Illustration by Eddie Guy for Fortune

How the media-juggernaut-turned-train-wreck is getting back on track after a rough two years.

In late January the Tweeps needed a kumbaya moment, and Jack Dorsey knew exactly how to give it to them. Donning a ball cap, white T-shirt, and zippered neon-orange high-tops, Twitter’s co-founder-turned-CEO-turned-pariah-turned-executive-chairman-turned-interim-CEO-turned-permanent-CEO stepped onto a small stage at the weekly all-hands meeting in Twitter’s San Francisco headquarters. The week had been hard, he admitted to a standing-room-only crowd of over 1,000 employees. But he had a plan to fix everything.

The previous Sunday, Jan. 24, news had leaked that four of Twitter’s top executives were leaving, forcing Dorsey to tweet a terse, defensive response. From the outside, it looked as if the social media service was bleeding talent and fumbling to react. In reality, the shake-up was part of Dorsey’s plan, a plan that he now explained in more detail to his co-workers. The departures, he said, were all part of Twitter’s turning a page.

The meeting quickly became a sort of corporate pep rally. Rank-and-file engineers and salespeople stepped up to the mike, effusively telling one another why they work at Twitter. (“Because this product saved my life” and “Because one tweet can change the world” and “Because I’ve never believed in a mission more.”) Anthony Noto, Twitter’s ex-banker CFO, declared, “It’s just us!” echoing earlier comments—“No one is coming to save us”—from a staff-wide memo. That may sound like an odd rallying cry, but employees latched onto the underdog message.

There was cheering. There was tweeting (#OneTeam, #LoveWhereYouWork, #ItsJustUs). “It was a moment of Jack at his best,” says senior director of corporate development and strategy Jessica Verrilli, whom Dorsey recently lured back to the company just a few months after she had left. “It was electrifying.”

Twitter, Jack Dorsey Jack Dorsey has streamlined Twitter’s product team since officially returning as CEO in October.Yana Paskova—Bloomberg via Getty Images

A jolt of electricity is exactly what Twitter needs. With stalled user growth, a stock trading at 30% below its IPO level, and a revolving door of executives, the past two years have been among the worst in Twitter’s history. And all the company’s missteps seemed to play out in public—especially on Twitter itself, where power users of the service pounced on every shortcoming and continually predicted its demise. “They’ve run out of eyes to be black,” says Chris Sacca, an early investor who still holds a substantial stake. “This is a company that has taken every punch possible and is still standing.” (Sacca believes Twitter’s worst days are behind it.)

Most vexing is the fact that Twitter, which turns 10 years old on March 21, is still grappling with the existential question that’s plagued its existence throughout: What is Twitter?

Five years ago Dorsey didn’t think the company needed an answer. “It’s different things to different people at different times,” he said at a conference. The ambiguity has taken its toll, leading to sluggish innovation, strategy whiplash, and internal dysfunction, all of which intensified—along with the scrutiny—after Twitter went public in November 2013. Worst of all: In a tech culture where constant evolution and perfection of “product” is the gold standard, Twitter’s product development had become a chaotic, crazy-balloons catastrophe, moving in every direction but forward.

In October, a few months after former chief Dick Costolo resigned, Dorsey officially became Twitter’s CEO. He’s simultaneously running Square, the payments company he founded and took public last year. In February he finally answered that pesky existential question: According to Dorsey, “Twitter is live: live commentary, live connections, live conversations.” Already Dorsey is encouraging bold changes to Twitter’s most iconic features, which COO Adam Bain says is critical to Twitter’s future success. “Part of why I knew it could only be Jack was because the product moves we knew we needed to make could only be done by the founder and the inventor of the product,” he says.

Twitter did not make Dorsey available for an interview. But conversations with advertisers, investors, and 15 current and former employees reveal confidence in him. Most of them—even the bitter ones—said some version of, “If anyone can do it, it’s Jack.”

The question is whether anyone can do it. Twitter’s product has insinuated itself into the fabric of international discussion, and the company earned $2.2 billion in revenue in 2015 (with a net loss of $521 million). But because Twitter failed to take that success to the next level, it hasn’t met the lofty expectations the media, tech, and financial worlds had for it, and that it had for itself.

Twitter has 320 million monthly active users—impressive, but well short of the billion-user milestone that separates a digital-media superpower from an also-ran. Alphabet owns seven billion-user products. Facebook has two. Three years ago, at its IPO, most observers thought Twitter could get to the billion-user mark too. But since then the company’s product has stagnated, while competitors—Facebook, Instagram, and Snapchat—have continually made their services better and more essential to their users.


Incredible, singular events happen on Twitter, from Kanye West’s wild rants to Donald Trump’s latest bullying. But the best of Twitter gets embedded around the web, analyzed on TV, and even quoted in stodgy old newspapers. So despite Twitter’s 95% brand awareness, many regular people—those who aren’t influencers in media, finance, activism, sports, politics, or pop culture—have decided they don’t need the app. Investors, in turn, have decided Twitter is worth a mere $12.5 billion—a far cry from Alphabet’s $494 billion market capitalization and Facebook’s $308 billion.

Twitter’s management, led by the would-be superman Dorsey, isn’t giving up. But this could be the company’s last chance to get it right.

In 2011, Dick Costolo, Twitter’s recently promoted CEO, decided that Twitter should make $20 million that year from a product focusing on live events, like concerts and big football games. There was just one problem: Not only did the events product not exist, but the vision of what it might look like didn’t exist. All Twitter had was a catchy concept and a revenue target. Twitter’s product managers had to scramble to create something advertisers might pay $20 million for rather than build something Twitter’s users might want. It was revenue first, product second, epitomizing everything that was wrong with Twitter’s strategy, according to employees familiar with the project. And to no one’s surprise, the $20 million didn’t materialize that year, because no “events product” shipped.

It’s hard to overstate how much companies like Twitter live and die by their products—the apps and websites they build and their constant improvements to those offerings. It’s critical, according to Silicon Valley wisdom, that the products have a clearly defined “vision.” Even more critically, products must emphasize user experience over revenue. If a company gets too greedy and ignores what users want, that company is dead. Users are a fickle bunch. Just ask Myspace.

Twitter, Jack Dorsey, Dick Costolo Former CEO Dick Costolo turned Twitter into a revenue-generating enterprise but stumbled on product development.Francois G.Durand—Getty Images

Twitter’s culture, leftover from playing catch-up to its own early runaway growth, has been more reactive than visionary. Its style has been to build things “the crafty, hack-y way,” as a former executive puts it. That adds to Twitter’s charm, but it doesn’t motivate product managers to dream up ambitious long-term projects. Many of Twitter’s most innovative features, including the hashtag, @reply, and retweet, were actually invented by users. “We always had a long list of stuff that we were slogging through, and we would only look quarter ahead to quarter ahead to quarter ahead,” says COO Bain, a 5½-year veteran of Twitter’s sales side.

As CEO, Costolo had strengths, although being a “product visionary” wasn’t one of them. He was well-versed in teaching managers how to manage. And he pulled off something Twitter’s previous two CEOs, including Dorsey, had not: bringing an air of relative stability to the freewheeling, Fail Whaling startup. He whipped Twitter into a revenue-generating business, taking it public in 2013 with a 73% first-day stock pop that drove its valuation to $22 billion. He also took a bold stab at the “What is Twitter?” question in the company’s public offering document with four simple words: public, real-time, conversational, and distributed.

But even during the successful IPO, investor concerns about slowing user growth lurked beneath the surface. Eager to show he could jump-start growth, Costolo put his No. 2, COO Ali Rowghani, in charge of Twitter’s product division. A glowing Wall Street Journal profile dubbed Rowghani “Twitter’s Mr. Fix-It.”

Rowghani found a disorganized, overstaffed product and engineering team that couldn’t agree on anything. Every team seemed to overlap with every other team, because no matter the name (“Growth” or “Timeline,” say) they were all essentially working on the same thing: the tweet. A rule that any team could test a new feature on 1% of Twitter’s users was meant to spur creativity, but soon Twitter was running more than 100 tests at once with little coordination. “It quickly got to the point where it was like throwing darts on a board rather than testing a hypothesis,” a former executive says.

What’s more, Twitter continued to grapple with its identity. Within six months of its IPO, the company’s biggest product initiatives no longer matched Costolo’s “public, real-time, conversational, and distributed” description. A feature called “While you were away” showed users old tweets they might have missed—the opposite of real-time. Updates to “direct messages,” Twitter’s one-on-one messaging service, were by definition not public. Meanwhile Instagram and Snapchat were grabbing attention with their own public, conversational, and occasionally real-time products, taking market share that should have been Twitter’s.

By May 2014, Twitter’s stock price had been slashed by more than half from its January high, and Costolo was under pressure. He took control of product development back from Rowghani, prompting his COO to resign on June 12, 2014. Looking back, many insiders point to that day, exactly a year before Costolo stepped down as CEO, as the clearest sign Costolo was doomed. “That was the moment everyone realized Dick was running scared, looking over his shoulder,” a former executive says. (Costolo did not respond to multiple requests for comment.)

High turnover and regime changes plagued Twitter through the next 12 months. The company lost two vice presidents of engineering, a product head, a media head, a director of product, and a senior director of engineering (see timeline above). The lack of continuity only intensified the short-term thinking among Twitter’s product builders. Any progress on new features “would be blown up every six months” by another reorganization, says a former executive.

The dysfunction reached an apex in May 2015 when Sacca, the early investor, published a series of blog posts longer than the U.S. Constitution outlining the company’s shortcomings. Investor cries for Costolo’s head intensified, not helped by Twitter’s June 3 shareholder meeting, where he reiterated his latest vision: “to connect everyone to their world.” (AT&T once used a similar mission statement.)

A week later Costolo stepped down. It was his idea, he insisted in interviews. Things at Twitter were just fine. In a statement that bewildered anyone who had been following along, Costolo said, “We have great leaders who work well together and a clear strategy.” Since then at least 16 high-level managers and executives have left, and the company’s tactics have completely changed.

Jack Dorsey has said Twitter should be “the most powerful microphone in the world.” Lately it’s been a powerful microphone for people to complain about Twitter. When, in January, Twitter changed its star-shaped “favorite” button into a heart, users loudly protested. (Even ex-Tweep Vivian Schiller tweeted, “I don’t get the point of this.”)

When the Twittersphere learned that the service would expand its iconic 140-character count, the vitriol was so strong that Dorsey had to tweet a clarification. On news that Twitter would use a Facebook-like algorithm to sort its fast-moving stream, the Internet boiled over in rage, elevating the hashtag #RIPTwitter to a trending topic.

Passionate users will always react passionately to big changes. But the real takeaway, Twitter executives will tell you, is the speed at which Twitter is introducing these changes. In the past Twitter’s product managers would debate for ages over barely noticeable tweaks. But in recent weeks, “we’re shipping, we’re shipping, we’re shipping,” says Verrilli, the corporate development director. “That is the energy and the momentum that characterizes the company right now.” (The other takeaway is that the changes appear to be working: Twitter says the heart button got 6% more use in its first week than the star button averaged since it was invented.)

Before it could ship, ship, ship, Twitter had to clean house. In October, Dorsey laid off 8% of its 4,200-person staff. “Some of the people that got laid off were amazing,” says a former product manager, “but you can’t have a bunch of people doing the same job.” Then Dorsey had to fix Twitter’s broken product process. He borrowed a strategy from Apple by appointing a “DRI” (directly responsible individual) in charge of decisions for each product. He also insisted that designers be included earlier in the development process. Dorsey killed features that he believes focus on boosting short-term metrics without adding much to the overall Twitter experience, like a “follow” button that appeared on individual tweets. His message to employees is “think bolder.” At a January executive retreat, he handed out copies of the book Mindset: The New Psychology of Success, which includes motivational, if vague, lines like “Becoming is better than being.” The right mind-set, according to Mindset, is a “growth mindset.”

And in February, Dorsey finally delivered his “Twitter is live” mission statement. “Hearing about and watching a live event unfold is the fastest way to understand the power of Twitter,” he wrote in a letter to investors. And okay, sure! People tweet more when there is breaking news or when they’re watching a live event like the Super Bowl. Periscope, the fast-growing video app Twitter acquired last year, is primarily live.

Having reorganized and declared a mind-set, a vision, and a set of priorities, Dorsey is now in recruiting mode. Hiring coups so far include former Google chief business officer Omid Kordestani as executive chairman, former American Express chief marketing officer Leslie Berland to run marketing, and former Apple PR executive Natalie Kerris to head communications. There’s also the effusive rehire Verrilli, who says, “If you are here, you’re here because you believe in this place and you’re trying to create something great.”

Indeed, staring at one of the many neon-blue signs at Twitter’s offices that command you to #lovewhereyouwork when you actually #hateit would be miserable. Disgruntled employees have no shortage of well-funded startups to jump to, and scores have done just that, landing predominately at Uber, Lyft, and Slack. (Some Twitter employees are calling Slack, a business messaging software startup, “the New Old Twitter.”) There’s even a Slack chatroom where hundreds of Twitter alumni at different companies share articles and gossip about their former employer—it’s called Flown the Coop. Those who stayed got a giant thank-you gift from Dorsey in October when he announced plans to give a third of his Twitter stock (worth $122 million at press time) to the employee equity pool.

Still Breaking the Internet Photos: Jenner: Jon Kopaloff—Filmmagic/Getty Images; West: Jason Laveris—Filmmagic/Getty Images; Swift: Anthony Harvey—Getty Images; Obama: Mark Wilson—Getty Images

Business woes aside, Twitter is where the biggest names in politics, media, and the arts break news and change the zeitgeist. Here are three of Fortune’s favorite world-changing tweets from the past year …

…and one from a famous guy begging for money.

For more tweets that made big news, read “12 Tweets That Changed the World.”

Through the drama, Twitter’s advertising business, run by the well-respected COO Bain, has remained a bright spot, and revenue grew 58% last year. Despite Facebook’s best attempts to court so-called influencers, Twitter is still the go-to place for politicians, business leaders, athletes, and Kanye West to make important announcements. When West publicly asked Facebook CEO Mark Zuckerberg to give him $1 billion, did he make the request on Facebook? Nope—he tweeted it. (See above.) Tony Effik, vice president of media and connections at ad agency R/GA, says buying ads on Twitter works great for reaching prominent professionals and leaders who drive public debates. The scale may not be there, he says, but the influence is.

Twitter isn’t profitable, but it has a $3.5 billion pile of cash. And though an unusually high percentage of its shares are held by short-sellers, many analysts believe that the company has hit the bottom—it can only go up from here. Just two out of 43 analysts covering Twitter have a sell rating on the stock. “Now it’s all about execution,” says Bob Peck, an analyst with SunTrust Robinson Humphrey. “It’s more of a ‘show me’ story now.”

In its decade of existence Twitter has survived enough drama and dysfunction to kill 100 startups of its size—it has taken every punch possible, as Sacca says, and is still standing. If Dorsey can transform “crafty, hack-y” Twitter into a focused, product-execution machine, the missteps of the past few years should give way to stability and growth. Twitter has a solid brand, a solid business, and an influence that’s impossible to quantify. That may have to be enough for now—superpower status is out of reach.

A version of this article appears in the March 15, 2016 issue of Fortune.

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