Anyone saying he can run two companies is lying to you or himself

By Sarah Lacy , written on October 9, 2012

From The News Desk

Can we finally stop pretending someone can run two companies if they just work hard enough or are brilliant enough?

I'm looking at you Jack Dorsey, Twitter CEO Dick Costolo, Twitter investor Peter Fenton, and everyone else who spent years arguing that it was totally doable. In various interviews and private conversations throughout  2011, people close to Twitter consistently maintained it was no big deal that Dorsey could build Square -- one of the single most ambitious, capital- and execution-heavy startups of our day -- and run product at Twitter -- a company that was woefully behind on any meaningful product innovation and desperately needed a visionary leader.

You know what they all said whenever anyone asked whether this was sustainable. And you know it even if you've never heard it first hand. "Well, Steve Jobs did it."

If there's one phrase that's more annoying than "What would Steve Jobs do?" it's, "Well, Steve Jobs did it." But here's the reality: Steve Jobs barely did it, and he was Steve Jobs.

It's widely acknowledged that Jobs was not nearly as involved in the day-to-day operations of Pixar as he was at Apple. And Walter Isaacson wrote in his biography of Jobs about the toll of filling both positions, saying that Jobs believed his health issues started when he was running both companies. The other example people bring up is Elon Musk, who runs both SpaceX and Tesla. But Musk too has said for years it's not an ideal situation and is "way past the fun part." Neither Musk nor Jobs-- two of the greatest entrepreneurs of our time-- have said it was remotely sustainable.

Finally, we see that Dorsey too had no magical powers. Despite what he and others were saying publicly about how doable it was, Dorsey now says he started handing back control to Costolo almost immediately. What's more he says that was the plan all along. Well, then why did you spend so long telling us how doable it was?

Nick Bilton's New York Times profileof Twitter's Costolo first broke the news that Dorsey was no longer involved day-to-day. From Dorsey's spinning blog post that followed it:

Our shared goal was to get those organizations back under him as soon as possible, simply because it was the right thing to do for the company.
That may have been the plan in Twitter's innermost secretive chambers, but it is in no way what people at the company have been saying since the move happened in 2011. Instead when asked Dorsey and others close to him would talk about how he didn't have a family, and lived close to the companies, and had arranged his life so it was totally doable.

In fact, in 2011 when Fortune wrote that Dorsey's role was a short term one, Dorsey even denied saying that. In fact, at the time of that article there was even speculation that Dorsey might pick Twitter over Square, leaving day-to-day Square operations to the very capable Keith Rabois. Investors even passed on Square because of the concern over Dorsey splitting his time. According to multiple investors I've spoken with, in pitch meetings Dorsey never told them this was a temporary arrangement that would change as soon as possible. They were told, instead, it wasn't changing anytime soon, and they'd have to accept it.

I don't write this to bag on Dorsey-- although there is clearly some revisionist history going on on his blog today or he was less than forthcoming back in 2011. He can't have it both ways. Bilton makes harsher claims in his piece, saying Dorsey was moved out, because employees found him hard to work with. Yeah, show me a product visionary who isn't from time to time? The bigger problem was just that it was a lousy, unsustainable arrangement.

The same person running two companies -- or even running one and playing another important, senior role at another -- is always, always, always a stop-gap measure until a better solution can be figured it. It is never ideal.

I have no doubt Brian Lee -- who is currently running Honest and ShoeDazzle -- will discover this too. Building a company is just too hard, too all-incompassing for anyone to do two at once. Period. Next time you read a story or hear an interview with an entrepreneur telling you otherwise, know they are either lying to themselves or you.

And while we're on the topic of misuse of the phrase "Well, Steve Jobs did it," let's address the other time you hear it: Whenever someone believes that simply replacing a CEO can totally change a dying company.

When Jobs returned to Apple, the biggest reason the turnaround worked wasn't the stunning new products like the iMac, the iPod, and the iPhone. It was that Jobs took a hard look at where the company was and slashed and burned jobs, projects, and divisions with all the sensitivity of a barbarian. 3,000 jobs were cut in the first year and all products that didn't fit into his two-by-two grid were murdered. People were aghast, hurt, upset, angry -- everything you'd expect. The board, at first, balked. But Jobs had no sentimentality about all of it. It was gone.

This is why Jerry Yang failed when he tried to "Steve Jobs" Yahoo. Jobs had no sacred cows. Yang had one huge one: The whole damn company. His emotional founder-ties to Yahoo prevented him from selling the company to Microsoft for $40 a share -- and the company has reeled from that since.

No Yahoo CEO has had the guts to make big moves since then, except Scott Thompson who unfortunately made all the wrong moves. This is why a CEO change made such a difference at Apple, and it never has at Yahoo. Because Jobs slashed and burned most of the company. The old Apple didn't survive with a new CEO. He built a new Apple.

Next time someone tells you Marissa Mayer can "free iPods and lattes!" her way to a Yahoo turnaround rather than slashing its terrifically bloated staff and making hard decisions, remember not to just ask "What would Steve Jobs do?" but to consider what Jobs actually did.