The Twitter exec is not in the same class as Google's Larry Page and Facebook's Mark Zuckerberg, the former Medtronic chairman and CEO added. George noted that Twitter's user base growth has started to slow, and said Costolo has an inflexible approach.
"Costolo is not a product guy. He's a consultant. He doesn't really understand product the way a Larry Page or a Mark Zuckerberg does, and so I think you need a new team at the top," he said.
To be creative Twitter needs product leadership and simply doesn't have that, George said. Costolo, and not his team are the problem, he said, noting that the Twitter executive keeps getting rid of product developers like Daniel Graf and Chris Fry and brings in the next team that hasn't proven itself.
"The advertising is very hard to use and it's not very apparent—they're almost against advertising—and so I don't think they have a sound business model," he said.
Twitter is a perfect target for an activist investor and could end up merging with another company, George said.
In a tweet, Ironfire Capital founder Eric Jackson said Twitter's board should keep Costolo and give him at least another year with his new team.