by Biz Stone
We had come a long way from being labeled the Seinfeld of the internet. We were on our way to becoming a grown-up company putting out a small, simple tool that could be harnessed for big change. We hadn’t changed the world, but we’d done something even more profound and had learned a deeply inspiring lesson: When you hand good people possibility, they do great things. There’s no such thing as a superhero, but together we can spin the world in a new direction.
Twitter had captured the attention of the world. On a Monday in late 2008, not long after Evan took over from Jack as CEO, I woke up in my little house in Berkeley and, for some strange reason, decided to wear a dry-cleaned, pressed white shirt that day. I never wear a shirt like that, but I saw it in my closet and put it on, and Livia said I should wear it. So I did.
I walked the thirty minutes it took to get from our house to the downtown Berkeley BART station, swiped my card through the turnstile, sat down on a bench, and waited for the train. It takes twenty-three minutes to get from downtown Berkeley to the Montgomery Street station in San Francisco, and the train, as I’ve mentioned, travels in a tube strapped to the bottom of the San Francisco Bay. It always makes me a bit nervous, which made my questionable white shirt a bit sweaty. I knew that shirt was a mistake.
Carrying my PowerBook on my shoulder, I walked the thirty minutes it took to get from Montgomery Station to our office on Bryant Street. By the time I got into the office, approximately two hours after waking up, I was shvitzing a bit.
As soon as I walked into the office, Jason Goldman told me that Ev, who had recently taken over from Jack as CEO, was waiting for me in his car downstairs.
It wasn’t normal for me to show up at work and be told that Ev was waiting for me to go to a meeting. Something was up.
“Why’s he waiting for me? What’s the meeting?” I asked.
“Just go.”
So I turned around and went back outside the building. Indeed, Ev was waiting for me in his Porsche.
I got into the car. “Where are we going?”
“Palo Alto.”
“Oh! Is today the day we’re supposed to do that Q-and-A at Google?” I said. “I wish I hadn’t worn this shirt. I feel weird in this shirt.” It was just an ordinary white button-down shirt, like a suit shirt, but I was obsessing. Should I have tucked it in? I already felt awkward in the stupid shirt, and now we were going to Google.
We started driving toward 101 South. Ev likes to drive fast. And in spite of his general patience with me, he gets annoyed when I babble without thinking.
“Stop talking,” he said. “We’re not going to Google. We’re going to Facebook.”
“Why are we going to Facebook?”
“To see Mark Zuckerberg.”
“Why?” By this time we were racing down 101.
“Facebook wants to acquire us.” Sometimes Evan is an enigma. When he said this, his expression didn’t change at all.
“Oh,” I said. “Do we want to be acquired?”
“I don’t know. Probably not.”
We didn’t speak for a few minutes, while Ev dodged and passed cars, maneuvering in and out of the fast lane. I thought about our last round of financing. It had placed the company’s valuation at something like twenty-five million dollars.
“How much does Facebook want to acquire us for?” I asked
“I don’t know.”
“Do you want to sell the company to Facebook?” I asked again.
This time Ev said no.
“Well,” I said, “why are we going down to Facebook, then? I feel weird in this shirt.”
Ev said the shirt was actually appropriate for the trip—I could tell he was trying to end the shirt part of the conversation—and that it was too late to back out now. He had agreed that we would meet Mark Zuckerberg and talk about acquisition.
“If we don’t want to sell the company,” I said, “maybe we should just make up a price so ridiculous that nobody would ever pay. That way, we honor the obligation of having the conversation but we get out of it.”
“What would be a crazy number?” Ev asked.
I blurted out the biggest number I could possibly imagine: “Five hundred million dollars.” I started laughing before I was even finished saying it. Ev started laughing, too. We were speeding down 101 laughing out loud imagining how funny it would be if Mark Zuckerberg asked us how much we would sell the company for and we said five hundred million dollars. We laughed for a few minutes. Then Ev said it probably wouldn’t be as simple as that. It was unlikely that we would actually talk numbers.
Arriving in Palo Alto, we parked the car at a meter. Facebook didn’t have a big campus yet. Its headquarters were spread across a few office buildings in downtown Palo Alto. We walked to the address. A receptionist gave us nametags and told us we should wear them so that the staff knew we were visitors. We dutifully stuck them on our shirts.
After a few minutes, one of Mark’s trusted lieutenants greeted us. He led us past some folks who were coding away at computers and to a modest office where Mark was sitting at his desk. As we approached, Mark stood up to shake our hands. We did the usual hellos.
“You guys didn’t need to wear nametags,” he said.
Ev responded. “Yes, we did. The woman at the front said so.”
“Yes, she did.” I backed Ev up.
Mark asked us if we wanted him to show us around. We said sure, so he walked us back the way we had come in. As we followed, he gestured toward a bunch of people working at computers, saying something like “Here are some of our people working.” Indeed.
He took us to the elevators and showed us a wall that had been decorated with graffiti. He said, “This is our graffiti wall.” It sure was. We said it was pretty cool.
The elevator took us to the ground floor, and Mark asked if we wanted to see another building. Ev and I exchanged a glance—in one look, we said to each other, “This is awkward but I guess we’ll go with it.”
So Ev said, “Yeah, sure, we’ll check it out.”
Since the buildings were spread around a few blocks of downtown Palo Alto, we found ourselves walking down the sidewalk, me in my uncomfortable white shirt, both of us sporting nametags, trailing after Mark Zuckerberg.
Again, awkward.
We arrived at another building and entered. Mark took us upstairs and showed us some more people working at desks. As we walked by them, Mark said something like “Here are some more people working.”
Yup. He was right. There were more people working, just like in the other building. I gave Ev a “what the hell?” look, and he stifled a laugh.
Mark suggested we talk and led us to a small room on the other side of the floor that was probably an unoccupied office. The room was just big enough for one chair and one love seat. Mark walked in first and took the chair. I walked in next and squeezed onto one side of the cozy love seat.
Coming in last, Ev said, “Would you like the door open or closed?”
Mark’s response was “Yes.”
Yes, what? The answer didn’t compute. Ev paused for a second, waiting for Mark to correct his answer, but no further instructions were forthcoming, so he said, “I’ll just close it halfway,” and carefully adjusted the door to a slightly ajar position.
All these things: my white shirt, the nametag issue, the tour of nothing, the door positioning, the tiny love seat where Ev wedged himself next to me (it’s a good thing he’s so skinny), the people sitting right outside the random office listening in on whatever we said—these things and more made the whole situation extremely uncomfortable.
I started us off saying something like “Mark, I want to tell you I admire what you’re doing. And I think we’re doing the same work. We’re both democratizing information, and I love it.”
Mark just looked at me with an expression that said I’ll wait for the clown in the white shirt to finish so I can talk to the smart guy. What can I say? I’m a talker. Sometimes Ev has to say, “Okay, Biz, can you stop talking now, please?” Even when it’s
just the two of us meeting, occasionally Ev will say, “Biz, can I talk now?”
Mark quickly got down to business. He said, “When it comes to partnerships, I don’t like to talk about numbers.”
“Neither do we,” Ev said quickly.
“But,” Mark added, “if you were to say a number, then I could tell you yes or no right now.”
What were we supposed to do? After hemming and hawing a bit, Ev just went for it. He said, “Five hundred million dollars.”
Wow, I thought. He actually said that number. As I’ve mentioned, Evan is a very grounded individual. He likes building productivity applications that help you make to-do lists and check them off. All his time is accounted for. Later he would even use his calendar to set aside time to play with his children. I was pretty sure “Offer our company to the founder and CEO of Facebook for five hundred million dollars” was not on Evan’s to-do list. I looked at Evan, but he was focused on Mark.
There was a slight pause, and then Mark said, “That’s a big number.”
That was my cue to make an inappropriate joke, so I jumped in: “You said you would say yes or no, but instead you said, ‘That’s a big number.’”
Ev laughed, but Mark didn’t. Okay, this was not my meeting. Blame the shirt.
Instead, Mark said, “You guys want to have lunch?”
We agreed and followed Mark out of the building to yet another nondescript building in Palo Alto. This housed the Facebook cafeteria. It had a long line out the door and around the block. (Free armchair-CEO tip to Facebook: fewer graffiti walls, more food service staff.) Now it was Ev’s turn to attempt a bit of humor.
“Aren’t you the boss? Can’t you just cut to the front of the lunch line?” he joked.
“That’s not how we do things here.” Then he turned his back to us and we started waiting. Mark had thought Ev was serious. We were as alien to him as he was to us.
I’m pretty sure both Ev and I were visualizing the same thing: a long, silent wait in line for our food followed by an even more awkward high school–style lunch during which Mark would continue to point things out to us: “Here are some people eating,” or “Here are some people wondering why we don’t have more food service staff.” So I pulled the old line: “Oh my gosh, Ev. We have that thing.”
“Oh yeah, the thing.” Ev said. Because a friend knows what it means when a friend has a thing.
“We have a thing back up in the city,” I said to Mark. Maybe he believed me and maybe he didn’t, but since we obviously spoke a different language, it was impossible to guess how he took it. We left anyway. “Here are some people leaving.”
Taking that meeting was a rookie mistake. If you’re not serious about selling, you shouldn’t take an acquisition meeting, because once an offer is made, you have an obligation to present it to the shareholders for serious consideration. There are three reasons an entrepreneur sells his company, and none of them applied to us. One, you’re about to be crushed by competition or sued into oblivion. Two, you’re tired or done and just want the money already. Three, your company’s potential, when paired with another company, is orders of magnitude bigger than you can possibly imagine attaining alone. (Actually, at the time, Twitter was doing so miserably, technically speaking, that we almost fell into the category of entrepreneurs who should sell because they’re just about screwed. It might have been a good idea to go to Facebook, but we weren’t ready.)
Unbelievably, within the week, Mark Zuckerberg came to us with an offer. It was a mix of cash and stock that added up to, drumroll please . . . five hundred million dollars. That number had come out of nowhere. It was simply the biggest number I could think of. I didn’t even know if there was that much money in the world. It had started as a joke, and now it was real. Talk about creating your own opportunities.
The offer was a big shocker, and a banner day for Twitter. We had a call with the board to discuss what to do, and then Evan composed a very convincing letter to the board explaining why we weren’t ready to sell. All signs pointed to Twitter’s potential to succeed. We had barely gotten started. We thought we could build a business, but the only way to find out was if we went for it.
The truth of the matter was that we were as passionate about Twitter as we had been from the start. We wanted to see it through. We were playing by our own rules, and we were willing to bear the consequences if it all came crashing down.
Again, the takeaway here isn’t about my behavior, which I’m the first to admit was juvenile bordering on obnoxious. Making jokes about massive amounts of money and then proposing them to serious potential investors is no way to build a career or a business. The point is to trust your instincts, even if you’re smaller and less powerful than the other guy.
Several months later, in a round of financing led by Benchmark Capital and Institutional Venture Partners, Twitter was valued at two hundred fifty million dollars. Facebook’s offer, based on my joke, had spiked our value. Who knew that this was how these things worked? I had assumed a lot more went into the valuation of a company, but as it turns out, it’s not much of a science. It starts at zero, and then one day you find yourself in a room telling people they can have x percent of your semi-existent company for x million dollars. You set your company’s own valuation. It’s made up, and then it’s affirmed by what people are willing to invest.
These days Twitter is worth something like fifteen billion dollars. One day it could be worth a hundred billion. Those, Mr. Zuckerberg, are really, really big numbers.
Nowadays I co-teach an MBA class at Stanford with one of the partners from Benchmark. The focal point for the year is this question: Should Benchmark have invested in Twitter at the level it did when it did it? The students research the company, the market, the competition, and other factors in valuation. A chief point in their research is the five-hundred-million-dollar Facebook offer, which helped set the price. It always amuses me to get up in front of the class, to look at all the serious, hardworking MBA students, and to say, “Do you guys know that it was a joke?A crazy joke?”
Four years later, in 2013, Facebook bought Instagram for one billion dollars in cash and stock. A billion dollars! Driving to Palo Alto in Evan’s Porsche, I couldn’t even conceive of a number that high. I like to think that Mark Zuckerberg learned something from his encounter with us. He wasn’t going to hedge his bets this time with some paltry offer like five hundred million in a mix of stock and cash. He probably said to Kevin Systrom, the creator of Instagram, “You’ve been working on this for eighteen months. I will give you one billion dollars.” I mean, startup, schmart-up. Who could say no to that?
As far back as 2007 people had started calling the updates to Twitter Tweets, and called the action of posting an update tweeting. In early news articles, the grammar police took note of this evolution. I loved it. In-house and publicly, we were just calling them updates, and called the act twittering.
The Twitter sidebar displayed your usage statistics, including the number of updates you’d made. Jason Goldman and I had a conversation about whether to change this to count user Tweets instead of Updates. I didn’t want to endorse the user-generated terminology right away. Having the users take ownership of the nomenclature was fantastic. It was like how Google became a verb. But I was afraid that if we, the company, started calling them Tweets, for users it would be like having their parents say that something was cool. I didn’t want to mess with the magic. So we held off using the Tweet terminology publicly or changing Updates on the site to Tweets. When asked what the terminology was, I’d say, “The service is called Twitter, and the act of using it is called twittering.” (That nearly screwed us later, when we tried to copyright the word tweet, because there was little evidence that we as a company had been using it.) Finally, in the summer of 2009, when the word Tweet was so widely adopted that Update sounded too generic, we went through and changed the terminology on the site. I was thrilled.
When it came to listening to the folks who used Twitter, w
e put our money where our mouths were. Watching for patterns of use across the system, we built features based on those patterns. Larry Wall, who created the programming language Perl, once said, “When they first built the University of California at Irvine they just put the buildings in. They did not put any sidewalks; they just planted grass. The next year, they came back and put the sidewalks where the trails were in the grass. Perl is just that kind of language. It is not designed from first principles. Perl is those sidewalks in the grass.” Hashtags, @replies, and retweets emerged in just that way.
Shortly before we went to SXSW in 2007, a guy named Chris Messina, a friend, who at the time was running an internet consulting firm called Citizen Agency and was an early Twitter adopter, walked into our office. I was in the middle of eating a really great taco. Chris said, “You should make it a feature that if someone types #sxsw that means they’re twittering about South by Southwest.”
Jason Goldman and I listened to Chris’s idea politely but secretly thought it was too nerdy to catch on. Sure enough—maybe Chris started it—people soon began using hashtags. They were using them for about a year when, in July 2009, we decided to hyperlink the hashtag term automatically to the Twitter search results page for that term. Now when you clicked on #sxsw, for example, you were given a page showing all the search results with that same hashtag. It was fairly simple to do, so even though we weren’t sure people would use it, there was no harm in trying it out. It seemed like a good enough way to group search results. Nowadays hashtags are so common that they’re used ironically, in contexts that have nothing to do with Twitter or linking subject matter.
Tweeters also came up with their own method for directing their messages to a specific person, by using the @ symbol. Starting your Tweet with @biz, for example, means you are talking to me specifically, much as you might single out a particular person in a group conversation. Back in 2007 we started supporting this behavior by doing things like linking the “@username” to a profile, then later to a given conversation. This use of the @ symbol was not a new thing on the web. It was used in early online chat forums in order to refer to someone who said something earlier in the thread. You’d type, “I agree with what @hamguy44 said.”