These days, Jack Dorsey wakes up in his $10 million seaside home in San Francisco before starting his day as CEO of a social media company that attracts 326 million monthly active users who send out a staggering 500 million posts a day: Twitter.
How this all came about can look painfully straightforward. Dorsey invented the platform, it turned out to be a hit, and with time and experience, he ascended to his rightful place as CEO. But in a company like Twitter (TWTR - Get Report) , which went through three CEOs in two years, the truth of the story may be darker than the bright blue bird would suggest.
The truth may be that its evolution was not the linear, carefully-guided direction of one man, but a product of conflicts played out in boardroom clashes and backroom meetings, all while the site's true value became more apparent to its founders and the world, one tweet at a time.
How Was Twitter Founded?
On March 21, 2006, Twitter emerged from the ashes of another startup, Odeo. Evan Williams, flush with cash after agreeing to Google's (GOOGL - Get Report) acquisition of his last startup, Blogger, agreed to enter a business venture with his neighbor, Noah Glass. The two worked on a platform supporting what they saw as the new radio, podcasting. Leaving Google and taking one of his co-workers and friends, Biz Stone, Williams secured funding and began work on the podcasting platform, Odeo.
Along the way, a chance encounter led to a new employee, Jack Dorsey. Dorsey had been working in a coffee shop, writing basic code for a ticketing company, when Evan Williams walked in. Recognizing the the minor Silicon Valley celebrity and eager to find a more interesting line of work, Dorsey found William's email online and sent over his resume. A few back-and-forths and one interview later, Dorsey became part of the Odeo team.
Despite the hype surrounding William's next venture, the platform gained little attention. Possibly from the timing of the service, possibly from its quality, or possibility from the increasing tension between the reserved and slow-moving leadership style of Evan Williams and the loud and frenetic style of Noah Glass, who didn't officially run the company but took on an increasingly outspoken role as it progressed. Whatever the reason, the company hit rock bottom once Apple (AAPL - Get Report) announced in 2005 that they would include podcasting in their juggernaut streaming service (at the time), iTunes.
Desperate to pivot from a now untenable situation, Williams held a series of hackathons among Odeo employees, in which they were told to put their normal tasks on hold and work on whatever side projects they had, with questions like "If you were to start a new company today, or reinvent Odeo, what would you build?" guiding their day.
Part of Williams' motivations to hold these were from hearing conversations between Glass and Dorsey. Dorsey had been tossing around a concept he called "status." It came from his time using live blogging services where users would send "away" messages when they weren't active. They would usually include an update on what they were doing at the moment, their status. He saw a platform there, where people could text message their status to the public. He told Glass, who immediately championed the idea to Williams and any Odeo board members who would listen.
On the last hackathon, Dorsey built and early vision of his platform. Once all the employee's projects were looked over, Williams decided Dorsey's looked the strongest and would be the one Odeo's resources would now go to. Noah loved the idea and even spent a day combing through the dictionary to find its name:
1. The light chirping sound made by certain words.
2. A similar sound, especially light, tremulous speech or laughter.
3. Agitation or excitement; flutter.
But how would this platform, hacked together over a day in what was essentially a hail Mary pass, come to be one of the most popular and powerful websites on the planet?
Here's some of what you should know to understand how Twitter got to where it is today.
- November 2004- Evan Williams leaves Google with co-worker Biz Stone to work with neighbor Noah Glass as CEO of Odeo.
- June 2005 - Apple (AAPL - Get Report) announces podcasting for iTunes, dooming Odeo's chances for success
- February 2006 - Dorsey and Glass discuss a "status" concept where people can send out text messages letting others know what they're doing. The idea is then discussed among Glass, Williams, and Stone.
- March 2006 - Dorsey hacks together an early version of Twitter (then - taking a cue from flickr--called twttr), sending the first tweet "just setting up my twttr."
- July 2006 - Motivated by increasing workplace tension and the support of Dorsey, Williams fires Glass.
- October 2006 - Williams, Stone, and Dorsey acquire the majority of assets from Odeo's investors and shareholders as the company pivots into Twitter.
- March 2007 - Twitter wins "best startup" at South by Southwest, making its first crack into mainstream recognition
- April 2007 - Twitter officially becomes its own company. Williams chooses Dorsey as its CEO.
- June 2007 - Twitter holds its first round of funding, raising $5 million and receiving a valuation of $20 million.
- August 2007 - The hashtag "#" makes its debut, supposedly started by user Chris Messina.
- October 2008 - With frustration over unaddressed server failures and the encouragement of Evan Williams, Twitter's shareholders remove Dorsey as CEO, replacing him with Williams.
- April 2009 - A Twitter feud between Ashton Kutcher and CNN over who would be the first to reach one million followers (Kutcher won) followed by Williams appearing on "The Oprah Winfrey Show" to set up her account leads to record-setting rates of new user sign ups.
- April 2009 - Dorsey travels with several tech entrepreneurs to Iraq as part of a U.S.-sponsored effort for Silicon Valley leaders to provide the new Iraq government advice on how to create a tech-friendly atmosphere. Also part of Dorsey's media campaign to cement his status as inventor and founder of Twitter.
- April 2009 - Twitter executives Evan Williams and Biz Stone are listed under Time's 100 most influential people in the world. Dorsey is not included.
- June 2009 - Twitter delays planned server maintenance while Iranian protesters use it to stage post-election demonstrations. This comes after a U.S. State Department official emails the company to encourage the delay.
- September 2009 - Dick Costolo is brought on board as COO to help Twitter's profitability, tweets joke, "First full day Twitter COO tomorrow. Task #1 undermine CEO, consolidate power."
- November 2009 Twitter changes "What's your status" to "What's happening."
- April 2010 - Twitter announces use of promoted tweets for advertising, creating its first clear avenue for consistent profitability.
- June 2010 - Twitter servers crash while Russian president Dmitry Medyedev visits offices for his first tweet, come back just in time for him to send it.
- October 2010 - Following a series of meetings with Jack Dorsey, the board removes Evan Williams as CEO, replacing him with Dick Costelo under the assumption that Dorsey will eventually take his place.
- July 2011 - The White House hosts a Twitter town hall with President Barack Obama and Jack Dorsey as moderator.
- June 2011 - Cofounder Biz Stone announces departure from his day-to-day role at Twitter.
- September 2011 - Twitter reaches 100 million users.
- December 2011 - Twitter redesigns profile and timeline of Tweets, adding Home, Connect, and Discover tabs for a layout that brings many comparisons to Facebook (FB - Get Report) .
- June 2012 - Twitter modifies its logo, removing text to make the slightly redesigned blue bird its symbol.
- October 2012 - Twitter acquires Vine.
- December 2012 - Twitter passes 200 million monthly active users
- November 2013 - Twitter releases its IPO, starting out with a valuation of $31 billion.
- November 2014 - Twitter announces instant timeline.
- December 2014 - Twitter releases new anti-harassment tools and announces that more effort will be put toward curbing online abuse.
- January 2015 - Twitter acquires ZipDial.
- January 2015 - "While you were away" feature arrives.
- March 2015 - Twitter releases "Quality Filter" feature for iOS users to block bullying tweets from their feed.
- April 2015 - Twitter shares fall by 18%.
- May 2015 - Google adds tweets to its search results.
- June 2015 - Dick Costolo steps down as CEO with Jack Dorsey taking over.
- October 2015 - Twitter adds Twitter Moments.
- November 2015 - Twitter replaces favorite button and star symbol with like button and heart symbol.
- October 2016 - Twitter lays off roughly 9% of its workforce, eliminating 350 jobs.
- October 2016 - Twitter discontinues the Vine app.
- January 2017 - Twitter removes the Twitter dashboard feature and replaces "Moments" tab with "Explore" tab.
- November 2017 - Rogue Twitter employee on his last day deactivates President Donald Trump's account. Taken back online after 11 minutes.
- September 2018 - Jack Dorsey testifies before U.S. senate alongside Facebook COO Sheryl Sandberg.
- November 2018 - Twitter expands from 140 to 280 word count.
- February 2019 - Twitter replaces declining "monthly active users" metric with "monetizable daily active users" count.
- June 2019 - Twitter reveals data showing thousands of fake accounts linked to foreign governments like Iran and Russia.
For all of Twitter's runaway success in attracting users, a question hounded it for years after its mainstream breakthrough: "How will it make money?" It could secure funding without a hitch, but year after year, its revenue held at a perfectly consistent $0.
It's first brush with profitability came in 2009 when Twitter sold the right for its tweets to become viewable on the search engines of Bing and Google for the respective sums of $10 and $15 million.
This, however, didn't offer a model for consistent profitability. The real question was how to introduce advertising in a way that wasn't over-obtrusive for users. The founders all adamantly wanted to avoid aping something as overtly-commercial as Facebook. The solution came in 2010 with promoted tweets.
This continues to account for roughly 85% of Twitter's revenue, and it consists of a company paying so that a tweet, account, or trend (such as a particular hashtag) will show up on people's feeds, with money paid out on a per-click and per-retweet basis. In 2015, this model generated around $400 million in revenue.
Twitter and Vine
In October of 2012, Twitter made what looked at the time like a promising deal in acquiring the startup Vine for $30 million. The platform allowed for people to take 6-second clips capturing their daily lives and quickly became the internet's go-to spot for short-form videos.
In 2013, the platform's dominant spot came under fire with Instagram's introduction of the 15-second video clip. Snapchat (SNAP - Get Report) followed soon, allowing users to send 10-second clips to their friends. Vine failed to differentiate itself from the competition and soon found its users and advertisers shifting onto other newer platforms.
Following changes of leadership, social media talent agencies, drafted and discarded plans for fusing Twitter and Vine, and a failed attempt at selling the platform, Twitter shut down Vine in October of 2016.
"I Started This"
After Williams fired him from Twitter, Noah Glass became effectively erased from the narrative of Twitter's founding. While some accounts of his erratic behavior at the time justified Williams' action, many employees also claim that no one in Odeo felt more passionately about the Twitter project than Glass and he was in many ways its spiritual leader.
For a while his involvement remained largely unknown, not publicly available anywhere save for the caption on his now-inactive Twitter profile: "i started this." That is until a 2011 Business Insider piece tracked him and a host of former Odeo employees down to get the story.
Following its publication, Williams tweeted "It's true that @Noah never got enough credit for his early role at Twitter. Also, he came up with the name, which was brilliant." Dorsey made no public comment on the story, but he later stated that he had no involvement in Glass' firing despite the reporting in Nick Bilton's "Hatching Twitter" claiming that he told Williams, "If Noah stays, I'm not going to work at the company."
Clash of CEOs
Twitter founders Evan Williams and Jack Dorsey had a fraught relationship to say the least. While beginning as friends, with Williams even choosing Jack as the person to lead Twitter, their relationship quickly soured. Williams became convinced that Dorsey lacked the experience to run the company. The consistent server crashes of the site's early years coupled with Dorsey taking time to pursue hobbies outside of work reportedly led Williams to take Dorsey aside and say, "You can either be a dressmaker or the CEO of Twitter."
Williams convinced Twitter's shareholders that Dorsey couldn't run the company, and they, in turn, informed Dorsey that he would have to step down as CEO for an essentially ceremonial role as a silent board member with Evan as his replacement.
The official narrative had been that a mutual agreement was reached where Dorsey would step down to perform other tasks in the company while the more-experienced Williams would steer the business side. In truth, Dorsey had no meaningful role at the company and was silently furious over it.
He used the time to begin a new startup, Square (SQ - Get Report) , and go on a media blitz to promote his own narrative. While not explaining the nature of his firing, Dorsey went on a wide press tour, accepting almost any interview opportunity that came his way to tell a story framing him as Twitter's sole inventor and the real mind behind the platform. This all came while attention exploded around founders and executives Evan Williams and Biz Stone as Twitter's popularity soared.
As time passed and Twitter's shareholders changed, Dorsey eventually found people sympathetic to his side of the story. Beginning with Peter Fenton and ending with Dick Costolo, Dorsey, through a series of meetings unknown to Williams, won the majority of Twitter's board over to his side. This culminated in October of 2010 with the board informing a blindsided Williams that he would have to step down from his position as CEO. While some frustrations existed over Williams' lack of decisiveness in dealing with Twitter's slowing growth rate and lingering questions of profitability, the firing came mostly as a product of Dorsey's secret campaigning and as such came out of nowhere for the CEO.
While the initial plan would have seen him completely removed from the company, an intervention from Biz Stone (who had been unaware of the coup) led Williams to taking on a role as director of product. But as it was with Dorsey, the former CEO discovered his position would be largely ceremonial, and in early 2011, Williams left his day-to-day operations at the company.
The relationship between the two founders has reportedly softened in the years since then, with Williams tweeting support for Dorsey during his official return as CEO in 2015. In February of 2019, Williams sold his shares in the company, saying "I will continue rooting for the time as I work on other projects" (he began the web-publishing platform Medium in 2012). Dorsey tweeted "I appreciate you, Ev! You're the reason I joined Odeo in the first place."
In its inception, at least two of Twitter's founders, Evan Williams and Biz Stone, had a clear view for Twitter's political stance - nonexistent. In the same vein as their last project, Blogger, they envisioned an uncompromisingly neutral platform where anyone could publish anything without censorship.
But even while these two founders were at the reign of the company, this vision didn't always appear to hold. During Iranian election protests in 2009, many viewed Twitter's choice to delay its scheduled server maintenance as influenced by an email they received from the U.S. State Department, and with that, an instance of them taking a political side.
Whatever complaints about the political leanings of Twitter during the Evan Williams' years only grew under Jack Dorsey's leadership, a founder who, at least in its early years, never voiced an explicitly apolitical view of the company as his peers. A major example of their differences in philosophy came when, shortly following the departure of both Williams and Stone from their regular roles at the company, Dorsey accepted the role of moderator at a White House Twitter town hall with President Barack Obama.
Now, with mounting complaints about online harassment and anxiety over governments and other organizations' use of Twitter as a tool of political manipulation, the pressure for Twitter to take some sort of stance has grown to a fever pitch. Several tools and policies have been put in place to address complaints, and more work than ever has gone into streamlining the process by which users can report tweets so that employees can determine whether what's been reported is allowed under its policy.
Still, many have complained of biases in Twitter's enforcement of their policies, and others complain that the existence of any policy whatsoever evidence's Twitter taking on a political role that goes against the spirit of its founding.
What's Happening in 2019?
Now, almost no day goes by where Twitter doesn't find itself somewhere in the headlines. This, of course, comes from President Donald Trump's use of the platform. His activity on Twitter has sparked commentary on all sides of the political spectrum. Some claim that his tweets fall under the categories of abuse outlined in Twitter's policy as bannable offenses, others defend it as an exercise of free speech to be preserved and defended.
Jack Dorsey has remained markedly neutral on the subject, maintaining a narrative of firm belief in both the company's anti-harassment policies and the president's continued right to tweet within these parameters, despite others' objections that this line has already been crossed.
Back in 2017, a Twitter employee on his last day deactivated the president's Twitter account (thinking it wouldn't actually go through). The employee was mistaken, and for 11 minutes, had accidentally erased the president's account. Though the president didn't comment on this after returning to the site, Dorsey has apologized for the incident, labeling it as a serious mistake.
Twitter doesn't just make headlines in the U.S. Its role has come under increasing scrutiny across the globe.
In Europe, where some of the strictest laws against the sharing of hate speech, violent content, and misinformation exist, Twitter has found itself in a struggle to balance its company's policies with the laws of the countries it operates in. The New York Times (NYT - Get Report) reported that in 2018, Twitter received over 500,000 complaints about posts that violated German hate speech laws. Ten percent of the flagged posts were taken down, but the extent to which this comes from violation of Twitter or the country's rule remains an open question.
Meanwhile, countries like Australia have gone one step further. Following the filmed murder of 50 people at a mosque in New Zealand, the country threatened fines and jail time for social media sites like Twitter and their executives if they failed to remove the video from its platform. Following this, the company announced it would experiment with ways of filtering out tweet replies from users' feeds.
Another area that's put them in hot water is China. Officially, the site is blocked in the country. Despite this, many Chinese critics of the government circumvent the country's firewalls to communicate on the platform, often at great peril. Those caught using Twitter have been subject to interrogation, extended stays at detention centers, and forced deletion of their tweets and accounts. While Twitter has remained largely silent on China other than voicing its sadness at not being able to access the country, the company recently came under controversy after deactivating the accounts of over 100 Chinese political commentators days before the anniversary of the Tiananmen Square protest. Twitter apologized for the event, claiming it was an error in their programs designed to catch spam and inauthentic behavior. Chinese protesters, wary of the country's intensified censorship tactics around this anniversary, remain skeptical.
Twitter has seen its ups and downs over the years, but for now, the company looks like it could have a strong turnaround in its future.
Its shares took a sharp dive of 4.3% on June 13 after MoffettNathanson analyst Michael Nathanson doubled down on his criticisms of the company having a "stretched" valuation and not enough funding for its online security development. But a mixture of new user engagement initiatives, stable revenue growth, increasingly transparent user metrics, and competitive advantages over its tech peers (of whom enjoy higher valuations) suggest the company's future could still be looking bright.
As of this writing, Twitter's stock prices are around $37.18 per share.