Exclusive: Sarah Lacy's New Chapter On Twitter From Once You're Lucky, Twice You're Good Paperback Version

Last year (nowTechCrunch editor) Sarah Lacy’s book, Once You’re Lucky, Twice You’re Good came out in hardcover. Here’s an interview we did with Lacy about the book in May 2008.

The paperback version of the book was just released (buy it here). The book includes a new chapter titled “The Fail Whale” that’s all about Twitter.

The chapter begins with a discussion of the infamous Fail Whale, the image that Twitter put up when the service was down. CEO Evan Williams told Sarah “I hate that fucking whale”:

Twitter’s unreliability had stretched nearly a year by that summer, getting worse by the month. The site could be down for hours a day, for days at a time. Twitter users were getting impatient. People had started to rely on the system as a sort of personal news feed, a way of connecting with friends, and a tool for tracking events. When it went down, people flew into a rage. It only made them angrier that Twitter’s staff wasn’t saying much of anything about why the outages were occurring or when they would end. The Twitter team wasn’t trying to be obtuse; they just didn’t know what to say. They were just as stumped.

The Fail Whale was cute at first. In fact, undeniably so. But when you saw him every time you tried to message a friend or Tweet a new blog post, his oblivious grinning expression became maddening.

As furious as users were, they stopped short of tearing Twitter down or abandoning the site altogether. There was something about Twitter that Silicon Valley rooted for; a remarkable sense of goodwill for a company that was continually letting its users down for months. Friendster certainly hadn’t been cut that kind of slack.

Even the whale itself developed fans. The problem went on long enough that a weird Stockholm Syndrome developed. A Fail Whale fan club emerged. One guy got a Fail Whale tattoo. The woman who’d designed the art started to produce T-shirts and mugs. She sent a box of Fail Whale T-shirts to Twitter’s offices late in the summer, but the joke was wearing thin on a staff battling the problem day and night.

Sure, some staffers found it funny. After a point you just have to laugh, right? But ask CEO Jack Dorsey about wearing a Fail Whale shirt and you’ll get this answer: “l won’t wear any shirt with a whale on it, ever. It has put me off the whole species.” Twitter’s cofounder Evan Williams agrees: “I hate that fucking whale.”

The chapter also goes into a lot of detail on the beginning of Twitter. Creator Jack Dorsey tells Sarah that the original idea goes back to when he was just fifteen years old:

That’s because Twitter didn’t really start in 2006. It started in Jack’s head back when he was fifteen years old. He was iust a geeky kid living in St. Louis in the 1990s who had an unnatural obsession with the dispatch industry. Particularly the armies of couriers who physically took something, put it in their messenger bags, and dropped the packages off somewhere else. He thought about it the way other fifteen-year-olds think about half-naked girls or Star Wars—with sheer awe that never seemed to end.

And when he thought of dispatchers, he would picture a huge map of New York city with blinking lights of couriers all acting like a flock of birds navigating the city individually, but also as one. A symphony of bikers fanning out in different corners of the city, crossing paths seamlessly, each on their own route, then coming back to the same place at the close of business. All controlled by one conductor; one master plan. “I wanted to write software to do it,” Jack says, “I just had to.”

On Dorsey’s firing:

The question of replacing Jack first came up for the board duriing the summer of 2008, while Twitter was raising another round of money. Taking the money meant that the company likely wasn’t selling, and the board asked whether Jack had the chops to take the company to the next level. Nothing was decided then, but it kept coming back up for two reasons: Things weren’t getting better between Evan and Jack and, increasingly, Evan was discovering that he did actually want to be the CEO of Twitter. Both Jack and Evan complained to the board, and the board decreed that one way or another, it couldn’t go on. So Fred Wilson asked Evan, “Do you want this? Do you want to be CEO?”

Twitter’s investor Fred Wilson and Spark’s Bijan Sabet were in town for a board meeting and the three of them decided the investors should deliver the news, not Evan. It would be easier for Jack that way. And really, the news wasn’t all bad. Jack would be awarded the second largest individual stake of Twitter stock and would be named chairman of the board. It was generous by any standards. Later that night, Jack went out with a few now-former coworkers. “Come on! This is a celebration,” one of them said. Jack smiled, but he couldn’t feel very celebratory on the inside. The next day it was announced with the ubiquitous face-saving line, “Jack Dorsey has decided to step down.”

On Twitter’s business model:

Indeed, that’s how Evan is thinking about Twitter’s business model too. The plan is to let corporate Twitter users use the service the way they want to – and charge them for it. There’s been a lot of debate over whether Twitter would have some sort of partial subscription business model or an ad-based one. Evan says neither. He’s planning something more creative that’s every bit an extension of the product as any free feature. “There are lame ways we could make money now. We have enough of a user base and enough traffic,” he says. “But it needs to be part of the system.”

Evan uses the word “system” a lot. He thinks of Twitter as a living, breathing organism – not unlike a flock of birds – that he needs to keep moving together, now that he’s taken over the lead position in the formation. Revenue is as much a part of that “system” as company culture, features, the user interface, and the behavior that happens on the site. “The revenue piece is pure product design,” he says, getting excited. “What are people trying to do and how much are we going to help them do it? Is this something only companies want? Then how much can we charge? And where’s the credit card field?”

These are just small excerpts from the chapter. If you haven’t read the book, you should. Buy the paperback version here. Kindle version is here.