
Twilio – Why there's no API for crossing the chasm - rmason
https://exponents.co/twilio-market-opportunities-risks/
======
chevman
I work at a company within the Fortune 10 and we use Twilio in some isolated
products, and they are pushing hard on a few potential deals/opportunities to
expand further.

Technical foundation appears solid to all their stuff, but their enterprise
sales/account folks seem very green - unsure of how to navigate large
enterprises, not connecting with the right folks at the right level within the
org, not understanding who or how decisions are getting made, etc.

We see this alot - deals with tens or potentially hundreds of millions of
dollars at stake where potential vendors have a couple sales folks working the
deal, not getting traction. Get a few more folks working the deal and figuring
out the right angles and they could have it locked down in a matter of months,
but they never seem to figure this out and a year later they're still dicking
around with the wrong people at the wrong level not making progress.

~~~
jzwinck
I work in sales at Twilio and manage the account of a huge enterprise
customer. We've sold to a few of their departments and what we've done so far
has been successful.

But every time I call my contacts at this customer, something seems to derail
us from the path to further integrations. They know our products work and save
them money. But just last week I called Glenda in accounting only to find out
her phone number now goes to some guy named Bob who refused to tell me what
desk he works on or what happened to Glenda.

So I fired off a quick email to Vincent, the CIO, asking for an updated
contact list since Glenda is gone and I heard Sally moved to outside sales.
Vincent's secretary wrote back to me saying she'd "ping" him and "circle
back". That was two weeks ago.

Last year when we closed a bunch of deals with this company I was recommending
to my management that we spend even more effort to get further with them this
year. But here I am halfway through the year and I feel lucky that my proposal
was turned down because we were already too busy with other clients. What
would another sales guy have done anyway, apart from dogfooding our sweet new
IP phone stack as he wasted his time trying to navigate an endless
megacorporate morass?

~~~
Dwolb
I see this a lot at start-ups as I come from automotive (similar to large
enterprise sales, engineering teams with product teams make calls on buying
10's of M to 100's of M in product.)

The biggest problem I see is you're not on site. You're not there physically
and haven't met Glenda and her manager or immediate peers. Because if you were
on site Glenda would've let you know she's thinking of leaving and would've
referred you to her manager in charge of her replacement. There's so much
gained in just showing up and being present.

It doesn't feel scalable or meritocric but it is how a lot of humans work.

~~~
tajen
Are you telling a Twillio sales rep that you can't do proper enterprise sales
by phone ? Life is hard ;)

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bduerst
TBH, their billboard is pretty genius: [https://i1.wp.com/exponents.co/wp-
content/uploads/2017/03/Tw...](https://i1.wp.com/exponents.co/wp-
content/uploads/2017/03/Twilio-Ask-Your-Developer.jpg?w=700)

Many CTOs, CIOs, C*Os, VP of product, etc. ask at least some of their
developers which platforms they prefer. Most people in those positions won't
admit they don't know the latest tech, but they do look to the people working
for them. This billboard taps into that and establishes authority, so I don't
think it's worth ripping on.

~~~
throwthisawayt
This is not how most large companies I've worked with operate. Large IT
decisions are driven top down, not organically through the engineering front
line. The CTO, CIO, etc. work with vendors that market to them. It's the way
organizations like Salesforce, Workday, Cisco, and Concur operate. The
consumer/developer first organizations like Dropbox, Twilio, and Stripe can
only get to a certain stage before they need to target the big fish. It's this
huge cultural shift (focusing on making something users want vs figuring out
how to sell to behometh organizations) that will make or break these
companies.

If they figure it out, they will own their markets because frankly their
products are better since they were user first.

I think it's important part of building a company - recognizing that the heart
and soul that led you to say $100M sales can completely differnent from what
leads you to $1B. It's almost like a mini innovators dilemma for startups.

~~~
gz5
Yes, absolutely. However, does this change over time? With:

\+ increased decentralized decision making \+ less monolithic systems
architectures and complex integrations \+ quicker/cheaper ability to take
software from pilot to production

Do developers become the new gatekeepers of the large enterprises?

~~~
maxxxxx
"Do developers become the new gatekeepers of the large enterprises?"

I doubt it. From what I see is that developers can do a few things but as soon
as the IT department hears about it they will try to standardize on a
solution. And you are back in big Enterprise sales. In the end the CIO wants
to keep his/her budgets and power.

I just went through this. We prototyped a system and thought it would work. IT
jumped at it and made that supplier the company wide standard. In the meantime
we got some doubts and will probably jump ship. But IT is sticking to their
decision.

------
eapotapov
I've read the article and that's one more argument for me that IPO is a very
toxic thing sometimes. mass marketing strategy/creating a commodity is a very
hard longplay game. the prize is a huge stake of the market, but it's very
challenging to get there.

now assume you have your revenue and then you get two customers that are going
to pay you 25% of your current revenue (20% of the revenue after they start
working with you). if you're private you just stick to your strategy and count
these two clients as some random money (as they don't fit your main strategy).
being public, now, if you lose these customers - you're at risk, the market
forces you to make decisions, to keep these customers, to go to the enterprise
market, hire sales people etc.

"In Twilio’s earliest days, multiple angel investors and VCs told Twilio’s
founders that focusing on software developers would never lead to a venture-
scale business. To make their case, Twilio’s skeptics pointed out that
software developers have no control over budgets in the enterprise.

But Lawson, Cooke, and Wolthius were undeterred. They believed deeply that
software developers held the keys to the future…and not just of telecom, but
perhaps the whole world."

well now, being public you can't just do this.

imagine Amazon listening to advise to use retail-chains (system integrators in
Twilio case), or should Amazon do really care about revenue coming from one
specific customer (even if it's huge)?

it's really hard to keep doing what you believe you need to do when you're
under pressure of the public market. I absolutely understand why do such
companies go public, but that makes me sad.

------
timfrietas
Twilio seems to be leaning a little bit in the directions of solutions #1 and
#2: [https://www.twilio.com/showcase](https://www.twilio.com/showcase)

But they are also going further all-in on the developer-first market with
things like their serverless offering:
[https://www.twilio.com/blog/2017/05/introducing-twilio-
funct...](https://www.twilio.com/blog/2017/05/introducing-twilio-
functions.html)

I'd be interested in the author's thoughts on Twilio's strategy in context of
AWS (which I think the author would agree has crossed the chasm).

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jrochkind1
I was thinking about the 'systems integrator partner' strategy before I even
got to the end, without knowing that 'systems integrator' was what that was
called.

After getting to the end, I realized a very common path would be to start with
the 'systems integrator partner' strategy, then realize, hey, these guys took
the risk and proved it could be done, but now they're taking a huge slice of
our potential revenue -- let's build our own products, end our partnerships,
and screw the partners who got us here. Sometimes it "works", sometimes it
doesn't.

------
djyaz1200
Twilio is wisely selling axes during the gold rush. Interesting article but
I've bet my company and $50k that this is wrong. (I buy their stock on dips)

Rather than trying to deal with all the costs/conflicts and intricacies of
selling their services directly to each client they are smart to empower
others to handle that last mile for them. That's the true essence of a
platform. When offering a platform like iOS you invite others to make money
handling all the stuff that you aren't uniquely qualified to deal with and/or
that isn't worth your time. I've talked to Google employees who consistently
say if it's not a $100M/yr opportunity we won't even look at X.

You could argue, as I think this article does that Twilio is leaving billions
of dollars on the table with this approach but they are getting something for
that money... an ecosystem of fiercely loyal clients invested in their success
(because companies like mine make money off of them).

Finally, does Twilio (or anyone) really know what the future of enterprise
telephony will look like? I would argue they don't, and anyone with any
technical experience knows how VERY dangerous + expensive it is to start
building a client facing product without a clear vision for what it should be.
Better that they provide the API and let other companies fight to figure out
the rest... which of course we are happy to make money doing for them :)

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jaytaylor
Page-down doesn't work right on this site, it skips over all the text and
takes chrome to the next image. Too unpleasant to read, imho.

~~~
sideshowb
I was thinking the same in stronger terms. Managing to break Page-down is a
pretty impressive level of web design muppetry.

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hyperpallium
"Crossing the chasm"... now there's a phrase I haven't heard for a very log
time. Although I enjoyed the book, even the author says that the "chasm" no
longer exists (in part, cured by his book).

Though he's right about consumer products due to direct access to consumers
via internet, it may still exist for B2B suppliers, especially for the
enterprise, where high-value purchases require an involved and cautious
organizational process.

------
hayden592
Twilio is great and we used it on my last team, which is a fortune 50.
However, I saw the issues with having a subpar sales team. As I was leaving
the communications team, "management" decided they wanted to replace Twilio
with a Salesforce product. That Salesforce product uses Twilio for sending
e-voice calls and text messages. Unfortunately my arguments against the switch
fell on deaf ears

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micaeked
Side note, please don't hijack normal navigation keys to do something
unexpected. In this case, page up/down navigates the sections instead of the
normal behavior.

~~~
Devolver
I had no idea it did that! Thanks for letting me know. Will look into.

~~~
throwmeunderbus
Smooth scroll here. Windows 10/Chrome59.

------
rmason
I personally disagree with this guy but felt the debate on here about what he
wrote would be useful.

If you've IPO'd in general you've already crossed the chasm ;<). Sounds like a
bitter former employee taking his shot.

~~~
Devolver
I'm the author, and am not even the least bit bitter. I love Twilio. I wrote
this because I want them to succeed.

A successful IPO has no necessary correlation to having crossed the chasm.

You've successfully crossed the chasm when you are the clear market leader in
the a "mainstream market" segment.

In Twilio's case, that would be Being at the center of communications
infrastructure for Fortune 500-1000 companies.

They've made some inroads (ING, etc). But most larger enterprises are still
using Cisco/MSFT/Avaya and other on-premise tech for call centers,
conferencing, video chat, collaboration, etc.

Also: Twilio is not profitable and it just lost one of its highest volume
customers (Uber) who had been using it for "point solution" use cases, mostly
around automated SMS and voice.

So if you disagree, that's fine. I'd find it much more productive to know what
you disagree with and why than the ad hominem accusation that I'm a "bitter
former employee" which is a. Not useful and b. False.

~~~
toomuchtodo
I think it's important to remember that what Twilio offers is a commodity, and
there are no switching costs, which limits their market value.

Just as it's easy to spin up comms on Twilio, it's getting easier by the day
to spin up Twilio-esq infrastructure itself. They had first mover advantage,
but it doesn't seem good enough (not taking into account their largest
customers deciding to internalize the functionality to reduce costs).

~~~
kevinburke
> what Twilio offers is a commodity, and there are no switching costs

There are plenty of switching costs. Porting numbers from one carrier to
another with zero downtime, for example. Negotiating a contract with a new
carrier. The new carrier may not support numbers, calls or SMS in some
countries you are currently supporting. Testing deliverability and call
quality across multiple carriers in multiple countries; you might discover
that the new carrier routes messages/calls using unreliable carriers. The new
carrier may not have good procedures for avoiding toll fraud. Sending SMS
messages that contain Unicode might render like Ã on some phones; Twilio put a
lot of time into figuring out how every carrier treats those on the wire and
ensuring that messages get rendered properly. Fallback procedures may break.

If you want to host it yourself now you probably need a NOC, and to test
binds, and to test the fallback protocols, and to figure out every edge case
that carriers have with respect to certain numbers, messages or routes.

~~~
toomuchtodo
I feel like you're exaggerating based on my knowledge of interfacing with
carriers using SS7, but that's just my opinion.

I agree that Twilio blazed the trail, but much of what you mentioned is a
known quantity now and can be replicated with less effort.

You don't need to be as good as Twilio, just "good enough".

~~~
sjtgraham
As a former Twilio engineer he might be somewhat biased. Full disclosure: I am
also ex-Twilio.

~~~
Devolver
Hey Steve! Love what you're doing with the bank APIs!

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hartator
3 paragraphs about why to write this essay. :/

