A long climb back, and a mountainous task ahead
While Twitter has grown considerably since Jack Dorsey left in 2008, the company is in a new state of disarray
Jack Dorsey, the new chief of Twitter. Photograph: Bryan Thomas/The New York Times
At 7:45am on October 15th, 2008, Jack Dorsey was called to a meeting at the Clift Hotel in San Francisco. He arrived wearing a black beanie hat and a matching zip-up sweater. His nerves were frayed as he sat down for breakfast with two of Twitter’s board members.
It was just before the 2008 US presidential election, and Dorsey was the chief executive of Twitter, then a fledgling startup with a couple of dozen employees that was in disarray, replete with hourly server crashes and mismanaged employees.
The board was not happy with his leadership. Sitting with an untouched bowl of yoghurt and granola that morning, Dorsey was fired from the social network he had helped invent in 2006.
Since then, Dorsey has been politicking and striving to take back the helm of Twitter. Last Monday, he finally achieved that goal, returning as permanent chief executive of the San Francisco-based company almost seven years after he was ousted from the position.
That may prove to be the easy part.
While Twitter has gone public and grown considerably since Dorsey left in 2008 – it now has 4,100 employees and offices in more than 35 countries – the company finds itself, nearing the 2016 presidential election, in a new state of disarray.
The board is fragmented, made up of former chiefs of Twitter – one of whom announced his departure on Monday – and others who rarely seem to use the service they govern. For years, the company has had a revolving door for executives, some who left voluntarily, while many were pushed out in power struggles. Employee morale is precarious.
Twitter, as a product, has also barely changed since Dorsey left and returned, which has contributed to the company’s major challenges. Twitter’s 316 million active users pale in comparison to Facebook’s 1.5 billion, and even Instagram’s 400 million, and user growth has flatlined. The company’s value has plunged from almost $40 billion (€35.5 billion) shortly after its initial public offering in November 2013 to a low of $16.5 billion this August. It remains at less than $20 billion now.
Now all of these problems are Dorsey’s to fix. “User growth is ultimately not going to be the biggest challenge; engaged users is what the company really needs,” said Brian Blau, a research director at Gartner who covers social media. “And ultimately they have to be engaged users that want to spend money with their advertisers.”
If Dorsey pulls off a turnaround, he may also be able to repair his own image, which has taken some hits over the years. He was once criticised for emulating Steve Jobs, who was ejected from Apple, the company Jobs co-founded. And Dorsey came under fire for taking sole credit for the creation of Twitter, even though several people contributed to its origin.
Advantages Dorsey has some advantages in taking over Twitter now, even with the company’s problems. He has grown to become an expert at boardroom politics, for example – he was executive chairman of both Twitter and Square until Monday’s announcement, when he stepped down from that role at Twitter, and was able to convince both boards to let him run both companies. He is also a board member at Disney. He has shown he can be an effective chief executive, taking Square to a valuation of several billion dollars and the company to the verge of a public offering. And with all of these jobs – he is also an adviser to several startups – he is now a multibillionaire.
Twitter also has colossal strengths. The service has become the zeitgeist of a million moments, where the Pope, US presidential candidates, celebrities, the rich, the poor and the disadvantaged all gather in the same room to talk about live events, and to make history.
A former adviser to Twitter, who is close to the board, recently told me that in many respects, Dorsey’s becoming chief executive will be the true test of whether the social network can become more mainstream (as its board hopes) and more profitable (as its investors expect).
That has never been true for any of Twitter’s previous chief executives. Last decade when he led Twitter, Dorsey found himself constantly at odds with Evan Williams, another co-founder, who owned the majority of Twitter.
A freer hand has been tough to gain for many of Twitter’s previous chief executives. In late 2012, when I profiled Dick Costolo, then chief of Twitter, I heard repeated stories about the struggles Costolo endured trying to run the company in Dorsey’s shadow.
In one story, Costolo took a taxi in San Francisco and asked the driver to take him to Twitter’s offices on Market Street. The driver asked Costolo what he did for a living and Costolo replied that he was the chief executive of Twitter.
“No way!” the driver said as he turned around excitedly. “You’re Jack Dorsey?”
After seven years, that is no longer a question. What does remain unanswered is whether Dorsey will be able to save the company he spent the past decade fighting to control. – (2015 New York Times service)