail-oriented people to take care of the details.
The deal Musk signed to buy Twitter isn’t crazy-short like the abated deal that would have put him on Twitter’s board in exchange for not tying to buy Twitter. It runs 43,000 words and you can read it here, if you’re interested.
But, now that it’s fallen apart and devolved into litigation, the big lesson according to some of the most entertaining and interesting commentary I’ve seen is that “get it done at any cost” seems to have taken primacy over “get it done carefully and right.”
Part 1 won out big time over Part 2, in other words.
Musk was represented in the Twitter deal by Skadden, Arps. This is a sophisticated firm that has been a leader in mergers and acquisitions since long before Musk and I were both messing around on the Vic-20 and hating prep school.
And yet, as Joe Patrice wrote for the legal site, Above the Law:
What’s Skadden supposed to do? As long as everything is legal and the firm provides Musk with complete information about what’s going on, Skadden kind of has to roll with it.
I refuse to believe Skadden wanted to waive every possible protection to create an absolute disaster of a deal for Musk, but based on the narrative of the complaint, he seems to have kept telling them to go ahead.
I have no idea what’s going to happen with the case. Twitter’s complaint was fun to read, but then so was Musk’s response (also .pdf), filed Friday. I suppose I can guess like everyone else that there will be some kind of settlement, but that’s like predicting it will probably rain sometime in the next 30 days.
I do know this, however: At this point, most people seem either to think Musk is a generational genius or a fortunate charlatan. There’s not much middle ground.
But as I write in my free e-book, Elon Musk Has Very Big Plans (which needs an update, since it predates the Twitter deal, but it’s still pretty good) you don’t have to feel one way or another about Musk to learn from him.
This is one of those moments. Sometimes the deal is in the details. And sometimes, the most brutal truths in life are the ones that are most important to face.