In interview before his last day in job, CEO says going public accelerated short-term-thinking, and regulation would pose threat to free speech
The outgoing chief executive of Twitter has said he underestimated the pressures that going public would place on the company and warned that his successor would nevertheless have to manage an increasingly complex set of geopolitical challenges as well as the demands of Wall Street.
Speaking to the Guardian before his last day at the company on Wednesday, Dick Costolo said that while Twitter had grown revenue by 97% year on year to $1.7bn (£1.1bn), the pressure placed on the company obscured its other achievements in bringing 302 million monthly active users on to the service.
“When we took the company public, I had an expectation that the market would evaluate us based on our financial metrics first and foremost,” he said. “I probably would frame the way we were thinking about the future of the company differently, understanding how we were in retrospect evaluated.”
Costolo said the pressures of meeting Wall Street expectations on a quarterly basis meant the company had to battle against a current of incrementalism and short-term thinking. “You always want to keep focused on the long-term vision, yet when you go public you’re on a 90-day cadence and there’s a very public voting machine of the stock price that accelerates that short-term thinking.”
But he argued that Twitter had stuck to a “cohesive long-term strategy” and said there were plans to make the service more accessible during live events, whether sporting finals or breaking news.
He referenced Lightning, a new set of features intended to enable better curation and promotion of live content on Twitter. “People have been asking why I didn’t do that four years ago,” he said. “Four years ago, the site didn’t even stay up. We were the only big site on the internet whose 404 [error message] was its own brand – the fail whale.”
In Costolo’s five years as chief executive, Twitter has transformed from a private company with 300 staff valued at $3.7bn to a public company with 3,900 employees valued at $23.5bn.
When he announced he was stepping down, he was believed to have succumbed to pressure from investors concerned about slow growth and a perception of disappointing revenues.
Asked why he was leaving, Costolo said he had put together a strong team that was now being recognised outside the company. “It is the right time,” he said. “Great leaders and great CEOs are both resilient and self-aware.”
He dismissed suggestions that he had set expectations too high by prioritising rapid growth in user numbers. “I have never paid attention to people externally who are saying I should do this or that.”
Costolo gave the interview after a rare speech in Granada, Spain, in which he argued that Twitter had become a “product of the world” that had taken on “a more ambitious and symbolic meaning – the idea of democratic access for all.”
Referring to article 19 of the United Nations’ human rights declaration, which asserts the right of the individual to “seek, receive and impart information and ideas through any media”, Costolo said that throughout history withholding information had been a method of retaining power. “With billions now online, that right of access to information is a reality and Twitter allows that information from the source.”
What constitutes a news story was no longer determined just by the media, he said, and while Twitter would not end propaganda, he argued that governments now found it harder to cover up the true version of events.
Costolo said the job of Twitter CEO had come to involve resolving complex geopolitical issues, citing for example Iran, where authorities use the site to communicate while blocking citizens’ access.
“The challenge is we can’t be excessively parochial and have an American perspective on the way things should be. We have to abide by the rule of law in the countries in which we operate, while pushing to make sure that these voices can be heard despite whoever is in power at the time.”
It is an example of the non-financial measures by which Costolo argued Twitter should be judged. “As a company, we will continue to navigate this intersection of ethics and technology that has not been confronted before, and make difficult decisions every day to ensure the smallest voices in the world can be heard.”
Twitter under Costolo’s leadership has been criticised for failing to crack down effectively on threatening and abusive messages, and faced pressure to block activity by terrorists trying to recruit.
Costolo said efforts to discourage abusive language included tripling the size of its abuse reporting team, allowing third parties to report abuse of others and making it harder for blocked users to reopen accounts. “You have to make the cost equation less expensive for the person who feels they are being abused,” he said.
He said regulation, particularly in Europe, was not an answer to the challenge, and it was not appropriate to act as if Twitter and its competitors were a type of communications utility that needed the sort of oversight imposed on broadcasters and telecoms carriers.
“I will say directly that I think regulation is a threat to free speech,” he said. “I can’t think of an example where regulation didn’t have unintended consequences and I’m unable to conceive of a regulatory body that will be swift enough to deal with the constantly evolving issues of ethics, communication and technology. I just don’t think it’s possible.”
Costolo’s successor has yet to be named – the company will be led on an interim basis by Jack Dorsey, the co-founder. Whoever takes on the job would have to contend with a far broader set of challenges, Costolo said. “When I took on the role of CEO I thought of myself as a technologist, but I’ve had to become more and more concerned with the geopolitical landscape, as have all my counterparts in tech.
“Dealing with that landscape will be the big challenge , the different ways in which countries think about the value of open exchanges of information. I have only seen that get more complex.”
Source: The Guardian