about this episode
Thomas Korte of AngelPad sits down with Jason on today’s episode. The discussion covers, similarities/differences in the European Startup scene, immigration and how it changes startups, and the state of Silicon Valley today and in the future.
:30 Let’s welcome Jeff Lawson, co-founder of Twilio
2:15 Let’s thank our first sponsor, SnapTerms! Go to snapterms/com/twist
3:55 Why and when did you start Twilio?
4:20 When were you working at Amazon?
6:00 What did it cost to setup your first website?
8:20 What was NineStar?
10:00 Why do you need to be passionate about the product you are building?
12:20 How did NineStar do?
13:40 Does it make it better to make product decisions if you are passionate about the product?
15:00 How did you come to Twilio?
16:20 How long were you at Amazon?
17:30 So how did Amazon affect your transition into Twilio?
22:10 What was the most impressive thing in the first couple of months at Twilio?
26:00 Thanks to TurnStone for sponsoring the program. Go to myturnstone.com/twist to receive 10% off of your order
28:50 So how did you build your cloud?
34:20 Who are some of the biggest clients of Twilio today?
38:25 How doe Uber use Twilio?
40:00 What does it cost to onboard a new country?
44:15 Talk about how you marketed Twilio.
45:45 What percentage of your spend went to developers?
47:00 Do you think phone numbers are becoming less relevant?
51:00 What is your opinion on Google voice?
51:40 What do you like about Google Hangout?
54:20 So what as Twilio do you do next?
55:10 What are customers asking for?
56:50 Can you explain webRTC to the non technical folks?
59:30 Do you guys handle billing?
62:15 Are you hiring like crazy now?
63:30 Are you hiring people from outside the country?
64:40 Thanks to SnapTerms and TurnStone
Narrator: Distribution provided by CoudSigma. The cloud that adapts to you. Visit CloudSigma.com/This WeekIn, for a free $200 credit.Turnstone: Today’s episode of ThisWeekIn Startups is brought to you by, Turnstone. More than furniture, we’re an experience. Go to myturnstone.com/twist, to learn more and receive 10% off your first order.
SnapTerms: And by, SnapTerms. Online legal protection made simple. Visit snapterms.com and enter the code TWIST to receive a free NDA with every order.
Jason: Today, on the program, Jeff Lawson, the Co-Founder and C.E.O., of Twilio. The communications API platform, that many startups, like, Red Beacon and Uber, are using to empower their services. He’s a serial entrepreneur. He’s been at the show, about, four or five times. He’s got a lot to share. Stick with us, we’re going to learn a lot, about building APIs and developer communities. That’s going to be the focus of the program. As well as, all the entrepreneurial shenanigans he’s been involved in. Stick with us.
TWiST title sequence.
Jason: Hey, everybody. Hey, everybody. It’s Jason Calacanis. The host of ThisWeekIn Startups, on the program, today, Jeff Lawson, who is the Co-Founder of Twilio. Of course, you’ve heard of Twilio. They make all of those amazing telephony and communications platforms startups, viable. They’ve created this whole ecosystem of APIs and developers. Creating, all kinds of, interesting stuff. Stuff, you’ve heard of, like, Uber, which, I’m an investor in, Redbeacon, Zaarly, Zen Desk. All that, like connecting telephones and apps and voicemail. Just, great stuff. We’re going to hear, all about that, today. Thanks to our friends, here at AngelPad, for hosting us. That’s very nice of them. Before we get started with this great interview, I wanted to, just, tell you about Snapterms, which, is, our sponsor, today.
SnapTerms Ad: They do a great job in helping in creating your own terms of service. This is very expensive to do. If you go hire a law firm to do your terms of service, it’s going to cost you thousands and thousands of dollars. If you don’t have a proper terms and privacy policies, you can be risking, very costly, litigation. There’s a bunch of ambulance chasing lawyers, just waiting for a venture or angel-backed company not to have a proper terms of service. It’s happening all over the industry. Snap terms is simple, affordable, fast, and easy to use, to protect your site. Go to ThisWeekIn.com/legal, and you will, actually, see our terms of service. And, wow. It’s, like, $149 to do this. I, literally, paid thousands of dollars, to do this for my site and hours and hours of my time. Man, these guys do it affordably and you get, a bunch of, revisions. The turn-around time is just a week, or so. Go to Snapterms, and get started. Only $149. When you check out, use the coupon code: TWIST. As in ThisWeekIn Startups. To get a free NDA, with every order. You, always, need that non-disclosure agreement, when you’re talking to folks. It’s a, really, great value. Thank you, @snapterms. You can go thank them, on your Twitter account. We couldn’t do shows like this, where we interview great founders about their careers, about the companies they’re building, and about why they’re building them, without the support of the sponsors, and snapterms, is no different. Again, we only allow people on the program, if we use the product. Snapterms is one of those products that we started using and realized, these guys would be a great, great partner for the program. Thanks, to the SnapTerms team.
Jason: Jeff Lawson, welcome to the program. You are the co-founder of Twilio. I don’t know, when I became aware of Twilio. When did you start it? Why did you start it?
Jeff: We got started in 2008. The reason was, we’re software people, I’m a software person. That’s what I spent my life doing. Prior to this, I had started three companies. Then, I went to Amazon and was a product manager at, Amazon Web Services. I left Amazon and was looking around at, a bunch of, ideas.
Jason: When did you go to Amazon Web Services? AWS, obviously, their cloud computing platform. When did you start there?
Jason: That’s when they started it?
Jeff: Yeah. It was really small, when I got there.
Jeff: It was like the Skunk Works project, in the company. It was a, really, fun time to be there.
Jason: Was that open to the public, at the time?
Jeff: Oh, no. Not at all. If you remember the old Amazon Web Services, that they launched in, like, 2000, I’m going to guess. Which was, you could get product data from an API and cover art, and all of that. That was called Amazon Web Services.
Jason: Ah. Right. It was like IMDB and those kinds of assets?
Jeff: It was for people building affiliate things. You could pull: product information, pricing, cover art, for CDs, videos, and all that kind of stuff.
Jason: So, it wasn’t like the modern-day AWS, that we think of, like, cloud computing and storage?
Jeff: Not at all. It was, actually, pretty interesting because, it created this air cover for Amazon to hire a bunch of people. So you’re working on Amazon Web Services, which, when they hired me, in 2004, I was interviewing with Amazon Web Services. So, of course, I did my research. Looked at all there was. They said, “Do you have any questions for us?” I said, “Yeah. You’re hiring, staffing up for Amazon Web Services, is it just cover art, for CDs?”
Jason: I think you have a hundred, too many, developers.
Jeff: They were like, “We’re working on some interesting, new stuff. But, we can’t tell you about it, until you’re here.” They held on and I pressed them. “Well, I’d, really, be interested…”. “Sorry, we can’t tell you. But, just trust us. It’s interesting.” I got there and on the first day and, literally, I knew nothing about what they were building, on my first day. “Oh, my God. This is, really, cool stuff.”
Jason: Right. It was, really, mind blowing, cause, up to that point, you were just buying servers. Right? People were buying servers and it was, extremely, expensive to set up an internet site. It wasn’t, like, plug and play, like it is, now. Fire up an Instance.
Jeff: My trajectory… I started telling you about the companies that I, first, started. The trajectory for my career was, my first company, I started in ’97. First, it was the ‘.com’ days. We were buying hardware and racking it up in Co-Los.
Jason: What would it cost to set up the first website, that you did? $100 thousand?
Jeff: Initially, you buy a slice of some machine. It’s, really, unreliable. Literally, my first web hosting account, was a guy, who had a shack, in a cornfield, in Michigan. He had, somehow, wired up some connectivity, back there. He had, just a shack and a bunch of machines. I remember, our website was hosted on a machine, the host name was “PITA”. Not the middle eastern food. “Pain In The Ass.” Because, he told us at one point, he was working, like, Windows NT, “If I move the mouse, it’ll crash.” But, that was the state of web hosting in 1997.
Jason: It was, pretty, brutal.
Jeff: He was, like, a few hundred dollars, a month, maybe. But, you got such a horrible product out of it. So, when we made the actual, real, site, we were buying Sun machines and racking them up.
Jason: $40,000 machines.
Jeff: Exactly. And, you owned them. You had to love them, and stuff. Then, my second company, StubHub, we started in 2000. So, in 2000, I thought it was amazing, because, you could rent machines from RackSpace, by the year.
Jason: Crazy idea.
Jeff: You didn’t have to own them. You signed a one-year commit contract, for this. That was amazing. Now, my third company, started in 2003, was, actually, a bricks and mortar retailer, called: Nine Star. As a bricks and mortar retailer, crazy times, you could rent servers, by the month, from ServerBeach.
Jason: Whoa. For a thousand dollars, a month, what? $500?
Jeff: It was, maybe, $200, something, a month, maybe.
Jason: Still, mind-blowing.
Jeff: Then, of course, now, here we are, with my fourth company, Twilio, where you can rent servers, by the hour, from Amazon. So, it’s like, you own it by the year, by the month, by the hour.
Jason: Hour, moment, second. What was Nine Star? You did a physical store? You got off of StubHub, which was a huge success, obviously. Then you did a physical store?
Jeff: Yeah. This was wild. It was like one of those career left turns, that happens.
Jason: Yeah. Tell me. I feel, I know what Nine Star is, but, I don’t.
Jeff: Well, you’re in Los Angeles.
Jeff: It was in L.A. Here’s what happened. I was having lunch with one of my investors in my first ‘.com’ company. I was having lunch, with him, Kevin O’Connor, of DoubleClick.
Jason: Yeah. I know Kevin. I knew him when DoubleClick was at Poppy Tyson, in 1995. At 23rd street, in Manhattan, when he had, like, seven or eight people. DoubleClick, didn’t exists. It was just the ad server, inside of Poppy Tyson, the ad agency. Go ahead. Continue.
Jeff: Kevin was the first angel investor, in my first company.
Jason: Wow. Small world.
Jeff: He was, like, my entrepreneurial mentor, when I was getting started. In college. An undergrad. We started this company. My first company was called, Versity.com. It did lecture notes, for college kids. We gave them away for free, online. We had over 10,000 courses worth of lecture content, online, in the spring of 2000.
Jason: Smart idea.
Jeff: That’s when we sold the company to a competitor, who promptly, went out of business, in the ‘.com’ crash.
Jason: It was brutal times. Tell me about this Nine Star.
Jeff: I was having lunch, with Kevin. He was like, “What are you doing?” I said, “I’m working on StubHub.” I thought it was interesting. I thought it was a great business. But, I’m not a big sporting event goer or concert goer. So, the product line we were building, wasn’t, exactly, up my alley. It was, actually, one of my biggest learnings, I think, as an entrepreneur. You have to build a product that you are passionate about.
Jeff: Or else, it’s, really, hard to get through some of those tough times. StubHub was this great business. I was starting to have this self-doubt, if this is the right thing for me to be doing.
Jason: When it’s going well…
Jeff: It’s great. You get distracted by the technical challenges, like that. It’s just, through the long term, you gotta build a product that you are, personally, passionate about and that you want the world to have. So, StubHub: great company, great product. It’s just that, I wasn’t, sort of, the customer for it. That made it challenging, for me. I was thinking about things. I was talking to Kevin, he says, “What are you doing?” “I’m building this StubHub company. Great company. Great product. I’m not so sure if, long term, this is my gig.” He says, “Why don’t you come out to New York and live in my summer home.” In the Hamptons. During the winter, of course. In the summer, it like, “Get out. My family’s hanging out.” He said, “We’ve got this brainstorming methodology. Let’s do some experiments and let’s try to find a new company to start.” I said, “That sounds, pretty, neat.” I grabbed one of my co founders, from my first company, we went out to The Hamptons, and we did this process, for about nine months. We did the structured brainstorming process. We came up with a thousand ideas.
Jeff: Yeah. Out of a thousand ideas, like, a hundred or 150, were half decent.
Jason: 15% percent. Not bad.
Jeff: Half decent. Not, completely, harebrained. We wrote, about, twenty business plans. Of those hundred and something. Believe it, or not, we got, really close, to the finish line, with three, but we were trying to build consensus, amongst us: myself, my co-founder, and Kevin, about which one we were going to go pursue. Out of left field, we, just, got wind of the fact that extreme sporting goods, $15 billion market: all mom and pops and Walmart.
Jason: Nothing, in between.
Jeff: Nothing, that was, what we call, the category killer, REI. REI does hiking, climbing, camping. Nothing, like that, for skateboarding, snowboarding, surfing, etc. So, we started Nine Star in Southern California, to build a, really, best of breed, experiential retail store, for the $15 billion extreme sporting goods market.
Jason: How did it do?
Jeff: It did, O.K. My learnings, again, number one: retail sucks. Plagued.
Jason: Retail’s, kind of, over, isn’t it?
Jeff: We, also, started a bricks and mortar retailer, at just the time, when bricks and mortar retailers were getting killed.
Jason: The economy was suffering. Not a lot of disposable income.
Jeff: The economy in Southern California, took a, real, dive in the second half of the 2000s. But, also, the category killers, who had been sweeping up, a lot of, the retail in the 80s, 90s and 2000s, actually, Amazon had starting affecting those. Look at it. Circuit City is out of business. Borders is out of business. A lot of the category killers are suffering. It was, sort of, bad timing, there. Here’s the biggest thing: I had done it, again. I had started a company, where I wasn’t the customer.
Jeff: I’m not a skater. I could stand up, you could tell, I’m not a skater, I don’t have lanky arms. I’m not a surfer.
Jason: Kevin is.
Jeff: Kevin is a surfer. So, I had done it, again. Doing it twice, in a row, is what, really, drove into my head. I saw the pattern and, said, “If you’re starting something, you have to, really, love the product and the customer and be the customer, yourself. That’s what your internal motivation is. ”
Jason: Does it make is it easier with the product decisions, as well as, get you through the hard times?
Jeff: It’s, just, everything. You, just, love what you do, because of, the end result of what you do. As opposed to you just love a particular task or particular hour of the day. The, sort of, thing you’re doing. But, when you are the customer of it, you, actually, love the end result of the product that you’re creating, the customer that you’re interacting with, all of that stuff. You, also, have a gut feel. You have a gut feel or compass, that you lack. That’s why you see big companies, always, doing focus groups, and stuff. Because, they have no compass for what is real. But, when you are the customer, especially, as a young company, you don’t have the money for focus groups, and all. You just need to make decisions.
Jason: That’s one of the reasons that Steve Jobs was so great, or, Bill Gates was so great, because they used those products. You can picture Bill Gates using Excel or PowerPoint and being, like, “This needs to be fixed. Cause, I need a PowerPoint done next week.”
Jeff: Well, Keynote. Keynote was created for Steve Jobs.
Jason: Right. And, that’s a perfect analogy. Actually, you can see, if you’ve ever used both of those products, the different individual influences on them. One is, like, elegant and the other is, like, every possible feature.
Jason: Nerdy. That would be the right description. One’s nerdy and one’s “designary” So, how did you come to Twilio?
Jeff: So, I left Amazon… and, by the way, the interesting thing is, I went to Amazon… this is for all of the entrepreneurs, out there: I had started three companies. Both were doing well, had achieved some amount of scale. But, if you’re building companies and you don’t have this notion of what you’re trying to build towards, it’s hard. Especially, when you think about process or culture and things like that. Not the product, but, the company that you’re trying to build. I, sort of, realized that I didn’t have that experience. I made the decision and said, “I want to go to a bigger company. One that I believe is ‘well run’. I want to learn, what does it mean to be a large, well-run company?” Because, if you building a company, you should have that learning, in your head. Learn what you want to replicate and learn what you want to avoid, as well. Right?
Jeff: An interesting by product of that, also, is, if you’re a B2B company and you’re selling to larger companies, you, also, have a better sense of what’s going on behind the scenes, when you’re trying to sell to them.
Jason: When they’re making their decision. Who’s trying to scuttle whose decision. Power plays.
Jeff: Yeah. I found that as a startup person, I had no context for what was going on at a bigger company. Cause, I had done it three times, in a row. So, it was an amazing experience, seeing how Amazon was run. I learned a ton.
Jason: How long did you stay there?
Jeff: I was there, a little, over two years.
Jason: What’s Bezos like? Did you get to interact with him?
Jeff: He laughs a lot.
Jason: It’s loud. It’s earth shattering.
Jeff: It is. I think it’s his mechanism. If you’re a well-known person and people interact with you a lot, I think, you don’t, always, have the energy to pay attention to what people are talking about. I suspect that’s his mechanism for, sort of, like… he has this booming laugh. (imitates Bezos’ laugh, then, “I didn’t answer your question. What else?) He’s a, really, smart guy.
Jason: (imitating Bezos’ laugh, “Moving on. Next slide”)
Jeff: I, actually, asked him, once… all three members of my product team were named Jeff. O.K. three out of three and, obviously, he’s named Jeff. So, I asked him, “Do you believe, there’s a propensity, at this company, to hire people, named Jeff? Because that’s your name.” And, he gave the bellow (imitates Bezos’ laugh) The awkward part was, that, we were at the urinals, at the time.
Jason: Yeah. That is, kind of, awkward. It is, kind of, inappropriate.
Jeff: I thought, “I made him do that big laugh at a urinal. I hope everything turned out O.K.”
Jason: Yeah. It could be, very, messy. You learned something, there, though, about web services, and you built Twilio.
Jeff: Indeed. So, I left Amazon, I was looking at, a bunch of, ideas. One was, essentially, DropBox. I decided that was a bad idea.
Jason: Well done.
Jeff: A few other ideas. Then, I started thinking about…
Jason: Did you have an idea for a tablet computer?
Jeff: I’m not one of those people, who claim to have invented, everything. I know somebody, who claimed to have invented the internet. And, balsamic vinaigrette.
Jason: Really? Al Gore, by chance?
Jeff: Kevin O’Connor.
Jason: Kevin O’Connor claims to have invented balsamic vinaigrette.
Jeff: And, the internet.
Jason: Impossible! My dad made the first balsamic vinaigrette in ’78. When did he make his?
Jeff: He has a lab notebook of ’76. So, there you go.
Jason: Oh. Wow. Crazy.
Jeff: When I was looking at, a bunch of, ideas. I realized: each of my three previous companies. I had my software hat on. We were building software teams. We wanted to build customer experiences that were,very, unique. We saw that as core to what we were doing in our companies. Those customer experiences, often involved, communications with our customers. Or, sometimes, communications, within the company or communication with our vendors. Communications was core to the experience we were trying to create. As software people, we wanted those building blocks to put together to build those communication experiences. Yet, when we looked at the industry, when we looked at what people were selling, to solve communications problems, we found software vendors and hardware vendors, big hardware and big software, selling you, monolithic applications.
Jason: So, if I wanted to do something in telephony, I’m in for a hundred dimes, a hundred thousand dollars, that is.
Jeff: Poker terms.
Jason: Ten high societies.
Jeff: Yeah. What they’re doing, they’re selling you… There are big price tags, there are big sale cycles, even bigger than that, they’re selling you a package solution. What we, as software people, wanted wasn’t a big, time consuming to install, then, basically, it does what it does, solution. We wanted the building blocks to assemble into the experience we were trying to build. I’ll give you an example. When we were starting StubHub, we made the decision that you could buy a ticket online, like, an hour before an event and you could get a courier to deliver it to you, just in time.
Jason: Or meet at the Staples Center.
Jeff: Or meet. The courier was a big one and we found that people would, actually, pay a lot for a premium service, that was a courier delivering you a ticket. And, it was how we would compete with the scalpers, right? If you had to buy it three days, before, because, you were going to FedEx it, you’d miss a whole lot of the market, if decided to go that day.
Jeff: So, we contracted with all these couriers in the major cities, where we operated. We said, “Great. How are we going to get the ticket from the seller to the buyer, in a short period of time.” Knowing, that, if we screw up the logistics, your thousand dollar U2 ticket is suddenly worthless. Like, this piece of paper is worth $1,000, right now and in two hours it’s worth nothing. Right? So, we said, “Wouldn’t it be neat if, the minute, someone clicks “checkout” on the website, we automate a phone call to the seller.” Saying, “Hey, seller, congratulations, your ticket just sold. We need to dispatch that courier to pick it up, from you. Press 1, if we should send them to your house. Press 2, if we should send them to your office. Press 3, if we should send them, somewhere else.” Then, we’d start calling down our list of couriers, saying, “Courier, we have a job for you. We need you to go to this address. Pick up a ticket there and deliver it there, by 6 p.m., tonight. Press 1, to accept this job.” So, the whole workflow panned out, again. Then, we look at our team, we were a bunch of web developers. We looked at the things that you could buy. There were these big monolithic things that looked like…
Jason: It didn’t exist.
Jeff: It didn’t exist. We started Twilio to solve that problem. We had to bring communications into the realm of software people: the people who look at the world through the lens of software and say, “I can solve any problem, if I can program it.” That’s why we started Twilio.
Jason: And, people went crazy. William Gibson, said, “The streets find it’s own use for technology.” You built this. But, people started building their own dreams and crazy concepts on it. I think Burner, was that, was built on it. A new app out, where you can get a phone number, just, provisioned, and then, throw it away.
Jeff: It’s an iOS app. You can click a button, get a phone number, then all of the voice and SMS comes into the app. Then, the idea is that you can throw it away. Use it for Craigslist ads. Use it for selling, dating, for all sorts of things.
Jason: Terrorism. All kinds of great stuff. Sounds like something from an espionage, James Bond film, or something. What was the, most impressive, early thing, you saw. At some point you let the public onto the platform, right?
Jeff: Yep. yep.
Jason: So, what were the things, in the first couple of months, that you said, “There’s something, here.”?
Jeff: First couple of months. There was a creative ad firm who did an app in, I want to say, Puerto Rico. Around… I can’t remember, what beer it was. They did a… there’s this tradition. The name of the tradition is escaping me. It’s embarrassing. It’s been, like, four years, now. The tradition has happened for a long time. You, essentially, punk your friends by going and Christmas caroling, at their houses. You assemble your posse and you go around and you start singing, loudly, at their house, at, like, 3 a.m.
Jason: On Christmas or, just, a random day?
Jeff: Leading up to Christmas.
Jason: O.K. I get it. It’s pretty funny.
Jeff: It’s a tradition. What this firm built was that, but, as an app that called people.
Jason: And, just, started randomly…
Jeff: You could sign up your friends to do that. I want to say Dos Equis, but, I don’t remember, exactly.
Jason: Then, what? You just start seeing some spike in usage? You see a thousand people doing it?
Jeff: In the middle of the night, too. So, of course, we’re, like, “What’s going on, here?” We, actually had a conversation with the developer. We found out what a, really, cool thing it was. So that was a big surprise, to us. What else? We saw some, really, cool stuff, early on. A customer of ours, called, Mobile Commons. Great customer. Great company. They built mobile marketing stuff that integrates to CRN and particularly have a great deal of non-profit customers. Like, the ACLU, and people like that. So, if you’re a non-profit and you want to get a message to your supporter base, they enable that. One of the things that they did, early on, was this thing, called TextToCall. Where, if you’re trying to activate your supporter base, for example, “We want to tell Congress to pass this law. Or, not pass this law.” They, very quickly, adopted Twilio, within a couple months of our launching. They’d do this thing where, they’d text out a text message to hundreds of thousands of people. Saying, “Hey, we’re trying to stop this law from passing. Call this number.”
Jason: Oh, my God. Call this number or press “1?, to call your Senator.
Jeff: You call the number that was in the text message. It was an app built by Mobile Commons, that would say, “Hi. Thanks for calling ‘Advocacy Hotline for This Issue’. We want this issue to pass, because of X,Y, and, Z. Now, I need to connect you to your Senator.” It knew who your Senator was, based on your area code and all that stuff. It knew who your Representatives were. “Your Senator, currently, supports it. So, thank him for his work.” Then, when you finish with that call, it comes back, “Now, we’re going to connect you to your Representative. Your Representative does not support this bill. So, tell her, X,Y, and Z are the reasons she should vote for it.” What’s, really, cool about it is, we’re a cloud platform and we have, always, believed that one of the promises of the cloud was that it is easy, inexpensive to get started, and that it can scale to whatever you need. That is the power of the cloud. These guys’ charts were amazing because they’d be like, nothing, nothing, nothing, then, through the roof. Because, they’d be texting hundreds of thousands of people, asking them to call.
Jeff: Then, back down to nothing. Right? They, obviously, get a real scalable infrastructure.
Jason: They’d have to spend a million dollars, buying the infrastructure.
Jeff: Boxes and paying multi-year contracts to carriers. All sorts of stuff, that we enabled for them.
Jason: When we get back from the commercial break, I want to hear about how you built this. Did you build all of this infrastructure? How did you plug it into Amazon Web Services? How difficult was that? Who’s using it most, now? I gotta think the campaigns are using it a whole bunch. I don’t actually know who the big clients are of the service, today. I want to hear, a little bit, about that. Let me just take a minute to thank our friends at myturnstone. Turnstone is gorgeous office furniture. You have good office furniture, I bet. You’re venture backed. Or are you cheap?
Jeff: I’m cheap.
Jason: You may be the Amazon guy, who, just, uses the doors.
Jeff: We do.
Jason: Look at the gorgeousness on here. From myturnstone. Gorgeous desks.
Jeff: Looks like money to me.
Jason: It’s not. That’s the thing. You would think that this looks like $5,000 a work station. Much, much less. Slightly more than your Home Depot doors.
Jeff: One of our core values: be frugal. Do they fit?
Jason: They fit. That’s what you’re going to love about myturnstone. Thank you, for working with me. These guys have simple and smart furniture solutions, for startup companies. We use them to furnish my office, ThisWeekIn, Launch, and Mahalo. Hopefully, you’ll use them to have gorgeous furniture. Yes, it’s good to be frugal. My turnstone is very frugal. Go to myturnstone.com/TWIST and get 10% off. That’s, even more, frugal. This offer is only for our loyal TWiST listeners. Trust me: 10% off is significant. myturnstone.com/TWIST. Beautiful offices, Hope. It sets a tone. A beautiful, elegant office, like this, with plenty of desk space. These are, very, affordable. To Jeff’s point. He’s super cheap, so he would know. Thank you, myturnstone.
Jeff: I am. You can ask anyone, we do the door desk thing.
Jason: That was Jeff’s big thing: you have to paint your door-desk. You had to pick it and paint your door desk. That was the early days. You went down to some central place.
Jeff: Did you have to build it yourself, in the early days?
Jason: I think, they would give you two of those horses. Whatever those things are that use at a construction site. You’d pick up a wood desk, that was hollow. They’d have paint. You’d paint it some design. Then, you’d put your desk together. They had done that in the early days and they wanted to keep that tradition going.
Jeff: So, we did that. Obviously, Amazon is famous for it. We did adopt it. When we started we, actually, subletted our current office. We subletted it from the sublessor. It came with furniture. Great. That’s frugal. It came with, like, fifty desks. We thought, we’d never run out of that. Then, we ran out of desks. We had to make a decision. So, then, we did the door-desk thing, which, was neat. Here’s what really struck for me. We were building out new conference rooms in our offices, about a year and a half ago. Our initial office was just a big, open space, with one room. One conference room. We had, like, fifty people. It doesn’t work. Very much, doesn’t work.
Jason: Open floor plans are great until…
Jeff: You gotta have the rooms for people to collaborate in and interviewing and all that.
Jason: Phone calls and everything. How did you build this cloud?
Jeff: You want to talk about clouds, not desks.
Jason: Yeah. Let’s get back to the cloud. How did you build all these desks? It’s a fascinating discussion for our audience.
Jeff: I gotta tell you. We were putting a conference room table in, there. We were looking at all of the quotes and our office manager said that it’s $5,000 for a conference room table.
Jason: That’s a little bit up there.
Jeff: They’re all, roughly, in that range. We’re about to be resigned to have to pay five grand to get a conference room table. Then, we said, “Can’t we just build one out of doors?” She put together a design that cost us $200. Four doors, a groove in the middle for all of the cords and stuff, a bunch of four-by-fours. We built it ourselves. We hired TaskRabbit to build it, actually. The whole thing cost about $200.
Jason: There you go. That’s another way to do it. Let’s talk about the servers that you built.
Jeff: Sorry. Is this bad for your advertisers?
Jason: It’s terrible. Advertisers, don’t worry about it. Some people have a maniacal cheapness to them, where the C.E.O. will spend eight hours on a conference room desk. Which, we can appreciate. Jeff Bezos and the other Jeff. Other people want to be like, “Hey, I want the blown out, awesome, gorgeous desk. I’m going to spend, a little money. I’m not going to spend five thousand on it. But, I will spend a thousand or two.”
Jeff: This whole thing is going to be edited out.
Jason: No, that’s fine. It, actually, makes it for interesting, when, there’s a diversity of opinions. I, actually, used to struggle with the same thing as you. I used to buy super-cheap desks. I bought Ikea. Then, I got these, they were, sort of, right in the middle. I find, that, for designers and developers, they really like high designed stuff. I think the world is moving to design. All I need is for one client to come in and see the gorgeous design of the office and then, they sign a deal. I think it, actually, matters to people, when they see a gorgeous office. They’re, like, “Oh. Wow. This is a serious company. Look at this beautiful desk” It, actually, will make a purchase order bigger. Maybe, not for an API company.
Jeff: It’s interesting. There are some people who don’t like the desk. Who will throw together there own. Be like, “I don’t like this.” “It’s cheap” or “not ergonomic”, or whatever.
Jason: See, some of those people will, maybe, have to get some Turnstone. Let’s talk about your cloud, though. The hardware. You talked about, you had to buy all this hardware.
Jeff: I have an idea. Can Turnstone comp us some furniture?
Jason: He’s so cheap. He raised $33 million, and he’s trying to get a free desk.
Jeff: Then, we’ll compare and we will write some reviews, for you.
Jason: I think you just closed your D round, because, anybody who’s so cheap and raises $33 million and asks for a free desk, I love it. How did you build the cloud? You said before, how expensive and how kludgy all of this stuff was. You made it simple. How did you, actually, make it simple?
Jeff: It’s interesting. We built, totally, on top of the cloud. We built it on AWS. Part of it was, having come out of AWS, I, really, felt that this was the future. Like, I said, before, my trajectory was, buying hardware, a year of contracts, month contracts, hour of contracts. But, there’s something much, much more important of that notion of contracts. It is the idea, that, now you can completely automate the systems that you’re building, because of that API, on top of it. Before, I talked about being a software people. Being a software person means, the more things you have, that you can treat as software, the better position, you’re in. Cause, you can do more interesting things.
Jason: Faster, quicker, cheaper.
Jeff: Well, because it’s, actually, in your domain. It’s a software problem, now.
Jason: You don’t have to go to the hardware people.
Jeff: Right. With AWS, we can now treat our infrastructure: scaling it up, making it reliable, making it redundant. Any aspect of our software is now, completely automated. Because we can look at it as a software problem.
Jason: How did you do that, though? It’s not like Amazon didn’t have the ability to provision a phone number. How did you connect that glue?
Jeff: That’s how we built our infrastructure, running on Amazon. Then, we worked with tier-1 carriers, from around the world. What we do is, we connect to them via, essentially, telecom protocols. Sort of, esoteric telecom stuff, in order to make this happen.
Jeff: We connect up to their networks to be able to, actually, drop a phone call onto their network, to make your phone ring or make it to when you dial a Twilio phone number, that call reaches our cloud, and we can process it.
Jason: That all costs money. Time on their networks. So they were thrilled when you came along, and said, “Hey, we can spur, a bunch of, innovation that would use more minutes and phone numbers on your network.”? Or, they were confused and scared. Which was it?
Jeff: No, it’s good. Right? Essentially, we are paying the carriers a good deal of money. That’s good in an age where carriers are in a situation where their business model and their economics are changing. We are a force that is finding new use cases, by opening up innovation, for the assets they have. So, that’s a good deal for carriers.
Jason: They’re at fixed costs. You’re just adding gravy to their, already, highly profitable networks.
Jeff: What’s interesting was that in the consumer space, where they see declining revenue, B2B is always willing to pay for quality. Businesses run their business, on the applications that people are building on top of Twilio. That is a good thing for carriers, because, APIs are how you build business applications, those business applications are mission critical for our customers, so, they pay for quality.
Jason: Who are some of the biggest people using it, today? I don’t know if you can say that. So, if you can’t say the name… Say, if Sales Force is number 1, or whatever. Maybe, you can say, a CRM vendor. What are the biggest use cases and/or client of the product?
Jeff: There are all sorts of things. That’s one of the really interesting things about building a platform. Is that you, really, don’t know, exactly, what people are going to do on day one. You just have this gut feel for, “Hey, I know there is a lot of demand, out there. So let’s see what those use cases are.” I told you about the Mobile Commons, text to call Congress. I’d never imagine that, in a million years.
Jason: You couldn’t send a salesperson out to sell that.
Jeff: Yeah. No one’s buying the Google Ad Words around that one.
Jason: Spam, Senators, phone calls, lobby… you couldn’t even find it.
Jeff: Yep. That’s what’s cool about being a platform. The creativity of developers. Some of the cool stuff, I see, going on. I see people reinventing what a call center looks like, in 2012, using Twilio. Again, it’s purely software. Some cool stuff. You got an iPad sitting there. I’ve seen people build a call center, entirely on an iPad. You launch an app, on the iPad, and that is a call center. It, actually, connects up to your CRM, then, using Twilio Client, it’s, actually, your phone, too. You can make outbound and inbound calls, all on an iPad app, over Wi-Fi or 3G, using Twilio Client, plug in a headset. You’ve got all of the data, also. About, who’s calling, plug in the Sales Force, pull up all of their call history, their buying history. Everything about that customer. Because it’s an iPad, you get this amazing interface. Where, you’re sliding around, like, Minority Report style. All this data, you can imagine that somebody goes through, when you’re interacting with them on the phone and the iPad is an amazing interface for being able to sort through that data to get to it. We’ve got Home Depot, via, Red Beacon. You mentioned that before. It’s, really, cool because Home Depot courted Red Beacon.
Jason: Red Beacon was launched at the Launch Conference.
Jeff: Awesome. What they were doing was hooking consumers up with contractors. Who could do things: fix your house, do plumbing, painting, any sort of construction work. Home Depot bought them and said, “This is great. But, what we want to do is start putting phone numbers up, in our stores. Because, you’ve got a guy sitting there in the store, saying, “Wow. That’s a really beautiful bathtub. But, I don’t know how to install a bathtub.” So, they put a phone number there, saying, “You need help installing this plumbing stuff, call this phone number. Call Red Beacon.” They started staffing up call centers in a really big and fast way. Home Depot is building this pretty fast. One thing that they wanted to do is to have this great customer experience. They wanted to be able to take your information, in near real time. Find you a contractor. Get all sorts of information and coordinate this whole thing and consummate the deal. That’s the value prop of Red Beacon, now part of Home Depot. What they said is, we looked at… we could go to a company, like, Avaya, and buy one of those monolithic call center applications. But, what we get is what we get. It’s out of the box. It doesn’t do what we need.
Jason: There’s no tweaking it or iteration on that, cause it’s not software.
Jeff: Or, if you do, you’re spending a ton of time and money. As much as you spent to buy the thing, you’re spending on professional services to adjust it.
Jason: Slow, arduous, expensive.
Jeff: So, what they said is, “That building on top of Twilio makes it so easy. The nuts and the bolts are there. It all just works. What we get to do is combine them and, actually, build the customer experience that we’re looking for.” That’s a, really, cool one. Another one: Walmart is using us for a bunch of various SMS campaigns. A, really, cool thing they did last year. They’re doing it, again, this year. They spoke at our conference last month. About… I can’t remember exactly. I’m probably going to get this wrong: “Vote for what goes on our shelf.” It was more creative than that. The idea is that they have a bunch of new products that they’re considering carrying in the store. They let consumers vote, by text message, for which ones they think are of interest to them.
Jason: How does Uber use it. Is that when I, say, call the driver? Or, the driver calls me. It doesn’t need to use the regular phone system?
Jeff: The Uber use case is for the text messaging when you communicate with the driver in the system.
Jason: So, it’s masking my number, so, they don’t get my number to text me?
Jeff: The driver doesn’t have any interaction. Which, is great. Perfect software people way of doing this, right? I request an Uber. First of all, they use methods to figure out, which one is going to be your Uber driver. Once they confirm it, you get a text message, right away, in real time, that says, “Your Uber is five minutes, away.” Then, when the Uber driver pulls up, they’re using the GPS, actually, in the iPhone, the unit that they have there, to figure out that he’s pulling up. That triggers another text message, to you, to say, “Your Uber is pulling up, now.” What was critical to them is, obviously, it has to work. If you get that text message ten minutes, later, it’s a pretty bad experience.
Jason: It has to be a fast text. There can’t be any text delay, on that.
Jeff: What they found was that we did a, really, great job. We focus on quality, a lot. So, we did a great job of making sure the text message gets to you on time, every time. Which, is, really, critical. The other interesting thing is that we’ve been investing in our global footprint. We launched in The United States and Canada. Last year, we expanded to the U.K. This year, we added twenty more, European countries. As of a few weeks, ago. We’re now in forty countries, worldwide.
Jason: That’s a lot of work. You have to go to each carrier and build this glue, each time, when, you go to a country.
Jeff: Build the relationship with who we’re going to work with, in various regions.
Jason: What does it for you to onboard a country?
Jeff: We have legal and regulatory environments.
Jason: It must cost you a fortune to spend up a city. It must take months. What was the time?
Jeff: The biggest part of it was the QA. When we’re working with a new carrier and new region, we want to make sure that we have a good partner. That it’s reliable. That we figure out the location thing. When we launched in The United States, it was easy for us to say, “We need to buy our inventory of phone numbers, so, we’re going to put a whole bunch of them in New York, a whole bunch of them in San Francisco, and a whole bunch in L.A.. Just, cause, you know it, it’s your back yard. But, when you’re going global, you have to do a lot of learning about the local markets.
Jason: Yeah. What are you going to do in Brazil?
Jeff: How about this. How do you format the phone numbers, in a local way? So, the local people, who are using your service, you don’t look like an idiot. Right? So, we tried to figure all of that stuff out, too.
Jason: This has never been done, before. If you think about it, you have people, lobbying in The United States, Congressmen and Senators. But, that same concept, extrapolated, if Coca-Cola or Disney, had phone numbers of a couple hundred million people, in a couple of dozen or over a hundred countries, eventually, when you get to a hundred. Think of being able to send a marketing message to every person on the planet, with a phone. That’s mind blowing.
Jeff: Here’s what’s, really, cool. Here’s what sucks, here’s what’s, really, cool. Software people. We don’t think about geography, very often. You build a website, anyone in the world can come and use it. You build a mobile app, it’s live in 130 countries, overnight. We just don’t tend to think that much… obviously, there language, translation, localization…
Jason: And, people don’t even do that. Read English. Figure it out.
Jeff: We don’t think about GeoPolitical boundaries, very much. It’s, sort of, as if software transcends that.
Jason: It’s a layer, around the planet and it has nothing to do with geographic boundaries. Why would it?
Jeff: Yeah, exactly. TeleCom, though, by it’s history is not like that. TeleCom was a geopolitically bound industry. Every country or every region and countries had there own TeleCom company. Often times, a monopoly, right? Like if you wanted to… So, Hulu is one of our customers. They wanted a call center. The first call center was in Los Angeles, where their headquarters is. They had phones on every desk. They said, “How are we going to build this?” They came to Twilio and they built that call center infrastructure in the cloud, in just a matter of a few weeks. Then, they launched, Asia-Pacific. In the old world, you would have to go to the local carrier in Tokyo. Get lines wired up. Then, ship boxes over to them.
Jason: Then, beg, bribe, and steal.
Jeff: With Twilio, it’s pure software. Our goal is one API, with global reach.
Jason: That’s mind blowing.
Jeff: So, when you want Japanese numbers, now, you just click a few buttons, or call the API, now you have Japanese numbers, sitting right next to your American numbers and running the same application, behind them.
Jason: Or, what if there is a natural disaster, like a tsunami, that is going to hit seven countries, and there is one, multi-national organization.
Jeff: Who does that stuff, worldwide. We’ve, now, got forty countries of phone numbers, but with our U.S. phone numbers, you can, actually, text out to 193 countries. Over 1,200 carriers, worldwide.
Jason: The great thing for you, the founder, then, to do all of this hard work. Arduous, like, climbing the mountain, or like 30 day marches,whatever, they’re called, in the Jim Collins book. It’s massively defensible, right? Every time you get another country under your belt, it get’s more defensible.
Jeff: What’s truly cool is that, for all the work we do, we’re lifting up our whole community. There are 150,000 companies and developers, using Twilio, today. All the work we do is, essentially, lifting those guys up, higher. That is what is so exciting, for us.
Jason: You’ve built a tremendous API community. That’s how I first became aware of it. I was like, “I have no idea what Twilio is, but they’re sponsoring every developer conference. They’re, just, everywhere.” Talk about how you marketed this. And, sort of, did this saturation of the industry. There were hack-a-thons, and everything, everywhere, for years. Whose strategy was that? How did you get it underway?
Jeff: It’s interesting. When we started Twilio, one of the pieces of feedback, that we heard from potential investors was, you can’t reach developers. Companies have tried and nobody knows how to reach developers. So, I think it became, something of a personal challenge, for us. We started using the, “Be Everywhere, Be Awesome.” idea. That’s yours.
Jason: It is. Yeah. It is, actually.
Jeff: We just started to say, “Where are developers? Both online and offline. Where are they?” There’s forums to hang out in, there’s Hacker News, there’s other sites. Then, offline, there’s hack-a-thons, there’s meet ups, there’s all sorts of events. But, the whole thing was, you have to be authentic. Just be ourselves. Go to these events. We’re not trying to pitch something. We’re just trying to be ourselves and be there and be developers. Our developer evangelism team is all extroverted, great communicators, who are developers. Who love working with other developers. Maybe more than they love sitting down and writing code, all day. They like writing code, but they also, love this interacting.
Jason: So, you invested, heavily, in building this vibe. What percentage of your “spend”, ballpark, in the early days, did you spend on developer relations? As a founder, what did you say? We need to spend 20% of our money on this. 10%.
Jeff: I don’t remember the exact numbers. But, it’s our marketing budget, right? One of the things we found out, early on, is that you can’t necessarily buy Ad Words, for, like, developer platforms. It’s hard. There’s a few instances, where that works.
Jason: And, developers are blocking the ads, anyway, and don’t click on them. The worst way to market.
Jeff: Developers hate ads. So, you think, “Where can we find our customer?” Ad Words are a pretty tough way when you have a platform. It’s not that you can’t buy Ad Words, but when you have a platform, it’s hard to. Ad Words are so transactional.
Jason: It’s, almost, like the use of the product, is the best marketing of it.
Jeff: It is. That’s what so cool. Because of this magical experience of Twilio. Write a few lines of Ruby and suddenly, the phones are ringing. Our goal was to just put it in the developer’s pocket. Put the tool in their tool belt. We know, from our experience, that the use cases will come up, where they need to use it. But, our job is to introduce it to them, hopefully, give them that magical experience, so they know what’s possible. Then, when their business needs that use case, they will know to pull Twilio out of their tool belt, and use it.
Jason: Is telephony, as we know it, with phone numbers and texting going to go away? Are we going to get to this… iMessage on the iPhone is starting to feel like, half of my calls to my wife are over Wi-fi, using FaceTime. I’m using iMessage. On my desktop, I’m using GoToMeeting, on every meeting. People are pinging me, on Skype. It just feels like phone numbers, themselves, are becoming less relevant. You guys have given them a second lease on life, in a way. Is the future, I’m going to route to Skype? I’m going to route to GoToMeeting? I’m going to route to iMessage? Have you built those plugs? Is that, even, possible?
Jeff: I think, certainly, how we use phones, how we communicate, and, even, what is a phone, is changing, very, rapidly. If you think about it, a phone, used to be, just that, a phone. Now, our phone is a computer.
Jason: A smartphone.
Jeff: One of the apps on that computer is “Phone”. Literally, on the iPhone, right? This is, obviously, changing, very fast. The great thing about what’s going on is, that, it’s moving from being tied to the device. It used to be a “phone”. You picked it up and made “phone calls”. That was the extent of it. Now, that we have moved into the application layer, literally, on the iPhone, the phone has been moved into the application layer. What this signals is that the opportunities are out there, for great software people, to be building this future. That’s why we built Twilio Client, which, let’s you make phone calls from iOS apps, Android apps, browser-based apps, with Java script, or traditional phones, via, the phone network.
Jason: Does the iPhone and iOS, try to block that? Phone calls inside and routing to. I know they’ve been, kind of, prickly about certain things.
Jeff: At the, very, beginning of the app store, they were hesitant. But, the past two or three years, people can build any kind of app.
Jason: Even the Burner app, that we talked about before. For Craigslist, or you’re a girl and you meet somebody in a bar and you don’t want to give them your, actual, phone number, you give them your Burner number. That one, to me, screamed of… If I have Wi-fi access, why do I need to have a phone at all: a carrier. Then, you see Freedom Pop came out with there iPod touch case. So, now the new iPod touch has a 4G case. Kids are using Voxer, Kids are using SnapChat. Kids are using iMessage and FaceTime. Do you think, this idea of everybody having a phone numbers going to start to go away? It’ll just have a destination on an IP, sort of, thing?
Jeff: The “phone number” is an interesting thing. So, yes. The “phone number” is a little weird. It’s like an IP address.
Jason: Yeah. Bizarre.
Jeff: But, you don’t use IP addresses to go to Amazon.com. We go to Amazon.com. Phone numbers are a, little bit, of a vestige of… that’s a technology routing address, that has nothing to do with what you’re trying to achieve when you try to communicate with someone. In some ways, you’re right. They’re antiquated. They’re unnecessary. What really matters is the address book. The thing that, I think, will take a long time to change is that has become the standard way for how to reach me. So, when there’s a billboard, phone number. Especially, with people communicating with businesses. When you’re filling out a form field, looking to buy a car, there’s a phone number field. There’s no other field for…
Jason: For voice communication.
Jeff: Yeah. For voice
Jason: There’s Skype. But, it’s not like Skype could work for that.
Jeff: You’d have to, like, friend the business.
Jason: Is Google giving up on Google Voice. It seems like they put all of this effort into Google Voice, then it, sort of, became stagnant. What’s your view on Google Voice?
Jeff: Interesting product. From the outside, it does appear that they haven’t been investing, very much.
Jason: It, certainly, didn’t become a platform, like you guys have built.
Jeff: I don’t know if they intended to it to be a platform. I think they intended for it to be an interesting service. Maybe, they achieved their goal. Maybe, they wanted to train the voice recognition, that they rolled out, last week. That could be it. It’s just, sort of, kind of an expensive proposition, to give everyone communications, for life. But, we’ll see.
Jason: What happens, now, when you hit the scale that you’ve hit.
Jeff: I think Hangouts, is a cool thing.
Jason: Google+ Hangouts. Why do you like those? What do you like about them?
Jeff: Pretty seamless. Pretty high quality.
Jason: It is stunning, how stable they’ve become. It’s pretty stable. I don’t like the controls. It feels like, I have a lack of control. It, almost, feels like they went for an anarchist… not anarchist but more like, almost like a democratic view of conferences. Nobody’s in charge, really.
Jeff: That’s why they’re called Hangouts. They’re not, really, business oriented.
Jason: It’s not “GoTo Meeting”. I just wish I could pick whose microphone was on. You know?
Jeff: It’s probably, just not designed for that. I’m guessing. But, it’s a cool experience. I like where that’s going.
Jason: It seems to be working. What happens to your company? It seems, like, you’re a nerdy developer, you’ve, finally, figured out, “This is what I should be working on. Not a surfing company. Not a ticket company, because I’ve never bought scalped tickets, in my life. I’ve never gone surfing, so what am I doing in those businesses.”
Jeff: I have gone surfing, it just wasn’t pretty.
Jason: You’ve never heard my surfing story, have you.
Jeff: I wasn’t buoyant, at all.
Jason: It’s, actually, worth telling. I’m 19 years old. I’m at Huntington Beach. I go, I get a wet suit and I get a surfboard. I go walk down to the beach. I have no idea how to surf. I put the wetsuit on. I’m getting my ass kicked, eight ways to Sunday. I just can’t get out, passed the waves. I come walking back in. I’m broken. There are, four or five, beautiful girls. I’m 19 years old. They are pointing at me and laughing, hysterically, at me. I’m like, “This is the most humiliating moment of my life.” Literally, up until that point, this kid from Brooklyn, comes out to California, jumps in the ocean, gets his ass kicked. I go, “I’m not going to stand for this.” I walk up to all five of them. I said, “What’s so funny? It’s the first time I’ve ever done it. I got my ass kicked. At least, I went out there and tried.” They’re like, “Dude.” They’re pointing at my chest. “Dude, your wet suit.” I’m like, “What, high five?” They’re like, “It’s on backwards.” I said, “What piece of male clothing, has a zipper on the back?” Every piece of male clothing: jackets, jeans, has a zipper on the front. They’re like, “You are an idiot.”
Jeff: How could it even…?
Jason: I got her phone number. It was very weird.
Jeff: Do you have a symmetric body?
Jason: No. My body is not symmetric, and I realize it, I’m like, Oh, my God, I have this puff in the front and the back is, too tight. It was bizarre. But, I got the girl’s number.
Jeff: You know the puff in the front isn’t, actually, air.
Jason: So, this is like a nerd dream, in a way. You got this API company. It’s a tremendous success. It’s churning. It’s making money. All the VCs love you. It’s like you’re on the right trajectory. What do you do, next? Cause, I’m sure Amazon wants to buy this. I’m sure everybody and their…. you know, wants to own this coveted layer of technology. What do you do? Are you going to go down to the layer that Amazon’s on? Are there things that you can layer on to it? Is there enough for you to keep building this slice? The communications slice.
Jeff: This is, very, easy. To me, there’s only one thing that you can do. Which, is, focus on your customer, build things that solve other problems, keep your ear to the ground. Keep shipping and keep building things that your customers value. That’s, really, the only recipe. That’s the only strategy that makes sense.
Jason: What do they want? What do the customers want? Do they say, “Why don’t you go ahead and build server farms for us.” and “Go compete with Amazon.” What are they asking for?
Jeff: They want us to continue helping them to communicate better. With their customers, with their vendors, with employees, in all sorts of interesting ways.
Jason: Wow. You’re a pro. I can’t get anything out of you. I’m trying to get, just, a little peak down the roadmap. Video conferencing? What’s next?
Jeff: You want to talk about furniture, again? We can go there.
Jason: Seriously, give me, a little, peak down the road map. If a Twilio person who is, just, absolutely, enamored with the product is listening, and there probably are many, and there will be, when we tweet it and stuff like that. What’s something exciting coming? What’s something exciting that you’re working on?
Jeff: I’ll, just, tell you, generally speaking, though. Things that are, really, exciting to us. Number one, the international expansion. You know?
Jason: Of course. Brilliant.
Jeff: We’ve spent the last year, growing out, to more and more countries. We’re adding more and more support, in those countries, everyday. And, adding more and more countries, everyday. That’s really exciting, for us. It adds value to our customers, here. Who have their customer everywhere on the web. Like you were saying, before. But, it also opens us up to people, developers, in those markets, who can now play with a service, that is local to them. That’s, really, exciting. The second thing, that I think is, so exciting, is Twilio Client. So, this extends Twilio Client with Voice-over-IP and presence into your iOS apps, your Android apps, your browsers. Web RTC just shipped on Chrome this week. There’s, a lot of, excitement there about the browsers getting more and more capable, with a best of breed AV.
Jason: Yeah. Explain how does that work for the non-technical folks.
Jeff: RTC, Real Time Communications. You know how Flash is often used to access your camera or access your microphone, but Flash has some limitations.
Jason: Yes. Steve Jobs would say so. 98% of all crashes on our platform are caused by Flash.
Jeff: What’s cool is what Google has done, they led the charge in this new technology of Web RTC. It, essentially, takes what Flash does, but puts it in the browser, so you don’t have to spin up the plug in, in order to access the camera and the microphone.
Jason: So much better.
Jeff: It’s got a great networking stack. A great set of CODECs for AV transport. What it lets you do is, essentially, the same thing as Flash, but, really, in awesome new ways. Firefox is starting to support it. Opera is going to support it. IE has a unique take on it, but, we’ll see where that goes.
Jason: MicroSoft supporting open standards is a mixed bag, sometimes. They’ve gotten better, though.
Jeff: You never know. Safari will be interesting. What we’ve got, essentially, if your running Twilio Client in your browser app, to make calls, like the Red Beacon/Home Depot example, from before, they’ve got all these agents, just sitting at computers, in Chrome, with headsets.
Jeff: There’s no phones.
Jason: You don’t have to load some software. It’s just going to be, like, all those live support things, where you’re on a website and you ask for live support, it’ll just turn on.
Jeff: Yeah. You just (connect) “How can I help you?” You talk right in the browser.
Jason: That’s going to be mind-blowing.
Jeff: So, very, cool. That’s what people are building on top of Twilio Client. Web RTC is cool, because, it creates customer experience for web browsers that have Web RTC.
Jason: Will it really help, like, the Quoras and the ExpertExchanges of the world? They would do some telephony to connect you with an expert for a dollar a minute.
Jeff: I didn’t know that. They started out great. Then, they put the pay wall, they made it look like it was blurred out, but it was really, just, a giant gift.
Jason: Yeah. It was weird. They were going for that dollar a minute. Then, there was this Psychics without paper Then there was this sex stuff.
Jeff: It had great SEO, for a long time.
Jason: Oh. It was so annoying.
Jeff: Then, you’d click through and it was, so, annoying.
Jason: It was like, “I need help. Oh. I have to give you money.” But, imagine Quora, with that Web RTC running it.
Jeff: A customer of ours. Do you know Dan Martel?
Jason: Yeah. Who is Dan Martel? I know him.
Jeff: Dan is an entrepreneur. He’s from Canada. He moved down here, a few years, ago. One of the things he’s been working on is, the thing he’s been working on is called, Clarity FM.
Jason: Yes. I know Dan. He was, almost, at the Launch Conference. He wasn’t ready.
Jeff: He uses Twilio to connect experts and people who need advice.
Jason: Right. Exactly, that concept. Do you guys handle billing, too? Or is that not in the current platform?
Jeff: Like, bill to my mobile phone?
Jason: No. Not bill to my mobile. I’m assuming you do that?
Jeff: No, we don’t.
Jason: That’s a big problem? Hairy problem? Hard problem?
Jeff: We’ve just found that people, don’t, necessarily, want that.
Jason: That cheesy, “Bill to my Phone.” Who wants to go through their Verizon phone bill, trying to find the charges for content. What about, like, I want to have something fire off, and have a Dwolla, PayPal, kind of payment. Are people asking for that?
Jeff: We’ve had a bunch of cool things happen on top of us. Venmo, I don’t know if you know who that is.
Jason: Yeah, I do. Actually, Gary Vaynerchuk sent me a dollar, through Venmo. It was bizarre. He was like, “I sent you a dollar.” Why? “Because, Venmo is cool.” It is, kind of, cool.
Jeff: Yeah. In fact, inside of Twilio, we all use it to pay each other back for lunch and stuff.
Jason: Basically, just text each other how much money…
Jeff: Pay $5 to Gary V,. Then, he get’s a text message that says, “You just got paid $5.”
Jason: Then, you can pull it out of the account, somehow.
Jeff: Yeah. Then you can put it in your bank account or you can use it to pay other people. That’s cool. It just got bought by BrainTree.
Jason: What’s BrainTree? I don’t even know that.
Jeff: The credit card processing company.
Jason: Oh. Very cool.
Jeff: They have an API and they got bought by them. For mobile payments. The thing about APIs is that you can integrate. So, the Dwolla guys, I’m sure, have done some cool hacks. I don’t think it’s a product, they offer, yet, per se. There’s a lot of experimentation, here, going on.
Jason: I wish that Twitter payment thing had worked. I know that John Borthwick, at Betaworks, in New York, was working on Twitter payments. It was some kind of app where, @jason gives this to @whoever.
Jeff: Essentially, you just need an address base and PayPal does it with email addresses. People are doing it with phone numbers, on top of Twilio, with SMS. Twitter is another way you can do it.
Jason:Listen, continued success, with the project. I know it’s going great. I know you’re staffing up on a, pretty regular basis. Hiring developers is never easy, so…
Jeff: Yeah. If you’re interested in seeing some of those door-desks, come by.
Jason:Come by, you’re not going to get Turnstone but, you know it’s the next best thing. $50 desk. You may get splinters, it may not be beautiful, but you, know. Whatever. Jeff’s cheap. But, he pays a good salary.
Jeff: You should, really, go work at a company that buys better furniture than Twilio.
Jason:Listen, if you work for Jeff, you get a terrible desk. If you work for Jason, you get a great desk. Whatever. It’s but one of the benefits. I, always, tell people, first name@company name, sometimes, reaches the founder. I’m assuming. If you’re a great developer?
Jeff: Jeff@Twilio is easier. But first initial, last name will do it.
Jason: You guys are, also, crazy hiring, I’ll bet. Crazy hiring, right now?
Jeff: Yeah. It’s a tough market, in San Francisco.
Jason: How do you solve it?
Jeff: I think that one of the good things about us, is that, for developers, particular, we’re a developer product. So, back to my idea of, I want to build something that I can use.
Jeff: It’s rewarding, cause you’re the customer of it and you get why you’re building it. So, any developers who want to help build the future of communications, but, also build APIs that other developers are going to use…
Jason: [Are] you getting a lot of Facebook developers? I hear a lot of Facebook developers are leaving and moving on to their next adventure.
Jeff: I don’t know. It’s not like dating where you have one spouse at a time.
Jason: No. Somebody told me that.
Jeff: You mean Facebook employees or developers?
Jeff: I thought you meant, developers. Most people do only have one employee, at a time.
Jason: Not developers that are like, “I’m leaving the Facebook Platform for Twilio. No. Developers, who work there, like, “I’m fully vested.” Looking for adventure. A lot of resumes, I hear, leaving the old Facebook camp.
Jeff: I hear that, a bit. You hear that all the time about companies. There’s a lot developers. A lot of great people at Facebook. A lot of people, I’m sure, love working there.
Jason: You’ve tried hiring outside of the country? Is that going to be a viable…
Jeff: You mean out of the country? It’s hard to get visas, right?
Jason: I’m saying, I hear from a lot of people that it’s so bad, here, we’ll just get fifty people out of Canada, coming out of the university. We’ll just train them up.
Jeff: We, currently, do all of our product engineering in San Francisco. But, it’s great. I think we have a great ability to attract developers. Cause, there’s an excitement about what you’re building. The other cool thing about it, from a developer building, Twilio standpoint is, one of the things that jazzes up, a lot of people at Twilio, we’re building stuff for our customers to grow, so we’re building for the builders. That’s exciting.
Jason: That makes it rewarding. This stock’s going to be worth a lot of money. Jeff can’t say that, but I can. I know people, who… This company is going to get bought, for a lot of money. I have a good feeling. I think, you’re going to have a great 2013.
Jeff: Focus on customers.
Jason: Focus on the customers. Head down. Don’t worry about an exits or raising money. That’s all good advice. Jeff Lawson. Great on the program. Do what you love. Do not build a surfing company, if you wear your wetsuit backwards. That’s just really bad. Thank you, myturnstone. For dealing with Jeff, absolutely, destroying the commercial read. That’s so great. @snapterms. Thank you, so much.
Jeff: I have no qualms with them.
Jason: You’ve no qualms with SnapTerms? $149 for SnapTerms. Jeff will do it for $129. You can photocopy Twilio’s terms of service.
Jeff: We’ll wittle a door into your terms of service.
Jason:Absolutely. Continued success. Everybody go, especially, if you’re a developer, especially check out Twilio. It’s awesome. Follow Jeff @jeffiel on Twitter. See you next time, on ThisWeekIn Startups.
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