Twilio, the cloud communications software-as-a-service (SaaS) company which went public in June 2016, has had a rough ride in the public markets since, seeing its stock price drop by over half in the year since.
Computerworld UK sat down with Twilio CEO Jeff Lawson to discuss the scrutiny that being a publicly listed software company brings, its reliance on Uber for nearly a tenth of its revenue, and how he is playing the long game.
Twilio told investors in Q2 this year that the revenue it was generating from its biggest customer, the ride sharing giant Uber, which uses Twilio services to help drivers communicate with riders and manage its millions of daily push notifications, was down from 17% of total revenue in Q4 of last year to 9%.
Lawson told investors at the time that Uber was "changing the way they do messaging" and that it "plans to move communications for some use cases in-app".
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Lawson explained to Computerworld UK, somewhat circuitously, that Uber decided to scale back its use of Twilio for bulk notifications for drivers, the sort of capability which allows Uber to inform drivers around London that there is surge pricing in a certain region right now. "That is a different use case and one we haven’t focused on historically," Lawson said.
So in a bid to save some money when it comes to delivering bulk push notifications Uber is "multisourcing based on use case and geography," a spokesperson for Twilio told Computerworld UK. This means that the company is "looking at different vendors in different regions depending on their use case. They are not building this capability in-house".
Uber still uses Twilio for what Lawson calls “very high performance messaging", which ensures that an SMS is delivered on time when a car is arriving, for example.
"So it is just a different part of the market we haven’t focused on and is part of their network load that they have decided to optimise in a way Twilio hasn’t optimised in the past. The low performance bulk messaging stuff," he concluded.
Lawson admits that "Uber were at a completely different scale than any of our other customer base, they had reached an annualised run rate of $60 million".
This may sound like a SaaS company CEO's dream, but as Lawson points out: "Most companies don’t strive for one customer to dominate revenue, you want to have a nice distributed revenue base, and outside of Uber we do." Twilio does now count more than 42,000 customers, but there is no doubt that Uber and its other giant customer WhatsApp more than pull their weight.
"There is no good answer when a customer gets that big so you just manage as best you can and focus the rest of the company on the rest of the customer base," he added.
Lawson was adamant that he doesn't let Wall Street get him down though: "In any short period of time there is a lot of noise and puts and takes to your stock price, both about Twilio and not about Twilio in the macroeconomic sense, so you just have to ignore those in the short term.
"In the long term we get value based on the performance of the company and that comes down to the core of the business: customers, product and team. Those three things dictate if we build a great business that gets more valuable over time.
"Ultimately we are building the business for the long term around customers that make up our base revenue not just the one."
Lawson was in London to announce its latest product, a code-free platform called Studio which promises to save developers time by allowing non-technical staff to build and tweak communications solutions like interactive voice response (IVR) systems, chatbots or a notification system.
Speaking about Studio, Lawson said: "We are always asking ourselves how to give customers the flexibility of Twilio but faster than they did yesterday. One of the ways we thought about it was that a lot of the code you write is probably boilerplate, so the basic stuff should be easy so let the developer focus on the unique stuff that matters like custom integrations or the special sauce of that particular company.
"Why should you have to cut a JIRA ticket every time a marketer wants to change it? Or changing basic flows to A/B test? That’s where the vision for Studio was born."
Ask your developer
The traditionally developer-centric company is sticking to its guns in terms of its approach to the enterprise, with Lawson's current go-to line being "ask your developer" when it comes to solving customer communication issues within an organisation.
“In companies of all sizes this notion of ‘ask your developer’ is working," he said. "We just want the developer to get how Twilio works, because one day at work you’re going to see a business problem, and eventually every business needs to talk to their customers, and when that happens, the developer will be able to say ‘I know how to solve that, it’s Twilio’."