Dick Costolo is on his way out as Twitter CEO, and in one of his final interviews he admitted that going public was a barrier to the company’s “long-term vision”. “You always want to keep focused on the long-term vision, yet when you go public you’re on a 90-day cadence and there’s a very public voting machine of the stock price that accelerates that short-term thinking,” Costolo told the Guardian. He also defended his record, pointing out that when he took over five years ago, Twitter had 300 staff and a $3.7bn valuation, while now it’s a public company with 3,900 staff valued at $23.5bn.
Yet despite the company’s revenues nearly doubling in its last year, Wall Street was more focused on slowing growth in active users. “When we took the company public, I had an expectation that the market would evaluate us based on our financial metrics first and foremost,” said Costolo. “I probably would frame the way we were thinking about the future of the company differently, understanding how we were in retrospect evaluated.” It’s the 90-day cadence comments that are worth thinking about, especially as Spotify moves towards its long-anticipated IPO. We often talk about the music industry being overly tied to quarterly-bonus incentives, but Wall Street’s cycle matches that – and both are challenging for long-term visions, whether you’re a social network or a streaming service.
