Twitter Gets a New CEO so It Can Run Like a Real Company
HP (HPQ) isn't the only company with a new CEO. Twitter replaced co-founder Ev Williams with Dick Costolo, the COO it brought in last year. It's not unusual for an entrepreneur to move out of the way as a company gains size and importance. However, Twitter has had a number of shifts at the top and some big business challenges. This changeover is more than routine. It's an attempt by the money people behind the microblogging company to hopefully get some of the value they told themselves that Twitter held.
Williams will focus on "product strategy." It was back in 2008 that he took over as CEO from co-founder Jack Dorsey, who became chairman of the board. As the company official line said then:
We're entering a new phase now and there are new kinds of challenges ahead. Healthy companies acknowledge the need for change even during the best of times. As Twitter grows both internally and externally, we took a good look at our path forward and saw the need for a focused approach from a single leader.While the board of directors and the company have nothing but praise for where Jack has taken us, we also agree that the best way forward is for Jack to step into the role Chairman, and for me to become CEO. Jack will remain on the board and be closely consulted for all strategic decisions, while I take on day-to-day operations with the support of Biz, Jason, Greg, and the rest of this impressive Twitter team.Now the official word is that, oddly enough, Twitter has grown from 20 employees when Williams took over as CEO to more than 300 now:
The challenges of growing an organization so quickly are numerous. Growing big is not success, in itself. Success to us means meeting our potential as a profitable company that can retain its culture and user focus while having a positive impact on the world. This is no small task. I frequently reflect on the type of focus that is required from everyone at Twitter to get us there.This led to a realization as we launched the new Twitter. I am most satisfied while pushing product direction. Building things is my passion, and I've never been more excited or optimistic about what we have to build.The phrase that jumps out is "profitable company." You could probably substitute "company with repeatable revenue equivalent to its buzz and user base" without a blink. As a business, it's Twitter's main problem: making money off a service that the vast majority of users aren't keen to pay for, and where presenting normal advertising is often a challenge.
As Williams wrote, "When I insisted on bringing Dick into the COO role a year ago, I got a lot of questions from my board." I don't believe it for a second, unless the questions why Williams didn't get someone with more traditional management experience than being Feedburner's (GOOG) co-founder and a performer in improv theater groups. VC firms have a lot of money riding on Twitter's success. Frankly, that's their fault, given how often a good story is the Silicon Valley equivalent of a good plan. In this case, however, the VCs have so much skin in the game, they might as well have thrown an entire torso. Things haven't been so happy on the venture returns front, and they probably need this one to pay off. That means Costolo doesn't have a whole lot of time to produce before the VCs start thinking, "You know, maybe a 'world class CEO' would be our silver bullet." When the money mavens think in terms of slaying werewolves, things are in a pretty bad business way.
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