Vintage 19th Annual VC Summit - Dick Costolo

Yeah, I actually, so when I graduated from University of Michigan, I had a computer science degree, but I decided I wanted to try to get on Saturday Night Live. So I went to Second City in Chicago, actually showed up there the same day that Steve Carell did, and performed there for like six years with Amy Poehler and Tina Fey and Steve Carell and all those guys. And I auditioned for SNL twice and obviously didn't get it, or I wouldn't be sitting here, but it would be a whole different thing. And so I went back into the business world.

The way, and I'll cut directly to the way that everything that I did at Second City and improv affected leadership at Twitter was when I took over as CEO of Twitter, we were slow and there was no accountability. And I was like, okay, if we're going to do two things here, we're going to have cadence and accountability. And one of the ways to get cadence is I instituted this thing called bias to yes. Amazon kind of has a similar thing, Jeff Bezos calls it bias to action, but bias to yes was when I took over as CEO, one of the reasons we were slow is as you grow, people start to ask for permission to do things. So if an engineer wanted to run an experiment, he would go ask his engineering manager, 'Hey, I've got an idea for an experiment that I think is going to drive engagement. Can I do that?' The engineering manager might say yes, or the engineering manager might say, 'Great idea. Check with legal and make sure it's okay.' Person goes and asks legal. Legal says, 'Great idea. Check with user trust and safety and make sure it's okay.' Pretty soon people are running around asking for permission instead of just doing things and running experiments. So bias to yes was nowhere in the organization other than your direct manager is anyone allowed to tell you you're not allowed to do that or you better go ask someone else for permission. Only your direct manager can say, 'If you do that, I'm going to fire you because you're supposed to be working on this other thing.' And that was a great way to lubricate the organization, if you will, and get things moving.

I remember when once we did that, one of the front-end engineers from the prior administration before I took over came into my office and said, 'Hey, the status bar changed and nobody asked me about that. Like, we didn't vote on that.' And that's the way the company had been run before I took over. It was we're going to sit around in a circle and vote on things and whether we're going to do them or not. And I just said to the guy like, 'Yeah, we're not doing that anymore.' By the way, I didn't even know that changed. Great. That should be the way the company works. People are acting and making decisions and moving forward on their own. So that is a long answer to your question about what I took from improv into leadership at Twitter.

Well yeah, as you scale, I mean, CEOs in the room, you will trust me, you will experience this. I will tell you two things you will experience as you add people. One, you naturally slow down because people just start doing things like going around and asking for permission or creating little bureaucracies within their own organization. You know, we had at one point, I remember the growth team came to me and said, 'Hey, we need a separate Mailchimp or whatever subscription because we want to send emails out.' And I was like, 'We already have one.' He's like, 'Yeah, but the marketing team won't let us use it.' I was like, 'What?' Like, it's insane. So the other thing that happens, so the organization naturally slows down as you grow and you have to remind the organization two things: one, we have a bias to yes, the answer is default yes, if someone outside your organization tells you no, come and tell me about it because they're going to get in trouble. And secondly, and organizations screw this up all the time, I used to get on stage every week and tell my people, nobody here will get in trouble for making a mistake. It is not the job of leadership to prevent mistakes from happening. It's the job of leadership to correct mistakes quickly when they happen. So if something is screwed up or something gets screwed up, come and tell us so we can fix it. No one's going to get, no one should ever get punished for making a mistake. And again, the prior administration was if something happened on the site, went down, which happened all the time, that person was punished and reprimanded and kind of sometimes in front of the company. It was crazy. So of course, people are hiding mistakes when they make them, trying not to get in trouble and walking around the hallways trying to make sure nothing gets, you know, the organization slows to a crawl. So you have to constantly remind people again, especially as you grow, nobody's going to get in trouble for making a mistake. I want people to take risks. We have a bias to yes. If you have a great idea and you tell your manager about it, go for it.

I mean, like every, which, pick a week, like, you know, I screw things up all the time. You know, I remember, I'll give you one specific example and then I'll tell you a story about it. Like, I reorged the company once and I decided like, okay, I'm going to reorg the company, but I don't really know when I'm going to do this particular leader and where I'm going to put them. So I'm going to tell these three other people first and then I'm going to go talk to this other leader later. Like, when you're doing reorgs, you have to do them like right away and tell everybody at the same time. You can't say, you know, 'Josh, here's what's going to happen tomorrow, but I don't know what I'm going to do about the Android engineering organization. So don't tell anybody.' Like, stupid. Of course, Josh goes around and tells three people, 'Hey, don't tell anybody.' And next thing you know, there's chaos in the organization. So I would get up in front of the company and say, 'I really screwed this up. Won't happen again.' You know, Google had a rule, all reorgs in 24 hours and you communicate them across the globe so that everyone finds out right away at the same time. And I mean, again, I would screw up stuff all the time and would just try to articulate that to the team so they understood, look, we're all going to screw things up as long as we're open and direct about it and we fix it right away instead of denying it or pretending there's not a problem. That's how the organization moves quickly.

Yeah. I mean, so, oh, I was going to tell that story I was going to tell you. So I had dinner with Ben Silbermann from Pinterest. We would have these CEO dinners once or twice a month. And it was Ben Silbermann from Pinterest and Aaron Levie from Box and I. And Ben came to the dinner. He's like, 'Hey, can I ask you guys a question? I just had lunch with, I can't remember, it's Pat, I'm blanking on his name right now, but I just, oh, Drew Houston from Dropbox. I just had lunch with Drew Houston. Was asking him how everything's going and he was like, amazing. It's great. We're like crushing it. I could never have been happier.' And Ben goes, 'Is that happening with you guys? Because I like wake up every night at like 3:00 a.m. and squeezing my head together thinking I'm going to ruin, fly the plane into the side of the mountain.' And I was like, 'He's lying.' You know, there's like, of course there's 17 things that are going wrong at Dropbox. And it's like anytime a CEO tells you like everything is great. So I just think you have to live with the fact that things are going to constantly be breaking and going wrong. And as a CEO of a scaling organization, the thing you have to remind yourself, this is when you go from tens to hundreds and then hundreds of thousands, is you have to stop being a firefighter and putting out fires and start to think in terms of forestry management. Like, you know, here's how I'm going to think about forestry management. I have to trust that people on the ground and people on the teams are going to put out whatever fires there are and I'll keep an eye on them as part of my forestry management to make sure that everything's broadly under control. But you can't dive in and tell people what to do.

Yeah. So I remember when, the challenge with running, specifically running Twitter, is it was and it still is in the news all the time and you know, all these celebrities are using it and all these politicians are using it and it didn't, you know, of course it didn't start that way. I remember in, and I'll tell a couple stories about it related to like managing the team. The first story I'll tell is I was in my management team meeting one morning in 2010 after I'd become CEO and my assistant comes in the room. It's Monday morning. We have our Monday morning management team. My assistant comes in the room and goes, 'Hey, there's a phone call for you.' And I'm like, 'Okay, like tell them I'll call him back.' And she goes, 'It's the White House.' And my like, you know, humble Midwestern upbringing, I was like, 'I didn't do anything. What are they calling me for? I didn't do anything.' You know, and it was really the first understanding or realization that we're this global platform and it was the Obama administration wanted me to come to the White House and talk to them about what was going on on the platform and so forth. And we'd never thought of ourselves as anything like that before. Of course, then over the course of the next few years and through now, it was in the news all the time. And so I had to constantly get up in front of the company and remind them like, you know, hey man, like, you can't, we've got to focus on, we know what we need to do. We had to focus on doing that and ignore that noise. In fact, I put up, I would regularly put up, you find an old Twitter employee, they'll remember it like it was yesterday because I did it all the time. I put up Michelangelo's statue of David just to give people a visual reminder and was like, Michelangelo wanted to portray David in that moment between decision and action. So he's got him with the rock in his hand and the sling over his shoulder. He knows he needs to slay Goliath. He's looking at him and his neck muscles are taut, but he hasn't done it yet. So he's captured him in this moment between decision and action. We know we need to go do and we just have to do it. There's a lot of other stuff going on. If you don't pay attention to it and we do what we need to do, we're going to be successful. And now it's one thing to say that and it's another thing when you know there's some article in the Wall Street Journal about something that's going on on Twitter and five of the new employees come to you and ask you if we're going to be, you know, if the company's going to be around tomorrow. But I tried to use that device as a way of calming people down and reminding them if we do what we need to do, we're going to be fine.

I remember when things started to go wrong sort of for the first time at Facebook, you know, a few years ago when they sort of pivoted to the metaverse and the stock started tanking and they were spending all this money. And there was a bunch of people left Facebook and there was a bunch of turmoil at Facebook and I was on CNBC and I got asked about that and I was like, 'Yeah, they've never been in this position before. Of course they're freaking out.' At Twitter, if there was a bad article in the New York Times, we were like, 'Is it Wednesday already?' You know, so it was like the company kind of became immune to it, but you know, for new people, they would continually come up and still ask, 'Is everything going to be okay?'

It's always hard. Like I had a Y Combinator founder come up to me in a coffee shop in San Francisco about eight months ago now and say, 'Hey, are you Dick Costolo?' And my answer is always, 'Oh, I get that a lot,' because you never know if the person's going to punch you if you say yes. So after he was like, 'No, really,' he's like, 'Hey, I'm going into YC. What's your one piece of advice for me?' And I said, 'It's always hard, you know, when you're, you're always thinking like, well, once we do this, once we get to XYZ or you know, once revenue starts doubling every year, once I hit my numbers four quarters in a row, it's just there's always 14 more things to do.' And the only thing that matters and that you have to constantly remind yourself is resilience is the number one characteristic of a ultimately successful leader because things constantly go wrong and you just have to be able to focus, compartmentalize, and push through.