Ep. 136 - Ev Williams: A Co-Founder of Twitter Speaks

Yes, it really is. I've been waiting a long time for the new model to come out. The Defender 110, I'm telling you, it's my favorite car of all times. It's my third one. You know, I have stories of going offroad. The guy managing the group was like, 'What are you doing in this beautiful car?' I'm like, 'I'm going offroad.' He's like, 'Are you sure? Because you can use one of ours and they look like Mad Max cars.' I'm like, 'No, no, no, we're going to do this.' And he was shocked.

That's my favorite part.

I think the official credit of the word 'blog' goes to Peter Merholz, who was one of the early blogs I read. And he said it kind of as a joke, because everyone called them 'weblogs,' right? And he said instead of 'weblogs,' we should call them 'we blog.' And then I thought, that sounds really stupid, actually.

'Blog' was a surprisingly controversial term. I didn't... but what I thought... so Blogger, the product, I just came up with the name. Like, no one was using the word 'blog' really, and so Blogger.com I registered as a name of a product, which since everyone called them 'weblogs,' actually had more brandability than it sounds like now. Weblogs.com was, I think, Jason Calacanis at the time.

And so yeah, so I registered Blogger.com. So it may... but I used it as a product name, not as like a, you know, person term.

All right. How much time we got?

Actually, then I can... I probably have to leave around 3:00. I have a 3:15 in SoHo.

Oh gosh, really digging up the... that's part I don't talk about. So it wasn't really tech startup. I was just trying to figure out any way to make my own way in the world, and I didn't have the patience for school. So I ended up going to Florida and studying marketing, really. And it was more direct marketing at the time. This is pre-internet. This is 1992. And so I didn't last long in Florida. I didn't really care for that. And I went from there to Texas, and I was doing copywriting for a living. And then I finally started my own tech company back in Nebraska in '93.

Or this is... it was Pyra... it was a company called Plexus, which you looked up in the dictionary and means 'network' or something. And we ended up doing just mostly internet hosting and web design. So that's where I learned HTML and eventually coding and stuff. And we were kind of just selling local businesses on websites.

Yeah, that sounds better. I was a web services developer.

Well, at the time I thought of ourselves as an internet company. That's as specific as we... because we wanted to create all these, you know, basically everyone had the same ideas back then just like they do now. But we wanted to develop products and software. We kind of reluctantly became a services company because of lack of money and a lack of skills. So we ended up... and that's why I ended up folding it also, was just I hated doing the selling. I hated working on other people's... clients are really annoying, right?

We actually never did. We probably should have. We probably could have both made money and grown more quickly had we done that. But Blogger never did that. I think the closest we came to a services company was when we ran out of money in late 2000. We had had a bunch of requests for an inside-the-firewall Blogger. And so we explored that. We created something we called Enterprise Blogger, and we just skinned it differently and we put it on a box. And the one client we had, we didn't charge them because we were testing out, was Cisco. Because my co-founder Meg had a friend at Cisco and said, 'Yeah, we want to try a Blogger inside Cisco.' So we put it on a box, we drove down to San Jose, and we set the box up inside Cisco, inside their firewall. We never saw what happened, and we never charged them any money.

Exactly. So here I am, the non-billionaire, telling you about business strategy. But what we did is we used that when we went and tried to raise money. And we said, 'Whoa, yeah, we're working on this Enterprise Blogger thing. We have Cisco using it.' We just dropped that, which was true, but it didn't get us any money.

I was probably depressed. But the hardest part was getting to that point where I had to lay off the staff. And the next day was... I was sad, especially because my company and all the employees were also my friends, and all of our friends, you know, worked with them. And a lot of people weren't very happy. So I was at that point super isolated. But the nice thing was my burn went way down.

Yeah, well, I had... yeah, exactly. I had to pay rent for myself and my office. I got rid of my office and servers, which were way more expensive per... we had a half a rack at Exodus that I paid like $5,000 a month for, and I was way behind the payments. So they were... but they went bankrupt anyway.

Yes. So they were letting... they were still giving me bandwidth. They wouldn't let me take any of my servers out, but I'm like, 'Okay, that's fine.' And still let them run anyway. So I just kept going because it's like the options weren't any better. And you know, I didn't want to declare failure. I still had users. I still had millions of users... probably not even millions, to tell you the truth. When I sold it to Google, I think we had a million registered users. And that's registered when we sold it, but back then that sounded like a much bigger number than it does today.

I like your version of it for when it gets rewritten as a movie. Probably go all right. I'll replay it. So what had happened by that time, this was in late 2002 that they called. I'll build it up a little bit. We... I had a small team of about five people. We were making a little bit of money. We were ramen profitable, I like that term, with just subscription services. And so we hadn't raised any more money after that, but we had enough users and we started launching things that they would pay for. One was called Blogger Pro, which was I think $35 a year for some more features. And one was you could remove the ads from your... if your blog was on Blogspot, the ads didn't make us any money because they were remnant network ads that basically made no money at all. But we would charge $12 to remove them.

Exactly. Exactly. We didn't call it extortion.

No, that's fine. We probably could charge a lot more, actually. But anyway, that was paying the bills and actually allowing me to pay a few people to work on it. So when Google called, we were... it felt like we were on the uprise again. And at the time, I had been talking to Joi Ito and his group about a new round of funding, and I had a term sheet on the table from them and was about to do that. That's when Google called. And what happens is through Tim O'Reilly, who was our investor, he said, 'Yeah, I was talking to the Google guys and suggested that they talk to you.' And they said, 'Yeah, we should talk to them about partnering.' I didn't know that 'partnering,' if you're a tiny company and you're talking to a much bigger company, is a euphemism for them being interested in buying you. I didn't know that either. And so we were thinking, 'Oh, well, how could we partner with Google? That's interesting. They're a search company. I guess we could maybe make searching blogs easier and stuff.' And so we drove down to Google, said, 'So we're thinking, you know, we got some ideas for partnering.' And David Drummond, the general counsel then, said, 'Yeah, well, it doesn't really make sense for us to partner with you guys, but maybe you could just bring Blogger here.' And I got the drift of what he was saying. I was like, 'Oh, okay.'

No, it was a confusing moment. But not that money is so important. I'm more kind of saying this is something I worked really hard on and I just killed myself for the past year by myself, and now everything's going to change. Maybe. Yeah, kind of. I mean, money is important. And I'd worked my whole life basically broke and usually in debt, and worked my ass off to make some money and to achieve the kind of freedom that could buy. And so the idea that I would sell my company was... it was a profound idea. But I didn't even... it wasn't immediately obvious I wanted to do it at all. It took me a number of weeks. Of course, we had to negotiate and figure out what it meant. But because I had this alternative path to actually raise money and build something on my own, and I wasn't going to get a bunch of money from Google, this is pre-IPO Google, which obviously is a good thing ultimately, but...

Exactly. And so I was... it would be... I could trade my independent future for having less flexibility and having a piece of paper that may turn into money. You know, it sounds silly now, but we didn't know what Google was going to be. It was impressive, but that it would be what it is, and even what that money would turn into was very speculative at the time.

Right. That is actually what it was like. Yeah, I didn't handle it very well, to tell you the truth.

I don't. Yeah, I'm not great at that. I wish I was better. I wish I had been better at Google because I was so fiercely dedicated to making my thing successful. I was proud to be a Google... it was the first time I'd ever been part of something else that I actually felt, 'I'm part of this thing and I'm glad I'm part of this thing.' But partially because I'd never worked in a company or had any formal training or schooling or anything, I just didn't even know how you do that. So I was fiercely dedicated in making my thing successful, and I felt like in a foreign land. I didn't know the rules. I didn't know the language to use to succeed in that environment. So it just kind of thrashed a little bit.

I worked very briefly as a contractor at Intel and HP, but I didn't really know how to manage. And this was also now you were working and you were leading something you still deeply cared about.

So I probably missed most of the things I was doing wrong. But I know one time, early on, I had this meeting with the vice presidents of product and engineering, whom I reported to both of them, because they didn't really know what to do with me, which meant neither of them ever talked to me. They had much bigger things to worry about. I presented to them and Larry and Sergey, and it was about like our plans or whatever, a roadmap. I don't remember the meeting that well. But actually several months later, maybe a year later, Jason and Shel, who worked with me and who was in that meeting, found a folder in this... when Google had what became Gmail internally, but when we got there most things still ran on Outlook and Exchange. And so there's this weird shared folder thing. He found a folder called 'Blogger' in the shared folders, and in that was one message. And it was from Larry or Sergey to Jonathan Rosenberg, saying, 'What the hell was that?' in regards to our meeting. And I'm paraphrasing, but it was some conversation between them about how clearly we didn't know what we were doing. And I was devastated at the time reading it, but it was probably not unique.

Blogs took off. Well, the beauty is what they did right, and what we did right enough, was we didn't kill it. And we focused on making the product better. And there was... we had product-market fit. So they just said, 'Do your thing.' And so we did our thing. They made it better and better.

Yeah, not as much as we thought. I thought, 'Well, I show up at this place with hundreds of engineers, I'm going to get some,' because I desperately need engineers. And then it was actually harder to get engineers there because any engineer that came in the door, they had to come through the same hiring process, they had to meet Google standards, and then they could be assigned to work on things like search and ads, which were these huge businesses that are blowing up, or they could work on our little thing that didn't really matter. So it was a clear dilemma. So it was hard. There was a thousand other projects vying for resources. And so because I didn't play that game particularly well, I did eventually get resources, but not a lot. And it was slow.

I saw it having very similar potential and properties. And I kind of stumbled into that because of my friend Noah Glass, who was working on that company. I didn't really leave Google to do it. I just wasn't doing anything. And he had his charms. And what I saw was it's all about the democratization of media. And so in a similar way to blogging, I thought, well, lots of people should be able to have opinions and voices and thoughts and share them in this form, which has not yet been impacted by the internet as much as pretty much everything else. And tons of people listen to the radio all day long, or at least when they're commuting. And it's old-fashioned and it's centrally controlled, and we should open that up in the same way.

Yeah, that was tricky. Because when we started, Twitter was a side project. We called it Odeo, but it wasn't working really. And we had a bunch of money in the bank, and I just... I wanted to get out of the situation. Not because I thought Twitter's going to take off. I thought Twitter was interesting. And so what I proposed to the board was that we first of all try to sell the company, because that was the right thing to do for the investors. And so we attempted to sell the company, and we failed.

Oh, we talked to all... we went to Santa Monica and talked to MySpace. We tried to talk to Audible, certain audio stuff. Talked to Yahoo. I think the only place we even had meetings or got meetings were MySpace and Yahoo. And then Rhapsody, or RealNetworks. Yeah. And you know, there just wasn't a lot of interest. And so we got to a board meeting where the board was going to vote to shut it down, give the money back. So Twitter had existed for a few months. It had... and we presented that at the board, and we showed the data. And you know, we actually floated, 'Should we just pivot to this?' And I got a very clear message from the board that, you know, there's no evidence that we have anything there. And if we're not going to... if we don't think Odeo is going to work, then we should just shut it down, give the money back. And so at that board meeting where that was going to be the vote, I said, 'How about I just buy the company personally?' Fortunately, Google had gone public at the time. It was still... it was a huge investment for me personally to buy the assets. And I wanted to make the investors whole. I didn't want them to lose money. So I paid a lot more than I needed to, because if they were going to get back 60% of their money, I got them back 100% of their money. And then that enabled me to just own it and do what I wanted with it.

I think there was some misunderstanding about what happened. Because there was a couple investors who ended up being investors in Twitter who were investors in Odeo. Because they had Charles River Ventures, who was always really cool about it, and George Zachary was the partner there. They were the biggest investor in Odeo. They ended up investing in Twitter later. And there were then... I had about a dozen angels in Odeo, and two of them, I believe, ended up investing in Twitter. And then some people, some of the others, got the impression that they just converted their investment. But there was no such conversion, because I bought Odeo investors out completely, put all the assets into a separate company that I funded for six months, and then we formed Twitter Inc. and raised the new round. And that wasn't the plan when I bought the assets. We had no idea that Twitter was going to take off or that we were going to do it separately.

I thought it was worth playing with more. I didn't think it was worth having, you know, millions of dollars of investment capital and a team of, at the time, a dozen people working on Odeo. So, you know, it's hard. We didn't necessarily think we had a hit on our hands. What I wanted to do is I wanted to create this lab, which we called Obvious, to build a bunch of different stuff. And so what I did is put Odeo and Twitter, our first two products, in this what was going to be this incubator. I was talking to John Borthwick at the time about what he was doing with Betaworks. That was just starting, and we had very similar ideas about what we're going to build. So I was picturing this kind of umbrella company that would have a number of products, and maybe we'd spin them out if it made sense, or maybe we'd just run them. And that was the notion. So just like, you know, Twitter's one of those. We're talking about others. And yeah, but obviously we didn't launch a lot of others.

Well, it wasn't really a mistake because they frankly didn't have a choice. Right. They made the right decision too. Yeah, it was the board's choice. You know, and the board's job is to look out for those shareholders, and the board legitimately thought this is the best thing for shareholders. So we're going to give their money back. So I didn't go to anyone. There are a couple people who I asked to invest in Twitter who were investors in Odeo and said no. There are a couple people who were knocking down the door to invest in Twitter who had invested in Odeo, and I said yes to. And those are the people who had been super helpful to me at Odeo, like Mike Maples and Ron Conway. And most of the others, I don't know, they may... there's a completely understandable reaction to say, like, if I was an investor in the company where Twitter was birthed, I should be an investor in Twitter. But it was neither a mistake on their part, or people have tried to make the case that there is some shenanigans there. But if you really look at the facts and you look at the investor communication, you look at the board, and you look at then, I think it quickly breaks down. Like, it was a bit of a fluke. And you know, and certainly some people's investment you probably wish went the other way.

Well, I felt there's a bunch of different things that went into Medium. One is that it was very clear that while social media and Twitter were very important and filled this gap that we didn't know existed before, it wasn't sufficient for the stories and ideas that the world needs. There's still a need for more substantive, longer, but different types of publishing than that affords. And B is what we've learned is it's not like networks are all powerful. And so this is the thing we missed building Blogger, as you said, it was a way to create a website and then update that website. And basically every general-purpose publishing tool on the internet at that time, and mostly since, has started with the premise that you need a website. Like WordPress, for instance. Exactly. And they were all just different ways to create and/or maintain a website. There's no reason you need a website. A lot of people still think they need a website, but if people publish for all kinds of reasons, sometimes just to express themselves, sometimes to influence the way other people think and affect the world, sometimes to market and sell stuff. And for all those things, you don't fundamentally need a website. What you want most, more than anything else, is you want audience. You want the right audience. You want feedback, qualitative and quantitative. A website isn't required for either of those things. What is efficient for both those things is a network. And so what we focused on was we want to build the simplest way to publish and to create a network effect, so you get the audience, you get the right audience, and you get qualitative and quantitative feedback on what you put out there in a way that makes the whole greater than the sum of the parts, both for the consumer and the creator and everyone in between. And so I think it'll be generally accepted over the next few years for those who publish on the internet, the point isn't to have a website.

Yeah, exactly. And I think more and more people realize that the website is not the point. And whether it's just to have good tools, or to find audience, or to get feedback, or to engage in conversations, a website is the least efficient way to do any of those things. And so what Medium is trying to be is, of course, the default place to publish for lots and lots of people. But I think the shift, whether we exist or not, the shift is going to happen from websites to centralized networks, for better or for worse. I'm a huge fan of the open web, and I think it's important. But the fact is, the majority of content and attention is going to go to networks that make it efficient for the creator and the consumer. And you know, there should be one of those that has substantive content besides Facebook.

For sure. And I think it's the same as... and there's also very practical... if you say you get someone to come to your website, then we have some unique engagement mechanisms on Medium, but say all you want is comments, that's important to some people, it's not important to others. Then people have to be logged in and they have to engage on a system where no people they know are, and that's just... it's not going to happen. So similar, if you're on Amazon, not only is it trusted, very practical considering it's like they have your credit card already and it's one click versus filling out a form. All these things, this plumbing and infrastructure is critically important. And people will shift over time to realize it. It's sort of one analogy I use is there's a time when everyone thought they had to own land, and some people still do. When owning land is great and you can do whatever you want on that land. But then the majority of people move to cities. And cities, you give up some flexibility and freedom and you trade it for convenience. You also trade it for the dynamic vibrancy of being part of a community and bumping into other people. And especially people who create culture do so in cities.

Yeah, exactly. And we're going to do more stuff like that. Because it's... and we're just... to use the city analogy more, is that the presence of other people is incredibly important to both give context to stories and to make them relevant to your interest. So if on Medium, on Facebook, you can be pointed to an article and then you consume that article, maybe you go back and there's comments, but there's no one in there with you. And so what you're talking about as an author, from a reader perspective, it's if you've read something and highlighted something or made a note, and I follow you and I come across that, immediately that's more interesting. It's like seeing a movie together. It's like, let's talk about that.

We're working on that. We're about to launch a big update to the notes function that, especially on mobile, that's going to make that a lot better. You can make it almost like... what I would love to do is cut and paste an entire book there. Because I sort of think I don't really care about publishing books, but if I post an entire book there and then... I mean, even Kindle should do this. I should see conversations within my book. Like, this is what he was meaning. Why did he say this? You know, it might be interesting.

It's a cool thing. Not with the current notes, but that's the way we're moving. The comments at the bottom can, as you know, and create all these trees. They're a little hard to follow right now, but super interesting things happen where because it's on the same level hierarchically, a comment can be its own post. And therefore people sometimes put a lot more work into them. They have lives of their own, and they can be contrarian or can build off the original thing. And so that's where the whole really starts to become some of the parts.

I know it's the subject of many articles that were even factually wrong or I disagreed with, I wouldn't bother writing a comment because it's sort of relegating yourself to, you know, underneath. And you don't really... you don't stand on level ground with the poster. So you just don't bother. Like, I'm not going to dignify that with a comment. But you can dignify that if you're on equal footing.

Yeah, no, I think that's a no-brainer. It should be easier to sell content, for sure. And it's going to be way easier on a platform where you have a much larger audience and therefore take advantage of the same thing that if you're selling shoes on Amazon, you can take advantage of. And there's no doubt in my mind that different content can monetize in different ways. A lot of it doesn't need to be monetized at all, and that's fine. That's not why people do it. Some of it works great with advertising, and some of it people pay a premium for. Even in this world of infinite content, sometimes they'll even pay more.

Exactly. And so that means they'll pay, you know, thousands to be able to create up the infrastructure because they know they're going to make, you know, six or seven figures here. Why not pay five figures here? And so I think it's likely that we explore that for sure. It's a matter of prioritization. But the beauty about doing that as part of Medium and not as a standalone thing is you can imagine, like, you write all the time, everything you write is then an ad for the paid stuff, right? And if you do that in a really seamless way on an integrated platform, as opposed to, 'Okay, now follow this link and go fill out a form on some other website,' it could work really well. Hopefully we'll see soon.

So that happened to be... that was a recruiting meeting. He doesn't work here, so don't report on who he was.

Yeah, was recruiting. I do a fair bit of that. But mostly I work with the product team here. We have more of the editorial people here in New York who are working on super interesting projects with writers or with VIPs or influencers. And in San Francisco, we have engineers and product and design. So I'm either sitting with them trying to figure out what we're working on, or giving feedback on what they're creating, or, you know, there's general management stuff. There's hiring, there's running the company stuff. It varies a lot. My happy place is on the creation side. So either by myself trying to... I love writing. I don't write as much as I'd like to publicly. I write a lot internally for the company. We have our own version of Medium that we use, both to beta experiences and features as well as to share our ideas.

It's pretty cool as an enterprise. It works really well, actually. And so I spend a fair amount of time on there. And it's really a free market of ideas within the company. And people are always discussing what's going on, or new stuff we might build, things they're worried about. So it's really just like talking to people and trying to help them and help the right things happen.

You bet.