Well, it’s about time.
The surprise resignation of Twitter CEO Jack Dorsey on Monday is way overdue for a company that has underperformed its peers for too many years. How he’s clung to power as long as he has is a mystery, as are the circumstances of his departure at this juncture.
To hear Dorsey tell it in the memo he wrote announcing his stepping down, it was his own decision, which of course means that was likely not the case. Don’t be shocked if the circumstances precipitating Dorsey’s exit come to light in the coming days, revealing whose footprint is currently gracing his derriere.
It’s difficult to shake the suspicion that what else may be learned in the coming weeks is new — negative developments relevant to Twitter’s business that the market doesn’t yet know but illuminate what prompted the changing of the guard, which has CTO Parag Agrawal taking the top job effective immediately.
It’s tempting to link the Dorsey announcement to Twitter’s underwhelming third-quarter results at the start of November, an earnings miss that has seen the stock lose a quarter of its value. But Q2 wasn’t a barn burner either, though the stock was looking strong over the summer.
Regardless, the simple fact is that in the eight years Twitter has been a publicly listed stock, its price hasn't really budged much. Meanwhile, companies like Snap and Facebook (now Meta Platforms) that were once deemed Twitter's rivals have left it in the dust.
Since its inception, Twitter has had a rather tortured leadership history with no shortage of palace intrigue, which makes it all the more interesting that Dorsey lasted as long as he did. His goose looked cooked shortly before the pandemic began in March 2020, when pressure from activist investor group Elliott Management seemed aimed at bringing about his ouster.
But Dorsey survived the attempted coup and hasn't faced much opposition since. That's remarkable considering for a man who seems to go out of his way to consistently project an air of casual indifference. Dorsey has an uncanny ability to generate headlines only for conduct suggesting he is hopelessly distracted from his responsibilities, from his misadventures in bitcoin alongside Jay-Z to his penchant for peculiar daily "wellness" habits like ice baths
That investors put up with Dorsey's dilettantism as long as they did is all the more mystifying given that he is in the highly unusual position of being CEO for a pair of separate companies, including payment technology Square. How an executive who can't seem to muster the attention span for one company managed to get entrusted with two businesses is worth puzzling over.
While Twitter will always have unmatched utility for those who want to keep their finger on the pulse of what's happening around the world at a moment's notice, that singular capability is not what will take the company to the next stage of growth.
Consider the stat Pew Research Center shared earlier this month: The most active 25% of U.S. adults on Twitter by tweet volume produced 97% of all tweets from these users. If that doesn't tell you everything you need to know about the platform, nothing does.
It's tempting to point to the well-known problems Twitter has had managing misinformation and handling former President Donald Trump as the things that softened the ground underneath Dorsey. But Twitter wasn't exactly alone in that regard, so it's hard to believe Dorsey is being punished for any of that.
That Dorsey is leaving now instead of years ago is all the more confounding considering that over the past few years he made huge strides to counteract one of the biggest criticisms leveled at Twitter: the lack of product innovation. Voice tweets, Fleets, Twitter Spaces (with ticketing) and Twitter Blue were just a few of the significant upgrades in functionality and monetization the company put in motion. It's tempting to conclude Dorsey exiting can be read as a sign that these changes aren't moving the needle.
That said, Agrawal has probably gotten more credit than Dorsey for these innovations, which means his promotion could be read as a vote of confidence. Still, you have to wonder whether Twitter's board is making a huge mistake here by not taking the opportunity to bring fresh blood to the CEO role while it has the opportunity to do so.
Best-case scenario is Agrawal will come in with what his company has never had: a realistic sense of what's possible. What has bedeviled Twitter most over the years is the company's advocates, who tend to be power users of the platform, confuse their own passion for the product with the mistaken belief that it has the potential to be as mainstream as something like Facebook. The corollary to that delusion is with the right leadership in place, Twitter's long-delayed potential can at last be unlocked.
Maybe that myth could have been true earlier in Twitter's life cycle, but at this stage of the game, it's a shattered dream.