Jeff Lawson steps down as CEO of Twilio(cnbc.com) |
Jeff Lawson steps down as CEO of Twilio(cnbc.com) |
This article [1] says "Anson and Legion [[2 investors]] have pushed Twilio to sell the Data and Applications unit, if not the whole company. Anson and Legion have both amassed individual stakes of around $50 million"
Twilios marketcap is 13.33bn. Why do 2 investment groups that own a collective of $100m twilio have so much power that they can push for layoffs or SELLING the WHOLE company?
They want twilio to sell a group that is 20% of their revenue. 20% of their revenue based on a 2023 $4bn would be around $800m or so. Twilio is an 8k employee company.. Is $50m in stock so high on the food chain that you get critical voting rights? That's nothing to an 8k large company.
Could anyone explain?
1 = https://www.cnbc.com/2023/12/04/twilio-layoffs-company-to-cu...
Edit: Ok I'm learning about "Activist Investing" now and I'm pretty sure as opposed to that really nice seeming name it's corporate vultures who try to take over the board and push a company to do whatever they're doing with Bed Bath and Beyond and all those.
It was ONE Portfolio Manager who went from Legion to Anson and brought Twilio into their portfolio at both companies, at $50m each.
He launched campaigns at Kohls, BB&B, Twilio, Nutanix and SurveyMonkey at least according to this article.
https://www.reuters.com/article/idUSL2N3B82SO/
And for anyone curious about Activist Investing - Moral of the story once you own 5% you get a form that notifies the board you own 5% and they send in a form to the SEC with all their wants/complaints: https://www.forbes.com/sites/emilywashburn/2023/02/03/whats-...
Anyway, I wish the best of luck to Jeff. I consider his book Ask Your Developer: How to Harness the Power of Software Developers and Win in the 21st Century to be one of the must-read books for founders.
This was not my experience. The gulf in pricing between Twilio's raw STUN/TURN solution (which they had clearly gone to great lengths to keep hidden amongst their product offerings) and their batteries-included WebRTC API solution was so vast it was almost comical. At a certain scale, a company could save maybe millions of dollars a year at the cost of a day or two of extra engineering effort. They were far from averse to the strategy of looting their customers.
Shareholders have been critical of Twilio's performance, and therefore Jeff Lawson over the last year or two though... They're in a difficult place. They don't have the margins of a SAAS company and they've been losing a lot of money.
This was fine in a low interest rate environment where investors are willing to pay up for growth, but when that changed investors wanted them to cut costs and show a path to profitability. As a result Twilio was forced to do large layoffs and refocus the business on products with higher margins.
Perhaps Jeff just didn't want to run the type of business Twilio needs to become in this new environment. He doesn't strike me as the kind of person who gets passionate about running a mature business that needs to focus on optimising profit margins above all else. I he think prefers to get stuck in and build things cool things, and for better or worse that's not where Twilio is anymore.
There is optimizing profit margins, and there is not losing hundreds of millions of dollars per year, year after year.
https://www.macrotrends.net/stocks/charts/TWLO/twilio/net-in...
> Shipchandler has over 25 years of experience growing businesses and driving financial performance across global, public organizations. Prior to Twilio, Khozema spent over two decades at GE where he drove operating excellence in GE’s high tech aviation division, plus accelerated growth in the Middle East region.
I wouldn't be too enthused about him running a software-focused company. His experience yells "generic businessman brought in by investors to squeeze more profit".
Yikes.
I guess when the company has no profit or potential you have to try to build something else?
https://www.theinformation.com/articles/twilio-set-to-lose-s...
That’s an unfortunate name to have. I’ve always wondered how people handle when this happens. If it’s as big a deal as I feel it would be if it were me.
Fire a bunch of people, especially those that are most tenured and have the highest salaries.
Raise prices each quarter to achieve revenue growth with the assumption that customers are more inelastic than suspected and won't leave.
Doubtful that any smart acquisitions will occur, given that requires an actual understanding of product, customers, and markets.
The beginning of the end until some larger corporation, looking to grow their revenue base decides to acquire them.
End of an era for sure.
That's already done
> He has a deep understanding of Twilio’s business, operations and culture, having most recently served as President of Twilio Communications, and previously as Twilio’s Chief Operating Officer and Chief Financial Officer.
MSFT/Satya is the outlier, should be what others aspire to.
In Twilio’s case, it is “squeeze some profit”. Having revenue be greater than expenses seems like a reasonable goal for a business’s leaders.
https://www.macrotrends.net/stocks/charts/TWLO/twilio/net-in...
But yeah: Jeff had been working toward GAAP profitability for a while now, but was unable to deliver.
I have my own feelings and biases about the company's trajectory over the past years (I worked there from 2011 until 2022), but ultimately a) Jeff lost his super-voting shares last summer, b) he didn't deliver on profitability, c) growth numbers have been unimpressive for a while now. Activist investors have been saber-rattling for most of the past year. Of course Jeff was going to get forced out, sooner or later.
They were never losing that much cash, and they have recently become cash flow positive, https://www.macrotrends.net/stocks/charts/TWLO/twilio/price-...
The large GAAP loses comes from dilution – mostly in the form of stock based comp. In theory if growth exceeds dilution then investors are still owning an appreciating asset, and if the stock is richly valued (as TWLO was) then it makes sense to fund that growth with capital rather than debt.
But yeah, as a shareholder I felt their stock based comp was egregiously high and it took management a little too long to realise we're in a new world and things needed to change... A side point, but that's actually why I invested in TWLO because the stock got so beat up and their SBC was so excessive that it was kinda obvious that things were going to need to change and the market would react to that positively.
The markets seem to be reacting favourably to this news and again I think that's because there was an assumption that Jeff Lawson was largely to blame for the lack of focus on profit optimisation.
Personally I think Jeff is a great CEO though and I didn't want to see him go. I just wanted him to make some tough decisions to stop the burn – which more recently he seemed to be doing. While I do think they need to be more finance minded in this next stage of the business, I would doubt whether a developer focused tech company like Twilio will benefit much from a managerial leader like Shipchandler. We've seen this mistake made repeatedly by tech companies in the past.
He created an environment where (at our best) we could have fun doing work that had a real impact, and we could it with people we enjoyed doing the work with. He pushed us to be creative to authentically empower and inspire developers. Wanna build a video game that teaches developers how to code and use Twilio? Let's try it! Wanna build an AI application with Tony Hawk and have Tony Hawk debug the code live on stage? Sure!
And Jeff would always be spending time with developer tools and Twilio's products himself, to the point that he could live code at the drop of a hat to show off what we'd been working on. This meant his own understanding of developers and their problems never ceased to amaze me.
But more than all of that, he was a rare CEO that led with empathy, humility and care.
Thank you, jeffiel. We can't wait to see what you build next.
Because Jeff wanted to be a celebrity CEO, and it was to the detriment of the company.
All of Twilio's growth (as a public company) happened on George's watch.
I don't think it's a coincidence that well after George left, on Jeff's watch - they had to do 3 different layoff for a total of ~24% of their entire public company being let go.
Note: former senior level Twilio employee, posted anonymous for obvious reasons.
For a public company, the CEO has to be a public CEO. Everyone takes on a different persona (some sell themselves as business geniuses, others as creative geniuses, and others as someone you wanna grab a beer with). Some really like it, and some do it begrudgingly. But at the end of the day, you can't be the same CEO of a public company as you were when you were private.
I've never known Jeff to hobnob with celebrities, travel in luxury or abandon his company. I'm not sure he's a "celebrity CEO" as much as he just became a public one, although I don't know him personally.
(FWIW, this is the reason I'd never want to go public. I personally don't like the system, but that doesn't mean it's not how the system works.)
It's more likely that someone as smart as George might have just looked at the fundamentals of the business and decided it could not keep this up over the long term.
or... it might have just been epic timing too. Probably.
A CEO has to be the face of the company and needs a good reputation. It seems like he was a good leader.
From an outsider it looks wrong.
I joined Twilio in 2012 and I saw first hand how pivotal Jeff was in supporting the idea that in order for a platform to be successful it needed to treat developers like first class citizens, and not simply the recipient of a "directive to integrate" from the CTO.
This idea wasn't simply a fist bump to devs for cool points, it was a recognition that developers themselves held the key to innovation and creating radically new things. This culture led to entirely new ways of building API docs, designing developer dashboards, creating developer events, and so on.
So many of these things have become mainstream and the new baseline for platform companies that people forget how unlikely it was in the beginning and how hard Jeff had to fight to keep the company from treating developers as a means, and not as an end. And I think all developers who are happily hacking away on a free tier of a cool API with excellent docs and a vibrant developer community should tip their hat to a person who helped make this normal and influenced a generation of leaders to do the same.
These are the strange effects of ZIRP and infinite QE. Many companies never had to care at all about profit and could just do things "for fun", and still see valuations skyrocket as long as they hired more people. What a time.
The fact that the music continued so long and led to incredible valuation inflation over the last 15 years made the excesses look a lot worse, but even in a more sane financial environment I'd argue you'd still want to do these things to be competitive in an attention-economy, just maybe not to the extremes we saw.
Blaming low interest rates on taking risk and doing highly speculative things, and investing in a culture that values that by funding off the wall stuff puts too much emphasis on the capital markets. If the company was a steel producer, fine. If it’s a company that essentially captures the stuff of dreams and produces a service that executes thought stuff in machines, you have to decouple your R&D from capital management to the extent your free cash flow can accept it.
Note of course low interest rates and other capital market looseness will create more opportunity for this behavior, and not every company doing these things is doing some is a well managed way. But they don’t have to - that’s the magic of capitalism. Through a Darwinian process only those who strike magic win and survive and the others recycle and try again. This feels like a feature not a flaw of zero interest rates - it creates enormous value by virtue of incentivizing taking risk at a time of high innovation. There are times in history where innovation rates were very low, and zero interest rates would just incentivize broken behavior. But at a time when almost all growth is coming from innovation, maybe loose credit is smart. ml
Like seriously.
They first make you deposit $20 to get started. THEN, they tell you to talk to customer support to activate your account (customer support took forever to reply).
Oh and then I had to fill out like 3 applications and my text messages are still randomly getting blocked - I have no idea why.
To be clear, this is literally just me using Twilio to text myself to test out the API. I'm not some spammer or something. It was impossible to get started.
I've seen, both personally and through others who've relied on his example or mentorship, Jeff be a force for good for those who were trying to do right while leading companies. And to even be someone to call in (or call out) a mistake when you make it — which a lot of bigger-name people are way too cowardly to do. He's also spoken up for his city, and for vulnerable communities, when it would have been so easy for someone of his stature to just stay silent.
It's obvious that Jeff is a brilliant technical innovator, but he is just as much of a pioneer of thoughtful and conscientious leadership in an industry that's become woefully bereft of it.
In my experience they’ll bring someone in to try to apply aggressive sales strategies to a dev tools company & it never goes well.
But my feeling is they really just want to strip the company for parts and/or sell it to private equity.
I was unable to get approved so I guess I'm out $20 for no reason. They have the worst dev experience I've ever seen.
Jeffiel kept the fun and weird alive and it was a helluva ride. Kudos Jeff!
Jeff (and team) deserve a ton of credit for two massive things:
First, changing how people think about devtools. I know Stripe gets a lot of credit, but Twilio was 3 years earlier and really defined how we look at building, marketing and monetizing tools meant for devs. They were early (if not first) to the devrel space, and Jeff's live coding (paired with a phone literally vibrating) was something I had never seen before.
Second, I know a lot of people have lots of opinions about San Francisco, but I have a lot of respect to Jeff for always standing up and fighting for the city that enabled him to build his company. He seems to be a really good person, and is one of the few CEOs I find myself eager to emulate.
Good luck to Jeff, Twilio, and everyone else involved. Jeff built something really special in the early years. And jeffiel, now that you have a bit more time on your hands, hopefully we can finally cross paths!
Twilio tried to expand into Europe and failed miserably. Customers (especially German ones) wanted exact locations of data, exact routes of packet transportation, wanted features Twilio promised on Slides but never delivered.
I was part of at least 4 customer meetings (the biggest in Europe) where the clients just called Senior levels in and told them off.
Twilio was great when it just handled voice and text messaging. It never grew substantially, it never delivered features customers were asking for years. Messy code base, hired product owners with no clue what they should actually build.
Jeff was famous for over-promising and under-delivering. 1 year into my Twilio career, it was clear that the company would fail hard. Colleagues and I had bets on when Jeff will be fired or the company sold. Well, the last few months have been telling.
A sad story, since they had a great core product, really smart people, great people working there. But especially through the pandemic, they grew an insane amount without actually building anything of substance.
Most of Twilio's business has been built on reselling network access purchased via SMS consolidators. These are companies who, decades ago, got their hardware installed inside the networks of the major phone carriers. This allows them direct access to send/receive SMSs. Twilio never really tried to own the network layer and these companies continued to demand higher and higher tolls for access. Short codes are a very good example of this. Twilio spent a lot of time and money trying to sew up access to those short codes.
On top of all that, high volume customers would move directly to these consolidators. Sometimes Twilio would keep some portion of the business if the sender used a round robin model to distribute sends, but often they didn't. OpenMarket and a handful of others were the goto providers at scale.
Add on to this the overall decline of the utility of SMS. Even as SMS volumes increased, they have not increased at the same rate as messaging overall. ie: other channels like iMessage and WhatsApp continue to pull volumes.
Cue Twilio's attempt to go up market. Flex and the purchase of Sendgrid were the best examples of this. Could CPaaS work for Twilio as a business model? I think we've seen so many fits and starts with the Flex product line and the integration of Sendgrid that it seemed like perhaps buying their way in to that market wasn't panning out.
Finally, as seen in the last year, the culture just seems to have gone off the rails at some point. [1] I don't know Jeff, but my respect for him is sky high. I've read all his writing over the years and he's been hugely influential for an entire generation of founders.
Unfortunately this seems like a bit of a hasty departure. I hope it isn't, but the choice of replacement CEO screams caretaker-CEO rather than shrewd strategic move.
Another commenter mentioned Stripe [2] and how they get a lot of credit for advancing DevTools. I agree that Twilio did it first and I think paved the way. Jeff Lawson and Twilio deserve more credit. "Ask your developer" was not a small thing at all.
I also think Stripe very likely is in a very similar position, but they are earlier in their cycle and they've avoided the scrutiny of being a public company. Credit card processors are gatekeepers and fully dominate in their markets. Stripe serves a purpose for them and dramatically improves access to their networks via great tooling and abstractions, but there is still a fixed cost toll to pay and what that toll is cannot be static for interminable time. Is Stripe in the "Commerce" market like Twilio is in the "Communications" market, or are they in the "payments" market, like Twilio is in the "SMS" market? (or somesuch)
1: https://news.ycombinator.com/item?id=36382361 2: https://news.ycombinator.com/item?id=38913134
Six weeks into the job I watched Jeff live-code a Twilio app in front of 10,000 people at IBM Connect. It was as if he was saying to all of us, "Yeah, live-coding is hard. And if I can do this in front of 10,000 people, you can do it at your local Ruby meetup."
It was the first of many, many times over my nine years that Jeff led by example, set the bar, and pushed us all to reach levels we didn't know we were capable of. Working under Jeff's leadership was the privilege of a career.
I can't wait to see what he builds next.
One of my favorite moments was running into Jeff in the hallway at our Beale Street office just before he had to do a quarterly earnings call after we went public. I said "good luck on the earnings call" and Jeff said thanks then asked what happened to a link to a specific Stack Overflow question/answer from one of our docs pages that got removed. He had just been building an application and felt like that answer was particularly helpful for context in a certain programming language, and was surprised it was removed.
Jeff's always been software developer at heart even though he had a ton of non-dev responsibilities. There are definitely advantages and disadvantages in that mindset! But he created a tremendous company along the way and I wouldn't change working there for anywhere else during those years.
My first day, we got briefings on what it was, what it will do, and then had to finish docs and re-arrange the office for our top customers. (At that stage, most people knew them by name. Shout out patio11!)
Since I knew nothing and the docs were.. weak, I decided to take out the garbage. I grabbed the bags and asked where the dumpster was. Jeff Lawson stopped me and asked if I had an office key card to get back in. Oops, nope. So he grabbed a bag and we took it out together.
So yes, Jeff opened doors for me. ;)
Despite the last year or so of chaos, he founded and built a company that redefined telecomm specifically and tech gtm as a whole. Not a bad track record.
My favorite times were:
- for one of Bob Metcalfe's courses at UT Austin. Yes, that Bob Metcalfe, the co-creator of ethernet. I talked about the origin of Metcalfe's Law here too: https://news.ycombinator.com/item?id=35259442
- 1:1 for Werner Vogels at SXSW. I gave it to one of his senior guys and he said "wow, this is great, let me go get Werner" which was intimidating as f.. a lot. But I managed to nail it.
Keep in mind his voting structure changed in May meaning he lost some shareholder power.
> Its use of supervoting shares, which gives CEO and co-founder Jeff Lawson a voting stake of 21.8% even though he owns only 3.7% of the stock, [1]
No derogatory remarks intended to Jeff, Jeff certainly has had great moments, but Kho is also a fantastic leader and capital allocator, who's made some truly uncanny calls (like raising in the market near the top,and share buy back near the bottom). I think Kho is the right person for the job in the times that Twilio finds themselves. It's something I've hoped for for years, as a shareholder. Jeff deserves praise for the humility to step down and promote from within a well groomed and talented successor.
[1]: https://www.theinformation.com/articles/twilio-set-to-lose-s...
Most just follow the crowd and do shareholder dilutive buybacks at nosebleed valuations.
If you can buy a long duration US treasury yielding more than twice what your shares yield, maybe stop to think before doing any buybacks.
Though I've written it up to mostly short term-ism towards increasing their own compensation through pressuring share price in the immediate term. The alternative is that all these CFOs and others are financially illiterate or incompetent
https://www.spglobal.com/marketintelligence/en/news-insights...
The only party he missed was putting our cash reserves in BTC. (which is an inside joke). It would have made the money like $4-5B based on the time of the suggestion. I think investors will be happy to hear he flatly outright said no to that. It looked like a missed opportunity (at $64k)... until it didn't. (back at $16k)
"Twilio Inc. Chief Executive Officer Jeff Lawson is stepping down from leading the software company he co-founded amid slowing sales growth and pressure from activist investors."
https://www.bloomberg.com/news/articles/2024-01-08/twilio-ce...
“The move is not likely to stave off the activists at Anson Funds and Legion Partners. Both are pushing for the company to sell itself or completely divest its data & applications business, CNBC previously reported.”
And while you hear a lot about ruthless but effective asshole CEOs, Jeff happens to be a brilliant executive and a great human all at the same time.
True visionary and 1 of 1.
Amazon could snatch, also Oracle the evergreen. SFDC is the dark horse, don't see MSFT touching it due to massive AWS setup.
Godspeed.
I was disappointed in Twilio for the last several years I was there. What had started off as an engineering (and product) focused company devolved into being driven by sales. We put out some products that were half-baked from an engineering perspective, and it showed: missing or buggy features, downtime, and unfulfilled promises to customers that sales/product made with barely perfunctory consultation with engineering. IMO it really hurt the company's reputation. I remembered a time when mentions of Twilio in tech circles would come with praise and even awe; more recently complaints seem to have overtaken the good vibes.
The "Ask Your Developer" billboard on US-101 as you entered SF was iconic. I loved that billboard; it perfectly encapsulated what the company stood for and illustrated why I was so happy there. For a while it was changed to something about reducing customer acquisition costs, a big red flag. More recently, it says some meaningless nonsense about "digital greatness" and "customer AI". That kind of shift tells me everything I need to know about where things have headed.
Ok, time to stop being so negative... having said all that, I wouldn't trade my time there for anything. I learned more than I thought possible, worked with a ton of people who I respect heavily, made many lifelong friends... it was a life-changing experience. Jeff was a big part of that, and I'll always be thankful to him, Evan, and John for creating a place where I could thrive and grow.
Usually company values are just written down as a checklist somewhere, which you once read and then forget about. But twilio's values are fun to read, think about and easy to follow.
Twilio did include telephony and was originally built as telephony-only provider, so it really stood out and was a lot more sustainable as a business than anybody else.
But, importance of telephony is falling. When was the last time you dialed-in to a Zoom conference? Without that, what's left of telephony? Just the 2FA SMSes.
I believe long term, providers like Twilio will become very thin layers of indirection to aggregate together underlying phone operator services, and will be mostly owner by those phone operators themselves, like Vonage now owns Nexmo, Twilio's direct competitor. Nexmo's API makes a lot more sense than Twilio's by the way, and is a true pleasure to use.
tldr: architecture that doesn't work for web apps, performance issues, missing features
I am just waiting for my minimum required balance to be eating up by fees i dont understand. I have moved on to a chat service. I wish them luck moving forward.
I think this is especially sad as Twilio really was a reflection of the purity of product and engineering coming together to make more than the parts.
I can’t think of a better leader at the intersection of people and technology than Jeff Lawson.
I think Twilio has a unique opportunity to lead in AI if they kept their Hacker spirit. Unfortunately the fatal blunder here was that they signed up for this outcome via IPO. Not much better being private under PE, however it was doomed to this fate the moment they went public.
All that said, congrats Jeff (jeffiel) for doing such an amazing job and holding on this long.
Long term: own the infrastructure for infinitely scaling call centers for any task you would need to do over sms/gsm voice
They probably need to go vertical and capture some of the value their users are generating to have the kind of revenue investors want.
1. Growth rate slowed such that valuations had to come down (went from inevitable overtaking of Salesforce in size, to decades of growth required)
2. Environment -- Cashflow negative meaning another raise was required without fiscal controls and in a high interest environment that's really tough. A return to office end of covid anxiety meant the Covid bubbled stocks are returning to mean. (eg compare zoom has done relatively similar over past 5 yrs)
3. IMO a few execs were absurdly over compensated whilst investor pressure against dillution was targeted to rank and file employees. eg: Eyal Manor earned a reported $42M in compensation (and a $2.5M retention bonus that reading between the lines sounds like hush money), meanwhile ICs were often given below cost of living raises and no refreshers.
1-2 means outside investors had to lower the valuation and 3 meant a combination of dilution and morale hits.
I also had a really annoying experience with Sendgrid post acquisition. I'd used Sendgrid for my first company (as in I personally made the purchase, implemented the apis, and for a long time, was the sole and then admin account). I went to use it for my next company pre website launch and they froze my new account and their customer service was a pita. To be fair, the site wasn't up, but I needed the ability to send emails to publish the site (it's a crucial part of new account flow.) They wouldn't allow me to use sendgrid even though I was happy to share my linkedin, my previous history with their company, etc. We're happy sendinblue customers.
After mid-2021, that $400+ stock price started looking a little silly. And the broader market downturn in 2022 hit Twilio even harder than it hit the broader market.
And, meanwhile, Twilio's growth numbers -- while still being an unprofitable company! -- look worse than they did at the beginning of 2020. $75 might be generous for how the company is actually doing.
(Full disclosure: former employee for ~10 years, and I still have a few shares left.)
Stagnant revenue and declining free cash flow means that the company doesn't have many tools in the toolbox to be valued higher.
[0] https://www.fool.com/investing/2020/09/25/microsoft-declares...
Can you share more insights on how you knew they were special?
We’ve become so accustomed to developer-oriented marketing and programs that it’s easy to forget that Twilio was really at the cutting edge of this movement and should be credited (or at least acknowledged) for the easy on-ramps most developer programs now provide.
Twilio also pushed the envelope in terms of what it means to talk to their developer community. Greg Baugues’ talk titled “Devs and Depression” reached a lot of people who were struggling, and was one of the reasons I personally sought out therapy, and my life is much better for it.
Early Twilio was a very human-oriented company, and I think many developers and developer programs are better for it.
The early people all just had this vibe of technical-but-not-complicated. It's common now, but at the time it was such a breath of fresh air. They were one of the first companies to pitch "easy of use" (compared to "look at how amazingly complex we are!"). I know this is super obvious now, but back then I had never felt anything like that.
All the people I met (I specifically remember Danielle) were friendly and excited... not in a sales-y way, but in a "I just love what we're doing and want you to, too" way. And again, I know this doesn't feel unique now, but that's because Twilio helped shape how we think about all of this.
I loved their attitude, such as this talk from John Sheehan (https://www.heavybit.com/library/video/runscope-ceo-and-twil...) about how they look at customers. I remember him saying they would fly to any little city that would have them and buy pizza and just hang out. They caught on early that there were so many tech people out there around the country who would become lifelong supporters because of little gestures like this.
Overall, a lot of what I can say about Twilio is super obvious now. But it's kinda like how people watch Friends for the first time in 2023 and say "meh it's a pretty generic sitcom". It's because they created the whole genre and shifted how everything thinks.
Then after not very long, you would goto the conferences where they would make announcements about what is coming, but no real timelines attached and some things that were announced, never really materialized - or not fast enough etc.
Then they started diversify like crazy into other areas, unrelated, and I think they really lost their focus - stopped using them (99% stopped) a long time ago for those reasons.
One way a company can be mismanaged is burning money it can't afford on ridiculous employee perks, like when Twitter got its own DJ.
I stayed for ~1 year after I realized I needed to get out: At the time I was getting paid very well, had very low expenses, and was saving to quit my job and start my own company.
My original plan was to stay a few months longer to build up some more savings, but "things happened" inside the company. I was re-assigned to a horrible manager; I hunted around for another assignment (on the advice of my boss's boss,) but that was going to be Flex-based. (And I bet correctly that Flex was going to fail in the marketplace.) I decided that I was better off quitting and self-teaching myself HTML + Javascript instead of getting paid to learn Flex. However, I could have stayed for a 2-3 more years, worked in Flex, made a boatload of money, and selectively applied for jobs elsewhere.
> One year into it you knew the company was going to fail yet you stayed on for 3 more years?
There's a lot of risk in changing jobs: If you "have a good thing going," it's best to bide your time until a better thing comes along. Interviewing is quite time consuming too, so don't assume that someone can just casually make a few phone calls and walk away with a "better" job. (This is especially the case if you have kids, a house, a mortgage, and a significant other who has their own career.)
Also, it's hard to job hunt when you're already over worked, both at home and the office.
Also, the devil you know. Every new job is a gamble. After a while, all the jobs kinda smell the same. So what's the point in playing frogger?
My guess is they profited _a lot_ from the crypto hype. Exchanges sprung up right, left and centre and they all needed customer call centres etc. So Twilio grew through that. Saw super high growth and thought: All is well. All the while the "real" customers didn't get the features they needed, and quit Twilio after a 6 month trial period.
I was on several calls with providers begging them to put us on a more robust network. Especially in years when there was an election. In those early years, we had one customer doing more minutes than our entire customer base. In fact, at an early Twiliocon (pre-Signal) John and Jeff had to help build out an entirely separate environment for them because it was dragging everyone else down.
My point is that the early days were definitely the "Draw the Owl" days. We were figuring out things on the fly. Carriers were dubious and it was tough to get things working consistently. However, by 2015 those same carriers were developing APIs of their own.
Twilio changed the game for the telecommunications industry. Two years before joining Twilio I was putting in large-scale Avaya systems. The fact that I wrote four lines of code to make a phone ring blew my mind. Twilio and Jeff created something special. It's sad to see his run come to an end, but every company needs to adapt to the changing times. This is just Twilio's time to adapt.
As an early large customer, I wonder if that was me... sorry for messing up everyone else ;) I do remember some issues at times, but nothing we didn't see with other voice and SMS providers. Well, other providers didn't have an online log browser, so I never had trouble with browsing logs their logs.
Twiml was much easier to use than the other 'programatic voice' apis at the time, and I never had time to figure out how to run calls on sip directly. As I recall, it didn't take much time to setup voice calls, and then boom. It was helpful that quality was good and support was helpful when there were destinations with poor results.
- stripe can be a "financial home" for many of its customers and build higher-margin pockets of software functionality, using easy payments as an on-ramp. See: stripe billing, radar, sigma, connect, etc.
- stripe is more likely to be able to "swap out" the credit card rails than twilio would be able to "swap out" sms. If the financial ecosystem evolves to make eg debit cards or any other kind of payment easier, stripe can simply add them as payment methods, as they already do for non-CC payment types (most notable outside of the US). So stripe is already at the abstraction level of "move money from customer to me" instead of "run their CC".
Encumbents manage scale very very well and historically they tend to come to a market late. While Stripe is rushing up the value chain, the issuers are just slowly lumbering around.
Billing, Radar, Sigma, Connect are all very well built products which drive usage of their core revenue generator. I suspect the revenue mix at Stripe is still largely payment processing. Voice minutes and SMSs on a carriers network, or authorizations and settlements on an issuer network.
I am not saying Stripe is doomed, far from it, but it's a non trival problem to solve over the long term and the default state is attrition. I think Twilio is a very good example of how difficult this can be.
This is pretty key to understanding Twilio's prospects as a business. In my experience, they are fantastically easy to integrate at first.
But they come with a cost that blows up your financial model if your product is any kind of high-volume use case, or if SMS is factored in as a direct cost and you're talking to investors about unit economics. At some point you have to get off of them and onto a cheaper-per-SMS solution, even if it costs more dev hours to maintain.
It's not just Twilio, you would have experienced this with nearly every SMS API provider. Across the different vendors I work with, I received numerous emails from each one advising me to come into compliance or risk my messages being rejected.
https://help.salesmessage.com/en/articles/6650461-changes-to...
https://www.telgorithm.com/news/10dlc-registration-required/
https://support.referrizer.com/support/solutions/articles/10...
From what I can tell, the telcos aren't performing any enforcement, even tho the deadlines and extensions are long past. Not to say they won't but the endeavor seems to have a stall vibe going on.
Some of that might be related to having major mass-campaign requirements placed on small biz who occasionally send a handful of texts (often non-sales) from their workstation phone apps.
At least I hope this is why it has stalled. Sending a few texts during a customer service session shouldn't be regulated as if it were a blast of 1M SMS ads.
New telco industry texting requirements came into play. In short, US biz are required to register with The Campaign Registry and pay regular fees if they want to do any (as in 1+) software text comms.
It can be onerous for not-large biz. Twillo took point early-on (inserting themselves into the administration, IIRC) and Twillo then got a lot of heat from their users - even tho the requirements originated from the telcos.
It's a shame as I think there are some legit non-spam use cases for SMS as a messaging platform, but considering you now seemingly need to pay, fill out a bunch of annoying/buggy forms, and wait for days to who-knows-how-long before sending a single message in development, I'd say it's been pretty well destroyed as anything a dev would ever play around with. Who's going to do all that before writing a line of code?
Like SPF, DMARC, DKIM. What the hell how many layers of security do I need to go through to get some emails delivered from a domain I own?
There should be an easier way to just test out the API.
Can't speak for the guy you asked, but I'm approximately his skill-set, and that's what I've used it for.
Long time ago, though; I can't speak to the developer experience now. $20 and contact customer support... What? It used to be easy. Like, create an account and ten minutes later your in business, easy. I used them for a number of (free-tier, I think) personal and (paid-tier) professional projects, and was a very satisfied customer.
That was gossip, of course; sure, George may have decided back then that -- even with all the growth he drove -- Twilio wasn't going anywhere long-term.
One of the worse CustomerService for SaaS Provider.
AWS (and presumably Google) also provides a suite of telephony services with Chime, SNS, Connect, etc. I assume the strategy now is to sell to/merge with a smaller CSP to provide a competitive portfolio of services.
I feel this way about most classic media. Famous movies and books almost always feel underwhelming to me because the notable ideas have been reused and referenced so many times that the original ends up feeling like a retread decades later. Interesting connection to tie this phenomenon to tech marketing and dev relations.
They play in both market categories, they sell it at higher margins with twilio brand.
Then sell it again, at lower prices from more regional less known brands.
That bad UX is being supplied by The Campaign Registry org.
I do recall Twillo performing TCR's tasks in the beginning (applications, registration, etc) but only until TCR was spun up. It's all on TCR now.
• ZIRP = Zero Interest Rate Policy
No, they are inflationary policies; fear of deflation was one of the factors motivating them.
> because they reduce the amount of interest payments (which are no different
That's...mostly irrelevant. Yes, government interest payments would be inflationary because some of them go back into the domestic economy, but flooding the domestic economy with money through loose monetary policy is not net deflationary; the reduction in money pumped into the economy in interest payments is far less than the amount of money that is pumped into the economy to effect that reduction.
They pay less interest on reserves.
The effect on the economy of banks holding reserves rather than securities is otherwise negligible because both securities and reserves can be used to satisfy any liquidity requirements, so reserves and securities are functionally identical.
That’s why it’s so dumb that people get in a flap over the idea of the Treasury issuing reserves “out of thin air” but they are fine with the Tresury issuing new securities “out of thin air”.
They’re more or less the same operation.
You join and are granted 400000 options at $10 strike and stock is worth $10
2 years in and the stock price is now $110
You think the company is terribly run and the stock with crash at this point. However if you quit, you lose the 200000 unvested options worth $2M on paper
Even if the stock crashes to $20 they are worth $200k
Hard to find a better paying job in that situation until the options are fully vested
You don't just say on day 1, "I don't think the company is going anywhere, but I'm committing to staying another 4 years".
One can continuously grow a stock if they reduce the shares outstanding.
That being said iirc buy backs have notoriously all gone to executives. Essentially they buy back, and then award themselves options to re-dilute, but cannot readily find a source for that. So maybe incorrect.
The business might pay the executive with stock per the board approved compensation package, but a CEO does not wake up and say “I want to give myself 5M shares so let’s do a 5M share buyback”.
A buyback benefits all shareholders equally by reducing supply of the stock and therefore increasing its price.
correct. Hence my wording
> and then award themselves options to re-dilute
It's not that executives receive the bought back stock, but that their stock based compensation plans result in no net decrease in the amount of outstanding shares.
Back in high school, I thought you were the brightest and chillest guy on the planet. My first Linux install was because I overheard you talking about it in class and I wanted to see what the fuss was about. Anyway, it's been a treat seeing you pop up again after all these years and discovering that my nostalgia lenses were right - you really are that smart and cool.
Edit: I shared this story with three guys my year who were also in that class. You'll be happy to know:
1. They all remember you.
2. No one remembers the trash can.
Agreed. Creative, high performing people don't do well in a work environment that's structured like a regional bank.
Valve Software -- incredibly profitable, high performing and private company, did fun things like hire economists (and then later Greek prime minister) to study and simulate virtual, in-game economies [0].
Blizzard Entertainment had giant statues of orcs made and fan conventions before their downfall, ya know, in the ZIRP macro economic environment.
Google allowed their engineers 20% time. Before ZIRP.
0 - https://en.wikipedia.org/wiki/Yanis_Varoufakis#Academic_care...
I once heard that this was more like 120% time? Meaning, 'extracurricular activities' on company infra was allowed and encouraged, but not at the expense of regular productivity/output.
Depends on how you measure performance. ARPU? Very high. Shipping software? Super low.
I think the question is more about whether doing these things caused the company financial success, or whether the company's financial success caused them to do these things. It strikes me as plausible that it's almost always the latter, even if the company's financial success isn't attributable solely to the macroeconomic climate.
I think it’s usually a sign of success that to protect the golden goose you stop taking creative risks and focus on operational efficiency.
Macroeconomic conditions really matter a lot more for capital intensive enterprises like manufacturing, refining, real estate, etc. Most creative / R&D based companies are much less cost of capital sensitive and frankly low interest rates matter a heck of a lot less for their planning and operations.
Both « being successful » and « doing these things » could be caused by a single root cause: a leadership team playing the long game.
My anecdote, FWIW, is that some of the worst performing startups do these tricks too.
There's something about flashy events and boondoggles that sound good on LinkedIn that draws bad founders into spending waaay too much on parties and fun activities.
Stripe obviously isn't in that category, but never assume that because a company spends a lot on parties and events that they're doing well.
I absolutely agree with this. Monkey see, monkey do.
I think the big winners who make it "fun" are the exceptions that prove the rule. Whatever they really have that leads to success (be it simply luck, timing, connections, market fit, whathaveyou) is a lot less visible and harder to replicate than the lazy, obvious stuff like "make the workplace fun for developers" which any wannabe can emulate.
Every so often, she'd express frustration about the "over the top writing" in Silicon Valley. Way over half the time, I could tie whatever it was she was complaining about to some concrete story from our industry.
What companies?
Some of the best performing public tech companies of the past 30 years include Amazon, Apple, Netflix, Nvidia, and Microsoft.You can get some variety in this list by varying the exact start and end dates, but certainly the first 4 are going to make most lists. Others like Google and Facebook handily beat the total market.
Certainly a lot of companies that never went public (Instagram, WhatsApp, Credit Karma, etc...) performed very well for their investors when they got acquired. And some companies that since going public haven't been blockbuster successes, like Snowflake, still were probably very lucrative for their VCs and other early investors.
Anyway, I don't feel like most of the really great performing companies that come to my mind are particularly "fun," but maybe I maybe I'm not paying attention and/or don't know because I don't work at them.
Tony Hawk at this event is just a marketing stunt and his celebrity can be beneficial to drive engagement, impress potential customers, keep existing customers happy, help with recruiting, etc. Those stunts can get incredible attention. Look at how common celebrities in advertising and endorsements are.
Stock buybacks, having the Moody Blues play your annual meeting or the Rich-dad-poor-dad guy give a speech to execs and play down to their biases doesn't drive marketing or the product. Its what execs enjoy personally and burn through money for these entitlements. Instead this money should be used to give raises to the working class.
Also I'd substitute accountants for MBA's in your comment.
Adjusted for inflation, there were more buybacks in 2000 than in 2015 and interest rates were quite a bit higher in 2000 than in 2015.
1. People build software differently now. There's not as much reliance on text messages (fewer phone apps build built, 2fa via phone is considered dangerous, etc)
2. Gig economy is stabilizing. There was a huge increase in new companies for years, but at this point it feels like we've stalled on new innovations in that space (while a lot of VC-subsidized ones have faded out)
3. There's way more regulations on spam (good for us, bad for Twilio). I think Twilio did as good a job of avoiding spam as anyone could reasonably expect, but the barrier to entry to using Twilio for even reasonable projects now involves the government. Plus with the crackdown on spam (good!), a portion of their business has likely been affected.
Looks like Eyal's compensation was more like 9-10M?
He got 33M in stock grants in 2021
You’re both pretty much right it looks like he vested all the RSUs in one year so he while he took it all home in 2021 it had probably vested over 4 years, the first 3 when it wasn’t reflected as comp.
https://investors.twilio.com/news/news-details/2023/AWS-and-...
The company was founded almost 20 years ago, and went public in 2016..and they are still needing to raise money?
I mean, this isn't a capital intensive space, right? What's the deal?
Software isn’t capital intensive the way a large industrial factory would be, but it still has unfavorable financial conditions that require raising. You can’t sell software until you’ve built it, so you have to incur a large employee/R&D expense for years until the product is ready. And of course none of that is IP that you can just get a loan against (unlike say, building a factory).
It’s funny to contrast that with the video game publishers. They’ll push to sell things that aren’t even close to finished, make bank, and do it again and again.
I think their go-to example was meeting up with a Google X person in their offices and that person getting huffy about something or other and then trying to storm out. But then they had trouble with their keycard so there was that awkward pause because they couldn't just storm out and slam the door. Best part was that they were on inline skates (and rocking a pony tail!) so it was a totally Mike Judge perfect moment - weird silent tension as pony tail skate master is trying to beep himself out of the room.
I've definitely seen and heard about lots of strange things in SV that people simply wouldn't believe if they heard it.
My wife thought the show couldn't be reality. I told her I'm confident that almost everything you see in this show happened in SV to at least someone, just not the same company/people in a short amount of time.
It's like if you took every story in SV history and compressed it to one company in 6 years.
Meanwhile, a short code would run you $4500 for three months (IIRC, memory is fuzzy, and it's probably changed), and you had to go through an approval process with all the mobile carriers (that is, Verizon, T-Mobile, etc. had to individually approve the short code) where you explained your use case and promised not to spam.
(Obviously things are different now with the campaign registration and approvals requires even for long code numbers. But short codes are still harder to get, and the approvals more rigorous.)
Nominally, CEOs are supposed to run the company and help brew the culture that makes that company productive.
We've grown a bunch of celebrity CEOs because people stopped caring about how companies worked over the last 10 years of low interest rates. But now that it's harder to raise money, it's time to see these guys run the companies they built.
I don't think you can accuse Jeff of not caring about company culture. He built one of the defining dev cultures out there. Yes, this have changed as they've grown, but I've always found the people and offices of Twilio to be warm, productive and smart.
And Twilio was forged in the hardest time to raise money ever... 2008. If anyone knows how hard it is to build in a climate without easy money, it would be Jeff.
At google Eric had very little to do with product and engineering. He was still a very effective CEO.
His customers probably expected better products, whereas his developers expected another round of amazing perks and fun work.
Is it?
From the DJIA: can you even name the CEO of 3M? Cisco? Amex? Visa?
I don't think celebrity is a pre-req for being a CEO. And as OP suggests, it could even be a detriment.
You can level a lot of criticism at Jeff but I don't think this one applies.
I did reword my comment though, because I don't agree Jeff is a "celebrity" as much as a "public" CEO.
If that's the case, the top layers of the system have space for so many CEOs. Some won't even care to be there, they'll just do their job and take the salary plus bonuses.
Jobs certainly was a celebrity CEO, and despite all the criticism of him, I've never once heard anyone imply he was bad for Apple (or its shareholders). Musk is a celebrity CEO, much to the detriment (and potentially benefit? who knows) of his companies.
The CEO’s job is to create value. The answer to your question is “it depends”.
If buyers of their services are impressed with his ability to live code and that moves the needle on results, then yes. If the same can be accomplished by having a non-CEO developer evangelist, then probably no.
Without googling, can you tell me the name of the CEO of Target? Sony? Texas Instruments? BMW? FedEx? Mitsubishi? Exxon? Home Depot? Siemens? Procter & Gamble? 3M? Nestle? Broadcom?
I certainly can't.
But I bet you can tell me who the CEOs of Tesla and Amazon are.
Just because whoever-is-in-charge-of-siemens hasn't run a vanity PR campaign to raise their personal profile, doesn't mean it would help the company if they did.
# Market caps:
Target 64.99B
Sony ~116B (I think)
TI 152B
BMW ~70B
Fedex 62B
Mitsubishi ~70B
Exxon 396B
Home Depot 343B
Siemens 141B
P&G 349B
3M 60B
Nestle ~290B
Broadcom 501B
...
Amazon 1520B
Tesla 750B
The sum of the market cap of the first group of companies is ~2.068T USD, while the sum of the second group is ~2.270T.
And of course the CEO of Tesla is(?) allegedly the richest man in the world, which is one of the reasons why people know him. And I honestly don't remember the name of the CEO of Amazon since Jeff Bezos stepped down.
Which is Twilio?
I can't imagine being offered a choice between owning (the company) Tesla or BMW and picking Tesla.
edit: Tesla did 4.2% of total market in 2023, outpacing VW, Subaru and BMW. They did 25% more sales in 2023 than 2022. They sell 500-700k/yr right now with 2023 being 660k. BMW delivered 550k cars worldwide.
https://www.teslarati.com/tesla-2023-u-s-market-share-volksw...
No. Look at S&P 500 CEOs.
In tech circles, a very well known story though.
Indeed, positive audience sentiment has an expiration date. He rode the wave too long, perhaps, but it is hard to know when to stop. All ongoing media productions (e.g. TV shows) suffer from the same problem and question of when to keep going and when to move on.
So even if it was a longstanding thing, pushing the content toward a more millenial/gen-z audience is still a new direction and risk.
In the end, the biggest factor was the dissonance between his warm, cozy "all in this together" messaging combined with grocery price hikes and news like this coming on the other side of it all: https://www.blogto.com/city/2022/11/loblaw-report-profit-foo...
If people aren't eating at restaurants, it is almost certain they are getting their food at the grocery store instead. For all the mockery of Galen, it seems the marketing strategy has been unbelievably successful.
That's probably why he continued to cast himself even as the audience focus shifted to millennials and gen-z. Letting someone laughing at you for a few minutes is no big deal. Watching them love you when they show up at your store over and over makes it all worthwhile, I'm sure.
Ironically my previous partner works there and she didn't know anything about the company prior to taking the job so me not even getting a reply to my application was a jab. I've always seen twilio in a positive light they do some really interesting work.
I live in the city of their HQ. I have no clue who the people mentioned in this thread are either but it makes sense that they'd see the CEOs in a positive light with how much positive I hear(d) about the place.
1. Jack Dorsey. Founding era, founding engineer, forced out when Twitter was ~30 employees because he had no management experience.
2. Evan Williams. Growth era. Another founder, but one who had past experience dealing with hypergrowth, getting companies acquired, and working inside a big company.
3. Dick Costolo. Maturation era. Adult supervision, he's the professional CEO hired to manage Twitter because both of its previous CEOs were really startup people.
4. Jack Dorsey (2). Came back after gaining some political savvy and learning how to launch a boardroom coup. Founded Square in the meantime and got a bunch of experience being CEO of another company. Also famously the guy who shut down the Jan 6th insurrection by blocking the sitting U.S. president from Twitter.
5. Parag Agrawal. Caretaker; Twitter was in trouble by then and Jack Dorsey was either forced out or decided it was better to die a hero than be remembered as a villain.
6. Elon Musk. Bought Twitter in a fit of insanity.
7. Linda Yaccarino. Glass cliff. Installed as CEO so that X's eventual demise is not Elon Musk's problem.