Dick Costolo ‘chose’ to step down as Twitter CEO like your childhood pet ‘chose’ to go to that magical farm upstate where all the aging animals go to live for ever and ever.
He ‘chose’ to step down as Twitter CEO in the same way a mobster chooses to slip on a pair of cement shoes and dive into the Hudson.
“This event was off the charts”
Gary Vaynerchuk was so impressed with TNW Conference 2016 he paused mid-talk to applaud us.
There are few things as unedifying as a corporate statement in the aftermath of a boardroom coup. And while Twitter will deny that there was anything but a magnanimous discussion that led to Jack Dorsey returning as CEO, it’s bunk.
Costolo vehemently denied that he was at all worried about his job in an interview at the Code conference two weeks ago. But the portents couldn’t have been worse if he’d woken up with a horse’s head in his bed and found an albatross tied to his car aerial.
Twitter’s growth numbers have been consistently disappointing. The markets have been murmuring about them quarter after quarter. Its product development has been sluggish and uninspired.
It had revenue of $1.4 billion in 2014 and still lost $578 million. When it announced results in April that fell below expectations, the stock tumbled like a toddler on a bad day, dropping nearly 25 percent.
Dorsey claimed unconvincingly on today’s investor call that the move had nothing to do with results.
We’re still not sure what Twitter’s for
The reason today’s announcement that direct messages with soon allow more than 140 characters sent such a ripple of excitement across Twitter is that there really haven’t been that many great changes to the service recently.
Twitter feels stagnant in many ways. The acquisition of Periscope felt exciting at first and it certainly has potential, but as with Vine before it, Twitter hasn’t really articulated a vision for pulling those various parts of its business together.
Chris Sacca, a major Twitter investor, wrote a lengthy post following the company’s last earnings call which outlined numerous ways it could improve the situation. The spectre of Costolo’s uninspiring performance lingered in the background.
Sacca’s prescription that Twitter needs to become more fun, easier to use and appealing to even those who don’t want to tweet or use it logged in is spot on. And that’s why Twitter co-founder Dorsey has been asked to return. He’s seen as a guy with an instinctual understanding of product design.
Of course, Dorsey has been Twitter CEO before stepping down (perhaps not entirely voluntarily) to work on other things – notably Square – before returning as Chairman when Costolo replaced Ev Williams as CEO in 2011.
Back to Jack
The pattern of being a company’s first CEO, then returning as its Chairman, and finally being installed as interim CEO or iCEO to right the ship in a time of crisis is the narrative spine of the Steve Jobs story. That’s something serious Jobs fan Dorsey will no doubt enjoy, and a comparison that will flatter him.
While Twitter’s release says Dorsey will only hold the role while the company searches for a permanent replacement for Costolo, I would not be surprised if that search ended up turning back to Jack.
He just said on the investor call that his “main priority is to ensure a smooth transition” but when he says he’s “excited to be working on products with the Twitter team,” I suspect that might be very addictive.
Whatever happens, Twitter is a company on the precipice, needing to justify its existence as a standalone service or face the real threat of being swallowed in an acquisition.
Costolo said today that the board “sees no reason why Twitter shouldn’t continue as an independent company” but then, he saw no reason to leave his job two weeks ago.
Image credit: Gerald R Ford School of Public Policy