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The Twitter IPO – Can a Successful Leader Have Two Different Masters?

So the Next Big Thing is the Twitter IPO. It hits all the high notes. The creation of a new global elite, the Twitterati. Facebook-like dynamics. Creator of revolutions. Steve Jobs sounds-a-like. And Jack Dorsey is not only a bachelor; he’s a vegan to boot (dating a yoga instructor as well!). What’s not to like?

Well to start with, Jack Dorsey is a mover and manipulator, which is both great and bad. He has done the round-trip in and out of Twitter, currently back as Executive Chairman. But the CEO now and post-IPO is Dick Costolo, the current CEO. The latter is an impressive guy but….

Hmm, if Bill Gates had said that he was going to leave Steve Ballmer in charge as CEO when Microsoft went public while he was part-time working for another of his interests, how well do you think that would have played in Peoria? Not to mention the stock price?

Maybe a Dorsey version of the Putin-Medvedev switcheroo gambit?

And then there’s the Square connection. Dorsey owns 6% of Twitter, but 32% of Square. He splits his time between the two companies, reportedly 50/50. Most of his income comes from Square.

If I was contemplating buying stock in Twitter I would want him to own 32% of Twitter and 6% of Square and get most of his income from Twitter. Maybe if you want to own a piece of Dorsey, you’d be better off waiting for Square to go public.

Right now Dorsey is hot, justifiably so. He has already expressed interest in becoming Mayor of New York. . Personally I think he would make a great Mayor, New York really needs shaking up. But if I were a Twitter shareholder, I don’t know that I would be so thrilled with that.

And of course, if Dorsey is thinking of becoming Mayor of New York, he might be thinking of running for President. Or circumnavigating the world in a hot-air balloon. Of course, these types of exploits are not unknown amongst businesspeople-adventurers, as witness Richard Branson, Ted Turner and Larry Ellison.

But if I were a Twitter shareholder I would prefer that the stock had already exploded before he started to express such sentiments. Who knows: he might want to be a politician. Or live in the Amazon rainforest. Then where would Twitter be?

The few doubts that are being raised about Twitter IPO concern its future revenues and the basis for its advertising projections. Fair enough. But as Warren Buffett is wont to observe, you judge the future of a company based on its leaders and managers, not its projections.

On that particular issue, John Q. Public is less informed. A recent book about the founding of Twitter by Nick Billton tries to rectify the omission. . Inter alia it writes about the conflicts between the original founders.

Stories like this are kind of standard in famous startups so they don’t particularly worry me. In fact if you have a founder without spirit they probably won’t ever get anywhere. Still, they bear being aware of.

Jack Dorsey is an unparalleled entrepreneur and visionary. Twitter has blown the socks off just about everything around. But then so did MySpace at a similar stage. Is Twitter a Facebook or a MySpace?

Personally I would want to understand more about Jack Dorsey’s other business loyalties if I were to invest. Maybe Square turns out to be more attractive to him than Twitter. The idea that the founder of my favorite stock investment might have another master could be rather worrying to some, me included. Corporate bigamy doesn’t sound the way to go for me. I would much prefer a monogamous Executive Chairman.

It’s true that there are leaders who have the exceptional personal bandwidth to be able to handle several big jobs all at once – think Richard Branson, Larry Ellison, Jeff Bezos. But even Richard Branson has spawned some dogs, such as Virgin America.

But for the vast majority of leaders, theory and practice tells us that if you have more than one master, something is going to give, possibly badly. Think Robert Maxwell, or for a current example, Eike Batista in Brazil. Is Jack Dorsey a Batista or a Branson?

Personalities like those of Dorsey are often free-ranging and untamable. When you fly, Twitter-like, like a bird, it’s often hard to keep you from that annual migration coz it’s hardwired into your brain. If you invest in Twitter, maybe you have to make sure you have a very good radio tag on him to make sure you know where he is flying.

And that he will come back.

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