Jack Dorsey: An Eye for an Eye

In 2007, Jack Dorsey became Twitter’s first CEO and one of the four co-founders. He was beaming with pride and excitement. It marked the first step in leading a promising business venture. Soon enough, it was attracting many investors. “Today, we’re excited to announce an important moment for Twitter,” he wrote on his Twitter account. “We’ve raised funding from our friends in New York City at Union Square Ventures.” However, Dorsey’s time to celebrate the triumph was far from near.

Fred Wilson, a partner at Union Square Ventures, invested five million dollars on Twitter. In a sepa-rate blog post, Wilson explained why he invested in Twitter, albeit not yet a profitable organisation. It was a social media platform growing and competing with Facebook, but it generated no income. “The question everyone asks is ‘What is the business model?’ To be completely and totally honest, we don’t yet know,” Wilson announced. “The capital we are investing will go to making Twitter a better, more reliable and robust service. That’s what the focus needs to be right now.” He was right. There was no time to worry about business models or revenue while Twitter was in its state. The truth was that Twitter had a deeper problem, except that Wilson and anyone outside the organisa-tion did not know how deep it was.

Since Twitter’s software was unscalable and built over two weeks, the large influx of people using Twitter made it prone to fall apart. For example, some posts were not showing up in the timelines, and the website was often down for hours. Twitter was built as a small rowboat designed to carry a few people across a pond; now, the same rowboat was being used to carry the same number of passengers as a cruise ship across an ocean. As a result, it was sinking.

Dorsey was not a veteran executive, so accepting the role of CEO could have been an unwise decision at that time. Even so, Twitter was a beast that even the experienced ones would have had a challenge to tame. Dorsey genuinely wanted to learn how to lead and run Twitter and how to be a good CEO, but he found himself at a loss for what needed to be done. He would not admit it. He would pretend that he knew exactly what he was doing and that his actions were all part of a big-ger, more persistent plan. Yet, Dorsey was so far out of his league that he was often speechless. Whenever things got frustrating, rather than confront the problem with his employees, Dorsey would go outside the premises and walk around.

Some employees believed that Twitter’s problems were not Dorsey’s doing or undoing and that no one could keep Twitter afloat in these tumultuous seas, especially with the influx of new people joining each day. Co-founder Evan Williams did not care whose fault it was. For him, the CEO was responsible. He wanted to stop the website’s outages and settle the organisation's overall chaos. His financial investment was at stake, and he risked ruining the reputation he gained from his first business venture, Blogger, by becoming known as a one-time success or pure luck. Williams was growing impatient, and so were some other Twitter investors.

Dorsey’s social life had also grown exponentially, just as Twitter had. People started to invite him to many parties and drink nights out. He was also feeling his first glimpse of fame as a Z-list celebrity in San Francisco, being written about in the media in Twitter-related articles and blog posts. To make matters worse, although Dorsey worked hard and came into the office well before anyone else arrived, he often left early to spend time on personal activities. Among the activities, he had been taking classes at a local fashion school to learn how to sew. He loved sewing and enthusiastically set out to learn how to make an A-line skirt for his first-class assignment.

During one of their meetings, Williams gave Dorsey an ultimatum. “You can either be a dressmaker or the CEO of Twitter,” he argued. “But you can’t be both.” Their relationship was already deteriorat-ing, but this meeting was the last straw. There was no cursing between the two that day, no screaming or fights, but Dorsey was seething with each critique slung across the table. Twitter turned into an internal tug-of-war gone awry: the strongest wins. Dorsey tried to solve the crisis by exercising his power as CEO, and Williams showed his approach by taking more control of the or-ganisation’s business operations.

Then, when Twitter took over Summize as part of an acquisition, Dorsey asked its lead software en-gineer, Greg Pass, to take over Twitter’s technical team, and hell broke loose. It was the cherry on the cake. Dorsey announced to Twitter’s board that Pass had been appointed director of opera-tions. When Williams received the news, he was livid. It was the “enough is enough” moment, and so were Fred Wilson and Bijan Sabet, two of Twitter’s investors and board members. It was absurd that an outsider like Pass would lead Twitter.

Wilson, Bijan, and Williams decided that Dorsey be removed as Twitter’s CEO. They met with some employees who were pivotal to Twitter to see how they would react to their decision. The plan was to fire or demote Dorsey and appoint Williams as CEO. However, co-founder Biz Stone protected Dorsey by threatening to resign if they removed him. The board gave Dorsey a second chance but with an ultimatum: “You’ve got three months,” they told him. “Three months to fix things and take control of the company.”

Of course, they knew Dorsey could not fix anything in three months or three years. He was incapa-ble of running the organisation. It was like watching somebody trying to build sandcastles underwa-ter. Dorsey’s attempts indeed proved futile. In less than the three-month deadline, the board decid-ed he would be demoted to the chairperson and that Williams would take his place as Twitter’s CEO. Dorsey did not have any stake in the organisation. He was the CEO but powerless regarding the board’s decision-making. In contrast, Williams was a significant investor and could exercise his ownership to oust any employee from Twitter’s business operation.

When Evan Williams took Jack Dorsey’s CEO position in 2009, the former spent his time restoring Twitter, but the intensity of the business politics did not stop there. Dorsey was placed as chairper-son, but the role was rather decorative than operative. Thus, he set off in search of what to do next, but he was sure about one thing: he was determined not to follow in the footsteps of Noah Glass, another co-founder ousted by Williams in 2006, who accepted his defeat and disappeared quietly. Dorsey was obsessing over every news article, blog post, and status update about Twitter. Each time he was not acknowledged as a creator of Twitter, his blood boiled. Each time a celebrity tweeted that they were visiting Twitter’s offices and he was not there to meet them, his wounds deepened.

Then, Dorsey met with an old friend, Jim McKelvey, and they started to discuss ideas for a new busi-ness they could create together. Their meetup eventually led to a new business venture, Square. However, Dorsey appeared to have another side project: revenge. Unlike Glass, who did his best to forget and forgive the betrayal by his friends, especially Williams, Dorsey ran in the opposite direc-tion, unable to flush the resentment he felt toward Williams and the board that ousted him.

Meanwhile, a newcomer opened a door for Dorsey to begin his revenge. Peter Fenton was Twitter’s newest board member and latest investor. He was an outsider who read many articles about its promising future but soon realised something was seriously amiss during a board meeting. Fenton believed Dorsey had a significant role in Twitter since Williams often invited him to special events. Yet, after the board meeting concluded, he felt a sickening tension between them. Another board member and investor, Bijan Sabet, then told him what happened in the past. Fenton got intrigued and asked Dorsey to meet for dinner and learn more about the incident.

Dorsey took this opportunity to tell his side of the story: Williams wanted to take his position as CEO, and Twitter had been Dorsey’s idea. Fenton was incensed. His mouth was agape. Impassioned, he slammed his hand on the table and made Dorsey a promise he wanted to keep. “I will not rest until you’re back in that company,” Fenton said as he spiralled into a passionate tirade. Dorsey felt relief because he finally got someone with real power to his side. “You are the founder of this company,” Fenton declared, his hand trumpeting the table. “I will not rest until you’re back at Twitter!”

Whenever journalists interviewed him, Dorsey explained that he was Twitter’s creator, and he never credited Williams. Perhaps he knew that if you repeat a lie often enough, it becomes the truth. Or maybe he wanted to provoke Williams or entice him into a trap. It is hard to know, but months later, he reached a point where Williams got irritated enough to send Twitter’s general counsel, Amac, to inform Dorsey that his Twitter email address would be removed, and rightly so, they did. However, the attempt to mute Dorsey was about to backfire because he started hatching a manoeuvre, which ended up getting back more than his email address. “They took my fucking e-mail address away!” Dorsey complained to Fenton, then his only ally on the board. Fenton was furious. “We’re going to fix this, Jack,” Fenton told him.

A few way back, Williams appointed an old friend, Dick Costolo, as Twitter’s Chief Operating Office. The board advised him to avoid hiring friends, but Williams reasoned that friends would never betray him. Although this is conventional wisdom, it does not apply when you are being undermined. With Dorsey’s interview stunt to make himself a larger-than-life figure on Twitter and William’s busyness, something was brewing: Williams focused on Twitter’s redesign and ignored most chores of a CEO, whereas Dorsey was offering friendly advice to those neglected by Williams.

It all started late in the afternoon in mid-2010 when the vice president of engineering, Mike Abbott, asked Dorsey for advice. He did not know that Dorsey’s title as Chairperson of Twitter was just a veneer. He believed Dorsey was influential because that was how he portrayed himself to the media. It was the moment Dorsey had been waiting for. He understood that he could whisper in one person’s ear, and those murmurs would turn into shouts elsewhere. “I consider the vice president to be equivalent to the CEO, and if you’ve spoken to Ev and it’s not going anywhere, you need to go to the board,” Dorsey told Abbott. “Talk to Fenton, talk to Bijan, to Fred – whoever – about your concerns. Talk to the other senior execs.”

Abbott started raising his concern about Williams and voicing his fears about Twitter’s possible demise to the board members. He also encouraged other vice presidents to meet with Dorsey too. The whispers eventually made it to Ali Rowghani, who had been hired as the chief financial officer and was frustrated by William’s slow decision-making. And then Costolo followed, too. Fenton had also set Williams with a mentor, Bill Campbell, who ended up undermining and serving as Fenton’s spy more than helping him. Campbell would constantly update Fenton with feedback, thus helping Dorsey to stay two steps in advance.

Indeed, it was not that Twitter was precisely falling apart. Williams was running an organisation that even the most experienced CEOs would have struggled to manage. These problems, when shown to the board under Dorsey’s magnifying glass, would make them alarming. Like a snowball rolling down a mountaintop, accumulating every speck of dirt it encountered and growing darker and more alarming with each meeting and call to the board, the case against Williams gathered an unstoppable momentum.

It had been a few months since Dorsey convinced the board through some critical employees that it was William’s turn to be removed as Twitter’s CEO. He had no problem convincing Fenton since he was on his side from the beginning, yet after Abbott, Ali, and other senior employees complained constantly to the board, the tide had turned. Ensuring the right things landed in people’s ears, Dorsey spent the summer moving people around like pawns in a chess game against his enemy, Williams. The problem for Williams was that he had no idea what was going on. He had no clue about Dorsey’s private meetings.

It was true that Williams had his flaws. He was slow in making decisions and did not prioritise a strategy to generate revenue. However, the board’s fear was heightened when Dorsey indirectly whispered in their ears the possibility of losing hundreds of millions of dollars with Williams at the helm. Of course, Williams did not have the chance to assuage anyone’s fears. He was clueless. As far as he knew, everything was just fine at Twitter. He held weekly meetings with his mentor, Campbell, and received positive feedback. So when Dorsey gave Williams the final blow, it was too late to save himself.

During one meeting at Dorsey’s apartment, the group made a pact on three things: first, At Dorsey’ loft during the first of the private meetings, the group that met had made a pact on three things: first, that they would agree to stand together against Williams and his loyal employee Jason Goldman no matter what happened; second, they would remove Williams as CEO; and third, they would ask Costolo to become the interim CEO until they found a suitable replacement. Finally, they would bring Dorsey back to the company’s helm. After the plot was agreed upon, there was another meeting, where they told Costolo part of the plan. He was picked, they explained, because the employees trusted him, and he could help as a transitional CEO until they found a permanent replacement. They could not do this until Williams was out. Albeit not mentioned, their choice for Costolo would have also turned Wiliam’s possible ally into a rival for Twitter’s CEO. Regardless, Williams was still oblivious to the coup at that time.

Meanwhile, Twitter was now making more money with its advertising products, but Williams was not as concerned with the revenue side of the operation, which was more fuel for the board’s desire to oust him as CEO. On the other hand, Costolo was leading the charge to make Twitter profitable, which contributed to the board’s decision to ask him to be the interim CEO when they thrust Ev out of the company. Williams knew nothing about the private meetings, his lieutenants talking to the board, or his conversations with his coach, which would return to Fenton and then Dorsey. Williams connected the dots when he was forced to resign as CEO, but it was too late. Given his money and reputation from his previous business venture, he may have been strong, but Dorsey outsmarted him.

TLDR: This case study is about Jack Patrick Dorsey, an Internet entrepreneur and software engineer who co-founded Twitter.