Only last week, I was on CNBC saying that I didn't expect Costolo to be out until the end of the year. Sure, Costolo made a lot of mistakes and the management turmoil at Twitter was hard to ignore and hard to blame on anyone but the CEO. However, a number of recent management appointees were solid -- Anthony Noto is a great CFO, Kevin Weil is a great head of product and Adam Bain is a great head of sales.
I thought the board would give him until at least the end of the year to see how this new team performed, but Dick is gone.
If I had to handicap the possible successors for Twitter CEO (and I did successfully predict Satya Nadella would get the top job at Microsoft (MSFT) well before he did), I'd say the top outsider for the job would be Mike McCue of Flipboard. McCue used to be on Twitter's board until it was determined that there was too much competitive overlap between Twitter news and Flipboard news. His name came up a couple of weeks ago as a possible Costolo successor when it was rumored that Twitter might buy Flipboard.
As far as insiders go, though I love Noto as a CFO, there's no way he could lead a company like Twitter. With Noto coming over from Goldman Sachs (GS), there's a suit from Wall Street that would never be accepted by the product people and engineers of Twitter. It's really only Adam Bain's job to get, for an insider. Even though he's a money guy, he's been there five years and worked closely with Kevin Weil for years.
Between Bain and Weil, I'd say Bain would be the more likely choice, only because Twitter is a close-knit company that welcomes insiders.
A dark horse? Maybe Ev Williams, if he wants to return and take the job. I don't think Jack Dorsey would want the job or could easily take the job as well as stay on as Square CEO. Williams has done the day-to-day thing before. He has the founder gravitas. If he really wants the job, the board would have to seriously look at him.
Costolo said on a conference call last night that he wanted to go, that he wasn't fired. He said he first approached the board six months ago asking to step down. The board didn't feel the time was right then, but they do now. That's the story.
I'm not sure I buy it, but I do believe this was Dick's choice. I think the board at Twitter felt a heavy sense of obligation to Costolo for steadying the ship when he took over as CEO a few years ago. He didn't do a perfect job, but Twitter's crashes (known as fail whales) disappeared under his watch and that was a big accomplishment compared to what occurred before he was promoted.
So, while I think Dick made this decision to go, I do think he saw the writing on the wall. My guess is the second quarter isn't going to be a lot better than the first quarter -- and he knows that. He knows he would probably face a grilling about it by the end of July when he has to reveal it. Costolo might as well go now and let the board get on with a search rather than face a barrage of criticism in six weeks and bite the bullet then.
I also think there has been intense pressure from investors on Costolo for well over a year now. All the management upheavals were never a good look for the company. It's hard not to pin that on the CEO.
The other big knock against Costolo is his poor communication skills. He's never done a great job explaining Twitter's opportunities. All of those discussions about the logged-out-user opportunity and the concentric circles never made any sense. Chris Sacca's letter explained the idea in a few brief sentences.
Though there are many who have been quick to congratulate Dick on overseeing the company and leading it to increase in value, let's face it: Dick would still be the CEO of Twitter if not for the fact that a lot of people -- including those on the board -- believe the company should be worth a lot more.
I'm super bullish on Twitter in the long term. I hope Twitter's next CEO starts knocking off all the items on Sacca's "love letter" to make the product more popular and easier to use.
Venture capitalist Fred Wilson once said in a blog post, the best qualification Costolo had to become Twitter's CEO (when he got the job) was that he was there.
Twitter's board now must pick his successor.