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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
KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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