kiethKeith Rabois has been a valuable and visible part of Square’s transition from quirky idea to one of the more innovative, ambitious, and highly valued companies in Silicon Valley, so the news that he was leaving Square was a bit of a shock last night.

He also had a lot to do with Square founder Jack Dorsey’s public image going from ousted Twitter founder who brought us the Fail Whale to “the next Steve Jobs.”

Rabois frequently said that Dorsey was one of the greatest designers and entrepreneurs he’d ever worked with — and that’s saying something considering he was an early backer of YouTube and Yelp and worked alongside Peter Thiel, Reid Hoffman, and Max Levchin at PayPal, LinkedIn, and Slide respectively. But more than that, Rabois handled a lot of the day-to-day headaches of growing and running Square. That allowed Dorsey the time to become somewhat of a celebrity, holding down jobs at Twitter and Square and doing a fair bit of fundraising, deal making and outside evangelism of the product as well as his own design aesthetic.

My understanding was that much of Dorsey’s 2013 was going to be spent traveling internationally. That means having a solid COO in Silicon Valley keeping the lights on will be all the more important to Square in the year ahead.

Square is probably at a more critical — not less critical — juncture than when Rabois joined back in 2010, given the much larger base of partners, investors, small businesses and employees all counting on this thing to work. Add in the pressure that financially Square has long been valued beyond perfection and will more than likely need to raise much more money before it’s all said and done. There’s little room for error.

Square will need a Keith Rabois, even if it’s not the actual Keith Rabois. A CFO pulling double duty isn’t going to cut it. And there just aren’t many Keith Raboises in Silicon Valley. Rabois, like Zappos’ former CFO Alfred Lin, is known for being the consummate number two executive behind a wild visionary — the guy who gets things done.

It’s a position that’s hard work and low glamour. Many of the Valley’s biggest names don’t have that level of discipline. More to the point, many of the Valley’s biggest names simply aren’t content to always be the guy behind the guy. At some point, they want the limelight. At some point, they are sick of having another boss, no matter how visionary and great he is.

My understanding is that at Square, Rabois got a greater chance to run the show than he has before, given a lot of Dorsey’s distractions. Now that Dorsey has just one job, I have to wonder if the marriage is no longer working, because there were essentially two CEOs in the house.

And I have to wonder if Rabois’ next move will finally be to step outside his usual role: Whether that’s into a CEO level job at long last, it’s becoming a No. 2 on a much bigger stage at a much bigger company, or he’s following in Lin’s footsteps into the venture capital world.

Given his track record in spotting great companies, his ability to work well with crazy visionary entrepreneurs and his statement that he wants “(to do) something different every day,” my money is on venture capital.

Update: Rabois published a letter on his personal blog that shed a different light on the situation surrounding his departure.

[Image courtesy TechCrunch]