If he were CEO, Palihapitiya had a list of three things he'd change right away. CNBC reached out Twitter for a response to the comments.
First, he said he'd bring down the company's costs, which are likely stifling the social media company's ability to innovate. He said that it "makes no sense" that Twitter, a fraction of the size of Facebook, spends a third of what Facebook does on technical infrastructure.
"There's an imbalance that means the product is technically, functionally broken," Palihapitiya said.
Second, Palihapitiya said Twitter needs to figure out its "listless" product vision, which he sees as something between Facebook and internet forum Reddit.
"That actually makes a lot of sense," Palihapitiya said. "It's partially curated [algorithmically], but it allows people to go deep on things they deeply care about. It can't just be the last 500 tweets when I look at it at the end of the day — it's impossible to engage deeply in the product."
Third, Palihapitiya said Twitter needs to address its leadership and morale. Bloomberg reported earlier this month that Twitter CEO Jack Dorsey was at odds with many of the company's leaders. The New York Times reported morale has deteriorated within the company after employees discovered a digital folder on that had the names of people who were to be dismissed.
"People are inherently good, that's a good company," Palihapitiya said. "You just have to re-energize them. You got to liberate them from whatever they're dealing with right now."
One source of conflict within the company has been linked to its policies toward abuse. Buzzfeed highlighted the issues in an article, which former CEO Dick Costolo called "total nonsense."
"That is a broken culture now," Palihapitiya said. "There are people there that are really good, but are probably just really sad."
Levie said that if he were in charge, he would get rid of the abuse and trolling problem using machine learning.
"That should be fairly trivial," Levie said. "It's not clear why it hasn't be prioritized."
Still, Meeker, who is known for her extensive and prescient reports on internet trends, noted that it's easy to criticize a turnaround.
"Turnarounds are really hard. To affect organizational change, you need at least 100 days — if you're really good — to figure out what's going on and redirect," Meeker said.
To be sure, Palihapitiya noted that he had been pitched many "horrendously bad" social media companies without the impact of Twitter.
"If you think about the social impact of technology today, that's where the play is," Levie said.