Pando

Dick Costolo: “We just spent a stupid amount of time managing that craziness”

By Sarah Lacy , written on July 5, 2016

From The Pandoland 2016 Desk

For all you Pando members out there that miss our fireside chats, you are in luck!

This week and next, we’ll be posting the best of our full PandoLand interviews.

Up first is the man who kicked the day off: Chicago’s own Dick Costolo. We crammed a lot into half an hour. We discussed why Dick Costolo wanted to start another company after the bruising experience of running Twitter versus, say, relaxing into the role of venture capitalist. I asked him why Index -- the fund where he serves as a part time venture partner-- gave Secret’s David Byttow another chance. We talked about his new startup and why he thinks this take on the health and fitness space will work while most apps that strive to make us better human beings than we actually are fail miserably.

And -- of course-- we talked about his experience writing for HBO’s Silicon Valley. He swears the non-confrontational Richard of season three is in no way inspired by Twitter’s founders. I am still not sure I believe him…

But one of the most interesting parts of the conversation was about a major problem he inherited at Twitter that isn’t discussed much: The loosey goosey rules around employees selling pre-IPO shares. In Twitter’s case, a fund run by Chris Sacca became a clearinghouse for those shares. Which make Sacca rich, but created a nightmare for the company in the process.

“We just spent a stupid amount of time managing that craziness,” Costolo said.

Not to mention it created this weird pseudo insider/outsider investor in Sacca who would later wage a Carl Icahn Tribute Band like campaign to oust Costolo, before Costolo just threw up his hands and quit. 

Costolo’s views on programs like these aren’t unique. Sean Parker was the architect of it at Facebook, and it was copied by a lot of companies in that era. Companies like Uber have learned and keep a tight leash over who gets to sell what to whom.

Costolo has learned this time around, as he explains discussing how he set up his current company. While his new company could easily crash and burn before it even gets to the levels Twitter reached, Costolo is enjoying being the guy to create any messes, not inherit them this time around. He relishes the type of say Mark Zuckerberg had when he bought Instagram, miming him taking a board vote raising his own hand and the acquisition passing.