Jack Dorsey: From Twitter Founder to Resignation

[Asia Economy Reporter Yujin Cho] On the 29th (local time), the social media industry was stirred as Jack Dorsey announced his resignation from the frontline management of Twitter. Although there was a gap due to a power struggle that led to his ousting, it was he who, since founding Twitter in 2006, had grown it into a global service as its Chief Executive Officer (CEO) until now.

Dorsey, who studied programming, dropped out of New York University and jumped into entrepreneurship in 2006. With the idea of "real-time short messages," he partnered with Odeo and created Twitter in just two weeks. He built a site where users could communicate through short messages of 140 characters or less, and on March 21, 2006, he posted the first tweet himself, announcing the launch of the service.

Twitter quickly gained popularity, but conflicts with co-founders intensified, and in 2008, he was eventually ousted from the company he had founded. The reason was that Dorsey was more interested in hobbies and activities outside of management.

Jack Dorsey. (Photo by NYT)

After leaving Twitter, he made a spectacular comeback by successfully founding a new company two years later. In 2010, the mobile payment service company Block (formerly Square), founded by Dorsey, received massive investments from British billionaire and Virgin Group chairman Richard Branson and the global coffee chain Starbucks, recognizing its potential.

Having founded and succeeded with two companies in Silicon Valley in succession, he was often compared to Steve Jobs, the iconic innovator and Apple founder. Like Jobs, who was ousted from Apple, founded Pixar, and then returned to Apple to create the iPhone and iPod, Dorsey also returned in 2015 as a savior for the stagnating Twitter and led its revival. He maintained his position as CEO of Block even after returning to Twitter.

Block achieved significant revenue growth by starting Bitcoin trading, and its corporate value soared to nearly three times that of Twitter. As a result, of Dorsey’s net worth of $12.3 billion (approximately 14.65 trillion KRW), more than $10 billion is accounted for by his stake in Block.

In some respects, Dorsey’s resignation is not surprising. The Wall Street Journal reported that Dorsey had been challenged on his leadership by a U.S. Wall Street activist fund since last year, which likely influenced his decision to step down. The activist fund Elliott acquired a large stake in Twitter in March last year and has been demanding the replacement of CEO Dorsey, leading to conflicts. They argued that Dorsey should step down from one of the two CEO positions he held at Twitter and Block, both publicly listed companies, to focus on management.

Twitter eventually agreed to increase its board members from eight to ten and promised to spend $2 billion (approximately 2.39 trillion KRW) on share buybacks as a condition for Dorsey to remain CEO. However, even after the agreement, Elliott continued to pressure Dorsey’s performance as CEO and regularly raised concerns about Twitter’s growth and financial improvements.

Dorsey, known as an eccentric CEO, had a management style that sparked much debate. With a long beard and a nose ring, he was one of Silicon Valley’s most enigmatic and conspicuous figures. The Wall Street Journal described him as having a management style that delegated most important company decisions to subordinates in order to pursue his personal passions.

Although Dorsey did not disclose specific reasons for his resignation, he stated in his resignation announcement that "leaving Twitter is my choice." The New York Times reported that Dorsey’s decision to resign reflects the trajectory of Silicon Valley giants who leave the tedious and anxious founder role to seek their own adventures.

Jeff Bezos, who has a wandering spirit, stepped down from Amazon, the company he founded, to focus entirely on space exploration, while Google founders Larry Page and Sergey Brin handed over the company to professional managers and invested in future-oriented projects like air taxis.

Industry insiders believe that Dorsey left Twitter to concentrate on cryptocurrency-related services such as Bitcoin. Bloomberg reported that when Dorsey returned as CEO in 2015, many analysts and investors predicted that he would eventually leave Twitter to focus on managing Block, the company he founded. Even before his resignation, Dorsey had told those around him that he wanted to leave Twitter to focus on cryptocurrency and philanthropic activities.