Listen, I’m sure there will be a lot of sturm und drang about what the whistleblower disclosures mean for Elon Musk’s Twitter deal, but I want to focus on something dumber and pettier: Jack Dorsey.
Twitter had serious vulnerabilities that Russian and Chinese governments might try to take advantage of, according to the whistleblower complaint from Peiter “Mudge” Zatko, the former Twitter security chief. (Zatko refers to himself as “Mudge” in the complaint, but I will be calling him Zatko because that’s his government name.) Zatko also alleges that Twitter had no incentive to count bots correctly. I can’t help but notice, though, that all of these allegations suggest that Dorsey was an incompetent leader.
Most of the stuff Zatko is complaining about took place while Dorsey was in his second term as CEO of Twitter. The first time Dorsey was CEO, he was fired in 2008. This is likely because Dorsey was a lousy manager, according to Nick Bilton’s Hatching Twitter. Dorsey liked taking credit, hated criticism, loved to party, and made some weird, expensive texting deals that cost Twitter six figures a month. Plus he was often uncommunicative with investors.
Personally, I would not hire this guy back for a second round, but Twitter was desperate in 2015. And so it was Dorsey, in his second run as CEO, who personally recruited Zatko. However, according to Zatko’s complaint, Dorsey was a “disengaged CEO” who did not speak a single word in some meetings. Zatko even heard from colleagues that Dorsey’s silences could extend for “days or weeks” and that the senior team was worried for his health, while “even mid- and lower-level staff could tell the ship was rudderless.” Whew!
If we take the complaint seriously, a lot of the problems seem to stem from what it describes as Dorsey’s “absent behavior.” Apparently, Zatko got “little to no support for his task of fundamentally changing the risky behaviors of 8,000 employees.”
Now, there were people saying that Dorsey was unfit to be CEO of Twitter, most prominently the terrifying Elliott Management, which argued Dorsey wasn’t paying enough attention to Twitter (as he was also the CEO of payments company Square, which later renamed itself to Block) and that he’d sucked at retaining senior staff. Ultimately, Dorsey stepped down and was replaced by Parag Agrawal as CEO, Elliott’s preferred choice. This is noted in the document and then followed by an extensive redaction, about which I am deeply curious.
Agrawal fired Zatko, as well as other senior Dorsey people, including Kayvon Beykpour, the former head of product, and revenue product lead Bruce Falck. This is not especially unusual for a CEO changeover. Often the new one wants to replace the old CEO’s team with their own. In Zatko’s case, however, Twitter’s spokesperson Rebecca Hahn attributed the firing to “poor performance and leadership,” according to The Washington Post. She also says Zatko’s whistleblower complaint is “riddled with inaccuracies” and that the point of it is to “opportunistically… inflict harm on Twitter, its customers and its shareholders.”
Well, okay, Twitter would say that. It doesn’t necessarily make Zatko wrong, though! Still, in Agrawal’s response to the story, emailed to employees, he repeats the line, writing that Zatko was fired for “ineffective leadership and poor performance.” Isn’t this the sort of thing that Jack Dorsey should have noticed from his own handpicked security chief?
Agrawal also suggests there will be more stories coming but says, “We will pursue all paths to defend our integrity as a company and set the record straight.” Sorry if this is just journalist brain but “pursue all paths to defend our integrity” sounds like “we might file a libel suit” to me. I hope Twitter does! I can’t wait to see what they come up with in discovery.
Anyway, the other thing I notice here is that Musk’s legal team subpoenaed Dorsey yesterday, including for communications and documents about the merger, or any transaction between Musk and Twitter, including buying common stock. Musk’s team also wants information on Musk joining the Twitter board and other Twitter communications.
I wondered when Musk’s bid was announced whether Dorsey was involved behind the scenes; he was still on Twitter’s board at the time. Dorsey and Musk are pals — which is part of what makes that subpoena weird to me. Couldn’t Musk just like, ask? Doesn’t Musk have his own records of many of these conversations?
Well, yes, Musk could have asked, but Dorsey, historically, is known for his indecision and inability to make good calls in a timely fashion. This was the heart of Elliott Management’s problems with him! It’s part of why he got fired the first time! If I’m Musk’s lawyers, I figure Dorsey’s interference is part of what caused this whole mess. And Dorsey being Dorsey — remember he loves being a cult leader and hates taking any blame whatsoever — is not going to defend the company he ran or even admit fault.
Anyway, if you needed more evidence of Dorsey’s spectacularly poor judgment as a leader, he imitated Musk’s vanity title at Tesla (“Technoking”) with his own at Block (“Block Head”). Our very favorite Block Head then tweeted that Musk was “the singular solution I trust” for Twitter’s future. In July, Twitter would sue Musk for reneging on the deal.
So, yes, most people are going to focus on omg what does this mean for Twitter. But I gotta say, if I were working at Block right now — where Dorsey is currently CEO — I wouldn’t be feeling great! Dorsey’s pet cause, Bitcoin, is a revenue bonanza for the company, but it’s not a profit bonanza. And in the last quarter, Bitcoin profit dropped 24 percent as consumer demand plunged. Block’s shares closed at $70.94 today — and are worth less than half as much as they were on January 3rd, the first trading day this year.
Oh, and the Consumer Financial Protection Bureau says Dorsey is dawdling on an investigation, which honestly? Sounds like Dorsey.
wazup.