What the departure of Twitter’s Jack Dorsey means for other founders

Jack Dorsey speaks during the crypto-currency conference Bitcoin 2021 Convention at the Mana Convention Center in Miami, Florida, on June 4, 2021. (Marco Bello/AFP)

Dorsey, a co-founder who was CEO of the company, criticized the founder-led strategy in his resignation letter.

Jack Dorsey has stepped down as the CEO of Twitter, the company he co-founded 15 years ago. He said he’ll exit the board in May, leaving the company for good.

Companies are often associated with their founders. And in Silicon Valley, having a smart, charismatic founder can be the difference between getting off the ground at all, or not.

But in his note announcing his departure, Dorsey said it’s critical for companies to stand on their own, free of their founder’s influence.

Sarah Kunst is general partner at the venture firm Cleo Capital. I asked her what challenges lie ahead for Dorsey’s replacement as CEO, Parag Agrawal. The following is an edited transcript of our conversation.

Sarah Kunst: I think a lot of the challenge will be to see how much of the Twitter magic is Jack’s magic. Jack has often been touted as kind of a visionary founder, and, like a Steve Jobs, visionary founders sometimes don’t always take the most feedback. And so, will there finally be an edit button for our tweets, right? And on the product side, the trust-and-safety side, many of those things, where many have felt that Twitter’s fallen behind over the years, are we going to see that finally catch up?

Sarah Kunst (Courtesy Kunst)

Kimberly Adams: Jack Dorsey said that when a company is founder-led, it’s “severely limiting and a single point of failure.” How true is that throughout this industry? And is that something that maybe is encouraging some of these founders to step down?

Kunst: I think a lot of those sentiments are really the things that often boards and investors talk about with founders, or even without founders behind closed doors, and so to see it addressed openly, I think makes a lot of sense. You know, there’s also the question of will a CEO who only has one CEO job instead of two, as Jack has famously had for years at Square and Twitter, will that be better for the company? So there’s a lot of exciting lessons and questions, I think, coming out of Twitter in the coming months.

Adams: Is this something that you talk about with the founders of the companies that you invest in? This succession planning and not having that single limiting point of failure?

Kunst: I mean, absolutely. In my business in venture capital, we call it key person risk. And the risk is, if you’re the only person with the keys to the safe and you get hit by a car, what happens? And so there is a very real question around that, right? It’s like one of my favorite random factoids is that presidents can’t drive in the U.S. because you can’t really get in a car accident as the president of America. So, we think about this risk all the time in our lives. And so, at companies, you do have to think about it, and the more iconoclastic a founder is, the better, certainly, that can be for setting the vision and recruiting people, hiring — but the more risk there is, right? I don’t think, love him or hate him, I don’t think any of us are particularly sure about what would happen to Tesla if Elon Musk suddenly decided to jet off into space and not be the CEO anymore because he wanted to be the first person to colonize Mars, right? So looking at, how do you build a strong team? How do you build a strong company culture? How do you build a strong mission? So that even without that key person, people know what they’re doing? And that, I think, is something that is incredibly important for any group of people, right? You want to all keep rowing in the same direction and know where you’re going, even if your captain falls asleep at the wheel. And so I think that this is a great opportunity for investors like me to have conversations with my founders, which we certainly do. But really, for anybody to look around any group or organization they’re a part of and say, “Hey, what happens if our Jack wants to go do other things? Like, do we all know what we’re doing here? Do we all have a shared purpose and mission and vision that would keep us here?”

Adams: How does him leaving the board as well affect potential changes down the road?

Kunst: Yeah, I mean, I think that’s a very interesting and symbolic move. I think to some extent, it could be that this is a symbolic gesture to say, “Hey, look, I’m not going to bird-dog you,” right? “I’m not going to be breathing down your neck. I’m going to really give you space, and I want this to be your company, not my company, that you are managing day to day for me.” I think when you’re not on the board, you’re going to have less scrutiny, be it on your philanthropic giving, or even your dating life, or what you’re doing or tweeting day to day, that I think could be really great for your next act. Jack is still a relatively young person who has a lot of decades ahead of him to do a lot of different things in the world, and not being on a board might be the best way for him to accomplish some of those other things he’s excited about.

Adams: There’s also the timing of the increased scrutiny from federal regulators on social media companies as well. Was he getting tired of getting hauled in front of Congress?

Kunst: I certainly think that that has to be somewhere on your radar, right? As much as you love whatever you do day to day, it’s always a relief when you get a little bit of a break. Jack’s been doing this for a long time. The other thing to keep in mind is while doing this, he’s also built this entirely massive other business that just is sort of this juggernaut that in a lot of ways has the potential to be much bigger and more transformative, which is Square, right? And so, if you’re getting called in front of Congress to talk about what somebody tweeted on your platform, and meanwhile, you have a whole other literal full-time day job — where people are using Cash App more than ever. Merchants are signing up for Square. Square’s getting into crypto. They bought Jay Z’s company in the music space. There’s so many huge things happening, that maybe it’s just a relief to focus on that and, and let somebody else go explain what finsta is.

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