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This is an article from the fall 2016 issue of LSA Magazine. Read more stories from the magazine.
Dick Costolo wasn't nervous.
It was the fall of 2009, just after he had grabbed headlines by accepting an executive position at Twitter, and he was sitting in a chair on the CNBC set. As interns darted about toting coffee and items of possibly even greater importance, Costolo thought about his day, checked his Twitter feed (naturally), and tried to ignore the white makeup bib that made him look more like a pilgrim than a pioneer. The show’s anchor strode over with a few words of reassurance: “Don’t worry,” he said. “It's only going to be a four-minute segment.”
“I appreciated him coming over,” Costolo remembers. “But there was definitely a part of me that thought, ‘After you’ve been booed on stage by a weird crowd in a foreign country, talking to a camera for four minutes does not seem like that big of a deal.’”
The Tina Fey School of Business
To say that Costolo (B.S. ’85, LL.D. ’13) took a nontraditional path to the vanguard of Silicon Valley is both true and not true. While he liked to tinker as a programmer growing up in Royal Oak, Michigan, and came to U-M in the early 1980s with his eyes firmly on a computer science degree, he found that his time in LSA opened him up to other ideas and interests.
“I needed to take all these courses outside my major, my concentration,” he says. “And the curiosity that you establish when you go outside your comfort zone and explore something new starts to feed on itself and builds up a lot of momentum. So my junior and senior year, I really started to go well outside those boundaries. I took a course in art history, for example. I’d never known or studied anything about art in my life. And I started taking theater classes and fell in love with those.”
Costolo became so enamored with those classes in the dear, departed Frieze Building (now the location of North Quad), that he took his computer science degree and promptly turned down a number of relevant job offers in order to head to Chicago and pursue a career in improv comedy, performing with Second City and the Annoyance Theatre with the likes of Tina Fey, Steve Carell, and Adam McKay. Unlike his cohorts, Costolo was not asked to join a house company, but he was still able to spend time traveling the world and exploring an art form he revered. Along the way, he picked up much more than just the confidence to get through a brief cable news interview.
“One of the things you learn in improvisation is that listening is the absolutely most vital skill,” he says. “The best improvisers are great listeners. Steve Carell, Tina Fey, they’re just great listeners. They’re locked in to the moment and pay careful attention to what’s happening, and then they’re initiating based on what they’ve just heard. And I think as a leader, you always want to make sure that you’re in the moment and listening and paying attention to perspectives while you’re in the midst of some dynamic situation or some rapidly changing environment.”
Eventually, Costolo made the move from show business to the business world. (Carell would run into him years later and joke, “I’m sorry things didn’t work out for you.”) And when he did, the internet made for one of the most dynamic and rapidly changing business landscapes in history. Costolo was paying attention.
Over the course of the next eight years, he rose to a senior position with Andersen Consulting. More and more, his work put him in touch with the power and possibility of even a nascent web experience.
“I was working at Andersen in ’93 when I discovered the browser Mozilla and then Netscape and started using those to work on some online learning components of an architecture we were building,” he says. “And I just realized that using the web for this was so much more extensible than any of these proprietary tools we had, and I got excited about it. I realized immediately that this was going to be really important.
“Of course,” he admits, “I think I was sitting 20 feet away from the guy who went and reserved the domain ac.com for Andersen Consulting, and I really should have thought at the time that I could just reserve, like, 50 other domain names and never have to work another day in my life.”
One missed cue aside, Costolo took another by leaving Andersen and founding his first company, Burning Door Networked Media, which leveraged the internet to help companies with design and development. Burning Door was acquired in 1996, so Costolo founded SpyOnIt.com, a service designed to sift through the ever-amplifying virtual noise and deliver users customized results via whatever channel they preferred: email, web page, or—remember, this was the nineties—AOL Instant Messenger. That venture was acquired in 2000, which led Costolo to launch FeedBurner, another pioneering content aggregator. Google thought enough of the platform to offer $100 million for it in 2007, and they thought enough of Costolo to offer him a job.
Slipping into Characters
About the same time as Costolo’s FeedBurner deal, a recently hatched social media effort became a phenomenon at the 2007 South by Southwest Interactive conference. Twitter, the microblogging network that allows users to broadcast messages (called “tweets”) of up to 140 characters, saw its usage triple over the course of that event alone. By the time co-founder Evan Williams stepped down as CEO and Costolo had left Google and taken over, users were sending more than 100 million tweets per day, with serv- er-quaking spikes around major events like the death of Michael Jackson or the crash landing of U.S. Airways Flight 1549 in the Hudson River.
Twitter spent several months without a permanent CEO after Costolo stepped down, leading investor Chris Sacca to take to—you guessed it—Twitter to complain about the board's slow pace in finding Costolo’s replacement.
Photo by Lars Niki/Getty Images
Under Costolo’s direction, Twitter grew from an intriguing internet startup with about 50 employees to a digital technology stalwart with more than 1,000. He took the company public, and in his five years as CEO its market value rose to nearly $25 billion. Due to its explosive growth, Twitter has changed the way news is consumed and redefined the landscape of e-commerce. While it gives “the smallest voices a microphone,” as Costolo likes to say, it also provides immediate and cap- tivating access to celebrities with their own accounts. (Everyone from politicians to power forwards has learned how even the briefest comment can lead to big headlines, for better or worse.) And through the use of hashtags—a word or phrase preceded in a tweet by “#” in order to group related content—Twitter has also become a powerful tool for activists. Hashtags like #OccupyWallStreet, #BlackLivesMatter, #ArabSpring, and #BostonStrong connected hundreds of millions of people across the world around a single cause.
Being the CEO of any public company brings with it a head level of scrutiny, but that was even more true of a platform whose very lifeblood is instantaneous commentary. To stay focused, Costolo relied on other vital lessons from his improv days.
“Entrepreneurs have to have short-term memory loss,” he says. “The investor Ben Horowitz says that being an entrepreneur is basically ‘periods of euphoria followed by periods of total horror and misery.’ So you have to know that and embrace it and move on to the next thing instead of obsessing about whatever’s gone wrong or why this particular thing didn’t work out.”
But, he says, it’s essential to acknowledge your own mistakes—and learn from them.
“Whenever I screwed up a decision or something bad happened, I would get up on stage in front of the company at our all-hands meetings and admit it,” says Costolo, who counts being unable to acquire Instagram just before Facebook did as
one of his biggest regrets at Twitter. “The very best companies are learning organizations, and I think that the very best leaders admit their failures as quickly as they can, learn from them, and move on by figuring out what they can do differently.”
By the time Costolo decided it was time for him to move on from Twitter in 2015, he was a long way from the small stages and occasionally jeering crowds of his comedy days. But he says his love of humor has continued to benefit him throughout his career.
“One of the challenges you face as you attain higher status or a bigger role in a company,” he says, “is that the good news finds its way to you really fast, and the bad news—not so much. So you want people—particularly people who might feel far away from your position in the company—to be comfortable sharing viewpoints or news that’s counter to other narratives you might be hearing. I think that great leaders can be kind without being weak and confident without being jerks, and I think a sense of humor is a great way to communicate that.”
Last year, two of Costolo’s worlds collided when he was asked to serve as a consultant on the hit HBO comedy series Silicon Valley, which follows a young entrepreneur struggling to turn an ingenious compression algorithm into a successful business. The work would be unpaid and uncredited, and it would entail Costolo commuting (ironically) from San Francisco to Los Angeles on a weekly basis. Call it a performer's intuition, but Costolo agreed immediately.
“I was around a table of 12, 13 writers who are some of the funniest, smartest, and most thoughtful people about writing structure and style that I’ve ever had the opportunity to hang out with,” he says. “And what I love about the writers’ table is that anything goes. Nothing is off limits. Nothing is verboten. They will literally say anything and everything and try out any line, and I thought that was great. It’s really a ‘yes and’ atmosphere, which you want in a creative environment. There’s a lot of idea exchange going on in that room.”
Featuring alums of The Office, Freaks and Geeks, Chelsea Lately, and Portlandia, the standout HBO comedy Silicon Valley was nominated for 11 Emmy Awards for its recent third season. Costolo has consulted for the show since 2015.
Photo by Mikka Skaffari/Getty Images
Costolo admits that the writers’ table and the boardroom are like “oil and water,” but he was struck by how his experience had unexpected relevance to more serious business.
“A boardroom is obviously a lot more structured,” he says. “But as a CEO, I thought of myself as the facilitator of the conversation, making sure one voice wasn’t drowning out the others, making sure I heard any sort of contrarian opinions that might be quiet in the room if the first few voices were particularly loud.
“One of the things I love about the humanities,” he continues, “is that it teaches you by basically making it a habit of mind to be conscious and aware of perspectives outside the self, perspectives outside of your own. I think that great leaders have an intense curiosity about and respect for other points of view, which enables them to make better decisions.”
With its focus on a talented neophyte fighting the juggernauts of the tech industry, Silicon Valley is at its core a David and Goliath story, a theme Costolo and entrepreneurs everywhere can relate to. In fact, Costolo credits what he considers the best corporate speech he’s ever given to a concept he was first exposed to in one of those elective art classes back in Ann Arbor.
In the speech, Costolo showed his audience of Twitter employees a number of artist depictions of the story of David, all of which portrayed the moment after David’s victory: standing over the giant’s vanquished body or holding his severed head aloft. en Costolo presented an image of Michelangelo’s David, which shows a determined and focused hero in that instant just before the battle begins.
“Really, it goes back to improvisation,” explains Costolo, who earlier this year announced plans for another startup, this one aimed toward customizing strategies for personal fitness. “Be here. Be present in whatever is going on right now and not somewhere else. Whatever you’re doing, it’s easy to start thinking about other things or some problem you’ve got at home or what- ever else is going on. But life is just so much more fun and intense and exciting and interesting when you’re right there in the moment and soaking it all in.”