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What Happened Inside Twitter That Led To The COO Leaving The Company

What Happened Inside Twitter That Led To The COO Leaving The Company

JAY YAROW TECH  JUN. 13, 2014, 8:44 AM

Twitter COO Ali Rowghani is out of the company in something of a surprise.

Although Kara Swisher at Re/code reported Rowghani could be out last night, there wasn’t much chatter about it before then.

According to a person familiar with the situation, Rowghani leaving the company is “really about product, and the speed of the product.” 

All product decisions had been flowing into Rowghani. CEO Dick Costolo wanted those decisions to come to him directly. Cutting a management layer between the product leader and the CEO will help Twitter make faster, more efficient changes to its products.

The better Twitter’s product gets, in theory, the more users it gets. Twitter’s usage is below expectations inside the company and outside the company. It has 255 million members and is growing slowly. (Instagram is expected to overtake it any day now.)

A different source familiar with the inner workings of Twitter explained the move to us by saying, “I think there was a sense that Ali didn’t have product instincts, didn’t know how to successfully win at least two problems: messaging and channels.”

Messaging has exploded in popularity. WhatsApp, for instance, sold to Facebook for $19 billion. Our industry source says, “When you talk to Dick about messaging, he’s like, ‘Sigh, that should have been us.’”

It’s not just messaging. Twitter should be better at curation — channels — to keep users hooked, says our industry source. Twitter could be better at providing topical lists for users to follow.

Our source also says that Twitter’s user engagement problems are worse than people realize. We asked in what way, but cryptically our source said, “I can’t say more specifically, but Twitter has a lot more competition than it did two years ago.”

Instagram, Snapchat, Facebook, even stuff like Whisper, is pulling on people’s attention. Instagram in particular is a drag for Twitter, says the industry source.

“Twitter sees all these things that it feels it should have been. Like, if they had the right product leadership, they would be doing those things,” says our source. “Every new success, every big fundraise, makes them very angry.”

Twitter thinks it has the right person in place to solve its product issues. It hired Daniel Graf from Google a month ago. Previously, he was running Maps. The source familiar with the company says, “The reception to Daniel has been great.” People at Twitter think, “We feel we got the right guy. He’s the dude that can get this done,” says our source.

It was the hiring of Graf that sparked the departure of Rowghani. Costolo wanted Graf to report directly to him. Rowghani wanted Graf to report to him. Costolo won that argument, and Rowghani is out. This happened only a few weeks ago, which is what makes Rowghani’s departure feel sudden.

Graf and Costolo have a big challenge. They have to navigate Twitter to bigger user numbers which means trying to figure out how to expand Twitter without breaking the product that everyone using it today loves

 

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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