There are times when all it takes is 15 minutes to feel like we really know somebody and their business.
A personality profile in The New Yorker did that for me this month. Writer D.T. Max spent a few months with 36-year-old Twitter co-founder Jack Dorsey.
I was surprised by how Dorsey’s life story kept circling back to Missouri. His journey from a St. Louis Catholic schoolboy to the sixth youngest billionaire inched ever closer to Springfield.
To my knowledge, Dorsey’s never made an appearance in Springfield, but his childhood friend and Square Inc. co-founder, Jim McKelvey, did this month. McKelvey, an acquaintance of Springfield businessman Doug Pitt, addressed the audience at the Springfield Area Chamber of Commerce’s Oct. 2 B2B Expo a few weeks before Dorsey’s New Yorker piece was published. I might not have read the story had McKelvey not already piqued my interest in Dorsey.
I must confess, I’m not a Twitter user. Never tweeted in my life. But that day feels much closer now. It’s funny how good journalism does that. I connected with Dorsey and have a better understanding behind the purpose of his tweeting technology.
And I can’t ignore the movement of 500 million users to Twitter.
But then there are the finances of Twitter. They’re messy. Dorsey is a technology guru, a brilliantly working mind, but a savvy company and fiscal leader he is not. I mean, he got dethroned as CEO his own company. And he tells The New Yorker he’s heeded the advice of a past girlfriend that “money is round; it’s made to roll.”
The company’s financials are in shambles, and it’s about to go public with a huge $15 billion estimated valuation behind it. Go figure. I guess technology, more precisely its potential, does funny things in the financial sector.
During a webinar for journalists last week by Sage Works, a firm that analyzes corporate financials, co-founder Brian Hamilton pointed to an alarming line item for Twitter: a net loss of $79 million last year. The negative profit margin – for every dollar generated, the company lost 25 cents – is curiously juxtaposed to extraordinary revenue growth, up to $317 million to close out 2012.
For the first six months of the year, Twitter posted slightly positive cash flow, and its third quarter revenue doubled the same quarter a year ago. Still, the company posted its largest quarterly loss and is expected to lose $180 million this year. The split personality financials are making investor analysts severely uncomfortable.
The investing public will tell, but analysts estimate an initial public offering for Twitter shares at roughly $17 to $20 apiece. That rivals the IPO prices for Microsoft and Apple but is almost half of Facebook’s $38 per share out of the gate. The latest in Twitter’s IPO drama is that it obtained a $1 billion line of credit ahead of its expected mid-November offering.
Still, we can’t deny the influences this St. Louis native – who was born the same year as me – and his microblogging service are having on this generation and the next.
Back to the work of journalist Max and his insight into the life of Dorsey. Are Twitter’s unpredictable financial statements simply a reflection of its co-founder? The story describes Dorsey as “a college dropout, a taker of long walks and a guy whose father liked to tinker.” It says his tastes are intentionally in synch with Twitter’s design, and he’s enamored by a Japanese principle that the greatest beauty is seen in organization with a dash of disorder: “The monks rake up leaves, then they sprinkle a few leaves back,” he tells Max.
Could it be that Twitter’s financials are not too far removed?
From The New Yorker story, “Two-hit Wonder,” here are 11 things to answer more about tech entrepreneur Dorsey:
• He commutes to work on a San Francisco bus line – in part, to observe people’s habits – where he says he saw the rise of Instagram, Snapchat and Vine (now owned by Twitter).
• Dorsey’s Twitter handle, @Jack, was the 12th account in the system, only because the first 11 were tests; there are now a half-billion users.
• Twitter’s first official message: “just setting up my twttr,” from Dorsey, who now has 2.4 million Twitter followers.
• Twitter was influenced by Dorsey’s interest in his family’s police scanner: “They were reporting constantly, and they’re reporting three things usually,” he told The New Yorker. “No. 1, where they are. No. 2, where they’re going. And, No. 3, what they’re doing. So, for an ambulance in St. Louis: ‘I’m at Fifth and Broadway, I’m going to St. John’s Mercy, patient in cardiac arrest.’ ”
• He had a speech impediment at a young age, and later in school – he attended Bishop DuBourg Catholic – he joined the debate team and speech club.
• He dropped out of Missouri University of Science and Technology in Rolla to live in New York and develop software; he later withdrew from NYU a semester short of graduating.
• He spends most of his time working on Square, having worn out his welcome at Twitter, where in 2008 he left the CEO post after complaints he was a distracting manager.
• He hopes the Square mobile payment-processing device will one day kill the cash register.
• Dorsey never touched a piece of paper during the few months he spent with the writer.
• He recently bought a $10 million home with a view of the Golden Gate.
• In summary (60 characters to be exact), he says, “Twitter is about moving words. Square is about moving money.”
We’ll soon see how much investor money moves the way of Twitter.
Springfield Business Journal Editor Eric Olson can be reached at eolson@sbj.net.[[In-content Ad]]
