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10-Year-Old Twilio Showing Maturity
Twilio heads into its 10th year on a financial high, along with new executives, including CMO Sara Varni, who will help guide the company's way through its adolescence.
Twilio closed Q4 2017, ended Dec. 31, with revenue of $115 million, up 41% over Q4 2016 -- its strongest period to date. Twilio hit $399 million in revenue for 2017, up 44% over 2016. But while revenue grew in 2017, so did losses. Operational losses, using generally accepted accounting principles, amounted to $66 million for 2017, up from $41 million in 2016. Even so, CEO Jeff Lawson and his executive team are projecting lower losses in 2018, in the range of $11.5 to $15.5 million for the full year 2018 ending Dec. 31, crediting product and go-to-market investments they made in 2017.
While boosting revenue, Twilio has also been growing its executive leadership team. Earlier this month it brought Microsoft and Salesforce veteran Ron Huddleston on board as its chief partners officer, and in January hired Varni, former Salesforce SVP of marketing, as CMO.
That these executives have roots at Salesforce has fueled speculation that Twilio is prepping itself for a potential acquisition by Salesforce, which recently disclosed a 1% ownership stake in the company.
A 10-year Salesforce veteran, Varni joined the company when it was almost the exact same size, in terms of its employees and revenue, as Twilio is today, she said. As she thought about her career goals, the idea of moving to a company at a point in its lifecycle like Twilio is today was intriguing, Varni added. "I realized it would be hard to go to a place that was just [selling] a point solution. In coming to Twilio, I saw that I would have the opportunity to completely disrupt engagement at large."
From Salesforce, Varni brings experience guiding marketing initiatives around an app store (AppExchange), a customer self-service platform (Desk.com, which Salesforce acquired), and software as a service (Sales Cloud).
Varni's three-part marketing strategy for Twilio focuses on developers, Engagement Cloud, and sales growth.
"First, our focus at Twilio is always going to be on the developer," she said, "and I want to ensure that we are providing the right content to developers for engagement with our products, that we are working with our product development team to make sure we're providing the right solutions for developers, and that we are going out and meeting developers where they are ... at the right conferences and events."
That said, Twilio knows the value of making its tools more accessible to non-developers, too, as it's shown via Studio, its visual drag-and-drop builder available as part of the Engagement Cloud. Studio "allows us to talk to an entirely new audience," like marketing professionals, and helps them "grasp the power that sits behind it," Varni said. As part of her go-forward strategy, Varni will be looking to unlock new markets for Engagement Cloud, she said.
In addition, "we want to really partner with our customers," Varni said. "We see how all different shapes and sizes of companies are using Twilio to transform communications, and with all the different points where they are touching customers, it's our responsibility to share best practices for driving communications in your organization."
Because communications is ubiquitous, Twilio finds itself working with a broad range of customers, from digital economy companies like Lyft to venerable financial services firms like Morgan Stanley. This means Twilio needs to make sure its sales team understands the pain points and challenges of diverse industries, Varni said. Retail and financial services, for which Twilio has seen a volume of conversations, will be its first focus areas, she added.
Engagement Cloud and Beyond
The bulk of work Twilio has been doing since its inception has been leading to its first major platform, Engagement Cloud, revealed last May. Word on the street is that it will next push deeper into the contact center, with a soon-to-be-announced (reportedly at Enterprise Connect next month) dedicated contact center solution, "Flex,", as reported by TechCrunch.
Flex could pit Twilio against some of its current customers, as TechCrunch writer Frederic Lardinois observed. "In a copy of the internal email we saw about the upcoming launch of this product, the company clearly aims to avoid this impression, but that's likely because it's worried about how this move will be perceived by current players in this market who are likely using some of Twilio's services themselves," Lardinois wrote.
In fact, this product announcement might cast some doubt on the previously mentioned rumors that Twilio is gearing up for a Salesforce acquisition. Rather than preparing for an acquisition, perhaps Twilio is really gearing up for a stronger play in contact center as a service.
But Twilio's marketing strategies won't differ too much depending on the platform in question, Varni said. "It's just a matter of how that buyer consumes information. Our buyers today are very different: Developers just want to get their hands on code and start to play around, but marketing VPs are all about attending webinars to learn about the products. I think whatever our next chapter is, it's about finding that audience and how they're going to get excited about that next chapter," she said.
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