Perhaps we should blame Steve Jobs for Jack Dorsey’s reappointment as Twitter’s interim chief executive.
Jobs set the precedent. Ousted by his board, he left Apple and was regarded as a sort of failure after a brutal struggle with John Sculley. But Jobs was brought backafter Mr. Sculley (who served as chief from 1983 to 1993) and Gil Amelio (who held the top job from 1996 to 1997) failed miserably.
When Jobs returned, it was a dark time for Apple. It was forced to team up with its archrival Microsoft, and even took a $150 million stock investment from the company, which was then run by Bill Gates.
Jobs was brought in to save the company. He did that and more, performing the turnaround of the millennium.
The legend of Steve Jobs lingers over Silicon Valley. One of its many forms encourages founders to return triumphantly to “save” their brands.
It’s hard not to think of Jobs’s legacy after the events at Twitter this past week. Dick Costolo, the chief executive of Twitter, announced his surprise exit, not too unexpectedly. Twitter has been under scrutiny by investors for not adding users quickly enough.
Mr. Costolo, who owns hundreds of millions of dollars of Twitter stock, had made it known that he planned to resign around the end of the year anyway. But plans changed, and on Thursday, Mr. Costolo announced he was stepping down as of July 1.
He will be replaced by Mr. Dorsey, 38, a co-founder of Twitter. Mr. Dorsey in recent years has been gaining respect after he helped start the payments company Square, where he currently serves as C.E.O.
Mr. Dorsey was not named as Twitter’s permanent chief; instead he was appointed as interim C.E.O. until the Twitter board can pick a new head. But let’s remember that Jobs rejoined as an interim chief, too, before gaining the full title three years later in 2000.
Though Mr. Dorsey seems to be a rational choice, eyebrows were quickly raised about the decision. First, Mr. Dorsey is already running a prominent tech company, Square. Running one big company is usually hard enough, but two can be quite daunting, even for the best managers.
In response to an analyst question, Mr. Dorsey pointed out that he had good leadership teams in place at both companies. “And I will be working directly with and through both of those teams,” he said during an investor call on Thursday. “I’ve been spending significant amounts of time at both companies, and I will continue to split my time between the two companies.”
Who else has done this? Let’s look again at Jobs, who simultaneously ran Pixar and Apple for nine years.
But there is also the matter of whether Mr. Dorsey can replicate the success that Jobs had with Apple. Mr. Dorsey had been previously ousted before by Evan Williams, his fellow co-founder who is still on the Twitter board. Twitter was known for being a terrible scrum during its early years, a place more akin to “Game of Thrones” than Silicon Valley-style nose-to-the-grindstone mettle.
Mr. Dorsey was ejected, in part, because he didn’t get along with Mr. Williams. Mr. Dorsey was in charge of the technical side of things, and the servers “were melting down every day,” as some of the criticism went. A lengthy Vanity Fair article about Twitter said that Mr. Dorsey “admitted he was a flawed manager” during this time. So the interim post is a triumph for Mr. Dorsey, who left in such ignominy only to be brought back.
Mr. Dorsey, who still owns about $800 million of Twitter stock, is clearly relishing his return, although he did not directly address in an interview with The New York Times whether he wants to be Twitter’s permanent leader.
A founder’s return can also be stabilizing. Rather than spending months performing an executive search to try to identify someone who understands the company and its business, bringing back a founder has its advantages.
Founders have a long-term relationship with their company, so they need little grounding in what the business is all about. The founder is the “soul” of the company and a “visionary,” arguments that go over well in the Valley.
Mr. Dorsey is not the only one who may be hearing echoes of Jobs as he walks the path back to his former company. Those who have returned for second stints in the tech world have included Jerry Yang, a founder of Yahoo; Larry Page, one of the founders of Google; and Marc Pincus, a founder of Zynga. None of them have done spectacularly well the second time around.
Mr. Yang failed to find a new business model for Yahoo andturned down an offer from Microsoft in 2008, worth at least $44.6 billion at the time.
After that, Mr. Yang left the company. The saving grace for his reputation was that he had negotiated what turned out to be one of the luckiest bets for Yahoo’s fortunes — an investment in what was then a virtually unknown company called Alibaba. (Yahoo paid almost nothing for the Alibaba stake, but its holdings in the firm were worth $39.5 billion at the beginning of this year.)
Other returns also haven’t been because a company was struggling. Mr. Page returned as chief of Google in part because he wanted to. Eric E. Schmidt, the previous chief executive, is still actively engaged with running Google and remains chairman.
But since that time, Google has feasted on expensive acquisitions like the purchase of Nest, a thermostat company, for $3.2 billion. Google’s stock price has also remained relatively stagnant since Mr. Page’s return.
Mr. Pincus left the helm of the gaming company Zynga after he failed to produce new hits. But Mr. Pincus controls the company, even though he owns a small stake (it’s another one of the quirks of Silicon Valley, where voting control often remains concentrated in the hands of founders, even after they leave).
Thus, two years after working on a new venture, Mr. Pincus is back. It remains to be seen, however, if he can find another hit for Zynga that will be as successful as Farmville once was.
Founders may also lack the skills or vision for a turnaround, which could require an overhaul of the business. Could Marc Andreessen, the successful venture capitalist, have saved Netscape, the company he founded, against the Microsoft behemoth had he not sold it?
When founders start companies, they are entrepreneurs with an idea and often few or no employees. It’s not the same thing to jump into an established enterprise with thousands of employees.
Mr. Dorsey is certainly older and wiser now. He sits on the board of the Walt Disney Company and has helped lead the success of Square, which is estimated to be worth billions.
And to be fair, Twitter is still an enormously successful property. It is a social media hub and it has a lot of potential. But the warning signs are also there that this may not be a smooth ride.
If Mr. Dorsey continues to wear the chief executive hats of two companies for too long, there may be an uprising by investors. In an interview with The Financial Times, Prince Alwaleed bin Talal, who owns about 5 percent of Twitter, said: “I believe and trust that Jack Dorsey is there on a temporary basis,” citing Mr. Dorsey’s role at Square. He then backtracked in a statement to Reuters, saying that “should Mr. Dorsey wish to take on the C.E.O. role, I would support him.”
It may be that Mr. Dorsey is the right person for the chief executive post at Twitter. But let’s hope that it is based on his real skills, and not the myth that if Jobs did the impossible with Apple, then any founder of any tech company can replicate that success.
Via Steven Davidoff Solomon at New York Times