Good news fellow humans — we’re not obsolete (yet)

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10-17 pm Session 1_1003.MP3

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Session name: The new look of business communications
Kevin Fitchard Kevin Fitchard
Jeff Lawson Jeff Lawson

Announcer 00:00
Just in case you are wondering, Surj Patel is the King of Mobilize. Always will be. Thanks, Surj. All right. Up next, we have “The New Look of Business Communications”. That’s going to be moderated by Kevin Fitchard, the Senior Writer for GigaOM. He’s going to be talking with Jeff Lawson, CEO of Twilio. Please welcome Kevin and Jeff to the stage.
Kevin Fitchard 00:25
Hello, everyone. Welcome, Jeff. Thank you for being here.
Jeff Lawson 00:28
Thanks, Kevin.
Kevin Fitchard 00:29
First, I bet a lot of people in the room have probably heard of Twilio before but I’m not sure if– it took me a very long time to understand exactly what Twilio does. It’s the hottest start-up set. A lot of people aren’t really quite sure what they do out there. I was wondering if you would tell us a little bit about Twilio and that strange world of telecom protocols that it navigates for the benefit of everybody else out there.
Jeff Lawson 00:51
Yes. I’ll tell you what we do and then I’ll tell you what we are. What we do is we help companies communicate better with their customers. What we are is we’re communications as a service company. Think about software as a service. It’s moving your enterprise applications into the cloud and you think of infrastructures as a service which is AWS which is moving your servers and your storage into the cloud. Twilio is doing that for communications and moving the telecom closets – that thing in the corner where you’ve got your telco equipment lines wired in – moving that to the cloud but also, even more importantly, moving it from its esoteric roots in hardware – and the lines that run into that hardware and those protocols – moving it into the world of software, moving it into the world of using software to create the communications, applications that we have in the communications experiences that we have without having to understand, build, deploy, or buy any of the underlying complexities of communications. The way we manifest that is, as a service just like infrastructure as a service, it’s a global infrastructure that’s available on demand in the cloud with an API that abstracts all that complexity so that developers can incorporate those communications capabilities into their applications, or into their workflows, or into their company to provide a better way to communicate with their customers. Sometimes, it’s communicating with employees, with vendors, with the customers in various ways that are shaped by the experience that you’re trying to create for a customer.

If you want an example of how we started the company, which is a good example of the nature of the use cases– I’m a serial entrepreneur. This is the fourth company that I’ve started and, prior to this, I was also a Product Manager at Amazon Web Services. Before that, I’ve started three companies. One of my experience is just classic. Right? I was the first CTO at At StubHub, we said, “If we’re going to compete with the street commerce, the scalpels on the street corner, we need to provide the ability to buy ticket just right before the events, do that online, and have the ticket delivered to you.” We said, “Okay. When you buy a ticket, we’re going to have to communicate to the seller.” Seller, your ticket just sold. We’re going to send courier to pick it up from you. Courier, I need you to go pick up a ticket here and deliver it to the venue. Buyer, that courier is showing up in the next two minutes. Make sure you’re ready. We have this whole need for communications. Right? Then, we looked at ourselves. We’re software people. Right? Web developers. We said, “Great. Making a phone ring, that is magical.” We have no idea how that works. Then, we went and we talked to the industry. They were trying to sell us this lines from carriers, these boxes, these esoteric software, and professional services to make the whole thing work together. We’re like, “Wait. This doesn’t make any sense. Why would we have to spend millions of dollars and 18 months to stand this thing up?” It doesn’t make any sense. We started Twilio to solve that problem.
Kevin Fitchard 04:02
You’re [inaudible] and you have to learn session initiation protocol or to latch into network.
Jeff Lawson 04:06
Exactly right. You look at the number of people who are skilled in telco technology. It’s a very small number but the number of developers, software people out there who are building the future of everything that we do, those are the people who are creating the customer experience for our companies. Yet, it felt weird though when you say, “Okay. Telecom is this thing that’s way over there.” Communications with your customers is something that the people who are innovating aren’t touching. We said why and we have that experience in all three companies in a row that I had started. Why does this keep happening to me? Is this just a fluke? If you think about it, it turns out that communications is so fundamental to what we do as human beings. It is the human experience, the way we communicate. It’s how we’ve built our societies. It’s how we conduct commerce. It’s all via our communications. When you think about software people who are building the future of all these things, and then you think about how fundamental communications is to the the human experience, you’re like, “Oh, these things are going to keep colliding.” That’s why we went about solving this problem.
Kevin Fitchard 05:07
The title of this panel is “The Changing Face of Business Communications” and the implication there is that Twilio is moving into the enterprise. The allure, the mythology of Twilio, it’s really to enable that kind of developer in the garage to add voice or SMS communications to their applications but, ultimately, your customers are all businesses in the end of the day. When you say you’re moving into the business or when you’re really tackling the enterprise, what exactly do you mean?
Jeff Lawson 05:34
It’s interesting. The use cases have always been various business use cases. Right? For us, the enterprise is a slightly different story from a younger company. Right? A younger company– let’s take in Über. They used Twilio to communicate with you when your cab is arriving, when your black car is arriving. That’s neat. They’re not coming fro decades of legacy and huge IT existing investments. When they say, “We want to create this great customer experience.” Software is how we’re going to do that. Now, on the flip side though, you’ve got enterprises. Enterprises have legacy investments in this stuff, those closets full of gear, lots of wires, connectivity, all these stuff. When you talk to enterprises, when you talk to IT departments, what you find out is that all that gear, all that stuff in that closet, it’s like an anchor attached to their heel. Right? It slows them down. It makes it so they can’t respond to what their customers need in a very clean way because you don’t have these silos of gear, organizations, and things like that as a result of the architecture.

Think about the call center. Right? I’m sure all had this experience when you call your bank and, first thing, you get an automated answer. It says, “Kevin, thanks for calling the bank. Please enter your account number now.” Right? You enter your account number and then it says, “Please enter your mom’s dog’s maiden name or whatever.” You answer all these questions. Then, you finally get to a human being. What’s the first question that the person asks you, they need to ask you? What’s your account number? What’s your mom’s dog’s maiden name? Right. You’re like, “Didn’t I just do all these?” The reason is because these systems are like black boxes of these silos. They don’t talk to each other. If you want to make them talk to each other, it’s like rolling a boulder up the hill. Right? The more vendors that are involve, the more organizational units that are involved in making these changes. Right? The harder and harder these changes get. That’s because of this legacy in the world of hardware that is fundamentally not agile. It is not software. It is not designed to be integrated, iterated, and designed around thinking about a customer first and working backwards which is how software people think. Right? We often– because software is infinitely flexible.

Software companies can ship updates to their product everyday if they want to. You think about mobile apps, how often updates get shipped? You think about websites, how often those get shipped? Software people fundamentally think that way but not when you’re working from a legacy of hardware and that’s how telco has always been. What we’re doing for the enterprise is bringing that agility of software, bringing that responsiveness to a customer, and bringing that to the world of how companies communicate. I love one of these examples, Home Depot, one of our customers. Obviously, they’ve been around a while. They’ve got all these call centers powered by [Via?]. They were spitting up a new initiative. They wanted to connect in-store shoppers with contractors in their area who could install that and sync for you. they said, “We could do this thing again where we’ll go spend a lot of money and we spend 12, 18 months installing this call center.” At the end of that whole road, we don’t really get want we want anyway if the customer experience is not at all what we dreamed about when we started the project. Instead, they turn to the cloud and they turn to Twilio. They put two software developers against it and, just a few months later, they had a full call center solution, zero spent upfront, live in a few months not years, and most importantly, they got exactly the customer experience they wanted. The coolest of all, they said, “We own the road map. We can do whatever we want to do.” That’s the power of software where you’re not [held in?] to some solution vendor when you have actually the building blocks that you’re putting together. That’s what you see in infrastructure service, AWS. Right? You can pull the pieces off the shelf that you need and put them together and really creative ways. That’s what, in many ways, the whole world of APIs, the whole world of decomposable enterprise is all about.

Instead of having this monoliths and these big organizational and technological boundaries that are preventing enterprises from moving quickly and responding to a changing environment – responding to start-ups to do move quickly – this notion of decomposable enterprise is getting a lot of traction which building blocks that then a customer-facing teams and customer-facing organizational units can pull together to assemble rather quickly into something that addresses the market need.
Kevin Fitchard 10:03
The example you gave is about Home Depot offered a new communications service. They have a new opportunity, embrace a software model. When an enterprise replace its legacy, PBX systems, with a Twilio-powered model n the future and they just have too much invested in those traditional telecom architectures.
Jeff Lawson 10:22
This migration from the closet to the cloud and from hardware to software is not an overnight one. Right? We first heard about the cloud and heard many names before that. Right? These architectural migrations started in the late ’90s. Right? It’s still going on today. When you look at SaaS, when you look at infrastructure as a service, you’ll say, “Wow! There are some really big companies out there doing this.” Look at Sales Force, 31-billion-dollar market cap. The entire CRM industry was about 15 billion dollars when they started. They’re not only expanding this but there’s so much potential because we’re still at the very beginning of this migration for the next architectural shift that’s going on, the shift from having 100 thousand or million companies all running some piece of software in their own closet and try to figure out how to scale it, make it reliable, and have contractors put duct tape all over the thing. Now, we’re going to run this one multi-tenant cloud that gets better everyday when that vendor ships code and everybody has the best of breed modern solution not something that’s a decade old sitting in their own closet. That’s the migration that’s started and is ongoing.

In communications, it’s even starting a little bit later behind those ones because it’s such a big market. It is all of those fundamental benefits that are there. What we see from customers is– we’re typically not going in there saying, “Yes. I know you spent 10 million dollars on your call center in the last week and you’re asking me to rip it out.” What we are seeing from customers is, they say, “We want to add this new capability.” Right? This works, by the way, probably in many different realms of software and cloud migrations. We’re trying to add this new capability. If we think about doing it the old way, then we find out that the timelines, the cost, and the teams who have to do it will take us a year and costs us another half million dollars in professional services to get some small thing added, like, I want to add a customer satisfaction survey at the end of a call center thing. Right? Now, what they’re saying is, “Well, this doesn’t make sense.” Again, we’re like throwing good money after bad when we do this. We’re going to start by taking pieces of these applications and move them to the cloud before we migrate the whole of it because you may even have authorizations like 10 years on some of these stuff. If you’re halfway through it, great. You shouldn’t keep throwing your good money after the bad stuff. Start moving into the cloud and then, eventually, all of the intelligence is probably going to be there anyway. That’s the architectural shift that enterprises are seeing happen in every area of their infrastructure and communications is next.
Kevin Fitchard 12:59
Going back to this, the overall business not just the [inaudible]. Obviously, you’re talking about the call center business when built around the idea of voice. You’re putting voice into so many thing right now and that was your first service. Right? I imagine it is still probably the biggest part or the big part of your revenue i right now. We, in the tech industry, have this idea that voice is dying out, that we have so many different options for communications out there whether a video, pictures, all different kinds of messaging, real-time communications, and that kind of thing. Building a business on voice, that almost sounds a little crazy. Is that a misconception? Is voice here to stay? Is it a growing business as we make it more nimble? Does it become more powerful?
Jeff Lawson 13:43
It’s interesting. I think that, obviously, we do many– we started with voice but then we’ve got SMS, global SMS. We’ve got picture messaging which we launched last month. We’ve got a number of different product lines: voice over IP embedded into iOS, Android, SDKs, all these stuff. If you think about the medium of voice – the medium of human beings speaking to each other – yes, it’s shrinking from a trillion dollars to 800 billion dollars. Okay. Yes, it’s shrinking but we’re still going to communicate. We’re still human beings. We’re not going to be– the only world where voice disappears is just like the Matrix. We’re all in odds and we’re asleep. Short of that, we are going to communicate. Some of that is going to be video, a whole lot of it is going to be voice, but what you’re going to see is that important stuff is going to be voice. Think about when you talk to companies. You talk to companies now when you are making a large purchase, when you need help and support. Those are primarily the times when you engage with a company via the voice shell. Right? You shouldn’t have to call the company just for some mundane thing like where is something, “Where’s my shipment?” That’s solved. Right? I can go to the website and find out where my shipment is on Amazon. Right? The times when I really want to communicate are big, important life cycle events for customers communicating with businesses they work with or in a B2B setting as well. When you think about sales teams, they are not closing million-dollar deals via SMS. Right? Those are relationship-building exercises. Those are phone calls. If you are buying a house or getting a mortgage, you’re going to talk to somebody because it’s a big decision and that decision involves trust. You don’t build trust in many ways over SMS. You’re going to, chances are, continue to have a human experience as part of conducting big transactions.
Kevin Fitchard 15:35
A theme in this conference is the internet things and we’re talking a little bit earlier about how you’re actually dealing with a lot of these. Same companies have been on the stage here at Mobilize about using Twilio APIs in there internet things, applications. Can you talk a little bit about that? It seems they don’t know a thing. It’s all about machines communicating. They’re not people communicating with one another. You’re very much a communications service.
Jeff Lawson 16:02
It’s interesting. We see both. I had a debate with someone last year on Twitter whether or not the internet are things that was just going to be called the internet or just going to be called things eventually. It’s both of these things. Right? We see machine-to-machine communications but, at the end of the day, there’s always a human being. We’ve got use cases where the vending machine will communicate to a coordination system via SMS, “I’m running low. My refrigerator just died.” Whatever. We see things where the fields, moisture sensors in a field will send text to a farmer saying, “Hey, the fields are dry. We need more water,” various things like that. You also see the great stuff that’s going out. SmartThings was here, Ninja Blocks, a number of companies that are doing this combination of sensors and actuators. That’s, sort of, the thing part. Then, take that data, suck it up, and put it into the cloud for software to do its magic to create more value out of that data and everyone will have use cases. It’s just about you’ll end up with some sort of notion of– and then a human being is going to be alerted or a human being is going to trigger an action. The moisture sensor goes below a certain level, farmer gets an SMS. I just saw someone tweet today that they wired up– or do we know they are garage door to Twilio because they kept leaving their garage door open when they go to work. They have everything in text and say it’s open or close. If it’s open, close it. Right? You end up with a lot of things like that where there’s a human bridge into the thing which bridges into the physical world again in some automated way. It’s amazing what the hardware revolution and the internet connectivity of everything is having. You see companies like– [Nest?] is doing really cool stuff and square with payments. Right? These are, sort of, internet things companies. Right? Taking a thing – a credit card – swiping it, turning the rest of it into a software exercise. It’s pretty cool and it’s revolutionizing payments.
Kevin Fitchard 18:03
We’re running out of time. Just a really quick answer here. Do you think that– I mean, Twilio APIs will eventually make them into-the-end-objects of the internet or things. If I have a problem with my T.V., instead of going online and contacting Samsung or LG customer service, the T.V. would just call customer service itself and they could troubleshoot directly from our T.V. or [crosstalk].
Jeff Lawson 18:25
That’s cool because you can have the communications and the data about what’s going on inside that T.V. all wrapped up into one communication channel. It’s cool. We saw at our conference with picture messaging, Sales Force built an integration where you say, “The wiring is not working on my cable box.” Take a picture of it and then it automatically goes into service desk ticket for an agent. Right? That will be the next logical progression of that.
Kevin Fitchard 18:46
Yes, definitely. That would be a very, very interesting space, our talking appliances. Anyway, we’re out of time. Thank you very much. Everyone, join me in thanking Jeff for being here.
Jeff Lawson 18:56
Thank you, everybody.