Host the author, the New York Times tech reporter nick bilton who joins us from San Francisco. Mr. Bilton, what was twitter supposed to be . Guest oh, thats the billion dollar question. Actually, the 25 billion question if you look at the ipo. You know, twitter was something that was different for everyone, you know . This was something that was started by four people that collectively were trying to build something that would, you know, communicate with each other, would connect them to their friends. But they all had different ideas of what it was. It was, the genesis of it, the real moment that it actually started was with who gentlemen, one was jack dorsey, and the other was noah glass, and they were two very Close Friends, and they worked at a Podcasting Company in early 2005, 2006. It was in San Francisco. And the pod Podcasting Company was failing, and noah and jack had been out drinking one night, and jack had had this idea that you could build something that would allow you to kind of say what you were doing at a moment in time in a very pithy kind of way, like im drinking, or im eating, or im at the park. And noah glass, his cofounder of this company, he had the idea that you could be able to connect with your friends. And he was going through a very difficult time at the time, noah was, and he thought this thing called twitter that they created would actually make you feel less alone. And that was the genesis of the idea, but everyone had a different concept of what it was once it started to grow. Host how did the name twitter come about . Guest twitter actually came about from noah glass. Hes the forgotten founder. He was the guy that was pushed out very, very early on. But he was one of the most influential people in the very beginning of this company. What happened was they had come up with this idea, and they had started to meld together a lot of other peoples ideas from this odio Podcasting Company, and they would, essentially, build what would eventually become twitter. And there were, you know, obviously different iterations of it, and they couldnt come up with a name. There were several names they were throwing around. One was status, one was actually called friend stalker which wouldnt have worked out very well. Another was called msme based on the way people text message. And noah, he was a very he was almost like a kramer kind of character, very effervescent, very sweet, but also kind of an artist. And he just felt like the name wasnt there yet. He went home one afternoon from work, and he was going through the dictionary, and his phone kept going ding, ding, ding because he was getting messages, and he turned it to vibrate, to silent, and he thought, oh, what about the word vibrate which led him to another word in the dictionary which was twitch which led him to the word twitter. Host what is noah glass doing today . Guest well, not that much. He was pushed out of the company by some of his closest friends be, you know . This is a big part of the story of the book, you know, there is this story that exists out there about twitters genesis which was the story that had been presented. The creation myth for twitter is that jack dorsey founded it alone and came up with the idea when he was a very young boy. And while jack had an incredible amount of influence in what twitter was, it was almost a dozen people who had influence in what it became. And noah was, i think, one of the biggest driving forces in the beginning days. Very quickly there became a power struggle over who got to run this thing, who got to feed it, who got to decide what it looked like and what it did. Theres a moment in the book where i explain where jack goes to Evan Williams whos financing the company and says that if noah glass stays, jack will leave. And jack was a very important programmer at the time, and so evan had no point but to fire him. Host what is jack dorsey today . Guest jack is worth more than a billion dollars today. He runs a Company Called square. Hes still involved in twitter as a chairman. And he is, you know, he spends times with celebrities, hes featured on the cover of magazines, but he also tells a story that excludes noah glass from the founding of it and noah, essentially, ended up with almost nothing. Host he did not benefit financially . Guest no. I dont want to give away too much of the book, the drama side of it, but theres a moment where one of Evans Williams actually gives noah a bit of his own personal stock because he feels bad about what has happened. But even in the best case scenario, noah had to sell some of that early on, and even in the best case scenario, its a pittance of what jack and is evan and those guys ended up with. Host nick bilton, what year are we talking about that twitter was founded . Guest so it was founded in 2006. There were or ideas and discussions that led up to it that be from 2005, but a big part was 2006, february, march. Theres another interesting aspect of the genesis and founding of this company is odio, this Podcasting Company, it was actually there was a couple of guys that worked there, and they were quoteunquote anarchist, and they actually led protests against, you know, the president and against other goths governments, and they were involved in the may day and all these, you know, different kinds of protests around the world. And they were using a tool called text mob which was actually a precursor to twitter which was similar to what twitter would become. It was a tool that allowed you, people that were protesting, to say, you know, the police are coming down 36th street, everyone go to 37th street. And everyones phone would get this text messaging alert. That was another idea that led to what this thing became. Host nick bilton, you mentioned Evan Williams. Who is her . Guest so Evan Williams was, he moved from a small farm town in clarks, nebraska, population of a couple hundred people, and he always had an affinity to computers. And he decided one day that he was going to move up to San Francisco, and he was going to try to build some software or some technologies or get involved in some startups. And he ended up up north, and he was working on programming books and doing the marketing for those and eventually ended up in San Francisco. He was trying to start a company, and out of that company there was a little project, a side project he developed called blogger. And it was one of the first blogging technologies that ever existed. Eventually, through some strife and turmoil and hard work, he ended up selling it to google. And he got about 20, 30 million in the end for the company. And used that money to help finance odio and eventually twitter. Host and one other in the original quartet of characters, biz stone, christopher stone. Guest original name is christopher, but everyone calls him biz. Biz grew up this boston on welfare. He, you know, came from a very dysfunctional home, and he was but he was a really sweet guy. Hes a kind of a joker, always cracking jokes and making people feel better in that respect. And he came out to Silicon Valley to work weve van williams on blogger evan well yams on blogger. He was also a big fan of blogging and so on. And one of the things that happened was he actually at twitter, he had a title of cofounder, so he didnt have a specific role as this company kind of grew, but he, he became the moral fence that surrounded the company. And this is actually one of the reasons i really was train to writing this book about twitter, was because twitter is a Different Company in many respects, you know . I write stories for the New York Times about facebook, you know, affecting peoples privacy, about google stealing peoples images off their phones, things that have happened over the past several years, and ive never had to write those stories about twitter, at least not yet. And part of the reason for that is people like biz stone, another gentleman nameed Jason Goldman. And what they had done was they had set up this rule that twitter should always be impartial, it should never be seen as having a side point or a viewpoint in a technology, in the way its being used. So when twitter was being used in the iranian revolution or it was being used in the occupy to wall street protests, biz stone was one of the people that said we wont comment on this to the immediate ya. We dont media. We dont see it as a good thing or bad thing, we just see it as the way medias being used. Host mr. Bilton, whats the relationship between those four cofounders today . Guest today . Well, noah glass, you know, after he was pushed out of the company by husband closest his closest friends, he kind of fell into depression. These were literally his best friends, you know, jack dorsey and him, they spent, you know, every waking hour together and then he found out he was pushed out of the company by him. And also Evan Williams too. Evan and him were very close, and they had a very contentious situation, and evan was the one that eventually fired him. And so he was very, he struggled a lot to deal with that. And none of these guys really talk anymore. As far as jack and biz im sorry, jack and ev, theyre both on the board of twitter, but their relationship is somewhat strained, to say the least. Part of the reason for that is because they both push pushed each other out of the company. And biz stone, hes always been the nice guy and gets along with everyone, but he also doesnt talk to noah either. Host so three out of four got wealthy on twitter . Guest yes. So three out of four got wealthy, and its almost giant steps between the wealth. Evan williams made a couple billion dollar ors, jack dorsey made a billion dollars and more money from square, biz stone made tens of millions, and as far as noah goes, the exact figure is unknown, but its definitely, if anything, single digit very low Million Dollars or two, but we dont even know its that. Host where did twitter get the money to begin with . Guest so the money in the beginning actually came from Evan Williams. So he financed twitter out of his own pocket with the money that hed made from blogger. Originally, it was financinged from the financed from the venture capitalists from odio, but they werent interested in financing what the company would end up being, so Evan Williams purchased the stock from these venture capitalists in the valley and actually put up his own cash to finance twitter until 2007 of after the south by southwest if festival that they actually started blinging a bunch of capital in. Fred wilson and johnson [inaudible] from Spark Capital and others ended up financing the company in later years. Host we should introduce another person active with twitter, and that is dick costolo. Guest yes. So dick is now the chief executive officer of twitter. He runs the company. But he didnt start out that way. He was a very close friend of Evan Williams, and so just to kind of back up, after noah was pushed out of the company, jack dorsey took over as the ceo. And he was running the company. He budget a very seasoned ceo he budget a very seasoned ceo. He had never been trained to run a company, and he was put in charge of this company that was growing rapidly. And he couldnt, he couldnt do it. And eventually, after the site going down continuously, after they had these text messaging bills because people were using twitter over text messaging, these text messaging bills were sometimes in the 100,000, 200,000 range a month. Eventually, the board and Evan Williams had to fire jack. So when he left the company, evan took over. And e van has this way evan has this way of hiring his friends a lot of the time. He feels he can trust them, that they wont turn on him which is a thing that does happen a lot in the valley with a lot of founders and startups, and he hired one of his very close frndz, dick cos toe low, to become the cos toe low to become the chief operating officer. Jack had been putting together essentially a coup to have Evan Williams fired from the company. And one of the people he kind of browpght into this accidentally was dick costolo, and dick was kind of put in a place where he knew his friend evan was going to be fired, but the board had actually asked dick to run the company. And after dick after ev was pushed out, dick became the ceo. Host how much time were you able to spend interviewing, following around those five main characters . Guest well, i spent hundreds of hours interviewing people for the book. I mean, i literally went and found exgirlfriends, boyfriends, cafe owners, you know, i was in search of the cleaning lady for a while. And i spent a considerable amount of time with all of the founders and the Board Members. I think i racked up 65 hours just with the founders and Board Members alone and then hundreds of hours with other people. I also through my reporting got access to thousands of documents and emails and internal legal documents which helped with the reporting. But the thing that was truly fascinating for me as a reporter was the fact that the tweets that these people had sent, all these founders and Board Members, over the years became one of the most important tools for my reporting. Because while i spent time with ev and jack and biz and noah, their memories, of course, have changed over time, and there are instances where their memories overlap, but there are instances where their memories are drastically different. And with things that, you know, dont even make sense. One interview i with ev sorry, with jack and biz, biz believed this discussion they had had not a very important discussion, but a discussion had taken place at a whole foods, and jack believed it had taken place at a park. And there were dozens of those moments. And what i was able to do was go through their tweets and their facebook upstated and four squared checkins and instagram photos and pinpoint exactly where they were, what they were doing, what they were wearing at exact moments in time which made the reporting just so unbelievable accurate. Host nick bilton, whered you get the idea for this book . Guest you know, i was looking at twitter, and i looked at the fact that this is a company thats changed everything, you know . Facebook has changed the way we communicate, absolutely, but it hasnt changed the way we perform business, the way we do media, the way we share stories, the way we consume magazines and blogs and so on and the way we have, you know, revolutions even in politics. Twitter has changed all those things. And when i looked at this story from a very high level, i thought this is a company that is going to continue to do that. And then what i found in my reporting and i didnt know this going into it, you know . My theory going into this was it was created by one guy, and it was just a company thats had a little bit of turmoil. But what i found was the story of these people who were incredibly Close Friends who put together a company accidentally that was intended to connect friends and bring people together, but in the process ended up tearing their own friendship apart. Host now, mr. Bilton, you said a little bit earlier that this is not an uncommon story in Silicon Valley. Guest well, its not an uncommon story in the valley. Twitter is unique in the respect that all the founders were pushed out in one respect or another over time. Usually you just have one thats pushed out, and then it goes away. But you have these stories in the valley, you know . Every company, every big company has one of these kind of tales to it. You saw it at facebook with, youve seen it at snapchat which is the latest darling which is the new photo messaging service, and one of the founders, the guy who came up with the idea, is suing the cofounders because he said he was thrown aside and not given credit for his creation. And you saw it with twitter. And what happens a lot of the times is that you have of a group of friends, often guys, that either, you know, knew each other in a stanford dorm room or used to meet each other for a beer after work. And they become very Close Friends, and they have the similar interest in technology and computers and mobile devices and things like that. And they find those connections in Silicon Valley that i dont think they would find anywhere else, especially in the midwest. And they set out to really build something together, and what happens in these instances is if the startup fails, its a great story, you know . They didnt make any money, and theyre still buddies, and everything works out. But when its successful, you get these people that are literally just voracious in wanting to take credit and be seen as, you know, the next steve jobs or the sole creator of a product. And we see this time and time again with startups in the valley. Host well, the quote your book, you say that in many respects, it was steve jobs that created jack dorsey. What do you mean by that . Guest well, so a lot of times youve seen in the media that people say jack dorsey is the next steve jobs, and as i say in the book, thats a creation that jack actually put forth. You know, jack, after he was pushed out of twitter, he believed he shouldnt have been pushed out, and he went on a spree of doing dozens and dozens of interviews with, you know, cbs and magazines and vanity fair and all these places saying that he was the sole creator of twitter, and he completely excluded everyone elses name from the creation of story, especially noah. And he partially did that because he believed that he had been unjustly and wrongly pushed out of the company. And he started to in some of these interviews, he started to quote, he started to give quotes that were from steve jobs, but he didnt say they were from steve jobs. For example, in the vanity fair piece he said when he was fired, he felt like hed been punched in the stomach s and steve jobs had said that this 1984 when he was fired from the company in an interview to playboy. There was instances where he was on stage at Technology Conferences where he would talk about things using the exact same language that Steve Jobs Used saying magical, and we think about the users and is all of these things that were literally verbatim quotes, and no one actually put those things together. And what i say in the book is while i dont think that that was right to do that, in many respects it was steve jobs that created this version of jack dorsey because jack and others in the valley want to be seen as that kind of, that next innovator. And i think that theres nothing wrong with wanting to do that, but they should do that in a way that is really them being the next innovator, not them trying to be someone else. Host nick bilton of the New York Times, i guess no story of Silicon Valley would be complete without a role by mark zuckerberg. Guest mark tried to buy the company twice. The first time he was trying to buy the company the week that jack dorsey was fired in 2008, october. And while jack was not against the idea, he was actually somewhat for it because it would have made him some money, Evan Williams was against it because he had just taken over as the ceo. And so they opted against it. And then the next time, a year or so later, two years later, mark tried to buy it again, and theres a great scene at his house in palo alto where Evan Williams, or Jason Goldman and twitters former lawyer, in this guy a. Mac, he, he went they went down to marks house, and there was a secret meeting, and they had this discussion about him buying the company. But, again, they opted out. But he has this, its interest, because while mark wanted to buy the company and he saw it as a threat to facebook and rightly so, it has been a threat to facebook, he also looked at it with just kind of a perplexed, you know, chaos. This was a company that he knew what was going on internally. He knew people were pushing each other out, he knew the site was going down. He knew the chaos between ev and jack and others and in one instance at a private dinner party at his house, mark said its as if they drove a clown car to a gold mine and fell in. Host who else has tried to buy twitter . Guest who else has not tried to buy twitter is probably the better question. Everyone has. You know, p. Diddy showed up at the office one day, and the rapper he made in this very, very heartfelt pitch to say that, you know, he wanted to use the service, and if he was going to use the service, he wanted some sort of compensation, and he would be able to bring more celebrities on and so fort forth, and the founders said, no. This was when Evan Williams and biz stone were running the company. Another instance, ev and biz went down to Ashton Kutchers place in l. A. And sat by the pool with demi moore in a bikini who then both tried to pitch them to sell him part of the company then. And then, of course, my favorite story was al gore, and al gore was running current tv, and hed dope a little experiment done a little experiment with twitter during the 2008 elections, and al gore, i think, had seen the potential for what this thing was. And a few months later he invited ev and biz to his place at the st. Eerie jis, he had a regis, he had a place there in San Francisco, and he wined and dined them and tried to convince them to sell him part of twitter. One of the concepts was to merge twitter and current and create a twitter tv. And he got the founders very, very drunk, and theres one moment where al gorgeous into the kitchen and comes out with a bottle of patron and says i hear this is the good stuff. And, of course, ev and biz politely decline. But there are dozens of stories like this of people trying to buy the company. Host where does twitter get its revenues . Guest twitter makes money from advertising. And so they do sponsored advertising, sponsored twitter accounts. So if i, im nickbilton on twitter, and if i wanted more followers, i could pay to have my account highlighted to people to see if i could get more followers. And i can do it in a way wheric target people i can target people that live in San Francisco and buy books. And i can tell that based on their tweets or what it says in their profile. Another way to do it is to actually promote tweets. So one of the things ive actually done is i wrote a tweet about my book. I said, you know, pick up hatching twitter, and i showed the link, hatchingtwitter. Com, and i put a photo of the book cover, and i tweeted that. I can go in, take that tweet, and i can promote it. People that search for twitter ipo on twitter will see this tweet, or people that work at facebook or even at twitter will see this tweet and, therefore, people will click on that link and buy the book. Host what kind of revenues do they have, how many employees . Guest so they have a little over 2,000 employees. The revenues this year are projected to be in the 600 to 640 million. Next year theyre expected to go over a billion dollars. They are not profitable yet. They did have a moment late last year where they did skirt with profitability, but that was actually, it fell because they decided to purchase a company. But they could be profitable todaythey wanted to be, theyre just taking the money that theyre getting from the ipo, from the advertising products, and they are reinvesting it in the company to hire more employees and expand internationally. Host whats your personal opinion about the ipo . Guest you know, i think that they were smart, twitter was smart in the fact that they undervalued the company. Facebook, even said, was worth 50 billion, and they decided to go out at 100 ball vluation, and billion valuation. And its now known as one of the biggest messes in ipo in the valley. Twitter did the opposite, they decided to go out at a much lower valuation. People said they were probably worth 18 20 billion, and and they were originally talking about going out at a 13 or so valuation. But that kind of backfired because they valued themselves too low. And so the stock spiked in the beginning and jumped up to 80 , actually, over the asking price on the first day. And now its been falling slightly since. And i think it will find that sweet spot in about 18 20 billion market cap. Host nick bilton, when will twitter shares be available to the general public . Guest well, there are ways you can purchase them now. There are others, presumably going to come on the market in six months when you have, you have the lockup right now, so you had employees that sell certain some of their stock until six months after the ipo, certain bankers that cant sell for a month or so, but there are ways to get it now and there will be plenty more ways to be able to do it in the beginning of next year. Host what do you think the ipos effect will be on the management of twitter . Guest thats a great question. I think one of my concerns as a user of twitter is that, you know, the thing that i really do love about the service is it is a service that cares about the people that use the service, you know . This is a company that has tried to stand up to governments who have tried to have peoples account shut down because they didnt like what they were seeing. Its a company that has protected its users on a continual basis. Its gone to bat for some of them, going to court. It has, you know, it has built systems to be able to let people use twitter without being identified by their location or their ip address and things like that to really kind of protect people. But when it becomes a Public Company as it has, the interests are no longer just aligned with the users, now theyre aligned with the shareholders. And i worry that not only will they start to make decisions that will affect the product in lieu of the shareholders, but they will also possibly do things that will not be in the best interests of the people that use the service. And i hope that they can find that balance. Host and finally, will bilton, where is noah glass today . Guest so noah lives in San Francisco. He left the city for a couple of years and went and lived down in the l. A. On venice beach, and he tried to find, you know, new projects to work on. And youll have to read to the end of the book to find out, you know, what he does and where he is. But i think he is the character really this the story, you know, he set out trying to find something and trying to build something that would make him feel less alone, and he learned along the way and i dont think any of the other guys completely did in the way noah did but he learned technology will be able to connect you to people, its those human connections, and he eventually found those. Host and its published by penguin. The name of the book, hatching twitter. Nick bilton of the new york tiles is the author. New york times is the author. Cspan, created by americas Cable Companies in 1979, brought to you as a Public Service by your television provider. Both chambers of congress are back in session this week as the house gavels in at noon eastern. On the agenda, a bill that would ban federal funding for abortions and possible consideration of t
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