SaaStr Podcast #218: Twilio Founder, Jeff Lawson & SendGrid CEO, Sameer Dholakia on Why Developer First Is A Maturation In The Supply Chain Of Software

Jeff Lawson is the Founder & CEO @ Twilio, the company building the future of communications allowing you to engage customers like never before on voice, SMS, WhatsApp or Video. Prior to their IPO in 2016, Twilio had raised over $250m in VC funding from some of the best in venture including USV, Bessemer, Salesforce and Techstars just to name a few. Prior to founding Twilio, Jeff was the Founder & CTO @ Nine Star Inc and enjoyed a spell at Amazon as a Technical Product Manager.

Sameer Dholakia is the CEO @ SendGrid, the category leader in email delivery, reaching half of the world’s digital users every 3 months. Last year Twilio acquired SendGrid bringing email into one seamless customer engagement platform. Prior to joining SendGrid, he spent 4 years at Citrix, where he drove the company’s product strategy for cloud infrastructure and server virtualization. Sameer joined the company in 2010, when Citrix acquired VMLogix, where he served as CEO and doubled revenues during each year of his tenure. Before that, he worked for 12 years at Trilogy, where he held key leadership roles helping the company grow from a start-up to a $300 million business.

In Today’s Episode We Discuss:

* How Jeff came to found Twilio and what was that a-ha moment for him? How did Sameer enter the world of SaaS and come to be CEO @ SendGrid?

* How did Jeff and Sameer assess the culture fit between the 2 companies when deciding whether or not to join forces? How did they formulate and approach creating a new set of values with the 2 companies coming together? How do they distinguish between culture and values? How can leaders both be authoritative and vulnerable simultaneously?

* What does Jeff mean when he says, “the developer first approach is a maturation of the supply chain of software?” How has Jeff seen his original thesis for “developer first” evolve and change with time? What does truly special customer experience look like in the developer first model?

* In terms of product strategy, how do Jeff and Sameer approach when is the right time to release a second product? What does Jeff mean when he says, “you have to maximize the number of at bat opportunities you have?” Why does Sameer think that SendGrid waited too long to release additional product lines? What were his core learnings from that?

* How do Jeff and Sameer think about what what truly special leadership looks like today? How do they approach speaking so that people will remember? What are some of their biggest tips to aspiring entrepreneurs with regards to that and team empowerment? Why do both Jeff and Sameer believe that so much of the management wisdom today is outdated?

60 Second SaaStr:

* What do Jeff and Sameer know now that they wish they had known at the beginning?

* The book they have gifted most often and why?

* What does it take to truly be a great board member?

* What do the next 5 years look like for Twilio? How big could it get?

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Jason Lemkin
Harry Stebbings
SaaStr
Jeff Lawson
Sameer Dholakia

Transcript

Harry Stebbings: Welcome back to the official SaaStr podcast with me, Harry Stebbings. You can suggest future guests and questions on Instagram at @HStebbings1996 with two b’s. Today is one of the most special episodes we have ever done. Why? Well, a number of reasons, but first we have, not one, but two incredible Unicorn CEOs joining us in the hot seat. Second, as a total SaaS nerd, I have to admit they are literally two of my biggest heroes, and then three, because after one acquired the other late last year, they now form one of the most formidable and exciting forces in the world of SaaS.

Harry Stebbings: Can you guess? Well first I’m stoked to welcome Jeff Lawson. Founder and CEO at Twilio, the company building the future of communications, allowing you to engage customers like never before on voice, SMS, WhatsApp, or video and prior to the IPO in 2016, the Twilio and raised over $250 million in VC funding from some of the very best in the business, including USV, Bessemer, Salesforce and Techstars. Just to name a few.

Harry Stebbings: As for Jeff. Prior to founding Twilio, Jeff was the founder and CTO at Nine Star Inc. and enjoyed a spell at Amazon as a technical product manager and if having Jeff on the show was not enough for my SaaS excitement, we have Sameer Dholakia also in the hot seat. Sameer is the CEO at SendGrid, the category leader in email delivery, reaching half of the world’s digital users every three months. And as I said last year, Twilio acquired SendGrid, bringing email into one seamless customer engagement platform.

Harry Stebbings: As for Sameer, prior to joining SendGrid, he spent four years at Citrix, where he drove the company’s product strategy for cloud infrastructure and server virtualization. Sameer joined the company in 2010 when Citrix acquired VM Logix, where he served as CEO and doubled revenues during each year of his tenure. Before that he worked for 12 years at Trilogy where he held key leadership roles helping the company grow from a startup, to a $300 million business.

Harry Stebbings: I do also have to say a huge thank you to Ryan McIntyre at Foundry, Ethan Kurzweil, Byron Deeter, David Cohen, and Scott Rainey for providing some really fantastic questions today. I really do so appreciate that.

Harry Stebbings: Jeff and Sameer. I mean, what can I say? I’ve heard so many great things both from David Cohen and from Byron Deeter. It’s such a pleasure having you on the show today. Thank you so much for joining me.

Jeff Lawson: No, thanks for the opportunity.

Sameer Dholakia: Yeah, thanks for having us.

Harry Stebbings: Not at all, but I want to start today with a little context. Jeff, how did you come to found Twilio and then Sameer, how did you come to be CEO at SendGrid? And I’ll let you decide who goes first.

Jeff Lawson: Sure. I’ll give you the 45 minute background. Really quickly, I am a software developer and I’d started multiple companies before Twilio. One of them, I was the first CTO of Stubhub. Then I was one of the first product managers at Amazon Web Services. When I went to Amazon, I thought about what I wanted to start next and I realized in every single one of the companies I had started previously, there were two things in common. Number one, we use the power of software to iterate quickly, to build ideas for our customers, put them out in front of customers quickly, learn, and then iterate. That’s the superpower of software and also in every one of those companies we needed communications. We needed to engage with our customers in clever and creative ways or integrate it with the software we’re building. Every time it happened I would say I’m, I’m a software developer.

Jeff Lawson: I don’t know how it would make the phone ring and that’s, that’s like magical. I have no idea how that works. I go into the telecommunications industry, people like carriers and the hardware manufacturers and say, “How do we build up this idea that we have?” And every time I got this very unfulfilling answer. It was like, oh yeah, you’re going to roll out these copper wires from the carrier to your data center, and then you’re going to rack up a bunch of that hardware and then you’re going to buy a bunch of software and then you get to bring in a small army of professional services to come integrate the whole thing. And it’s going to take you two years and it’s going to take a few million dollars. Let’s get started. And every time that happened, I said, well, this is insane. Like this is the complete opposite of software.

Jeff Lawson: You know, software. It’s like, you have an idea. You build something quickly, a minimum viable product. You put it out in front of your customers and you start learning right away. But when communication was involved suddenly your iteration cycles took years and millions of dollars, that was insane. And so we started Twilio to solve the problem with bringing communications out of its legacy, which is in hardware and physical networks and bringing it into its future, which is software. In doing so, we empower all the software developers of the world, to be able to incorporate communications into all the apps that are building and to enable their companies to really engage with their customers in the most amazing ways possible.

Harry Stebbings: What a journey it has been. Sameer I do want to switch over to you. How did that CEO role at SendGrid come about? And I do have a little bit of context personally from Ryan, but I want to hear this from you.

Sameer Dholakia: Yeah. SendGrid is an amazing business with a founding story similar to what Jeff describes. Three developers: Tim, Isaac, Jose. Awesome guys who saw the same problem in a different communication channel, focused really on email and how developers had to be able to drive growth in their applications by engaging their users and email’s an important channel to do that. They got going in 2009. I ended up joining the company about five years in, in 2014, so SendGrid had already gone from zero to $30 million in revenue or so over that time frame. We did a couple of bumpy patches of scaling, and how we had to get to the next level. Then I got the great privilege of coming in to try to help with that in 2014.

Harry Stebbings: And my word, what a role you’ve done in developing that and navigating some of those bumpy patches, but how can I not start today on the big news recently of Twilio acquiring SendGrid? I always think of good acquisitions like relationships with both parties really weighing up the pros and cons and deciding to unite. Now every investor that I spoke to of yours, asked this question, so with that in mind, specifically Ethan Kurzweil at Bessemer asked, “How did you assess the culture fit between the companies and between yourselves, when contemplating joining forces and what made you so excited?” Again, I’ll leave it to you to decide who goes first, but let’s start with that.

Jeff Lawson: Sure. I mean, you know, to me I think there’s an interesting parallel track here with both companies. Both companies were founded by developers. And I think having that developer DNA early in the stages of both companies really created a lot of common ground as it relates to the values of the company. Because I think developers do operate in a certain way. We tend to totally generalize an entire profession of 25 million people that like, I don’t know, developers tend to be thoughtful.

Jeff Lawson: They tend to like some of our values that I think really play out for a lot of developers are no shenanigans. The honest, direct, transparence of certain intellectual honesty of like trying to get to the answers. There’s a curiosity and I think a lot of those founding principles that both companies really started with in their DNA, persists through to this day, years later. That really makes the two companies very compatible because we’ve approached the world in a similar way for a very long period of time. I think that was a sort of a founding basis of it. And then sort of how we assess it is another interesting question. Sameer how did you assess it?

Sameer Dholakia: It was interesting when I was thinking about it, the other one that really mattered to me as we were going through it was another quality or trait that I’ve seen in spades here at Twilio and I’ve seen that is so core to the SendGrid culture, which is around humility. Being humble is in both of our value sets from the very beginning and that, I think, if I were to reflect on SendGrid’s culture from its inception, it was probably his most distinguishing or differently–The thing that was most unique about it relative to many other businesses, companies I worked at. I saw that reflected so strongly in Twilio, in you and Jack, when I was in all our conversations and all the folks I ever had interaction with, all the Twilions I ever met. That was, to me, how I assess. That’s how I knew that this was going to work. It was principally around that singular characteristic.

Harry Stebbings: I love that focus on humility, that you mentioned there Sameer. I do have to ask, and this is slightly unfair of me going off schedule, but I’m too intrigued. I associate sometimes humility also with vulnerability and I’m interested for you both as leaders, how do you kind of navigate between the balance of vulnerability but also strength as leaders and showing that overarching confidence to the team? Is there an internal balance for you and how do you think about that?

Jeff Lawson: I mean, I think your power as a leader comes from authenticity. It comes from trust and people trust you when you are vulnerable, when you’re authentic, when they know that they’re dealing with a real human being. And that’s, generally speaking, how I approach the job and I’ve noticed Sameer approaches the job too, which is if you be your authentic self and that means being vulnerable at times, that’s what causes people to trust you and want to follow you. If you’re building a company that is built on these kinds of values.

Sameer Dholakia: Yeah, and I think folks absolutely agree with everything, Jeff. So there’s deep respects that I myself have when I see leaders and I see this in Jeff. I commented on in our, we had an ETM meeting just yesterday where I commented on it, where I see him behaving that way and it creates a deep respect, I think, from people around you when you exhibit that humility and vulnerability. You’re not trying to pretend to be perfect. We all know none of us are and it’s about assessing those things.

Sameer Dholakia: To your point about confidence and showing competence, I think that every CEO, every entrepreneur listening, you have to have deep conviction in what you are setting out to do in your strategy, your mission, your purpose. Absolutely you have to exhibit those with a great deal of depth, but if you make mistakes as a leader or if you think you have areas to get better or you want to go complement yourself in a different space. I think sharing those with the people around you will do nothing but engender trust and respect.

Harry Stebbings: I totally agree with you there on that and I love that focus on authenticity. It’s super interesting there. When you kind of thinking of the acquisition and the merging of two great companies and cultures because I know that you kind of created a new value set for the new kind of pro forma company to adopt. I have to ask then, what did that formulation look like and what was the thinking of this new value set for you both as the leaders?

Jeff Lawson: Yeah, it was an interesting point in time. At Twilio, we had a set of nine things for our original values and we set those out in 2011 and then a few years later when we realized that there was a bunch of things you missing about what we expected from a leadership standpoint, actually. And instead of morphing those nine things to incorporate some of the missing leadership traits, we built another list. We call them our leadership principles. We operated for several years with this list of 17 things that was, essentially the written words describing the culture of Twilio. That’s what I think of values. Values are written words, culture is actually how you live.

Jeff Lawson: And we knew that we wanted to simplify this, because 17 things is a lot for anyone to really hold on to. And we also observed over time that how they got lived–There’s some overlap between the ones with some redundancy. And so we knew we wanted to do that and then along came the opportunity to bring SendGrid in to the fold, and the other four things, the four Hs.

Sameer Dholakia: Yeah. The timing was just perfect where it happened to be that Twilio was already evaluating that and it provided such a great opportunity to come together and Jeff had gone to all the different sites across Twilio and been having active conversation about this and came to the SendGrid side and said, we want to incorporate it at the SendGrid perspective here as well. And Jeff and I remember deeply, we had agreed with the conversation over my kitchen table at nine o’clock at night during the M&A process on culture, on values, on where we were similar. But I think equally importantly about where we were different. All of that kind of played in, I think ultimately to the shaping of what netted on the back end of all that. So we were able to then introduce the new set of values that Twilio came up with to the new Twilio to the new combined company.

Jeff Lawson: It was sort of funny because we had our 17 things and Sameer, you had four Hs, so yours I thought, it’s too short, so we wanted to go, “What’s the happy spot between those?” We ended up with our 10 things and we call them the Twilio Magic. It really is something that you hear it around Twilio a lot. There’s just this sense that people get when they work here, when they walk in the front door, guests hear it, interviewees. I hear it all the time. It’s magic.

Jeff Lawson: When you walk in the door, this feel, this positive energy, this vibe that you get. We’re trying to capture what it means to get the job done. How do we make decisions? How do we act? How do we win? And that’s how we framed our new set of principles that we call the Twilio Magic and incorporates the best, I think, of Twilio’s values, of SendGrid’s values but also makes them more concise and therefore easier to live by. That’s ultimately the goal of any set of values of a company. They are a set of written words that people can live by.

Harry Stebbings: I’m sure the team are very thankful for the reduction from 17 to 10. You said the word magic there, and one of the elements there that allowed for the dizzying heights that you both have reached today, was really the kind of introduction of the developer-first approach that you really pioneered with Twilio here, Jeff. I do have to ask on this because it’s one that I’ve really actually grown up with. I can’t actually really remember a time without developer first as a very obvious and brilliant strategy. It was quite a contrarian thought at the time, though, I’m told. So what was the original thesis in thinking here? Have you seen it develop and evolve over time with market interaction?

Jeff Lawson: Absolutely. I mean I think that if you think about the grand scheme our can be technologies to take technologies that are very first generally speaking, expensive and esoteric and difficult to use, difficult to implement and then over time be able to make them more and more accessible to more and more people. And I think that’s the general arc of technology and that is now happening for the developers [00:15:09].

Jeff Lawson: I think it’s happened in certain realms for long periods of time with developers. Developers are used to able to write assembly code for particular CPU in order to write software, but then along came compiled languages and then came operating systems that made it standardized across all the hardware and then came the web and then scripting languages. And so the, the general arc of making computers easier and easier to build upon is one that, [inaudible 00:15:32] the shoulders that we stand upon that pick a building for 50 plus years.

Jeff Lawson: But the most recent incarnation of it was really moving all of that to the cloud and providing infrastructure as a service. When I think about what you see happening before you with this developer first approach that Twilio was very early to introduce. I think it is a maturation of the supply chain of software. If you think about every company is becoming a software company. Every company is having to build software in the cloud, on mobile, web applications, mobile applications, backend services. Every company, whether you are a tech startup, a bank, an airline, a hotel, you name it, a retailer. Every company is having to become great at building software and that means you have to go quickly. You have to listen to your customers.

Jeff Lawson: It has to be scalable. It has be secure. It has to be reliable and every company cannot figure out every piece of that themselves. They need to rely on a supply chain in order to do a great job of that. The developers, the people tasked with building all that innovation for every company, it’s natural that they would want to turn to companies to help them do their job faster, better, more easily, get the outcomes that the business is ultimately paying them to achieve and that’s why the time is perfect here for the supply chain to mature for developers to have these very reliable, very scalable APIs that do important pieces of the functionality that they need to accomplish with their applications. Bury it into a moment in time when it’s becoming more and more and more critical.

Jeff Lawson: That basic seed in building those innovations, less their company be disrupted by somebody else. This a hot moment in time where mobile and the web and the cloud come together with developers, even the people leading the charge inside of every company that is causing the need and therefore the market demand for infrastructure services like Twilio, like SendGrid to make every developer more effective, faster and expand the universe of things they can build to move their company’s mission forward.

Harry Stebbings: I love that thesis on kind of the maturation of software. I do have to ask on the flip side, Sameer. You adopted this approach and really integrated into an existing strategy. What were some of the biggest challenges of doing so? What advice would you give to others who are contemplating doing the same, given your incredible experience in hindsight?

Sameer Dholakia: Isaac and the team in the very early days, obviously shared investors and backgrounds. No question that that was front and center in their minds as well to really serve the developers and serving the developer and the entrepreneur has been at the core of building the brand of the company and building the business itself. I think Jeff and I will often talk about how you could go to a hackathon or a developer event, a start up event and you would probably see a blue hoodie SendGrid developer evangelist at a table right next to Twilio red track jacket wherein a developer evangelist and they were there to help and they weren’t there to sell.

Sameer Dholakia: They were there to help and be helpful to empowering in those builders of the world that were building the next generation of technologies, innovations, and applications. I think that when you have that kind of spirit and mindset going into it, that actually, the challenges were few and far between, frankly. I mean the challenges I would say is making sure you have CEOs who believe in that who aren’t pressing on what’s the ROI of those two people showing up at that particular event in a hard and fast, put in a spreadsheet. That’s hard to do. But, when you know, it’s just the right thing to do. You’re building a brand, you know you’re serving that particular base of customers that these developers that you know that’s going to play out.

Sameer Dholakia: And that has played out for us as being critically important over the long term. But for folks who are building, whether it’s a developer first motion or any persona to specific motion, I would just say focus with: know your intention when you start that process and make sure you’re committed to investing in it and invest in it, because you’re going to end up with a lot of debate and conversation with your leadership team or board members on a specific ROI and you’re going to have to have conviction that it’s going to play out and work out long term.

Jeff Lawson: If anything is, I remember when we first started, there’ll be like big companies, we have our developer strategy and they’d show up with like a lot of money and suits, stuff like that. Developers can just tell like when they’re being fake, when they stole like a thing. Developers also have been burned so many times by companies whose strategy of the moment was: developers! Then like when that didn’t suddenly materialize into $1 billion business overnight it was, okay, a new strategy, VR, and they turn their backs and they started the next strategy and it was like, I think developers do have a healthy amount of skepticism for companies trying to pitch them. That’s where again, the humility and the words that we use, our [inaudible 00:20:22] developers and the fact that our company’s products treat the developers as the customer, not as a strategy is a really big deal.

Jeff Lawson: Because if you’re a customer, you know that you are important to the company. Customers, developers, want to be served like customers. Not like a pawn in some giant game of corporate chess. I think that’s another important thing that both Twilio and SendGrid approach this market as, developers, you are not some strategy, you are our customer. We’re here to treat you incredibly well. And that I think was new. And by the way, when we started Twilio, it was very much not conventional wisdom that developers were a market. I had to convince a lot of investors, who initially said, yeah, that sounds like an interesting idea but developers don’t have the checkbook. Developers don’t make any decisions. So come back to me when you figure out a real product that you can sell to a company.

Jeff Lawson: You got that with people were quite a bit in the early days of Twilio and we, in fact, we spent the whole summer of 2008 trying to fundraise and didn’t raise a dime. It didn’t help that financial markets were collapsing and everything else was going on. But the biggest piece of your background business was go find a market and they come back to me. The thing was we listened to our customers. We had developers who were using early versions of Twilio, giving us great feedback, using it, launching things, wanting to pay us. Ultimately we listened to customers instead of the investors and I think led us in the right direction.

Harry Stebbings: I want to touch on one element that you specifically said there, the word strategy, Jeff, and it’s really interesting for me, hold on to strategy because when we chatted, Sameer, before, you said to me that maybe you think SendGrid added secondary lines of products a little bit too late. Twilio added secondary products, slightly earlier. So I’d love to touch on this element of: what is the thinking here on how to fundamentally think about, when is the right time to add those secondary products and that strategic mindset to product’s introduction, so to speak?

Sameer Dholakia: Yeah, I know in the SendGrid case, we had incredible opportunity to extend what we were doing at the API layer to cover email marketing. It’s a big market opportunity. Builds on everything that we’ve already been doing. Customers had been pushing us to do it and we were just very reluctant to go there, given the often recited guidance from investors and board members to focus. That led to focus on the core was great, but we didn’t get act two started until too late, I would argue. We could have done it earlier. If we had, to Jeff’s point, listened to the customer demand more so than other voices, I think we would have gotten more wood behind the arrow, behind our second act earlier, which would have accelerated the growth trajectory of the company.

Jeff Lawson: I think entrepreneurs, there is all sorts of advice that you get about focus, focus, focus. Find a niche, get rich. There’s all sorts of cute phrases, concepts, but I’ve always rejected that advice. First of all, it’s like there’s a conventional wisdom that says, just do one thing and do it well. But I believe that for basically two reasons that we want to, not like do a poor job of the first thing. So in order to move on, but actually build a system that is resilient enough that you can build one thing but not have to dwell on that one thing for a decade before we think about the next. That is, I think, two things. As a customer focused company, I think you have actually had an obligation to go solve customers’ problems. It’s easy to say, no, no, we’re just going to do this one thing and when anyone, when customers come to me with like, yeah, I know that one thing, thank you for that, but hey, there’s these other related problems that are–

Jeff Lawson: I’m really helping you can solve these. A non customer focused company. It’s kind of self serving. No, no, no. Find a niche, get rich. We’re just going to do one thing. But if you’re truly a customer focused company, then when you hear those problems that you can solve for your customer, you take it personally. You take it as an obligation to go and solve those subsequent problems and make your customer’s life better.

Jeff Lawson: By the way, by doing so, they [crosstalk 00:24:21] can build a better business. The other thing I would say is because what we do is software, the costs and the risks of experimenting, listening to those customers and saying, “I hear your problem. Hey, what about this? Would this solve your problem?” You can test hypotheses with customers without writing a single line of code, which is what I would recommend people do.

Jeff Lawson: But once you feel like you’ve got your finger on the pulse of how to solve the right problem for your customers, then writing software is, in the grand scheme of things, one of the cheapest and most scalable forms of innovation that humanity has ever seen. Think about it. You’ve got a blinking cursor and you can type some magical codes into a blinking cursor and suddenly you make a global network of like thousands or millions of computers to do your bidding. It’s like, why wouldn’t you do that all day, every day? The hardest thing to do in business is to discover an unsolved problem that your customers need you to solve. I believe that. I think the hardest thing in business, it’s discovering a truly big unsolved problem and once you discover that unsolved problem, actually writing the code or building the beginning of a product that you can start to iterate off of? That’s the easy part.

Jeff Lawson: Why wouldn’t you take three engineers and a product manager, to go start learning more about that problem and figure out how to solve it when you can. When you have a company with the resources to do it. You have to do that responsibly. But to me, it’s a combination of one: the obligation to your customers as a customer focused company that requires you to go learn about their problems and figure out how you can solve them. That yes, you have to make smart decisions about is it adjacent and does make sense for your business? But then number two: the low costs of doing that innovation. Of starting that innovation.

Jeff Lawson: You can get started with very little investment and very little risk and then see where it goes. That’s what led us to very early on, that we were a one product company when we launched in 2008 with Twilio Voice. In 2010, just two years later, we launched our second product: Twilio SMS. I’m incredibly glad that we did that and we continue that pace of innovation throughout the course of the company. Whether it’s introducing Twilio Video or Twilio Chat or all the different channels like Whatsapp and Facebook Messenger.

Jeff Lawson: We now have products that allow you to program in Alexa and Google Home and even our newest product, Twilio Flex the contact center application platform. I feel like it’s in our DNA to go listen to customers, hear their problems, and then have teams go work with those customers and figure out how we can solve them with great products.

Harry Stebbings: In determining whether to build these new products. I do have to ask, you mentioned that the cost of experimenting being so low in software, would you say that’s the primary factor that really influences your decision making or is it the opportunity cost of the potential product that you may or may not build? Is it the internal capacity within the team? What do you think is a primary driver in determining the yes or the no to that opportunity that may have arisen?

Jeff Lawson: Again, I thank that so much of our management techniques and business wisdom that is out there today, is based on the industrial era, where it’s like, should be go spend [inaudible 00:27:19] [crosstalk 00:27:19]. Build a new factory? Manufacture light trucks or whatever and you’re like, okay that’s a big business decision. You got to think about that a lot. You can actually like, there’s going to be shovels involved. But with software, it’s literally, what is the cost of building a prototype is often an afternoon of some idea. Flush it out, write a little bit code. We call them steel threads here and put it in front of customers and see if it’s interesting. When your cost to innovation is so low, why wouldn’t you? [crosstalk 00:27:49] Why wouldn’t you take as many at bats as you can?

Jeff Lawson: I love the Bezos shareholder letter a few years ago. He made the analogy, that people often talk about the analogy on business of wanting to get out fast. Just like you in baseball, the more bats the better chance you have of hitting a home run. I certainly believe that in the case of software. And then he continued the analogies that the difference though, is that in baseball the very best outcome you can have is a grand slam; four home runs, four runs right? But in business you can hit a billion run grand slam if you have the right idea. That makes it even more important for you to invest in your app outs. And I just tend to ascribe to that being a software developer myself, I’ve always thought, It’s so easy and cheap to go play with code to go figure out if you can solve the customer’s problem that I just love that process.

Sameer Dholakia: The one add that I would have to what Jeff said–I’d highlight one comment he made earlier. Identifying the big unsolved problems in the world, for the entrepreneurs listening, make sure they’re big. If you’re going to go spend time on it, make sure they’re big opportunities, big at bats where you can swing and if you’re going to have it be your second big product line, go and find a big market.

Harry Stebbings: I’m with you on the big market and before we move into the quick fire, I do have to jump on that Sameer. Because as a VC also by day, we often always say, go for big markets, but there’s also the newer wisdom that’s going for these niche markets that expand into much bigger markets with time. How do you think about, go for the big market today versus go for the big market tomorrow thinking?

Sameer Dholakia: Absolutely reasonable to say I’m going to pick off, every great journey starts with that first step. And so if you’ve got a clear line of sight to the big market by starting on something that isn’t one yet, but you’ve got conviction that that’s where it’s going? Then by all means start with a smaller, but you just want to make sure that there’s a path to it.

Harry Stebbings: I am absolutely loving this show, but this is why I’m really ruing putting a time limit on the 20 Minute VC. I do want to move into my favorite element, being the quick fire round. I say a short statement and essentially you give me your immediate thoughts. Normally we do 60 seconds per answer, but given the special dual interview, we’re going to try and do 30 seconds per answer if that works well for you. Are you ready?

Sameer Dholakia: We’re in. Sign us up, let’s do it.

Harry Stebbings: So your favorite book and why.

Jeff Lawson: I’m going to go with Made To Stick by Chip and Dan Heath. I just return to it every time I’m trying to figure out; how do I relay some complex idea to the world? Whether it’s pitching investors, whether it’s giving a keynote, whether it’s talking to my employees, whether it’s selling the vision of the company, Made To Stick is one of those books I always go back to and I get new insights every time I read it. It helps you understand how to say things that people will remember. That’s such a fundamental leadership skill, that we all need.

Sameer Dholakia: Love that. I would go, Built to Last. It was the first business book I ever read. It was in the mid nineties. I was 21 years old. That was required reading at the company I was joining. It framed the way I think about wanting to build companies that are iconic, here for the long term that have a mission and a core purpose to them. They are people centric and I think it’s a big part of why I’m excited to be here. Totally. I think we’re doing all those things.

Harry Stebbings: What do you know now that you wish you’d known at the beginning of your time, obviously founding Twilio and then with SendGrid respectively.

Jeff Lawson: Sameer is pointing at me and I think I would say, talk to people. Don’t assume. I think sometimes, I’m an introvert so if I can avoid some conversation I would, that would be my natural tendency. But whenever you’re trying to figure out some sort of hard situation, just go talk to people and get their point of view and to paraphrase Aaron Burr; Talk less, listen more. That’s what I wish I had really thought more about them.

Sameer Dholakia: Great Hamilton reference. I wish I had just gone faster. Making calls, going faster is always better. That would be as simple to all the entrepreneurs listening, they all understand speed.

Harry Stebbings: What motto or quote do you frequently revert back to?

Jeff Lawson: I’ve got a few that are easy to remember because I actually made them the values of the company. No shenanigans. Draw the owl, be an owner, but one that’s not a value of the company that I always really liked for my people is: “The world but world was built by people just like us.” And it’s easy to think that, well, we’re not capable of this,have that imposter syndrome. Yeah, we can’t achieve that big goal. Those people who built those innovations prior to us, like they were special. They were different. It’s like no, no, no. The world was built by people just like you and me. We can accomplish anything.

Sameer Dholakia: That was awesome.

Harry Stebbings: What would yours be?

Sameer Dholakia: Mine’s hard. It’s more of a parable than a quote, but I talk about it a lot. My mom told it to my brother and I when we were little kids. It was: “We all entered this world as babies with our fists clenched, kicking and screaming. When we all leave this world, we leave in peace with our hands open. On entering the world, we’re all holding unique gifts and the purpose of life is determine what that gift is and then give of it freely and when you are done, your time will have passed.” And that notion, I always loved that parable because it just focused on giving, and others, and not you. I think that’s it. It’s a powerful one. Been in a lot of aspects of life from business to personal and family.

Harry Stebbings: Now I’m using this advantageously for myself here, but I’ve just joined my first board. You both have some incredible board experience. If you were to advise me on what I can do to be the best board member, what would your advice be?

Sameer Dholakia: Remembering that being a board member is not being an operator and remembering which decisions you’re there to support versus make. I think that’s a hard one, particularly for folks who have a lot of operating experience to remember that distinction.

Jeff Lawson: And I’ve seen boards be content with the readouts and I would not allow the board to believe that their job is just to oversee and receive the readouts, nod, cross your arms and nod a lot, but rather say, look, we’re here to help you build a business. We’re partners. We’re just another type of leadership team the company has. Bring the company’s big problems to us. Not just, don’t make it seem like everything is perfect and it’s under control. Don’t be afraid. Bring us the hard problems, exercise our brains. We’re here to help you build a great business, not just look over your shoulder. I’d encourage leadership team to treat you that way.

Sameer Dholakia: The way in which you engage in problem solving as a board member is super important as to whether or not you expect the CEO to bring more problems to you in the future.

Harry Stebbings: What is the right way to engage in that respect?

Sameer Dholakia: I think it’s constructively, there’s not the finger pointing. It’s not: I think you’re incompetent as a result of it, but you know, if someone is bringing you a problem, it’s on your side of the table. I’m rolling up my sleeves with you and we’re going to dig in and solve this together and be an active problem solver versus judging the problem and the person bringing it to you.

Harry Stebbings: I absolutely love that and I think you should invoice me for that advice. I do want to finish on my final question, which is a broad and a massive one, but what is the next five years look like for the incredible now Twilio and SendGrid? Paint that road map and vision for me.

Jeff Lawson: Absolutely. I mean we are just getting started. It is day one one of the transformation of the world’s communications, from its legacy in hardware to its future in software and for Twilio, our next five years, it’s really about unlocking the full potential for every company to engage with their customers, in the most compelling and natural and trustworthy way as possible. We think that every company should be leveraging the full power of software to make their relationships with their customers as tight as can be. And I think that most companies are truly at the beginning of that journey.

Jeff Lawson: At Twilio we want to help unlock all the potential the companies have to really innovate and figure out how do we build very tight relationships because of the power of digital communications with their customers. That’s really what all of our products are designed to help companies do. As we continue working with more and more companies to increase the amount of communications, the amount of engagement they build, across every part of their customer’s lifecycle and every touchpoint that they have with their customers, we seem to be able to unlock more and more magic in their customer bases and their potential and we want to help every company to bring out the full potential that they have to engage their customers.

Harry Stebbings: Jeff and Sameer, I do have to say this has been one of those episodes, which makes me so thankful to be able to do the show. I want to say a huge thank you for giving up the time and it really has been such a pleasure, thank you so much for joining me today.

Sameer Dholakia: Thanks, Harry. Thanks for the time.

Jeff Lawson: Thank you, Harry. It’s been a pleasure.

Harry Stebbings: I mean I think that has to be one of the biggest highlights of my interviewing career. I want to say a huge thank you to both Jeff and Sameer for giving up the time today. Not an easy thing, but I really do so appreciate it. Likewise, I would love to see you behind the scenes here on Instagram. You can do that at @HStebbings1996 with two b’s. It really would be great to see you there.

Harry Stebbings: As always, your tuning in and support just means the world to me and I cannot wait to bring you another brilliant episode next week.

 

Published on March 20, 2019

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