Let me start our next session, a fireside chat with Dick Costolo. Let me give you a little background before we jump in. The title is going to be 'Serial entrepreneur with three exits and former Twitter CEO who took the company through IPO shares lessons on building and backing transformative companies.' Dick is a managing partner and co-founder of venture capital firm 01 Advisors. I hope I'm saying that right. He's shaking his head, so that must be good. Prior to that, he was CEO of Twitter from 2010 to 2015, having joined the company as COO in 2009. He oversaw major growth and was recognized as one of the 10 most influential US tech CEOs by Time magazine. Before that, built several startups of which one he sold to Google. We're going to break this kind of 40-minute chat into three parts: past, present, and future. Dick, welcome very much. We're thrilled that you're here.
You got to go off mute, Mr. Technologist. There you go.
Sorry. I always come in unmuted and then yours I came in muted. So, anyway, no, no worries. Great to see you. How you doing?
I'm good. How are you? Mute is the great equalizer. It removes all status from the room.
It's true. I mean it happens to everybody, especially a lot probably it happens a lot to you, but I get on the calls with these brilliant rocket scientists, deep tech, I mean so brilliant, similar to you, and all of a sudden the mute is, you know, we mess that up. And during my keynote earlier today I messed up just the play button in Zoom, so you know, we can't be perfect. So let's kick it off. You know, many know you as CEO of Twitter, now venture capitalist, but a few know that you actually started out doing improv comedy in Chicago.
And so obviously, you know, how did you go from a comedian to a serial entrepreneur? And there must be some joke in there somewhere.
The joke is on me. So I studied computer science at the University of Michigan. And when I was a senior, I decided that I didn't want to take any of the offers I had from, you know, actually the only company that I had an offer from that's still really around is IBM. The rest were like Burroughs and Honeywell and those folks. And I decided I wanted to try to get on Saturday Night Live. So I went to Chicago and auditioned for Second City because that's where all the SNL people came from. I actually got there the same day as Steve Carell. So Steve and I performed together at Second City for like six years together. And I was there with Amy Poehler and Rachel Dratch and Tina Fey and all those guys. Then I auditioned for SNL twice and didn't get it either time, but to my credit, Steve auditioned for SNL three times and never got hired, but he stuck with it and it worked out for him. So all well and then it just ended up going back and you know I was like, 'All right, I got to put my degree to use.' And it was right around the time the Mozilla browser was taking off and I was like, 'Oh, this is the future,' and I just started my first company.
So tell us about, I remember back then I was in the mid-90s I worked at @Home Network in Silicon Valley. It was just a couple years, you know, the same time Netscape was coming out and going public. So tell us a little bit about, you know, it was a couple startups, a web dev firm and then RSS feed company called FeedBurner. Tell the audience like back in 2000, what was that and go ahead.
No, the idea behind FeedBurner. So this is pre-Twitter actually. Twitter and similar services end up displacing what FeedBurner did. So there's this technology in the early 2000s called RSS that allowed you to syndicate web content anywhere. So, in other words, instead of going to, you know, your favorite VC's blog in the morning and your favorite news site and the New York Times and, you know, ESPN or whatever, there were these feeds that were XML feeds that you could distribute anywhere. And there were these tools called web readers or aggregators that would aggregate all the different feeds and so you could read all your news in one place. The idea behind FeedBurner was we're just going to be a publisher clearing house to match publishers and subscribers and do things to help publishers understand here's everywhere my content is going now that it's distributed off my site and you know I have AdSense ads in my site. I'm now going to put them in my feed. And we just felt like we're going to be the publishers' syndication clearing house, sort of the Mastercard or Visa connecting publishers and subscribers if you will. And then Google bought that company because they were like, 'Okay, if the future is syndicated and not on websites, AdSense is, you know, in big trouble if we're not a part of that.' Of course, literally the year after I sold my company to Google, Twitter came along and kind of became that next way of syndicating the way your thoughts and what you were thinking about through that centralized service.
So what was during that FeedBurner days? What was your biggest, you know, sometimes I just like helping the audience with a lot of times we learn the most from some of our mistakes. So what was your biggest mistake the FeedBurner days that happened and that you learned from?
Yeah, the biggest mistake, what I would say the thing we did right and the thing we got wrong was we just weren't thinking big enough. We didn't have a big enough vision for scaling quickly, going as fast as we could, you know, scaling ahead of demand. And so it was just kind of, it was a successful startup but in many ways we had this sort of parochial mindset if you will and just weren't thinking big enough. I remember when we sold to Google and I was at my first Google all-hands with Larry and Sergey speaking in 2007 after we sold the company. I was like, oh, it was really eye-opening, like, oh, they're thinking big, big, like we're not just going to be web search, we're going to be, this will be where you go for all your products. This will be where you read books. This will be like, oh right, that's the right way to think about things. So I think that was our biggest mistake and one of the things I encourage founders is to, you know, make sure you're thinking big enough. That's probably the biggest mistake we made. The most successful thing we did was understand that Google is a much bigger behemoth than us. Instead of, you know, I think people frequently think that they're going to be able to achieve something, you know, we don't need to sell to Google or I mean, look, I don't know if you remember the live audio social network Clubhouse. Jack Dorsey offered to buy them for $4 billion when they had eight employees and they turned them down and now the company doesn't exist. So we were smart enough to realize like don't get too far ahead of yourselves and so forth and this is probably my outcome.
And then you joined Twitter as COO in 2009 and how did that come about from, you know, transitioning from Google to that?
Yeah, I met the future Twitter guys when they were at Google and had sold Blogger to Google. So Ev Williams and Jason Goldman and Biz Stone had sold Blogger to Google. And when we got to Google, Larry and Sergey said, 'Hey, you should go meet one of the other CEOs of a company we bought to help them understand, you know, what it's like to work here and what's like to be a former CEO who's now.' So I got to know those guys. And as I was coming in, they were going, as when Google finally did buy the company in 2007, Ev and during the purchase process, I'd got introduced to them. By the time we joined, Ev and Biz and Jason had left and started Odeo, which became Twitter. So when I left Google two years later in summer of 2009, Ev right away said, 'Hey, we really need someone to come in and be an operating executive here who's done this before and you have.' So I took the job.
Cool. And so I mean so you went from startup in Chicago, FeedBurner, to big company Google, and then to that stage back to Twitter which I mean roughly how many people? So what was first impressions there and like okay what's focusing?
It was a mess. But you know what the funny thing is, in an exciting way probably. Yeah, but I'll actually backtrack for a minute to Google because one of the second lessons learned at Google was oh, everything is not going as well as it appears from the outside. They just, it just so happens that we have this thing called AdWords that prints money and shoots cash out of the ventilators and it enables the leadership team to make all sorts of insane mistakes that don't end up mattering. So, I'll give you one example. Google decides they want to try to buy this company Grand Central that eventually becomes Google Voice. I remember that it was CNET founder Holly Minor, wasn't it? That is exactly right. It was Holly Minor. So the corp dev team at Google texts me and says, 'Hey, similar to me getting introduced to Ev, says, 'Hey, we're going to go pitch Larry and Sergey on buying this company, and it would be good to have a CEO from an acquired company in the back of the room in case Larry and Sergey have questions, blah blah blah blah blah.' I'm like, 'Sure, you don't have to do anything. Just sit in the back of the room while we're discussing this.' And at this point, I've only been at Google for like two months. And I'm still sort of wide-eyed and this is this amazing company. And I'm working for Susan Wojcicki at the time, who is awesome. I'm like, 'Great, I'm going to get to go into this corp dev meeting with the founders of Google, and it's going to be like really insightful. I'm going to learn all this stuff.' And I go in the back of the room. And the meeting starts off by the corp dev team saying, 'Okay, hey, we want to talk to you today about this company we want to buy, Grand Central. The purchase price is $92 million.' Haven't even talked about what the company does yet. And right away, Sergey says, '$92 million? We could build a lunar landing module for $92 million.' And Larry goes, 'There's no way you could build a lunar landing module for $92 million.' And we proceed to observe an argument between Larry and Sergey for the next 30 minutes over whether you could build a lunar landing module for $92 million. And I turn to the head of engineering who wants to do the acquisition who's sitting next to me and I whisper like, 'Is this plan B? Like what's going on? Like is anyone going to say we need to go?' The meeting ends because Larry and Sergey have to leave and I'm like, 'Okay, now what happens?' And the head of corp dev goes, 'I'm going to call the CEO. I'm going to call Holly Minor and say Larry and Sergey got called out of town. We're going to meet with him again next week.' So, it just, one of the other things I learned at Google was oh, like when people tell you how awesome, you know, company X is and it's doing really well, it doesn't mean that everything's always going according to plan. And so, that was super helpful when I got to Twitter because I got to Twitter and it was growing like a weed, but it was a totally a mess internally. Like the site. I don't know if you remember at the time.
Oh, the fail whale kept on appearing.
We literally had a brand name associated with the site being down. The fail whale, like it was, I don't know if that's ever happened since or before but we had a brand name associated with the service crashed and the company was just kind of, everything was, decisions never got made.
And that brand name came up, that brand name, sorry to interrupt, was always about because when you land, when the system was down you landed on a web page but there was a big whale and it was the Twitter whale so I mean it was kind of self-induced brand.
Biz had drawn on a whale with balloons attached to it that became known as the fail whale which was just a page that said we'll be right back or something like that. And so I got there and I was like okay, I at least instead of freaking out like oh this place is a mess. It's not what everyone thinks. I at least had the Google experience in my back pocket of all right this is just the way things go out here. People have one expression on the surface and then behind the scenes things are a mess but we have to clean it up. But I, so with the, it's kind of a story that I bring up frequently because it's one thing to have that, you know, kind of fail whale but there was so much demand and so much interest and that actually gave more interest and more demand and more press and so you know it's kind of like there was early IBM commercials you probably remember that said you know you need all these server farms for your launch but if nobody comes there's no value. It's like, you know, a double-edged sword, but if a ton of people want to use it, it's actually a good problem to have as long as you get out of the problem soon enough. Wouldn't you agree or something like that?
100%. And it just goes, I mean, it always goes to show you, you know, I read these, there was one of these on Twitter yesterday, actually. I guess we're supposed to call it X now, but I still call it Twitter. There was one of these on X yesterday of somebody going through here are 20, you know, CEO founders of top companies and the things they all have in common and it was, you know, Ben Silbermann from Pinterest and Drew Houston from Dropbox and Jack Dorsey and on and on and on and it's just nonsense. The reality is it's just nonsense like there are lots and lots of different ways to be successful. Some of these founder CEOs are great CEOs. Some of them are great founders and bad CEOs. Some of them are bad founders who have the right product at the right time and brought in the right team. So one of the things I always tell YC founders or other CEOs who come and ask me for advice, you know, they've read the Steve Jobs book and they'll say something like, 'Oh, you know, Steve says you have to say no to most ideas and should only say yes to a couple things.' My first response to those people is always, you know what, there are lots of different ways to be successful and you know, it has almost nothing to do with following somebody else's playbook.
Yeah. No, that I think that's great advice and everybody's going through their own roller coaster and there's different advice for different times of different domains and there's never one size fits all and I think being empathetic and listening and trying to help people through things without, there's never one answer which and people always ask for one answer.
100%. I'll give you another version. I'll give you a Twitter story that maps exactly to that actually brought up Steve Jobs. So, we decide at one point after I become CEO and we can happily talk about that. Jack Dorsey is now the chairman of the board and I'm the CEO and it's beginning of 2011 and I've just become CEO in October of 2010 and we have an open board seat and we decide to try to get Jeff Bezos to take the board seat. We're like, who's the best person we could get to join the board? Bezos. And so Jeff says to Jack and I, 'Listen, I don't let any of my C-suite take board seats because we should be focused on Amazon. So I really shouldn't do this either, but you know, it's interesting enough that I want to at least have the meeting and like let's talk about it.' So Jack and I sit down with Bezos and have this discussion and Jeff asks like, 'Tell me about how you think about strategy.' And right away Jack said, Jack is the real Steve Jobs acolyte at this point. And right away, Jack says, 'Well, Steve says, the most important thing about strategy is to say no, and the CEO's job is to be the chief editor and blah blah blah blah blah.' And Bezos looks at him and goes, 'Oh, yeah. Well, I like to do everything.' And he has this big laugh. He goes, 'My team has to talk me out of stuff, you know.' And he's like, 'Hey, Jack, just so you know, there's lots of different ways to be successful. And if you think reading the book on so and so is what Steve Jobs is like, it's not exactly what he's like, you know.' So it was just a great reminder that, you know, you can be successful doing things the...
So many different ways to do it.
So many different ways to do it. So talking about that, you know, period of CEO, what do you think was the toughest moment that you dealt with? I mean, there were probably many, but I mean, in your mind, I mean, what was the toughest? What was that?
There's probably a bunch of them. Pick a Tuesday. Like, I mean, I'll give you a couple examples. And this is, I'll give you a couple. Well, first of all, the biggest regret was we tried to buy Instagram a month before Zuck bought it at Facebook. So, it's February 2012. We try to buy Instagram and we offer Mike and Kevin, the founders, Kevin Systrom and Mike Krieger, the founders of Instagram. There's only six employees in the company at this point and yet we all realize this thing's going to be a monster and we offer them 10% of Twitter at the time which was like, you know, we just raised money at $4 billion and 10% of the company at the time's plenty. And I'm telling Evan like you're going to be able to run product for the whole company. You're the best product thinker in Silicon Valley right now. And they turn us down. They raise money from Greylock and then a month later they sell to Zuck for a billion dollars. 300 of cash and 700 of stock. And I call Kevin. I'm like, 'Hey man, I would have, like if it was the cash, I would have like borrowed 300 million, 350 million from JP Morgan and given it all to you.' But you know, Mark, good on him. Locked them basically in his apartment for a weekend and you know didn't let him go until they gave him everything he wanted. So that was the biggest regret for sure. I mean think about the history of the internet would be totally different if we had gotten Instagram and they hadn't. Okay, the biggest challenges though were almost always related to, should we take, you know, they took Trump's account down long after I left but it was always around trust and safety issues of like all right is this okay or not okay? I'll give you a specific example, you know, and I mentioned this one because people who are users of Twitter always say, 'Well, it's easy. Just delete, you know, if someone does X, delete it, and if they do Y, don't delete it. Why is it so hard?' I'll give you a specific example. So ISIS, at the time the terrorist group ISIS captures these pilots from one of the countries attacking them, puts the pilots in these orange jumpsuits in cages and burns them alive and they video it and take photos of it and they post those to Twitter. So my general counsel comes in and goes, 'Hey, this is happening. I think we should just suspend any account immediately that posts these photos and videos.' I'm like, 'Sure, easy. Like, no-brainer, easy decision.' Later on that day, I get a text from Kara Swisher, the reporter. She's like, 'Why did you guys suspend the New York Post account?' I'm like, 'What?' And I find out the New York Post has posted the photo of the pilot being burned alive. And the trust and safety team's like, 'Okay, here's the rule. Suspend like...' So, whenever we would have these discussions around this is a black and white issue. Obviously, we should do X. It was never as black and white as everyone thought it was. And then you would have these like, okay, well, now what do we do? Can you post that if we know you're a good guy? You know, can you post from this if this country but not that? You get it? And there were these things happen constantly.
I mean it's similar to that comment earlier we talked about like there's not one answer and giving advice there's not unfortunately, you know, fortunately or not fortunately there's different views and everybody, you know, there's right and wrong and different people's vantage points and building a platform and the network effects of that it's very hard or impossible to say one group is wrong and the other there's more right and more wrong and everybody's going to have a different perspective on that.
Yeah. And the great takeaway from that is you will see, I mean otherwise very very smart people like Elon the current owner of the platform saying it's just easy you should just have rules for X versus Y. And I remember when he bought the company I was like you're about to find out man, you know, you're going to see yeah you can't do that or like oh this thing's a bot just delete all the bots. Okay well the New York Times weather Twitter account is a bot so you're going to delete that, you know.
Yeah. Exactly. You get it? Exactly. So, tying what you said about, you know, your interest in acquiring Instagram. Just as a reminder, you know, to the whole audience, it relates to our next topic I want to ask you about. So, our thesis at LD Capital since founding in 2012 is, you know, majority of data our brains analyze is visual. So, a majority of data that AI will analyze will be visual across the light and electromagnetic spectrum. Back then, it was thought as cute, niche, and science fiction. Now, it's validated. And you were about to buy or tried to buy Instagram in 2012 roughly. Then Twitter acquired Vine the video platform and then Magic Pony in 2016 for 150 million all in the imaging space. So tell us a little bit about when you were there was it always the goal to add more rich media? Did it all of a sudden start to say why then and why not earlier or later?
Yeah. So before I became CEO, there was this what I will call stupid thesis inside the company that all tweets are equal weight and image photos and videos shouldn't be bigger than the text tweets otherwise they'll get all the attention. And my response to that was when I was COO rather was hey man go look at Facebook. 95% of the usage of Facebook is photos and videos and people commenting on the baby photo or whatever and not like whatever status someone has written. The idea that photos and videos should be weighted in the timeline equally to text is dumb. Like if I write a one-line text tweet it should be this big and if I take a photo it should be so I can see the whole thing it should be this big but before I was CEO they were like no no no we have to crop the photos because all tweets are created equal which I just thought was idiotic. So the moment I became CEO it's like humans, what you just said, humans are more interested in and want to engage with rich media and it will always be so and so we immediately started investing more heavily there.
