Twilio: The Inside Story with Jeff Lawson, CEO/Co-Founder

Let's give it up for Jeff Lawson.

Very exciting.

Thanks for coming.

Thank you, Jason.

Yeah, this is great.

Thank you, everybody.

So, um, I learned a little lesson yesterday. Let me make sure. Show of hands for people that do not— have not heard of Twilio. Are there any here? Zero? So I don't have to ask Jeff to explain. You want to give 30 seconds for the 2 people on the top row?

Yeah, I saw one.

You saw one?

Absolutely, all right. Twilio is a cloud communications platform that allows software developers to embed communications into the apps that they're building. So if you want text messaging, voice calls, video calls, authentication, even now wireless capabilities inside of apps, Twilio's an easy set of APIs that developers use to embed communications into their apps. And so you use it all the time, you don't even know it, right? If you take an Uber and you call the driver from inside the app, you're actually using Twilio to make that call.

Yeah. So good. So for you up there, that's the answer of Twilio. We'll learn more over the next little bit of time. Before we do, I want to share one like tiny, tiny, tiny story. So I'm a founder. I founded two companies selling to enterprise, and somehow we stumbled into this, putting on some small events. And you learn a lot about putting on events. And what happens a lot of times is some speakers can't make it. It does happen. Sometimes you get like a random text. Sometimes you get someone's EA. Last year we had a unicorn CEO whose EA said, unfortunately, a speaker was sick. But it was 3 months before the event, so she must have been prescient or prescient. I will say, last year Jeff was going to speak, and I got a message that he wouldn't be able to. And this was right around the press was saying Twilio might IPO. And I'm 95% certain the reason was this quiet period when you have to go quiet to file an IPO. But he's the only CEO that ever called, and he said, "I feel so bad." I will find you a better speaker than me by tomorrow. I've never heard that, so I think that's the kind of CEO that we all want to work for. Yeah, a little bit of, it's pretty cool. I had nothing.

I was like, I hope he doesn't take me up on that.

No, but it was, but you know.

No idea.

I believe you would have made it happen. How unbelievable. Fortunately, yeah, fortunately.

Pretty sure Aaron Levy will do it.

What's that? Yeah, well, we had him, he's the ringer.

Yeah, he's the ringer.

We've had him both years. So fortunately, Jay from Atlassian, right before the IPO and said he'd love to speak, so we had an extra slot. But that was the first time I've heard it, so that's a pretty special thing.

So I felt really bad, 'cause you plan way ahead.

Way ahead, yeah, I kinda make that up.

You're really good at that, and I was like fighting with our lawyers about, come on.

I knew, I knew when I got a message that said nothing, I knew exactly this was gonna go to lawyers. And some folks, like the first year we did it, Aaron Levy came one week after the IPO in the middle of that. I didn't think they'd let him come.

Yeah, that's, that's cagey.

I think he just told them that he was. That would be my bet. So, so first, congrats on the quarter.

Thank you.

So it's pretty good. How long have we been public?

This was our third quarter reporting.

Third quarter reporting. Okay, one last quick question, then I want to get into the— what is, what's better, a Crunchy or coming to the Saastr Annual? What would you say is a better award?

Well, they gave me a trophy.

They gave you a trophy?

You know what I got? I got a sock from you.

You got socks and Taco Bell.

Yeah, and Taco Bell backstage. It's true. Although I don't think Taco Bell was open at this hour, so I'm kind of curious. I'm not sure how it happened.

Yeah. So, I want to talk about a couple things we talked about before, but let's kind of, one high-level thing I wonder, maybe you can, so Twilio's clearly the flagship of next-generation developer-centric companies, right? First one to go IPO of this generation. I know your marketing materials, everyone, we talk about how the whole world's more developer-centric, but as someone who has built and shipped software, but doesn't really code at this point, I'm still kind of shocked the markets are so big. So voice is huge, right? Voice is one of the largest markets out there, which is part of Twilio's secret sauce of growing so quickly. But why, for real, why is the developer market bigger today?

Well, I don't think, you know—

Or maybe it isn't.

I don't think of developers as the market per se.

Yeah.

I think of developers as the strategy to get into the market for whatever you're doing.

The entry point.

The entry point, right? It's a different entry point than you're used to. At the end of the day, you know, Twilio still sells communications, AWS still sells servers, right? But the way we're selling it is different than how it was done in yesteryear, 'cause yesteryear, if you had a communications product, you would go into a relatively top-down IT-type sale, you'd have an enterprise sales force, a song and dance, and maybe some steak, and that's how you got a deal done. Whereas, with the developer-first approach, what you're really doing is putting a new tool in the toolkit of the world's developers, and so that when one day they're at work, and they realize there's some problem that needs solving, you know, whether it's, you know, communicating better with customers, or adding two-factor authentication to their app, or, you know, whatever it is, and they encounter a problem, they're now able to say, "Aha, I know how to do that." Yeah. "It's Twilio." And they pull out Twilio, and they can usually build a prototype in an afternoon. Right, and that's faster, way faster, than you can often get an enterprise sales rep on the phone.

Way faster.

Right, and so you actually ship the product before you can even start that enterprise sales process in the sort of traditional sense. And so I think that developers aren't a market as much as they are a vector to get into customers that is just a much more efficient model than relying on what, you know, inside of Twilio we like to call the hero sale. You know, the salesperson who's gonna come in with the great presentation and the amazing, skills to work the room and therefore get the sale, right? This is just a very different model.

So today, you announced your quarter, I think it was $75 million in GAAP revenue, something like that, is that right?

I should remember.

Something like that. So let's call that $300 million run rate, whatever it is. It's probably higher than that, right? I have to do the math. So today at $300 versus day, is how much of your customers, is the insertion point still the developer as day one? Is it all of it? Oh yeah. Are you seeing more CIO-level pull, or what's changed there over time as you've gotten to scale?

You know what's interesting, right? As we are working with bigger customers, you know, traditional enterprises, etc., you do find that you've got more levels of the organization who are interested and care and are working on the, you know, interested in that sale, right?

More stakeholders.

But what we're still finding, and this is fantastic, is that developers are the ones leading us into those scenarios.

Yeah.

Developers are the ones who, bring you in first, build that prototype, you know, and then it starts to snowball within the company, right? The momentum, because people see this thing and they say, oh, we want to ship that. Hey, what's preventing us from shipping it? Well, it's security, or it's IT, or it's procurement, or whatever. Great, so let's bring those people together, and that's where our sales force comes in, works the process through, and ultimately, we're just trying to get something that typically the developer started through to production.

Through to production.

Through to production, right? And so, you know, if it's a startup adopting Twilio, like, the developer does it, ship, they're done, right?

Like, you don't need sales.

They're the decision maker. But if it's a complex enterprise, great. That's where we shepherd, oftentimes we're actually kind of teaching the developer almost how to get through their own organization, but it's still led by the developer, and so you have this really nice tailwind as you're going through the process. Because again, it's not a hero sale. You're not like, hey, let's just do an RFP with 5 of our competitors. It's a, hey, the thing's already built. The executives may have even touched it and said, oh, this is awesome, let's get it shipped. Right? And now we're just trying to check the boxes that need to be checked in order to get something out the door.

Got it. So even today, at $300 million plus run rate, you don't need to do top-down sales at all. Everything is most, even your most non-techie customers, they're still getting pulled in by developers?

Yeah, it's usually more of that bottom, bottom up.

You've got this brand now, right? So how does it, how does the brand change things, right? In the early days, you were having to convince people they could trust Twilio. I assume that's mostly faded away even with these multiple stakeholders.

Well, you know, it's interesting, right? We've got that billboard on the 101. It says, "Ask your developer," and like people often ask me, "Why would you, like, why do billboard advertising anymore?" It's a good question too, yeah. And, you know, I think what it does is it provides air cover. —so that let's say, you know, a developer builds a thing and they're in some meeting where they're saying, "Oh, how did you build this?" And they say Twilio, if you have name recognition, even though maybe I'm not thinking about those people as literally, you know, the first customers, most important that we hit, I want them to say, as you did in here, right, "Oh yeah, I've heard of Twilio." "I've heard of it." Right, they're trusted. Aren't they the ones that power Uber? Aren't they the ones who power ING's call centers? Aren't they? Yeah, I heard about that, right? Yeah. You want that name recognition, 'cause I have to believe that just that kind of greases the process. Now eventually, I think that CIOs and CEOs should care about communications as a strategic part of how they're gonna deliver on a great customer experience, which is ultimately the only way they're gonna survive. Yes. And that's, I don't care if you're a software business or you're a bank or an automaker, whatever it is, like, customer experience is going to be king, and communications is almost always a major part of that. Of that customer experience. And so, in the long term, yeah, I would love the C-level suite to say, "Yeah, you know, we use Twilio because communications, how we communicate with our customers, is actually really important." But it takes time to build that kind of awareness, absolutely. But right now, I'd say it's about that air cover.

Yeah, I think we missed that, how important that air cover, second and third touch are. We want to have heard of something we haven't heard of, and that has a profound effect with us.

I always thought about it as, You know that NetSuite billboard?

It's been there for a decade. Right? Yeah.

I didn't know what the hell NetSuite was, and I was in some board meeting like 4 or 5 years ago, and it was like when we were still on like QuickBooks or something, like whatever system I had set up, right? And it was like, okay, like we need to get off that to our next thing, and, you know, somebody, I think it was our CFO, said, great, it's either, you know, I think Intact at the time, or NetSuite. And I immediately was like, oh yeah, clearly NetSuite, right? 'Cause they have a billboard.

We laugh, but it does matter. It works, right? It does engage leads, it supports leads.

I didn't question that decision at all. I'm like, oh, I've seen that billboard a lot, they seem to have a lot of good logos on it as customers. Yeah, that just makes it so that when someone recommended NetSuite, it's like, eh, it makes sense. I'm not gonna really challenge that or wanna dig in, and just sort of like, eh, sounds good.

Yeah, that I think's the, we mock a lot of this stuff like billboards early as founders, 'cause we're like, there's no way we're gonna get leads. It's not about leads. It's about reinforcing the brand and supporting that. And then I've heard of it. You do it just right, it can even work at like a million in revenue. We think you've heard of it. Yeah. It can even work. So related to that, let's talk a little bit. So for folks here, the insertion point's still all developers, which is super cool. But as you have the stakeholders, how does that drive changes in the product? We talked a little bit about SLAs and other things like that. How is two-factor? Maybe we'll get 3-factor, but how has it changed, how has going more upmarket changed the product?

Yeah, well I mean every company starts with, you know, you're trying to figure out the utility you provide to your customer, which usually it's not about, say, security and compliance and things like that, because, you know, those things can block you from delivering utility from a customer, but you need to first figure out what utility you're providing. And if you succeed in doing that, then you start reaching these customers that are, bigger, more sophisticated, they know what questions to ask, they have a lot of compliance and processes.

Did you go through a phase where you failed like every security audit? 'Cause a few of us have been through that.

Well, one of my co-founders was a security guy, so we always had a good stance, but we didn't have good answers to the checkboxes. Like, he would be like, wait, we're way more, like, these are the stupidest questions, we're way more secure.

That's what you hear from the guys that are too smart, that they're stupid questions sometimes.

Well, it's because it's the checkbox questions, not the actual security questions, but. So we made it through that stage so we could actually say, yes, we are gonna check the boxes in addition to actually being secure. And of course—

They are related, but two separate things.

Yeah, and of course, it's a never-ending journey to security. No one ever just says they're secure. But it's, so you have to go through this process where you start seeing these customers, and the first one you get, you kind of be like, oh, silly customer with your processes, right? And then as you go on, you get more and more and more of them, you're like, Yeah, we should probably, if we want to get this segment of customers, we should probably be investing in this roadmap. And so I think most companies that are successful do go through that transition where you end up investing in quite a bit of those things. And, you know, as somebody who, as entrepreneurs who are looking to make more revenue and to, you know, figure out how to differentiate your customers and price points, you know, this is an obvious, a lot of people have done this. It's obviously a great way to differentiate your pricing. So for Twilio, for example, we have got our enterprise plan. It adds things like single sign-on and client certificate validation and a bunch of other, like, security and compliance-related things that, you know, clearly enterprises with a lot of checkboxes, because of their compliance requirements, need to check. So great, it's a value-added product. We monetize it separately. It's a monthly recurring revenue product, and actually one that our enterprise sales reps are regularly bringing in because it is a great way to sort of go in the door. If you're not willing to sign up for this monthly recurring package, then you're probably not a very qualified— It's a great gig. —opportunity, right? Because with our usage-based model, the prices at Twilio start at a penny. Yeah. And you can sign up on our website and get going and just pay us as you go, and that's fantastic. But it's hard to put an enterprise sales rep's time towards a deal if literally our SKU costs a penny.

It's, it's, right?

And so for us, it was a great way to distinguish between the types of customers that we have, and also which customers need an enterprise rep, because they have that kind of requirement set, and those who merit our investment in an enterprise rep. So it's a good, it's kind of a win all around. They get what they need, we get what we need, and we grow our business by delivering them the things that they need.

And do you find sometimes that that can be a slightly challenging cultural change? Especially if you come, if you start off early, you're super cool hacker culture, you're doing cool stuff, and then all of a sudden you've gotta go more enterprise. Some of that stuff does not always seem fun to everybody.

[Speaker] This surprised me, right? So I'm a developer by my background. How many folks in here are like sales by background?

[Speaker] Probably 25%.

[Speaker] Oh, it's a good number of people, awesome. So I'm a developer by background, and so the thing that I'm always thinking about, how many of you are developers? Right, that's probably like even split almost. You know, developers, we often think about, oh, the culture, right, is really important about, you know, giving us freedom and do the creative energy, which is, you know, developing and focus and concentration and like big screens and like all the things that we always think about as culture for a great engineering organization. And I never really thought as much about the notion of like the sales culture of an organization, just 'cause I'm not a salesperson by my background. I thought that the cultural shift that happened was not so much a struggle for like the developers, it was actually a really interesting struggle for the salespeople, especially the early ones that we brought into the organization, because they were the ones who were in many ways were asking, hey, we want you to conform to this very engineering-centric culture.

So sales were driving a lot of that change, yeah.

Well, it's not that they were driving it, it's that we had to, figure out how to build a great sales culture alongside a great engineering culture.

Got it. Without engineering viewing sales as some sort of tax.

Yeah, I mean, imagine if you're the first engineer inside of an all-sales organization, you'll feel a bit out of place.

It is hard, yeah.

And, but we just did it the other way, which is that we added a very engineering-driven organization, and then we introduced sales into it, and like, they were the fish out of water, and I felt that I had to go overboard as the CEO to let them know that I support them, that sales is important to our company, even though we do talk about the power of that self-service developer-led model, we do believe that sales is a critical part of our growth, and a critical part of our long-term success. And so we have to be great at both engineering, and engineering culture, and sales, and sales culture, and have mutual respect between the two. And I think that's really hard to pull off, and I don't know a lot of companies— I think about a lot of, you know, Google, you typically hear stories about, oh, it's all engineering-led. You know, in Salesforce, you typically hear the story, oh, it's all sales-led, right? And every company has this story about which culture is dominant, and I think it's really hard to pull off, but I think it's my goal that if you're a salesperson, you should have an amazing sales culture and sales team to work with, and if you're an engineer, you should have amazing engineering culture and amazing engineering team to work with.

[Speaker] Now, did you have, did you try and make the transition a little teal, like with no quotas or best efforts, or did you move quickly to a traditional sales model when you added these folks?

Well, you know, I think our path to a sales model has been, like, nonlinear, because our model is quite different. It is. When you can sign up on the website, and you publish all your pricing, you know, you end up with a little bit different model than if the price list isn't published. If you, if our SKU is, literally starts at a penny, with no minimums, and pay as you go. Yeah. —It's hard to say what sales— —Should do. —Should do, and it's hard to measure what sales is doing, 'cause you chronically ask this question, would we have made that sale anyway?

Like, you know— —Especially on people that buy more. They buy more minutes, they buy more usage, right? —Sure, and their usage— —How much does the sales rep get credit for that?

—And the usage is, you know, we have multiple vectors of growth inside of an account, but one of the most dominant ones is just, you know, the customer built a thing and they roll it out, and as they roll it out and more and more of their end users use it, we're gonna, with a usage-based revenue model, we're gonna make more money on that account. And so the question is, do we have a sales rep who is causing Airbnb to rent more apartments, that's driving more communications? No, clearly we're irrelevant to that. They bought a Super Bowl ad, that's what we like, right? A sales rep didn't cause that to happen, and so we're always questioning, and that took multiple iterations. I feel really good about where we're at right now, but it took multiple iterations to figure out like, how do we separate the organic growth that happens with or without what we do from the inorganic growth that is what we're investing in with a sales model?

It is hard.

And it's really hard, and we went through a lot of iterations about how to figure out how to do that. Yeah.

So let's talk about a couple interesting—

And by the way, it is never good when like a salesperson is like, you know, I made the sale, like I'm really awesome, and then like management's like, Yeah, are you? Right, like constantly questioning the value, right? So that was one of the challenges we had to get over in this, in building the sales culture, and also define the sale moment. Like, when every account at Twilio starts at a penny, like literally every account spent their first penny at some point, and it's just a continuous stream from 1 penny to 2 to 10 to 100 to 1,000 to 100,000, whatever. At what point did the sale occur?

Yeah, I don't know. Right? I drew the line at $99 a month. That's what I allowed it.

But like most companies, there's a, you're not a customer, and then you are a customer. You are a customer, yeah. And it is a step function.

Here you just became a customer. Yeah, right?

And for us, it's like, it's just a linear, hmm, I wonder where along the way you became the customer, such that the salesperson can declare victory. And it took a while for me as an engineer to figure out the sales game, it's a game. And you wanna know when you're winning the game. You do. And in our model, it was kinda hard to tell you if you were winning or not. Yeah. And that was a really interesting challenge that I think we had to figure out along the way.

So to me, when in those models, it's about whether the rep can inflect the curve. Because if you'd achieve the same amount of revenue without a rep, then you can do it all with happiness officers, right?

Yeah. And it's interesting 'cause I've made a blind faith, you know, I had for many years made a blind faith investment in sales because what I did is I look back at like every major customer that I could look at, like our top 50 list or whatever. And I go through the list and I would like, a substantial number of them I looked at and I was like, wow, when we were really small and even before we had a sales team or much of a sales team, I had gone in and almost every one of these accounts had like sold. And that's how these accounts got started. You'd sold. I did, the CEO.

You went there, you, you were the one.

So at the same time I would be like, I don't know if we need sales. Yeah, but you were doing sales.

In the very early days, I was doing sales.

When I realized that, I was like, wait a minute. So the top 50.

Yeah, right? Like, I'm doing that. How many of them had you met in person, do you know? A lot of those. A lot, so that's sales.

'Cause I was being a founder and hustling and meeting customers and like, paying, you know, shaking hands and learning about their business and saying, hey, what if you did this or that? Hey, we can help you with that, right? And then I go back to the office and be like, you know, I don't know if we need a sales model, right? And then like, I had this realization one day, I'm like, Wait a minute.

That's what I'm doing.

You know, every major account, you know, that we have, it feels like I'm touching, I'm actively, I'm giving them love and all that. I'm like, yeah, that's sales, okay. Screw this.

Yeah, that is, that's a critical insight some of us missed, right? So.

And I think a lot of, especially the engineers out there, we like to think that our products are so good that they don't need to be sold.

Yeah, that's a tragedy when I hear that. It is true on occasion, but it is. Very rarely. What's that? Very rarely. It's hard to get to $300 million with the product selling itself.

But even, I mean, some products get started on their own. Yeah. But again, if you really want to go deep in the customer, make a long-term relationship, continue to go deeper and sell more and more things, and be more meaningful to their business, like that's going to be a relationship.

Yeah, and worst case, if you go visit them, you're going to make more money from them. Yeah, absolutely. One way or the other, right? The churn's going to be lower. I mean, you know, they're going to have to call Jeff before they leave the platform. No one wants to do that. Thank you for that. Can we talk— let's talk a little bit about sort of agility as a high-level topic. Because it's something I— as I've worked with more founders, I've learned I'm in love with founders and companies that are more agile than I was as a founder or CEO. And so two things around Twilio. One we chatted about backstage, which is multiple product lines. And I was barely ever able to do one product line in my second startup. My first one I was able to do more. With Twilio, you launched with voice first and then SMS? Yep. And you launch, you launch, it's a hack in the beginning, and with 18 months you've got another product line? Is that the history in the early days? Basically.

We launched voice in 2008, very end of 2008. Yeah. And the number one thing we were hearing from customers was, hey, you know, we've got these phone numbers we're buying from you to do these voice calls. You know what would be really cool is if we could send and receive text messages with those phone numbers too. And we said, yeah, that makes a lot of sense. And I bet there'd be some cool stuff you could do. And so about 18 months later, we launched Twilio SMS, which was, I don't think we exactly realized it at the time, but it was a completely different market, completely different set of use cases. Completely different use cases. Yeah, really, I mean, a very different product line. But for us, we were A, just following our customers' needs, and B, we've never really wanted to be a single product company. And I know there's this, advice that entrepreneurs often get about, you know, find a niche, get rich, you know, focus, focus, focus. Focus, focus, focus. You know, there's a lot of ways to phrase this bad advice. And for me, it's always been about, you know, every time you ship a product, it's like, it's a bet. It's a bet that the customers need the thing that you're building. And you know you didn't get it right the first time. but that with iteration, ultimately you will find something there. Yeah. Right, you're digging holes trying to find oil, whatever. Pick your metaphor. Bezos had a great one in their shareholder letter last year. What was it? It was like, you know, more at-bats. More at-bats. And he says, you know, like every at-bat is a chance to score a run.

He does have a significant amount of scale though. He does have scale.

Yeah. Right, he's like, your goal is to just get more runners on the bases, 'cause every one of those, every time you get a runner on the base, that's an opportunity to score. For a home run, but then he has this great, like, zinger at the end of it. He says, but unlike baseball, where the best outcome you can have if someone hits a home run is 4 runs, in the world of business, your outcomes are unconstrained. A grand slam in business can be 100 million home runs. Like, you know, there's no limit to how much you can, no ceiling to what you can achieve if you get a home run. And so, you know, I just believe that. I think that it's a probabilities game with all sorts of things, whether it's starting your company or whether it's your single, your product itself. There's a probability to it. I'm also a really big believer in the power of a small team to build and operate a product. [Speaker] Yeah. [Speaker] Right, so you don't need 100 engineers to build a product. You need 5 engineers who work really well together and who know the problem domain, know the customer, can prioritize well, and can ship and operate code. Right? That's the unit of progress in any company. Yeah. That small team.

A group of 5. Yeah.

And so for us, it was all about saying, you know, we're not content with just having one bet out there. Let's have more bets out there, and then let's continue to invest in them when they work.

But they're all discrete teams? Discrete teams.

Engineering team. Yeah. Yeah. Now, as the products get bigger, right, like our voice product now is a much bigger product than it was back then, you end up breaking the problem down into many smaller problems. So our voice team isn't one team anymore, it's many teams that each own parts of that problem. But they have clarity about what they own, what customer they're serving, what success looks like, even as you break down. And as an API company, it actually becomes pretty easy to break down problems, 'cause you've got different kind of parts of the API that interop nicely together. And so I've just always believed in this notion of, you know, it's not about finding a niche, or focusing on only one thing, because you're very single-threaded on that one thing working. And yeah, you're gonna be very determined to get it to work, but you know what, not every place where you dig a hole you're gonna find oil.

And so the 5, so the 5's the rule, put 5 folks on a project, build the product. 5 to 10. 5 to 10. And then it was interesting, yesterday we had Michael Pryor from Trello, who was at Fog Creek before, and Trello began to consume all the resources of Fog Creek. Fog Creek was small, I didn't, I mean, I was an old customer, 50 people, and all of a sudden 20 people at Fog Creek are building Trello, and then they have to spin it out. So when do you shoot it? If you put 5 or 10— because then it's going to be more, right? It is.

How many employees at Twilio today? Today about 730.

I mean, it's big but it's not huge, right? So when do you decide SMS was probably obvious, right? Because it probably took off so quickly, but maybe didn't.

Yeah, it turned up pretty quick.

Turned up very quickly, right?

Voice video that you killed with like an active team? Not exactly.

Are there initiatives you killed with those small teams? Well, you know, it's interesting.

Yes and no. We've killed the teams, but maintained the products. So we find another home internally for the product to live. We have never killed an API that we've ever built.

Thank God. I hate that.

Yeah, no, it's one of the key tenets of our company. We've got, you know, our still main API, the version on it is 2010.

You gotta maintain it, don't you?

And it just, we just keep adding to the same APIs. We don't make backwards incompatible changes. Because that's really critical to building our trust with developers. But yeah, I mean, you change your staffing, your resourcing, and you try to put your investments where the best opportunity for success is, and then you manage a portfolio of investing in your core business to keep growing and scaling the key drivers of the business, but also making new bets. And that's kind of how we think about it every year. So at any point in time, we've got, Investments that are kind of your shorter-term incremental roadmap for your main revenue drivers. Then your medium-term, clearly we have customer demand and we have to build it and we have to get it out there in the right way. But this thing, and then you've got your long-term kind of long shot bets that you really have no idea if they're gonna work out or not. And for us, it's been about managing that portfolio, even since we were quite small. [Speaker] Yeah. [Speaker] We would start new initiatives with one person. And just say, hey, let's try to ship a thing, see the best you can do, and let's just explore this new area. And when the whole engineering team was so small that, you know, the only way you could make an investment was one person or part of a person's time, right? It's still something that I think you have to do.

Yeah, no, I love that. And then one related topic I want to make sure we can dig into. I'm not an expert, but I've learned a little bit from the sidelines. Voice is a challenging area, right? right? It's mission critical. And in some ways, achieving end user expectations is impossible. I'm guessing with SMS, you have a bunch of, you can disguise any issues on service level. I mean, people don't, I mean, the SMS is, if it's a minute, if it's 60 seconds late, does it matter? I mean, it sort of matters, right?

Well, every product has its own—

But voice is hard, right? Yeah, voice is really immediate. And so how do you remain agile and try and have quarterly, monthly, daily, hourly releases and not break break a mission-critical application?

Yeah, that's a really good question.

I've never figured that answer out to that question.

That's one that we've worked, we've spent a lot of time figuring this out, and I'm really proud of where we are today. We have given a name to this, it's called agility with resiliency, and the way we've sold it internally, and I've actually started talking about this externally as well, is that the goal of a high-performing engineering organization is to remain agile, but deliver resiliency at the same time. and a lot of companies mistakenly believe that, you know, there's a false dichotomy between those two, right? They believe that we can be agile, but we're gonna give on, on, on quality, right? Zuckerberg's move fast and break things. Yeah, we don't even need a QA team.

Like, we'll just roll back.

Or the opposite, which is, hey, we're gonna ship, you know, quarterly and be really methodical about things, right? And make sure we get it right and ship quarterly. But at Twilio, we have, you know, we ship, we're now annualized 18,000 production deployments a year. I mean— About 100 a day.

100, oh, production deployments.

Production deployments a day. And it used to be a few years ago that when you plotted our production deployments against our incidents, they followed each other, the graphs. Right? And so we had this very conscious moment, you know, a few years ago. We said, well, we either need to slow down our deployments, but we know that's not best engineering practice, or we need to figure out the root cause here. And we went about figuring out the root cause, solved a lot of problems about how to build resiliency, and now we can ship 18,000 times a year, and we have a 5 nines available API, and a 7 nines success rate of the requests that we're serving. And so we're really proud of what we accomplished that. And how we've done it is I would say two things. Number one, the small teams approach is really important, because those small teams build the software and they operate it. So there's no throwing it over the wall to ops, that kind of thing. They're responsible for it. Yeah, they're responsible for it. They run the services internally and externally. And, but the other key thing here is we've trained people. You can't expect everyone to just know how to build resilient things. And so we've trained people and coupled that with platform services that they get to consume internally, and made a big investment in our internal platforming, so that teams who are building product can ship fast and have a really good safety net that's built by other teams over here who are building services as well. And then we train everybody. We have a program we call OMM, the Operational Maturity Model. Internally, it's codenamed Iron Man. And it's 6 vectors, it's things like, testing, monitoring and alerting, security, architecture, and what we've done is we've documented best practices, we train the teams, and then we test them, and then we retest them.

Against this OMM. Against the OMM model.

Yeah. And what we've done is we've found is that like, every engineer wants to do a good job of this. Yep. But she doesn't always know how to do it. And so what we do is we do a training model where we figure out like, okay, here's how we do it here. Here's what we figured out as best practices. And we've actually started externalizing this. We've started talking about OMM. We talked about it at our conference last year. And we started actually going into our customers, 'cause they're really curious. How do you do this? We wanna try to achieve this. And we've started actually sharing a lot of our wisdom with our customers as well. But once we, and the interesting model is also with our product lines. So the product development lifecycle starts with a new product comes out, it's an internal alpha, then it's a developer preview, then it's a beta, and then it's a GA. And it used to be, you know, several years ago, that a product got called GA because customers wouldn't adopt it if it was called a beta. Yeah. Right, it was like, we call it a beta, we put it out there, and then like we would hear feedback from customers, you know, we don't want to adopt something that's a beta. When's it gonna be GA? And we'd be like, um, it's GA now, hey, right? And we were never quite comfortable with that, and so what we figured out is what GA should be a signal of is from Twilio, to you, our customer, is that we stand by this as an operationally excellent product. And in the early days of a product, by the way, you shouldn't hurry to make it operationally excellent, 'cause you're still trying to figure out your product market fit. Did we build the right thing? Let's not harden it if we didn't build the right thing, right? But once you figure out that you've built the right thing, customers want it, now your job is to harden it, and we've defined what that means. It's this OMM, Iron Man model. Once you can check all the boxes, prove you have checked them to the engineering leadership of Twilio, that's when you get to call your thing GA. And that's how we've achieved this resiliency by putting the tight iteration loops where they need to be, then having a model where we train and check, and then call it GA so that our customers can expect operational excellence from products that have gone through that whole process. And then communicate what you do internally with your customers So they're with you, right? If you're a beta, here's what that means. That's cool.

Yeah, all right, we gotta convince someone on your team to write a guest post on SaaS or on OMM, 'cause I need to learn for everybody. Yeah, we'd love to do it. It's a good one. So we're over time, but one last question. What are you most excited about for this year for Twilio? What are you looking forward to? What's exciting? There is so much.

We've got a lot of new product lines in the market, programmable chat, programmable video, programmable wireless. So we've got a really, a lot of really cool things coming down the line. And then in particular, I'm excited to hear what other communications problems we can be solving for customers. In fact, you know, actually I'll tell you the thing I'm most excited about. You know, last year was a really crazy year. We had IPO, of course. We had a follow-on offering. So I spent a lot of time with bankers and lawyers and, you know, road shows and all this kind of stuff. And when I look back at the previous year, I realized like, you know, I feel like that was all very time-consuming, so this year I'm returning to spending a lot of time with customers. Yeah. And so I set the internal goal, I'm gonna meet with at least 3 customers a week. I love it. That's great. And face-to-face meetings with customers, and I asked the sales team's help, hey, I want you to bring me in, I wanna meet customers. When I get on a plane, it's gonna be to meet customers, not to meet investors or to do PR or speaking gigs. I was able to walk over here, that's why this is cool.

I appreciate it, yeah.

But, you know, really focused on customers this year, because, you know, the process of going public and all that does— Distract. Can be distracting. And so I made a very conscious effort, but also set the tone for the company. We're a very customer-centric organization. We strive to be. One of our core values is wearing the customer's shoes. And so, you know, again, I like to make sure that I'm wearing, you know, I'm wearing customer shoes as much as anyone in Twilio. All right, guys. I'm excited to do that.

If Jeff can do 3 a week, I think you each can do at least 2, don't you think? Absolutely. Pretty cool. All right, everyone, give it up for Jeff Lawson. This was amazing.

Thank you very much. Super cool. Thanks for doing this.

It was great. Absolutely.