Co-founder Biz Stone is leaving Twitter. He still plans "to work with the company for many years to come," according to a post on his blog. More of Stone's time will now go to relaunching The Obvious Corporation, which gave birth to Twitter, with fellow co-founders Evan Williams and Jason Goldman.
So what is going on at the company? Just a continuation of management changes that go back to when Williams pushed Jack Dorsey out as CEO, even though Dorsey actually invented the service. And although Stone appears to be leaving voluntarily, it's likely that he and his co-founders got nudged by major investors as Twitter tries to become a "real" company that makes revenue that justifies the levels of investment it has received.
Stone was the last of the trio still at the company, as Williams announced his departure in March and Goldman used an interview during the LeWeb conference last December to step down. In high tech, it's unusual for the entrepreneurs who started a company to leave of their own volition, particularly before a start-up either gets acquired or completes an IPO. But it can be tough to do either without revenue.
Still searching for that business model
For a long time, Twitter was a service without a business model. In 2009, Stone insisted that Twitter wouldn't use advertising as a way to make money. By the fall of 2010, advertising was suddenly a given, as he discussed different potential models.
And for a good reason. With estimated total venture investment of $360 million, Twitter needs to show promise. Rumors have it that the company made $150 million in revenue last year, but as the company doesn't publish its financials, you ought to take that estimate with a bucket of salt.
Maybe Stone, Williams, and Goldman simply had too much experience at Blogger, which eventually sold to Google without having ramped up that big a revenue stream. The money came from premium accounts, not advertising. So maybe they believed that a similar unorthodox approach could again win.
Investors let them build the user base to a respectable number, but then would have had to consider the all-important exit strategy. These days, that means showing honking big financial growth, which requires serious revenue.
Not that $150 million is anything to sneeze at. But if the founders objected to the strategies and practices that made it possible, the investors would have limited patience for their continued involvement. So now Stone, William, and Goldman will continue their interest in "building systems that help people work together to improve their lives and the world." And, who knows, maybe make a buck or two in the process.