The Importance of Technology in Financial Services

On this episode of Lochhead on Marketing, we are presenting some Pirates Perspective from our newsletter, Category Pirates. Eddie Yoon, Christopher Lochhead and Katrina Kirsch of Category Pirates discuss Elon Musk’s recent move to rebrand Twitter to X. They also speculate why Elon made such a move, and what he could have done from a category design perspective. Welcome to Lochhead on Marketing. The number one charting marketing podcast for marketers, category designers, and entrepreneurs with a different mind. Twitter to X Elon Musk's choice to rename Twitter as X has left people puzzled, questioning why he would give up a well-known brand and introduce a new one. Katrina follows up that the others think the move might be aimed at entering a different category, possibly related to financing. She wonders whether it would have been wiser to create a new company instead of rebranding Twitter. Eddie Yoon discusses the debate surrounding the cost of rebranding and the value of legacy brand identity. He highlights that classic economic theory suggests ignoring sunk costs, which are expenses from the past, and instead focusing on future opportunities. Eddie mentions that while some argue against rebranding due to the value of Twitter's legacy brand, most consumers prioritize what a brand can offer them in the future rather than its past reputation. He suggests that rebranding can make sense when a company wants to enter new categories and emphasizes the importance of looking towards future opportunities rather than dwelling on the past. In Musk’s case, he’s not banking on the legacy of the brand itself, but the established userbase that Twitter has, who have a high potential of also buying in to what new category Twitter, now X, might become. Elon Musk’s Mistake with the rebrand While Christopher Lochhead agrees with Eddie Yoon’s points, he also believes that Elon Musk made a mistake by rebranding Twitter without clearly unveiling his vision for the new category of service he wants to create. He argues that a rebrand should be part of a strategic launch of a new category and not just a standalone action. The value of a brand lies in its perceived leadership in a relevant category, and in this case, the microblogging category may not be as impactful as before. Although Elon Musk's approach might not align with the ideal category design strategy, his reputation and influence will likely still garner attention when he eventually presents his big vision for the new category. But it definitely will lose some steam because the rebrand has become open to interpretation, rather than being focused on the intended category creation. X as a financial category The three further discuss the possibility of X creating a new currency or incorporating cryptocurrencies into its platform. Eddie mentions that X is already experiencing a shift in money flow, with revenue coming from both advertisers and users. They also speculate that Elon Musk might have plans to introduce financial services or a new token (X token) on Twitter/X, incentivizing creators and potentially offering various payment options, including cryptocurrency. They compare this potential move to American Airlines' frequent flyer program, which essentially created a currency in the form of loyalty points. While they acknowledge they don't have insider information, they highlight that Musk's background with PayPal and his desire to make X a vital part of everyone's life might lead to interesting developments. To hear more about the discussion on what Elon plans to do with X, download and listen to this episode. If you want to join in the discussion, subscribe to Category Pirates and find more Pirates Perspective buried around the beach. Don’t forget to grab a copy (or gift!) of one of our best-selling books:  Snow Leopard: How Legendary Writers Create A Category Of One  The Category Design Toolkit: Beyond Marketing: 15 Frameworks For Creating & Dominating Your Niche