Twilio CEO - ‘There’s a Darwinian evolution happening, where customer experience wins’

Profile picture for user ddpreez By Derek du Preez November 19, 2019
Summary:
Jeff Lawson, founder and CEO of enterprise communications platform Twilio, explains why companies need to either build or die.

Image of people evolving

Twilio is a communications platform that has a lot going for it. As my colleague Phil Wainewright has noted previously, the company plays directly into the idea of the ‘frictionless enterprise’ by breaking down silos of engagement for customers. 

The best way to think about Twilio is two-fold - it’s both a building block for enterprises that are thinking seriously about customer experience and also an API platform that allows developers to customise, without losing flexibility or agility. 

On the first point, Twilio aims to do for communication what Google does for Maps or what Stripe does for payments. In other words, it’s a core component for building modern digital applications that allows companies to plug and play communication tools, whether that be SMS, WhatsApp, video, or notifications. However, it’s also a platform centred around APIs, which allow companies to tap into systems of record, pull together information from a variety of silos, and develop customised communications solutions on top. 

On the latter point, for example, Twilio has launched its own contact center PaaS product, Flex, which provides companies with an out of the box, scalable solution in the cloud, which is also customisable for a variety of use cases. Historically contact centres were either standardised in the cloud (limiting versatility and customizability) or on-prem (limiting flexibility and agility) - Flex aims to bring enterprises the best of both worlds. That’s where Twilio has a sweet spot.

We got the chance to sit down with Twilio founder and CEO Jeff Lawson, who explained why Twilio enables companies to pursue establishing “unbreakable relationships” with their customers. Lawson believes that companies today are competing to provide the best engagement experience with consumers, arguing that those that don’t succeed will die away. In order to do this, Lawson said, internal development is key. 

We can’t live in a world anymore where we have these siloed apps and we can’t build and we can’t innovate. You’ll just get clobbered by some tech company that can do those things. Every company, whether it’s the threat of disruption from a startup or whether it’s the natural competitive dynamics, they’re investing in building. You used to have some technology decision and the classic question was - build versus buy? 

There’s a Darwinian evolution going on right now, which is if one company in a competitive sector hires software developers, listens to their customers, and starts building a better customer experience, they’re going to win. Once one starts doing it, they all need to start doing it. So it’s not really build versus buy anymore, it’s build versus die. That’s the nature of business today.  

Flexing its muscles

Since launching 12 years ago, Twilio has grown to be a platform that is used by over 7 million developers, with over 172,000 customers. Lawson explains that part of Twilio’s success is down to the foresight that it needed to be centred around APIs, rather than simply being a ‘traditional’ SaaS play, as this allows it to work in use cases that enable a ‘frictionless’ environment. He said: 

Getting those systems to talk to each other and not be silos is one of the biggest challenges every company faces. What Twilio does is help tear down those walls. We are not another app that won’t be integrated into the rest. We’re a platform. We are building blocks. So that you can actually build those bridges and build those integrations to really focus on the customer experience that you’re trying to build. 

If we were yet another app, we’d actually make the world worse. And that’s what being a platform is all about, it’s about being an enabler for your customers.

Twilio’s foray into the contact centre - with Flex - was a natural development for the company. The contact centre is the home of customer communication, but it traditionally has a bad rep for being a blocker to effective engagement. How many times have you tried to call or digital engage with a company and faced a number of unnecessary blockers? On Flex, Lawson said: 

Typically the reason why companies want Flex is that they want customizability and they want it to have operational excellence (high uptime, high availability, be global). 

You’ve got all these new ways to engage - WhatsApp, SMS, email, chat - and when you’ve got a system that you can’t really touch because it’s so fragile, you can’t really serve your customers. Because we are a platform you can keep building. You’re not stuck with something you bought. You can be agile, listen to customers, keep innovating, bring in new channels. 

The great thing about SaaS is that you can get up and running quickly. And the best thing about APIs is that you can build anything. What Flex does is it brings the best of both worlds. Out of the box it does the things you’d expect a contact centre to do. But the next step for a developer is, download the SDK and start customising it. 

Flex has gained traction with ‘digital disruptors’ such as Lyft and Shopify, but has also gone on to see success with more traditional players, such as Allianz Insurance. 

Priorities

Given Twilio’s bread and butter is communication, I was interested to find out from Lawson if there is an appetite within the company to target internal enterprise collaboration. However, this doesn’t seem to be a priority for the CEO. Lawson instead sees Twilio doubling down on customer engagement, which he hinted could be extended to areas such as sales and marketing (where customers are already developing their own solutions). He said: 

The area we focus on is how companies talk to their customers. That’s actually the battleground where companies are winning and losing. The opportunity that we are pursuing is helping companies to make it so that all the communications that they have with their customers, all the engagements, actually make sense.

One area that Twilio sees further opportunity, is the use of automation tools to enable better two way conversations between companies and their customers. Last year Twilio launched AutoPilot, a new service for building omnichannel bot experiences. Lawson explained: 

If a company is trying to build a great relationship with me, having it be a one way conversation is not a great way to do that. The great companies are realising that they can actually use these channels to create a two way conversation. 

One of the ways in which companies can scale this notion of a two way dialogue without breaking the bank is to use automation, to use bots. That’s what we use our AutoPilot product for. If it’s a simple question, a consumer would rather get a fast answer from a bot versus waiting for a human. 

But if it’s a more complex thing, then the automation can escalate the communication to a human being. That’s where we are seeing this really interesting set of workflows emerge.

My take

Like my colleague Phil, I see a lot of opportunity for Twilio. This is because it is aiming to solve a problem that so many of us as consumers experience on a daily basis - poor engagement with companies. It is aiming to bring that engagement to us in a way that makes sense for the end user, whilst allowing companies to customise their approach. 

However, I think Twilio’s biggest problem (which is often the case for developer led tools) is that because its use case is so varied - “communication” - it can sometimes feel intangible. Products like Flex help that somewhat, giving it a strategic focus in the minds of enterprise buyers. But because Twilio can do so many things, it’s easy for the messaging to be diluted. Whilst Twilio’s growth rates are huge, focus will be key for the company going forward.