The ecosystem thrived and created dozens of major companies that made Twitter truly useful. The user numbers grew as well because those very same companies marketed their new and innovative solutions. Then Ev was fired. Dick was brought in and month of after month they lay waste to the ecosystem. Dozens of companies died and hundreds of millions of dollars in VC money was lost.
Why? Fred wanted to cash out with a lot of other VCs. They wanted to turn Twitter into a media company. Run up the revenue and go IPO to dump their shares. Sure, if Twitter went along with their founders vision it could have been much bigger over time but going that route didn't help Fred cash out his 100x return and report back to his LPs.
The reality is founders spend years even getting off the ground. The "board", represented by VCs, rarely add value to the operation and vision of the company. They invest because they believe in the vision. Make sure that reality is in writing so people like Fred don't stab you in the back so they can cash out early.
For anyone wondering why parent uses "undone", "could have been much bigger", at a time that Twitter is a household name, the President tweets, people hold public conversations over Twitter, and list Twitter handles instead of their emails.[1]
It's because Twitter is "only" an $11.9 billion company by market cap, whereas Facebook is at $492B or 44 times bigger. I can't think of any other metric by which Twitter isn't a resounding success story.
[1] https://levels.io/hoodmaps/ - Very bottom "I don't use email so tweet me your questions."
Take Hollywood, for example: few things nowadays are as ever-present as motion pictures, but the total box office revenue for 2016 was around $11bn [1]. That's about 19 days worth of revenue for Apple, going by their last quarter [2].
Just because you see it everywhere, or everyone talks about it, doesn't necessarily mean that it's a huge moneymaker.
[1] http://www.hollywoodreporter.com/news/2016-box-office-record...
[2] https://www.apple.com/newsroom/2017/05/apple-reports-second-...
Seriously though, I think you're being totally unreasonable. :) $11 billion is huge revenue for movies. That's not chump change.
¹ https://www.forbes.com/sites/laurengensler/2016/05/26/global...
Twitter might be ubiquitous (a household name, as you said), but just like Iron Man, its popularity is not proportional to its financial success.
I agree it sucks that Twitter shafted its developers, but the LPs wanted to get paid. They don't get into VC to back charities. The VCs are just repping their LPs when they do this stuff.
This comes at the cost of what is good for the company. Using Facebook as an example, you would sell Facebook when Viacom wanted to buy it for 75MM. Great huge return for investors for such a young company. Can turn around and show your fund had a huge exit. Especially great for a seed fund but terrible for the founder and the employees. Luckily, Zuckerberg had control and could thwart investors desire for a quick sale. [1]
I am totally not against VCs making a return but what I am against is VCs forcing premature exits. We may never know what Twitter could have been if the ecosystem stayed in-tact and they figured out how to monetize the whole thing and kept the user growth trajectory in place.
[1] http://www.businessinsider.com/all-the-companies-that-ever-t...
If they had let the system continue, one of the clients could have gotten enough market share that they could have simply changed the backend to their own app, and none of the users would have batted an eye. Or Facebook could have bought up 2-3 of them quietly then forced Twitter to sell on the cheap.
It's easy to romanticize the wild-west period of Twitter's API being completely open for all use cases. However, it was, from a strategic perspective, extremely dangerous to the company's future - there's a reason why companies now know to build walled gardens.
And honestly, they should. Managing a company through 50, 100, 150, 500 and 1,000+ employee milestones requires very different leadership skillsets. There are very few founders who (1) understand this (2) are willing to party ways with their company (3) can navigate through each stage without help and (4) would pull a Zuck and surround themselves with more established/senior people (e.g. Sandberg) as they hit those milestones.
I'm all for young entrepreneurs challenging the status quo by thwarting an old guard of seemingly "old people" (a la Jack Barker), but this is one area that traditionally has a lot of "old people" simply because experience is incredible valuable to scaling companies.
I haven't read "The Hard Thing About Hard Things", but my understanding is that it basically touches upon all of the intricacies of how to navigate business challenges that typically more experienced senior individuals possess.
Please recall the entire context:
Thiel stated early and often (as Facebook's earliest investor) that he would stand behind Zuck retaining majority control. Based on this support there was no other option than to provide Zuck with all the support, mentorship and education he would need to scale along with FB.
Zuck had unflinching VC support :)
I'm not convinced. If you look at the big ones like Amazon, Facebook, Apple and Microsoft, they kept their founder until big except Apple where they kicked him out, went pretty much broke and then got him back and then recovered.
There are also many examples where the founder was kicked out and the company tanked but it would be hard to distinguish cause and effect there - maybe they were fired because the company was doomed. I find it hard to think of any where they achieved great success by firing the founder(s).
Managing a large company is a skillset but you can hire for or learn that.
Having the vision and drive to start and build a company is also a skillset, and one that's much harder to hire a replacement for.
By the way The Hard Thing suggests hiring experienced people to help the CEO, not replace them.
Your statement contradicts itself. He was not about to be fired, his legal standing guaranteed that could not occur. The investors and board fully understood the context the entire time, they invested knowing that it was Zuckerberg's kingdom. Besides, he was the board legally.
& who can say for sure if what was written in Hatching Twitter is correct?
Everyone on HN is SO sceptical of everything, & then as soon as something negative is written about a VC you jump on them like a pack of hyenas.
Here's a quote from the book after Ev was told he was out with a vicious quote from Fred:
Williams, stunned, picked up the phone and began dialing. Bijan Sabet was apologetic and insisted that they wanted to keep him on in a product-advisory role. According to several people at the company, Fred Wilson, however, said he thought Williams had always been a terrible C.E.O. “I never considered you a founder,” he said. “Jack founded Twitter.”
Other portfolio investments of Fred's have followed a similar pattern of having the original CEO pushed out once they get to a certain level of success.