By Zoe Schiffer -
NBC News
When Jack Dorsey announced his resignation as CEO of Twitter on Monday, he offered a surprisingly stark assessment of his time at the helm of the company.
“There's a lot of talk about the importance of a company being 'founder-run,” he wrote in his resignation letter, which he shared on Twitter.
"Ultimately, I think that is very limiting and is a mistake," he added.
It's a move that some activist investors and outside critics have called for, not least because Dorsey had also served a dual role, serving as CEO of Square, the payments company he co-founded in 2009.
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Criticisms of Twitter were almost as varied as its critics.
Civil society groups said it did not do enough to address abuse and misinformation;
tech analysts said it didn't innovate fast enough;
political activists said it gave extremists a voice and fostered political dysfunction.
But Dorsey's legacy may end up being viewed a little more optimistic.
The company's stock price, while volatile, rose during his tenure.
It recently rolled out a variety of features including a subscription service and a new payments feature.
It also launched a variety of initiatives to crack down on extremism and misinformation.
Twitter CEO Jack Dorsey testifying before the Senate Intelligence Committee in Washington DC on September 5, 2018.JIM LO SCALZO / EPA
Former Twitter CEO Dick Costolo, who ran the company before Dorsey took over, said he would have liked to do more to clean up the platform.
"If I could change one thing about how I ran the company, I would be much more aggressive about the way we deal with trolls," he noted in an interview.
He also said that part of Twitter's success under Dorsey stems from the executive's management style, which he described as "very focused."
“He sees the role of the CEO as: 'Let's do less, but let's do it well,” Costolo explained.
“I wanted to do a lot of different things and discover a lot of different angles.
Both can be winning or losing strategies depending on how you execute them.
I think he did a great job against the strategy he wanted to execute, which is, 'We're going to do some things really well.'
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Dorsey will step aside and his role will be taken over by Parag Agrawal, a 37-year-old Twitter engineer who has served as the company's chief technology officer since 2017. And while Agrawal is a Twitter veteran, he walks away from the co-founders of the company. company that have previously run it, namely Dorsey and Ev Williams.
Many hats
Dorsey's permanence on Twitter has been marked by doubts about the time he could dedicate to the company.
Since 2015, he has run both Twitter and Square.
"There's a joke about Dorsey that everyone on Twitter thought he was working more at Square, and everyone at Square thought he was working more on Twitter," wrote journalist and technology commentator Casey Newton.
"This served to sidestep the question of how much I was working at all," he added.
Last year, investment firm Elliot Management acquired a roughly 4% stake in Twitter, and attempted to remove Dorsey as CEO.
One of the firm's main objections was that Dorsey's attention was divided, our sister network CNBC reported.
The co-founder remained in his position, but agreed to let Jesse Cohn, managing partner of the investment firm, join the board, among other concessions.
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“The writing was on the wall.
I had to get out of town, ”said Scott Galloway, a marketing professor at New York University's Stern School of Business, who previously advised Elliott Management, during a Monday night discussion on Twitter Spaces, a tool audio that the company launched this year.
In response to a request for comment from our sister network NBC News, a Twitter spokesperson pointed to Dorsey and Agrawal's tweets, as well as a company press release.
Few remain
With Dorsey's departure, Twitter now has few of its co-founders involved in the company.
As part of the Dorsey deal, he also leaves his board of directors.
Only Biz Stone, one of the four original co-founders of Twitter, remains on the social platform.
While most tech companies place a high value on keeping founders involved, Dorsey opined in his resignation letter that this too can backfire.
“Once the product is developed, the CEO needs to be good at building the business, which among other things requires knowledge of many more functions (marketing, sales, operations, finance, accounting, etc.) and how to weave all of those functions in one cohesive organization, ”wrote Noam Wasserman, author of The Founder's Dilemma and dean of Yeshiva University's business school, in an email.
"A founder who is just learning those things will slow down the organization and hurt its value," he added.
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Wasserman noted that in analyzing 6,130 "high-potential startups" in the United States, he found that founders who stay as CEOs for too long tend to "significantly hurt the value of the company."
He added that that could be especially true of a person who runs two companies, such as Dorsey, and that it could have held Twitter back.
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"At a very simple level, you could say that there is a bandwidth problem: there are limits to the amount of things you can focus your attention on as a leader," explains Ranjay Gulati, a professor at Harvard Business School.
"The idea that you can run two companies - even if you delegate a lot of work - is very difficult for anyone to do," he added.
More freedom
In his resignation letter, Dorsey said he is retiring from the board of directors in May to give Agrawal room to lead.
"I think it is essential that a company can fend for itself, free from the influence or direction of its founder," he wrote.
Gulati says the move could allow Twitter to better define why it exists in the first place.
"CEOs play a symbolic role in an organization," he explained.
“They embody the culture and purpose of the place.
Why do we exist, who do we serve, what do we believe in?
When you're a part-time CEO, it's very difficult to live in that role, even if you're a co-founder. "
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Dorsey's reasoning also raises the question of why he's quitting now, according to Wasserman.
"They were also for Twitter five years ago," he said.
"Should Jack have resigned then instead of now?"
But for Costolo, the move makes sense.
He said being the CEO of Twitter is "constant stress and you're under a microscope."