Twitter chief humours investors

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Twice the age of many technology leaders when they take their companies public, the words most often used to describe Twitter chief executive Dick Costolo are “grown-up”.

With his penchant for giving management classes, frequent speeches on leadership and odd zip-up jumper-under-blazer uniform, Mr Costolo could be seen as a bit too much of a suit for a young tech company such as Twitter.

Luckily, he’s also a comedian. Before Mr Costolo became a serial entrepreneur, the computer science graduate turned down three “proper jobs” in technology to work in homewares store Crate and Barrel by day and tread the improv boards by night.

Appearing in a show entitled “Modern Problems in Science”, he was part of a trio that “proved” any madcap theory that they were given by the audience, such as “the earth is shaped like a giant burrito”. One critic praised the “funny, verbally facile performers” who used “every intellectual weapon at their disposal”.

Mr Costolo is a mix of computer science nerd and workout fanatic capable of 35 pull-ups, says Scott Hess, the senior vice-president of human intelligence at Spark, a Publicis Groupe ad agency, who met Mr Costolo in the early 1990s when they shared a cubicle wall at Andersen Consulting.

“Fortunately, during this time, the internet happened,” Mr Costolo joked to an audience of college students in a commencement speech at his alma mater earlier this year.

“It may sound funny to you guys but we didn’t have the internet in our pants,” he said, taking his smartphone out of his pocket and waving it around on stage. “That’s how bad it was. I sound like my grandfather . . . we didn’t have teeth, there were no question marks . . .”

Saturday Night Live’s loss was eventually Twitter’s gain. From the mid-nineties, he started and sold three start-ups in Chicago: web design company Burning Door; Spyonit, which allowed people to spot when changes were made to websites; and Feedburner, a web feed manager that was bought by Google in 2007.

Until then, he had not felt the pull of Silicon Valley with its all-night programming parties and tech networking on every corner. In Chicago, he worked 18-hour days, but come rush hour, he was on the commuter train home to put the kids to bed before getting back on the laptop.

Mr Costolo was not an immediate convert to Twitter, in spite of investing early on.

“I remember the first time I saw Twitter and thought ‘I don’t get it’,” he wrote on his blog in 2007, “and then somebody explained it to me and I thought ‘uh-huh. I don’t get it’, and then somebody explained it to me again, and I thought ‘Ah! . . . I don’t get it.’ Only after I saw somebody using it in a way that I found valuable did I finally get it.”

After two years at Google, he was brought into Twitter as chief operating officer in 2009 by his friend Evan Williams, chief executive at the time. Jokes got the better of him the night before he started, tweeting: “First full day as Twitter COO tomorrow. Task #1: undermine CEO, consolidate power.” Within months, he was in charge, after Mr Williams was ousted by Twitter’s board.

If Twitter was not in such chaos when he took over, the energetic entrepreneur-cum-comedian may not have transformed into a management guru.

The site was regularly collapsing under the weight of the traffic it was receiving, investors were clamouring for it to start monetising and the almost-Shakespearean plots and betrayals which had removed the two previous chief executives had left the company directionless.

Mr Costolo had written in his blog – dubbed “Ask the Wizard” – that “focusing on business model too early can hurt a company’s prospects”. Yet after four years without substantial income, he helped to pioneer Twitter’s “promoted tweets” that would form the backbone of its ad business.

After three years, Twitter users now rarely glimpse the “fail whale” of old, an image that used to appear when the site was not working. The company is forecast to generate almost $600m in revenue this year and its staff has grown almost sixfold in the three years he has been in charge.

While never losing his sense of humour, Mr Costolo was not afraid to show his tough side as he whipped the company into shape, former employees say. He was open, sharing private details about financials or new products with employees at big meetings – but people found leaking news to the press would be fired on the spot.

But some complain that this business-like approach came at a cost to innovation: he took fewer risks than a founder-chief executive might have done, amid multiple company and departmental reorganisations under his tenure.

On Thursday, Twitter avoided the fate it had feared: following Facebook into a dismal early performance as a public company. While shares soared 73 per cent, Mr Costolo was flying across the country from New York, where he had watched the opening trades, to be with staff at Twitter’s headquarters in San Francisco as the market closed.

He landed having succeeded in the biggest challenge of his leadership. From his first day as chief executive, says one former employee, “Dick’s single job was not to [mess] up the IPO, so everyone gets their money back”.

Additional reporting by Emily Steel in New York

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