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I guess this week is Geoff Lawson the founder and CEO of twilio. Twilio is a 15 billion dollar company offering a cloud communications platform to its customers twilio is used by customers.
Lift twitch and Yelp to make Communications in their products easy Jeff and I talked about why it pays to be a platform how to build a platform and how to sculpt a company's culture. This is a must listen for anyone building a business whether it's a tech business or not. Please enjoy our
conversation.
Mr. Jeff. It's kind of a random Story how this conversation came to be which was I was trying to figure out who to study what companies to study when it came to learning about apis and a friend mentioned the twilio should be the first company I go read all the
The financials I found you on Twitter and on Twitter. You have a number that you can text. So I texted that number and sure enough it works it got to you and I invited you in here. We are so a great example of the company technology itself leading to a really interesting conversation. I thought a fun place to start would be we're kind of surrounded by some interesting what look like company values and there's one that stood out and you see owls all over your office, which is draw the owl I have to start there because it's just the one that I can't figure out what it means. So I'm very curious. Can you describe what draw the al-amin?
The best values that company has actually believe require some explanation because if it's like weird like Integrity or card, yeah, you're like, okay, you just kind of dismiss it out of hand but your rival new company and you talk about the values and one of them is draw the alley like wait a minute. Hold on a second. I those are the ones you remember because they're real and you take time and you have to explain them. So draw the owl goes back to one of the early memes of the internet and in the early days of twilio, we couldn't get enough of it. And here's all the mangos just a picture you can
Google this just Google draw The Owl and you'll find this. It's a picture. It says how to draw an owl is the title Step 1 draw some circles and its got like head Circle and then like a sketch little body Circle and once this step to draw the rest to the owl and it's got a beautifully drawn done. Alright, it's like it's a two-step process just catch some circles and then draw the rest of the owl so it's funny. But for some reason this meme Wouldn't Die in the early days of twilio be printing it out putting it up on the wall taping it to the back of monitors and it
Our did creeping into our conversations like someone would email was like when we were small we were 10 people someone email the whole company. Hey, does anyone know how to do this without and inevitably somebody would just reply with this Meme and we're like, why is this funny? Why does this work? We kind of thought about were like, well, this is really represents the very notion of what it takes to get something done to build something because there is nobody here who's going to give you the instruction book of yours exactly the hundred steps. You have to go through to actually get this job done or to build this company because it's not that obvious the opportunity is here because we have to figure it out.
Out and so the subtext underneath draw the owl is figure it out ship it and iterate. There's no instruction book. It's ours to write and it's this call to action really if you think about for Builders saying look when something is hard or ambiguous. You don't know how to do it. Well our jobs to go figure it out and that's exciting and that's what gets us out of bed in the morning. That's why we love doing what we do because if there was an instruction book if we were painting by numbers here. Well, guess what? I wouldn't be interesting and also that would be an opportunity. I think about twilio like we were really the first API business
Number when I started fundraising back in 2008 started the company built our prototype talk to customers got early customers on board and went out to go raise money for our seed round in 2008 and the wisdom the advice that I got from the investors I talked to was generally hey look developers. They aren't customer and apis. Well that is not product. That's like a feature of a product. That's not the product. Let's a go build a product. Go build an app that does something if you want to add apis to it go have fun, but API is on the product and developers on a customer.
Early customers were telling us a different story. They were saying that we were filling a valuable hole for them and that they needed our product. So we listen to our customers. And so I always thought you think about draw the owls. Well customers need a thing and it's not conventional actually build an API as a product. But you know what? I think this is what the world needs and so we followed our vision there and more importantly we followed our customers and they let us to build this platform company, which is quite different from most product companies, especially of that era in 2008, and I'm glad that we did and I think that was the beginning of many such
This is where we really followed our customers and followed our vision to be able to build something that conventional wisdom if we were painting by numbers or following the Playbook would not have led us to where we are and those moments where I think are the most exciting actually as an entrepreneur when you get to do something that you feel is right and your customers are telling you is right. Those are the best moments of doing is you're not just heard of rinse wash repeating some well-trod thing you actually figuring out her problems and that's what's so exciting. So that's what draw the owls all about. It's an awesome mentality for Builders and you mentioned too kind of ideas.
As in apis there that I want to spend some time on so for the uninitiated maybe describe what's important for them to know about what an API does what it represents why it's different than an app that you can click on stuff and interface with absolutely apis are building blocks that developers use to build applications with and so if you think about applications are a solution they do a thing. So if you need a solution for I don't know your marketing you can go buy an app and it does its thing and if you need a contact center you can go
As context in our app and it does its thing whereas API is our building blocks that are designed for developers to take and stitched together to go build something I think about every app on your phone every app on your phone is using some amount of compute power. It's storing a bunch of data almost all of them. It seems like you some kind of geolocation or Maps they all take payments. They all do Communications And if every developer every company had to go figure out how to do those things by themselves. The world will be moving at a much slower.
Her Pace, in fact much of what we see on our fund State wouldn't be built. If it was that hard if you had to go invent everything ourselves. So instead what developers can do is take apis that provide infrastructure and glue them together to build and out much more quickly and much more scalable and much more globally than they ever could before and you think about that's what AWS is all about AWS provides compute and storage as a service behind an API so that a developer can bring compute and storage into their app very easily twilio does it for
We have virtualized the global telecommunications Network and provided it as apis to developers of a developer needs to make a phone ring or send or receive a text message or do a video Real Time video conversation or real-time chat conversation. Those are all just apis with a few lines of code in developer can drop into their app and now have best-in-class communications functionality inside of their app and it's actually pretty crazy. When you think about it going back to my story where 2008 ago and said, oh this isn't this isn't a thing. This isn't a
it's not thing developers aren't customers. But you now look at obviously the success of AWS the success of twilio stripe is doing it for payments Google Maps for geolocation and map stuff. These are the fundamental ingredients into every app that you use all day on your phone and we obviously are using apps whether it's on our phone or in the cloud all the time. They are how we run our lives and when you think about it, why have these business has been growing so fast twilio has been growing incredibly fast. We just
Two billion dollars of Revenue last year AWS is by the fastest growing enterprise software company in the history of the planet stripe is amazingly successful. Why is this category of products that are not Solutions at all, like most people would think but actually our apis why are they growing so fast? It's because as our economy has turned into a digital economy and every company has had to become a software company and have to start building software in order to Delight customers because your
Murmurs want to engage with you over digital interface, whether it's their mobile device whether it is a web application. If you are not a digitally enabled company, you're going to lose your customers. So every company is starting to become a digital company hire software developers. Well twilio stripe AWS. We represent the supply chain for companies as they become Builders of software. Then you think about every mature industry out there. I'm from Detroit. So everything's goes back to Automotive for my brain and you're like, oh yeah, of course is a very important.
Sure, and sophisticated supply chain for building a card General Motors. They don't build everything. Now. They've got a supply chain for seats and for the steering wheels and for steel for the body panels and the seat belts and like there's a very sophisticated supply chain where people specialize in doing parts of the car and then GM assembles them and and chips them. Well for the world of software has never had that for most of the history of software if you were to build software you really were building it yourself you would be writing a ton of C code and
actually having to figure it out all on your own and then in the cloud or in the early days the internet you'd even figure out how to host it yourself. You have to go spin up your own data center or by racks of servers and have people plugging cables in so you had to do in order to get yourself on line that indicates to me. There was no supply chain. It was every company for themselves to go figure out how to do this. And so what the last 15 years have really been about is recognizing that every company is becoming a builder of software and as such
You need a mature supply chain to power all those companies. They don't have to go figure everything out themselves. And that's what the platform Revolution here is all about when we went public in 2016. I had this slide in our in our deck and it said we have entered the Next Great era of software. If you think about the areas of software of enterprise software. The first era was the 80s and 90s. It was the big Enterprise era where every decision
Asian cost Millions tens of millions of dollars and so the CIO made all the buying decisions and it was the high-stakes era of software the vendors then were Oracle and sap and everything was a big decision and high stakes and these things these projects took years to implement and they were extraordinarily complex and the high failure rates of all these Enterprise software projects because it was on-prem big expensive lift. Well around the turn of the Millennium Along Came software as a service and suddenly it became a lot less risky to do software.
Because you could instead of having to go spin up a data center or rack up a bunch of gear and hardware and software and the types of stuff that only CIO could do. Well now any line of business owner inside the company that had a sales could go put in Salesforce and they could buy it themselves. They didn't even need an IT department to implement it. They could have just essentially buy it online and the head of Finance could buy netsuite and the head of HR could buy workday. Everyone could just go out essentially in provision the services they needed they just paper the seat and most
People think that software as a service is the latest and greatest thing like that is software but actually the fastest growing enterprise software company history doesn't sell software doesn't sell seats doesn't sell anything like that. It's AWS and it's a platform model when you look at it the success of AWS the success of stripe the success of twilio. This indicates to me that at the scale that we're all operating at at the pace at which we're all growing. This is a new era of
Where and it's that supply chain that is powering the need for platforms to provide things like compute storage payments or for Tulio Communications because these are the fundamental ingredients in every app that we use and every app that companies are building. So you sit in a very privileged seat because you get to sort of see as a platform maybe not knowing ahead of time how developers are going to use you but then being able to observe sort of the interesting ways in which they do so you mentioned this idea and I love this idea of build or die as a replacement to buy or build. Love you.
I hear you riff a little bit about how you recommend people out there that run businesses which are not software businesses, but understand this shift and want to orient themselves to becoming software providers. We're incorporating software into their business model. You've gotten to watch so many do it. What recommendations would you give somebody like that out there? That's running a business. Yeah. It's fascinating. I mean if you think about for most of the history of software your company would need some sort of say back office system. You need a new Financial software something like that.
Any kind of functional you might imagine it would be really common to have a CIO and that CIO would undergo a build versus by decision. And the decision is really what should we go build this we hire developers and build this part of our company or should we just buy something from a vendor and for most of the history of software, he'd run that process and some vendor would come in and say look, why would you reinvent the wheel we've already built this thing that you need is this really the source of competitive advantage or financial system or even this your marketing whatever.
Her like that's not your competitive Advantage. You're not going to build software to compete here. Go compete on your main thing. What us take care of this for you. And honestly, they had a point and so most companies would just Outsource all parts of their company and they would just by vendor after vendor solution for solution rack them up somewhere or Outsource it entirely even look at the IT department. So most companies in the 90s and early 2000s will get completely outsourced to a ppos and things like that and people said, you know all this technology. We used to run our company. It's a cost center and as such we
Was to make it as inexpensive as possible. Well as cost effective as possible Outsourcing it makes a ton of sense, but suddenly around 15 years ago around on the web started really becoming mainstream when mobile started to really hit company after company realized that software digital interfaces were how they were going to talk to their customers and how they're going to compete in the market think about Banks. When's the last time you walked into a bank branch your bank is now an app and so if your bank is outsourced
It's app. Well, that's probably not very good if they saw it as a cost center. Well, that's probably not a good indicator of how happy your customers are going to be when you view your product experience as a cost center. And so in every industry, they've started to realize actually building software is the source of our competitive Advantage because if we are going to let either our competitors or maybe even some digital disruptor some startup come out of nowhere and build this amazing product experience because they really understand how to build software. They know how to listen to customers take customers feedback and implement it quick.
In the product and iterate iterate iterate. Those are the companies who are going to win. And so when suddenly that is how customers are judged you how good you are at listening to them and building great products and great customer experiences. That is how customers judge you that's how customers were words you with their business and their loyalty in that world. You can't think of it as build versus by its build versus die because if you don't build and you don't listen to customers and you can't answer customers needs and
stuck with the same experience that everyone else is outsourced their product has well, then guess who's going to win some new startup that comes along and just brilliant tip Building Product or the incumbent company that gets it and starts building a hiring software developers listening to customers iterating your way. And one of my favorite examples of this is what's going on in the world of Finance, especially in banking, especially in Europe because they've got a lot of progressive laws about recording openness and she got all these Challenger Banks companies like bunk or end 26 or coming
And as software companies and they describe themselves were software companies. They happen to have a banking license. They build these amazingly beautiful customer experiences and apps are incredibly easy to use and they just they look like thing about the most modern easy-to-use app in your consumer phone. They're like our Netflix or whatever you want to think of is the just a great app. Will these banking apps are that easy to use? And so that's how the digital disruptors are coming up in Europe and saying hey look this is amazing product experience in our core competency as is not even banking our core.
Nancy is actually software and we just happen to have all the licenses and things we need to do to be a bank but really we're here to serve you with amazing software and they're winning millions and millions of customers are switching to these brand-new digital Banks. But here's the most amazing thing in response to that. The incumbents are doing the same thing. So one of our customers is ING Bank ing is fascinating because several years ago that promoted a new CEO and he came in and the first thing he did was said we as a
Are becoming a jewel and I'm not talking about just the software developers. They're going to do Sprints. That's almost a given the whole bank is going to start acting like an agile set of agile teams. So down to the branches and of course the software teams every part of the company is going to be comprised of small teams. Those small teams are going to aim to operate autonomously. They're going to operate in two weeks Sprint's with stand-ups and the whole bit and so if you're running a bank branch for ING
They literally are running it like an agile Lean Startup and it's amazing to see it and say you've got the digital disruptors coming in building amazing software and then the incumbents realizing that if they are going to survive. Well, they need to act the same way and ing is this amazing example of truly top-down was the there's an amazing video on YouTube agile at ING. I think if you Google that, I'm sure you'll find it and it's fascinating. It's a fascinating watch because you get to see the leadership of one of your
Largest banks not the technical leadership the business leadership say we have to be agile every part of this company has to operate like a start-up or else we will lose. And so when you think about build versus die, that's the dynamic playing out right there got great startups coming in with amazing product capabilities building digital Banks, and then the incumbents in the space. They're evolving to fight that and it's like almost literally a darwinian Evolution because of customers measure you and reward you with Revenue.
When you have a great product in this digital era that is a software product. Then build versus died literally plays out in that darwinian sense of things because companies live or die by Revenue. I've talked to some of the senior Folks at AWS about this notion of customer intimacy and building or extending in their case. The platform very much liked will Leo's in ways that align with their customer needs not just by asking them but by living with them, I'm curious how you hear a twilio build meaning. How do you decide what products?
Is the near term Vision how do customers figure into that? So for those that are building software? What would you recommend is the proper sort of product mindset? Well at Tulio we have a number of things that we do but for us the most interesting thing is the fact that as a platform it allows us to learn from our customers. So if you think about a product company that has like a solution when you have a solution you've made a lot of assumptions about what problem your customer needs solved and how they want. It solved because
That's the definition in some ways of a solution. And so you build a solution customers who have that problem kind of hover around your solution customers whose problem is just a little bit different than what you imagined. Well, they probably you're not going to intersect with them or if you do salesperson will quickly qualify them out. So you customer you are unqualified to be a question. We like what a weird concept that is to unqualified a customer disqualify a customer. And so what I love about being a platform is that as a set of building blocks customers can go build just about anything and
And when we talk to customers to find out why they're building the things that are building it is extraordinarily enlightening because when a customer like it's go back to that ing example, they built an entire contact center on top of twilio. See I had this problem. They had 17 Legacy contact centers that they had on pram cobbled together over the years and they needed something better. And so their team came to twilio and sort of building a contact center on top of twilio and when we went and talked to them and we said,
First of all, thank you for your business. Now. I want to better understand. Why is it you're building? There's so many solutions out there in the contact center Market. Why would you go build your own on top of twilio? That's not the path of least resistance. Now, we make it a whole lot easier than it would have been 10 years ago. But still you could just go buy some solution and call it a day. Well, they painted this picture force of the contact center Market that was just broken and they said there's nothing out there that meets our needs and that's why we are building our own on top of twilio because with your building blocks, we can finally build the contact center. We've always dreamed of
That's really interesting we go talk to a bunch of other customers who are doing similar things on top of Thalia. We start to see this pattern emerge the contact center Market is broken and most companies are still on Prem. They've been stuck on Prem for decades and they want to graduate to the cloud and they can and so what being a platform allowed us to do was to listen to customers observe how they use us go talk to them and then say did you want to go build all that stuff yourself is a well ideally know if you had delivered something that gave us the speed of a nap.
Let us spin something up quickly and get to Market quickly, but then the customizability of your platform. So great apis that I was to build anything we want on top of it. That would have been fantastic and So based on those set of conversations, we built Toyo Flex, which is one of our most recent products. It is a contact center application platform what's really neat about it is you can go in and spin up a contact center in the cloud in minutes. Just go click some buttons your contact center and does all the things you expect to contact center to do it is voice calls and text messaging and chat.
Supervisor View and agent views and scales up to thousands and thousands of Agents all this kind of stuff. But the next step after you create your contact center. It says and developer download the SDK and start customizing it and so really it's an API and it's designed for extension integration and all this kind of stuff and we would have never seen this opportunity in the contact center Market that really the structural problem the contact center Market we would have never seen it if we had just built a solution instead. It was having a platform where customers by their activities show us this
these hot spots on our platform of God. There's something going on here in this context on why is everybody going in building that when you go ask the right questions make the right observations into what's motivating the customers to go use your platform and that way you can really paint this very rich product roadmap going forward in the future. And so that's one of the neat things about being a platform company. And so I always sort of think if you have the opportunity to be a platform and I know that's a word that's thrown around a lot which I become closer. Yeah, right. Like you said, we're a platform for clean teeth you like your toothbrush.
Don't call yourself a platform but in the true sense of the word a platform to me is something that allows customers the flexibility to really build the things that they need with developers and API is that really is the true sense of a platform that affords you the ability to really learn from your customers and if you get your product teams your customers close together so that learning can happen quickly and iteratively then you can really unlock a lot of opportunities for the company and I've seen that work really. Well it totally. Oh I love this question asked.
Your developer that I've seen kind of related to twilio. I think was even on a billboard. Yeah, we've had that billboard up for six years now, I think on the 101 here and services go often. And so I seen that billboard. Can you describe what that means Y is ask your developer such an important idea. Well, we were taking out the billboard. It was like 2014-2015 run that time and we hired a marketing agency to come up with ideas for the billboard. They talk to our customers and talk to our employees and they did all this work.
At the end of their multi-month process it did the big meeting with us, you know in the boardroom where on Draper making exactly right? It's the Madmen pitch meeting the carousel presenting and they literally like easel with the slides and pull it out and it's like great companies used to Leo and there's a logo one of our customers and they like a different version of that great travel companies use twilio and there's like a travel logo and like really that was months of work. What else you got there like great.
Fatality companies used to lie. I'm like, okay, thank you. Thank you very much. We have a billboard to put up on Monday. What are we and so we were like literally in this media members a Friday afternoon. We couldn't leave the office. I'll getting the artwork to the company to put up the billboard and a bunch of ideas were flying around but one of things that I always have in the back of my mind was, you know, those pharmaceutical commercials were people frolicking in the fields and all sorts of metaphors for something and hang on bathtubs. Yeah, right and at the end of it so so
Ask your doctor if try Flora call is right for you, whatever and I said this thing in the back of my head ask your developer if twilio is right for you. And so I just kind of blurted it out in this meeting. I was like, what about just ask your developer? And at first I was like, huh, but eventually it was just mysterious enough just begged the question enough. There's always the question like your billboard to be so clever that people remember it or is it so stupid that no one knows what the hell you do is like a fine line between that and I never know it. Don't worry.
Been up there for like six years, but I still don't know whether it most people are like, oh that's so clever. Twilio. Are there like the hell's totally oh what a stupid billboard but it worked because it created it off mystery and it kind of works on two levels one. It's sort of like this nod to the developers out there who are our customers. Hey developers, you get it. You understand what you need to go innovate you understand the tools that you need to go build the things you need to build to Delight your customers and you know what the business people they'll follow you, but it's also a nod to the business people of hey, look you should really be
To your technical Talent, you should be trusting your developers with some of your biggest business problems. And I actually think that is one of the mistakes that most businesses make which is you take developers every business. They want to be talked to any executive. Do you want to be Innovative? Of course, do you want to be great at building software and delighting your oh, yeah, of course, like these are all things we need to do and then you say okay. So how do you work with your software developers? Like well, okay. So we have this product team. We have Executives who come up with ideas then
Teams who write very detailed product description documents product requirements documents prds. And then only after everything is completely figured out do we throw it over the wall to a developer and say build this so let me get this straight you're taking the people your developers of kind of the most knowledge about what the technology is capable of and most knowledge the existing systems how they work and you're just giving them tasks write code that does this as opposed to going to your developers and really handing them the big business problems. You're trying to solve you go to your developers and
Hey, we're trying to increase conversion on the website by 30% That's our goal. How can we do that? We're trying to decrease wait times for our customers when they're using our product by 50% Hey developers. How do you think we could do that developers because they understand the architecture the understand the software. They understand the domain they could come up with some amazing ways of doing that but businesses don't think to ask them and so ask your developer is sort of this observation if you will that most
Companies do not collaborate with their software developers in the right way to get their full potential out to get their full energy out and think about software developers are hard to recruit their hard to retain their very expensive and everyone but moans. Oh my God, it's so hard to hire developers. Well, let me get this straight. You're gonna put them in the basement and like a software Factory Sweatshop and just hand them tasks to go do and you're complaining that it's hard to retain them. Now. How about instead of giving your developers tasks give them?
Problems share problems not tasks with your developers and guess what your business will be better. Your developers will be more engaged will get better ideas everyone wins and it's sort of interesting. I actually think agile and I'll assume that most your listeners may be no been about agile the software development methodology which in a lot of ways is fantastic and it's far better than waterfall and there's a reason why it's basically taking over the industry as far as how software gets built, but the one thing about agile that I really take exception to is
This idea that really we should model software development after a Industrial Age Factory because that's literally what it is. It's a factory system product managers write stories and specs and then they put them into the factory system to be built in the factory over a two-week Sprint and the developers can do planning and then it goes into the Sprint and they can reject it. If the specs are not good enough Bubba what you've really done is taking this creative process.
An application that does something to Delight a user of some variety to achieve some business goal, which is a creative problem. How do I use this my palette here, which is everything software can do and use it to solve big problems and you've taken this creative problem and turn it into a factory which is bizarre. We all know that creative problems are not solved in that deadline-driven factory soul-crushing way yet for some reason software development has fallen into this. No, no developers you sit in your cubicle.
You sit in your lane and just do the things that someone hands to you take in a wreck with your right hand you write it and you hand it off with your left hand to the input at the done pile. That's not how great software gets built because software is creative code is creative and the best software developers I've ever met in my life are incredibly creative people. They're able to see some customer problem out there. And the first thing they asked themselves. Okay, so how could software solve this and they're incredibly able to connect the dots between some business problem or some customer problem and they Gear start turning in there.
And they say oh I bet we could solve it by boom boom and putting this stuff together and that's how most great software projects get started. And here's the fascinating thing. I assume have you heard of hackathons? Yeah, of course so hackathons this idea that you put developers together and you share some problems with them or even leave it open-ended and in relatively short period of time 24 or 48 Hours developers can build something that's quite amazing. Its prototype quality but developers can take some problem and solve it in a very short period of time and think about
What that means it means essentially that is a Creative Energy the most companies think about. Okay once a year we'll do a hackathon will keep the developers happy and we'll order some pizza and we'll get some lemonade and we will have a hackathon and then developers will be okay for another year. Let me get this straight you see you're saying we recognize our developers are creative problem solvers. And for one day we're willing to let them do that and then 364 other days of the year back in the coments. Yeah, stop being creative stop actually.
Problems get back in the coal mine, you know, like this makes no sense at all. But the best companies do is figure out how to actually pull developers in to the problem solving part. The here's this big business problem. We're solving he was in our users need us to do and share problems with the developers and make them a part of actually the building of the solution and the designing of the solution in the ideation around the solution not just here. I'm giving you a task now go do it the other fascinating thing I think about that whole hackathon.
Thing is a lot of developers will do like hackathons on the weekend. This isn't as big but several years ago startup weekends were a big thing where for a whole weekend actually a bunch of developers get together. I've been to a bunch of them may be like a hundred developers sometimes hundreds of developers get together for a weekend and build an idea and sometimes they would even turn into companies but they would just mostly be like thinking about why I wonder if we could solve a problem like this for a weekend, they would just go at it. And then Monday morning they go back to their day job and you think about it. What is that mean?
How many professions do you and your weekend and clean energy? Yeah, I don't know but the lawyers on the weekend after a long week at the firm going. I'm gonna go do some amateur loitering on the side now. No, usually like okay, I don't have to work now for a few days developers. They love doing that a that creative act of solving a problem of software. They loved it so much that so many developers actually do this as a hobby of the weekends you let me get this straight again business you pay their paycheck and you didn't realize that your developers.
Actually have so much more to give that they're actually doing the job. You want them doing it your company, they're doing it on the weekend for fun. So figure out how to unlock that energy. That's what ask your developers all about. Ask your developer. Don't tell your developer ask your developer about the big problems that they can help the company solve and the big business challenges than big things. Our users need done. Ask your developers for how they should go about solving them. Don't tell them here's what I need to go. Do I love this idea. Someone told me you don't hire great people to tell them what to do you hire them to tell you what to do.
It's kind of exactly the same concept and quite beautiful. I think business culture figures into this very prominently behind us as a board that says the twilio magic and there's sort of 10, I guess what you call values or principles and you can tell just 10 minutes in the office. I could tell that this is all very intentional and a key part of what drives twilio. I'd love to hear a bit about again the origin story of maybe some of the specific ideas like draw the owl that we already talked about but more generally speaking codifying aspects of the culture.
ER and why that seems just from the cheap seats ten minutes in here to be so important what you're doing. I always think that human beings were tribal creatures. That's how we've survived for tens of thousands of years basically is by affiliating with some other grouping of human beings for our survival. And so we're it's really baked into our DNA and our ethos of this sense of belonging to a tribe and that can be the country that we live in that can be the school that
We went to that can be the company that we work at that can be the sports teams that were big fans of there's a lot of tribes of actually ascribed to during our lives. But when we feel like we understand what the Norms are of that tribe and we understand what we do to fit in or what we could do to not fit in that really helps us to actually have that sense of belonging and so as a company it's incumbent upon us to figure out how to make it so arm plays understand what we stand for. What is this tribe we call twilio.
Horn plays we call them to Leon's one of the things that we stand for. Why are we an important grouping of human beings on this planet? And how do we fit into your life? How can you identify as a part of this tribe? Because if you don't identify you're not going to do very good work be probably also won't enjoy it. We all strive We crave being a part of tribes. Just think about the behaviors that human beings do the reason we group together, there's religions and there's nationalities and there's School identities and brand affinities right now. I'm a member of the Nike
I'm looking at my feet and that's because this treble nature and I was a company need to Define your what it means to be part of your tribe. And I think that any of these groupings are really defined by three things Your Heroes your symbols and your rituals.
That's what defines a tripe really and so for a company really defining Your Heroes your symbols and your rituals come to be the defining elements of what it means to be a company what it means to be a unique group of human beings that's different from the group of human beings occupying the office across the street or anywhere else. And so you think about that first of all, you know, your hero's who are the people that you talk about one of the accomplishments they have countries have their Heroes George Washington religions have their Heroes.
Companies do to and who do you call a hero and for what reasons is really important in a culture. What's a hero of yours? Why don't we talk about customers all the time? And we talked about the amazing things customers have built and so I think those are many of the heroes that we have at twilio. I love for example. Skip Potter the CTO of Nike spoke at our company last year and he you know talked a lot about their vision building unbreakable relationships with their customers and using technology to do it and being agile. That's a hero story serving.
Someone like Skip and Nike is incredibly powerful thing to unify us all together talk about the ing story. I told before there's a company they've got 50 developers on a multi-year roadmap to reinvent their contact center using our technology. Like that's amazing. Look at the dedication. Look at how important look at the mission that they're on that. We're helping to be a part of their Heroes. We put them up on a pedestal and say we are here to serve you that is absolutely amazing. We here to make you incredibly successful inside of your company. Those are heroes.
The next star rituals so think about the rituals that companies do or any group of human beings are obviously think about Nations have all sorts of rituals religions have all sorts of rituals. What companies do too? Well great. You have all hands every Thursday morning and there's Bagels at it. That's a ritual and for some reason when that stops people get upset. You could just go by bagel on the way into work. If you stop bringing the bagels in it's not too big a deal. It's a 50-cent Bagel. But the reason why people get upset about the change of those things is because it's a ritual it starts to Define you all we've got
bagels on Thursday morning for All Hands meeting and remember like we actually do this I started in the very early days actually are all hands were Mondays and it started as the stand-up actually between the founders some planet star bring Bagels in was a half dozen bagels for like six people in the company at the time and then it was a dozen in the two dozen at some point. I was walking to the office every Monday morning with four dozen bagels and like this isn't scaling anymore. I can't carry this many bagels. And so and even today we do our own hands and we have a few thousand Bagels. I think delivered to the office what a silly thing but
Just one of those rituals and it helps Define who you are. We do Wednesday night dinner and most of our offices again. It could be any meal. It could be any night of the week. It could be anything. But it totally oh we have wnd Wednesday night dinner and that helps Define who we are we make them silly because a theme every week and there's something fun. And so that's the rituals aspect of it. And then there's the symbols and the symbols are the things that represent what matter to the tribe and so for most companies the most powerful symbols you have
The values because the values are words that are handles on the culture. I'll separate out the culture and the values so culture is what you feel when you walk into work every day and you don't have to write anything down. It just is and every company has a culture whether you've articulated it or not. There's a culture. There's a feeling you have when you walk into the office a feeling you have when you try to get work done and it can be a good feeling. It could be a bad feeling whatever it is, but that's what the culture is how
Everyone feels during their course of their interactions inside the company now the values are written words.
That are like handles on the culture. They allow you to describe it and they allow you to guide it. So without those handles without those words, you really have no way of described. Think about what do you feel when you get into? I don't know the subway. I feel something but there's no words for it because I don't think the subway system has really a values or whatever something a tribe most of us belong to like the subway tribe when you walk into your company when you articulate your values, you're putting words to that feeling and then you can actually go to work guys.
It and improving it and making sure you stay true to the culture you want to have because use the words like handles to guide it and so you can start to build them into. Okay. How do we Implement these in a fair and Equitable way in our hiring and in our promotion and in our recognition systems, how do we use them in our decision making I hear our values articulated in decision making all the time now hear them in the hallways here and that's why another working one of our values is no shenanigans.
And I hear that invoked in decisions a lot. That's how I know. It's working at so why did you pick someone's talking about a decision they made and I'll say well, why did you pick A over B and they said well we thought about it, but be really felt like Shenanigans and so we went with a it's like okay good. Our values are doing the job. What is Shenanigans specifically mean to you? Well Shenanigans is like a good word. Yeah. It's like mucking around. Yeah. It's messing around. It is foolish is nonsense. What are those words? I'm not Conjuring.
Exactly the right word I'm looking for but here's the important thing we thought about when we did our values when we articulated our values and by the way, I say articulate very carefully because you can't just create your values. You can't just invent values out of the air. Like I think it sounds good to say this that will just be an empty word on the wall if it's not really representative of who you are, but what you can do is introspect the values of the company or introspect to the company itself introspect that feeling that you have when you walk in the door and we did this early on we did the first version of values and our values have of
Ah, but over time the first version that we did in about 2011 or so. I pulled about 15 people in a room house, maybe a third of the company the time or so and we did a series of actually like dinner conversations for the several months to think of what the words are to describe the culture and debate that and all that and eventually we were able to articulate. Yeah. These are the words that are the right handles on it. But one of the things I always thought about is you there's a lot of ways to cope with those words. There's a lot of words you can use to describe a culture what I've always sought to do though is to come up with words that
Very human because there's a lot of words that are just sort of like say intellectual. You may know what they mean, but you don't really internalize them most companies have a value. That's the word integrity like Integrity. That sounds good. Yeah Chev Integrity is a value who wouldn't want Integrity. But when you really think about it when you're walking around you're making some decision you're like do I have integrity right now?
That's not something you ever asked yourself. It's not something you could even cancer. You're like, well, I know what integrity means in the dictionary. But am I do I have integrity right now? Does this decision is it Integrity full? I don't even know what the adverb version of that is, but it's a word like Shenanigans kind of known you see it. You know it when you see it. You're like I have an idea we can cover the pricing model. So complicated. No one can ever figure it out in some cases. Like you know, what that's Shenanigans. Yeah, like oh, yeah. You're right. I get it.
And so you know it when you see it, one of the other lenses that we use is can we imagine people saying this in the hallway Queen imagine someone invoking this in the meeting? Can we imagine this as a hashtag believe it or not? Because think about the great hashtags are short in their memorable and you can throw them out easily. And if we want these things to be used in everyday decision-making you want someone being able to throw this out into a meeting you have throw this out in a room as in part of a conversation you want somebody saying we could not no Shenanigans. One of our other ones is be an owner and we hear that a lot. Hey.
We're having a hard time figuring this thing out hot potato. It's not us. No, did somebody just say look, somebody's to be an owner here who owns this and that throat be an owner. You know, it's serious that's one of our values and that means that we have to figure this out. And so you see that in a lot of our values they're short. They're memorable. No Shenanigans be an owner where the customers shoes a lot of them. We also try to make a memorable like a lot of companies have a value around customer centricity. It were a customer obsessed customer focus.
Like whatever they all sound good but a lot of those types of values are actually not quite opinionated and enough to tell you what to do about them as an employee like a we're customer obsessed. Okay. Now what now? Let's have a meeting. Okay, whereas it's really a what we've decided to do is to phrase it as where the customers shoes because to us the way in which you are a customer Centric company is by looking at problems and looking at the company from our customers perspective and the only way we can understand our customers perspective is if we walk a mile in their shoes and so we will literally go
Go into a customer and say we have a pair of twilio shoes. Give these to Leo branded shoes. I will trade you a pair of twilio branded shoes for your shoes.
And we have customers shoes hanging all around our office. We hang them in the conference rooms. We hang them in the public spaces and it raises these questions. Someone will walk into the office oftentimes. I'm interviewing a candidate for a job and I'll see you all. Do you have any questions for me half the time they're like, yeah. I have a question. What's with the shoes hanging everywhere? And there's like a placard with a name and a company under it and I'll say that's a great question is a constant reminder that we're here to wear a customer shoes. And those are actual issues that our customers have given us and the
And why we hang them on the wall is to cause people to ask the question. What's with the zoo's and it's a constant visual reminder of that value of ours. And so the way you can think about the symbols and the rituals and the heroes and kind of combining those things together to create a cohesive experience and I think that's a really powerful way to think about the culture that you're trying to intentionally build it the company and how you can guide it with the symbols and the rituals the heroes and just being
really thoughtful about that. It's really fun to when you're starting a company yet to really ask what kinds of what collection of human beings do I want to actually cause to exist if we're successful and that's something you get to decide as an entrepreneur. I have two quick closing questions for you. And I know we gotta go the first is any parting advice for people that are not building platform companies, but that might be able to borrow some of the wisdom that you've learned from building a platform company. So any portable Concepts that you would encourage people to
Think about more linear business. Let's say start with why always be looking for ways to ask customers. The reasons behind the actions are taking don't let a salesperson qualify out a customer whose needs are slightly different than your platform. Then your product provides. Why because you might learn something by understanding why they need something different than what you built. So the machine might want to grind through customers and reject those ones, but you imagine what your
Missing if you do that, so I start with Y and even the customers who are implementing a platform. A lot of people are content to say great. You're gonna buy my product fantastic. Why remember to always ask that get in there with customers to truly understand what they're there to do. That's why I think of as the wearing the customers shoes what's life, like in their shoes? Why are they building and then build systems mechanisms in your company to continually capture why customers are using your product and why some of them aren't using a product and the more you can
Socialize and build closed loop feedback systems to learn from that. Continually the more able you are to really hear your customers. I think that's the key thing and I think also giving proximity decreasing the proximity between your decision makers and your customers so much exists think about product managers. A lot of them see themselves as the Defenders of the engineers to keep the customers away from the engineers, and then you've got the
Customer support team. There are the Defenders of the product managers. How do I keep customers away from the product managers? They can all focus on the work and like let me get this straight all these people are designed to separate the people who are making decisions from the customers so that they can make better decisions or they can make worse decisions more quickly. I guess that's what that is there to do. You like no, no create systems to actually create that proximity between your products teams and your developers and their customers. So for us that means small teams if you're smart,
Cog in a giant machine you feel really disconnected from serving your customers and you're just going to do it someone asks you to do and go home at 5 p.m. Whereas if you feel like you have agency of the outcome you're building for your customers and you feel the empathy for what those customers need from you that's the thing that creates that intrinsic drive to do your best work and to go beyond and solve big problems. So the more you can do as a leader to create that proximity between your teams and your
Customers don't let the machine separate them. The machine wants to separate them. It wants to say we're here to protect people from customers and distractions all this kind of stuff. But once you decide that customers are a distraction, you're done. Yeah. So my closing question for everybody is to ask for the kindest thing that anyone's ever done for you to answer that question. I will point to a mentor that I had early in my career a guy named Kevin O'Connor who was the founder of double-click which was the darling of web.
Plano invented the banner ad and really the first monetization system of the internet. He was an investor in my first company an angel investor and after the.com implosion happened and sadly my company didn't end up making any return for my investors. Kevin said, what do you think of doing next? I said, I don't really know and he said why don't you come out to my summer home in the Hamptons in the middle of the winter and just pull yourself up there and find out when your co-founders from the last company just go and
with basically in isolation without a lot of distractions. Let's go figure out an X company and I said seriously, he's like, yeah, I'll put some money in and let's go do idea number two. And so did that it's been about nine months in the Hamptons the middle of the winter. It was desolate. They don't even plow the roads out there because I Hamptons know the same thing. Yeah empty in the winter. Most of the stores aren't even open. I mean luckily, there's like one grocery store the stayed open in the winter. They didn't plow the roads. I remember we would order stuff on Amazon just so the UPS truck would come plow the road fast one.
We've
done what we had to go restock. But Kevin was an early mentor and he'd come out periodically and we do brainstorming together and research we wrote a lot of business plans ended up starting all things are bricks and mortar businesses result of all that work, but I was always very appreciative that Kevin a invested in my first company which of course you didn't have to do but that was an investment decision. But then even after that investment didn't work out he believed in myself. Am I the co-founders as entrepreneurs and he said great company one didn't work out. No worries. Let's figure out the next thing and he helped
helped us to think about a getting back in the saddle and not worrying too much about the.com company that didn't work out but then particular had a lot of faith and also taught us a lot and I learned a lot from him about being an entrepreneur about being pretty resilient as an entrepreneur and focusing on customers and focusing on the building that needs to get done. And so I that was incredibly generous of him now, unfortunately, I've never made Kevin a dime he invested in my first company which was.com got caught in the whole.com implosion so he didn't make anything there my second company. I was the first CTO of StubHub.
And there Kevin ended up not investing in StubHub. Then my third company that we started as a result of that Hamptons brainstorming which is bricks and mortar retail where they Kevin he was actually basically partner of ours and building a company that ended up not working out, you know bricks mortar retail. It's a horrible business and then when I started twilio, I he was the first person I went to and he said yes developers not apis apis. And so unfortunately, I've never made Kevin a dime. So Kevin, I'm sorry, and I really appreciate.
You've done for me as an entrepreneur and see anyone else out there who's the opportunity to mentor and help entrepreneurs to really unlock their Visions with your money, but more importantly with your time and with your knowledge your expertise, and that is a fantastic thing to do. That's the paying of the entrepreneurial industry here wonderful place to close. I've learned a lot from reading about twilio and now hear from you today. So I appreciate your time. Thank you Patrick. It's great to be here. Hey everyone Patrick here again to find more episodes of invest like the best go to investor Field Guide.com forward.
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