Specialist
Former global head at Segment.io Inc
Agenda
- Twilio's (NYSE: TWLO) operating environment – Segment integration risks and opportunities
- Evolution of competitor set from CPaaS and CCaaS vendors to CRM (customer relationship management) platforms
- Go-to-market strategies, adoption obstacles and sale cycle dynamics
- Outlook for Q4 2021 and beyond – execution risks and product roadmap
Questions
1.
How does Segment fit into Twilio’s evolving journey to become a customer engagement platform since its November 2020 acquisition by the company?
2.
It seems there are a handful of companies aiming to own the entire entire end-to-end customer journey and identity. That is largely what Twilio Engage is trying to solve in terms of a pain point from a marketer standpoint. What is unique about Twilio Engage’s approach to the problem, given there might be alternatives available?
3.
You mentioned Segment was born of a customer data infrastructure company and Twilio was more platform-oriented. What are the influencing factors that determine if a company is a true pure play CDP [customer data platform], given so many companies refer to themselves as such? I think of Amperity and mParticle as most similar to what Segment does, so much as more slightly nuanced business models such as Brightloom, Wisely, Bridg or Braze. How many players exist that might be able to replicate what Segment has, if at all, in terms of how big its moat is relative to the other CDPs?
4.
Does that mean that Segment will be more insulated from some of privacy and identity headwinds such as CCPA [California Consumer Privacy Act], IDFA [Identifier for Advertisers] changes and third-party cookie deprecation with Google Chrome relative to CDPs and given it has Centrifuge? Is it a function of Segment getting more first-party data from Twilio, so much as its clearing house through Centrifuge is regulatory compliant which will allow it to properly manage and utilise that data to provide insights to marketers?
5.
Do you think the data that comes through the consumption patterns on Twilio will become increasingly important? It’s probably more of a policy question at the end of the day. However, do you find many times the trends might be headed towards where it’s very first-party publisher oriented? Is this the case to the extent where factors such as POS data or credit card data would be at risk of having more limited access across the board from a data residency standpoint, and then it will be siloed by first-party publishers dynamic?
6.
What TAM exists for Segment, particularly as it comes together with Twilio? When Twilio first acquired the company, it referenced that USD 17bn market, which consists of maybe more of a USD 2bn serviceable TAM, where all the company is spending is on CDP software at that moment. However, there is also a USD 15bn do it-yourself, positional software tools and data integration market that could be added on and layered into what Segment already is. Do you resonate with that kind of a breakdown of what the overall revenue market opportunity might be, or is there a better way to think about that?
7.
How early are we in improving the learning curve element if Twilio and Segment combined are aiming to achieve customer engagement, which is somewhat similar but disruptive to what Salesforce is doing? It’s important for them in the sense that it is more developer-led and inbound and driving more of a B2C story vs a B2B one. Is that story told much more easily to players such as Allbirds or Warby Parker vs some of the bigger companies that control a lot of the marketing spend such as GE or Johnson & Johnson?
8.
Will the sales motion be largely trying to drive an understanding of the value proposition as relatively unique to what other marketing cloud or advertising companies offer? Is it the chief marketing officer on average, or do you think it will largely be that Twilio engages now, discussed hand-in-hand with Salesforce, Adobe, Facebook and Google increasingly, thinking about what will stand in its way of getting more Fortune 50?
9.
Is there anyone else outside of the top four of Salesforce, Adobe, Facebook and Google that Twilio will start to nudge up against? Which incumbents are most exposed during the early days? Who does Twilio Engage have the highest potential to disrupt?
10.
Is it largely CDP-esque companies such as Braze and Attentive that are inherent churn risks for Twilio now that it’s brought Segment into the mix? What other customer types should it be consuming on the Twilio platform and might be something the company is inherently concerned about as it brings Segment’s capabilities into the platform?
11.
It seems one of the nicest puzzle fits for the two companies is that they were both developer-led from the beginning. Is that enough to have a smooth culture fit in terms of how they approach the product? You mentioned Segment is more start-up and Twilio is providing a way to not be considered a start-up anymore. Is there a negative clash element to consider there?
12.
Is there any significant key person risk at Segment when considering the management team and how visionary they might have been? Would you be concerned if anyone left too soon?
13.
What parts of the product are you most excited about with the two capabilities coming together as Twilio Engage is set to launch in Q1 2022?
14.
You mentioned Twilio is a good omnichannel across data residency collection, given it was infrastructure oriented. Are there any either inbound or outbound channels that will need the most improvement as the two companies come together? The company’s February 2019 SendGrid acquisition stagnated in terms of the cross-sell that might’ve been, so maybe e-mail is one area that might have had a hiccup.
15.
How do you expect the go-to-market and sales motion to come together? Having the product in place is important, but so is the ability to demonstrate the value proposition. What within the sales motion or pricing model will be most challenging once Twilio Engage unifies and launches?
16.
You mentioned how great it is that Twilio’s flexibility and extensibility will cater to the different ways the Segment product can be utilised by customers. Does that mean that it will still be very programmable oriented? Would it undercut cloud marketing players such as Adobe and Salesforce on price, given some of the R&D costs required by the actual comms team you’re selling it to, to do a lot of that programmability once it’s activated?
17.
Presumably a lot of the Fortune 50s are using a product such as Adobe and Salesforce already. How much pent-up demand is there for this product and how much more difficult might it be to get material uptake right out of the gate, if it’s more displacement of incumbent-oriented products?
18.
Will Twilio be more thought of by a marketer in terms of an actual advertiser piece of the wallet share, so it’s more like the USD 200bn-300bn-some-odd digital advertising market it can increasingly try to capture?
19.
You mentioned if Twilio sets up as a product specialist that’ll allow it to increasingly do bolt-ons or roll-ups to increasingly fill out the platform. Is there anything else the company could consider to fill with additional M&A as it continues down the journey?
20.
Do you expect Twilio COO George Hu’s departure to impact the company’s ability to follow in a more efficient, developer-led way similar to Salesforce? How much of a key person is he regarding that longer-term journey?
21.
When thinking of how Twilio tries to continue to replicate Salesforce in a bigger and better way, something that comes up a lot is the quality of Salesforce’s app exchange platform and how it allows its partners to come in and develop dynamic solutions and then sell within a marketplace. It seems to an extent something Amazon has tried to replicate through Connect and building a bit of a marketplace through which developers can sell their APIs, but it hasn’t fully been replicated. Is that a challenging thing to do and is that important in terms of the product roadmap?
22.
What is the most challenging part to get to an app exchange platform? You mentioned tools to build on top, tools to sell and maintenance for support and customer service. Which parts of that pie would be the biggest headwinds for Twilio to accomplish what Salesforce has already done?
23.
Should an app exchange be Twilio’s primary focus for its roadmap? Are there additional pieces of the puzzle that need to be filled out first so the platform is fully bespoke and then you think about the marketplace dynamic? Or is it getting to a point where that should be the main thing it’s driving towards?
24.
It seems there are many tailwinds and exciting opportunities for Twilio with the Segment integration. What might be the biggest risks to accomplishing all the goals from the combination over the next 3-5 years?
25.
Will a lot of the existing Segment/Twilio customers be some of these early adopters? What might that mean for what those customers want that would drive the value proposition for them?
26.
The enterprise competitor set differs meaningfully from the SMB and mid-market. What are the incumbent tools Twilio might be using for SMB, if that’s where the adoption story starts?
27.
How price-sensitive are SMB customers? Is that the biggest concern then, given you mentioned you can’t discount how important the pricing and packaging is? I would presume SMB will cost more, regardless of all the premium value-add that comes with it and there’s a limit to what they’re willing to pay more than they already are. How important will it be to not overprice, at least if the SMB side of the market will be where the story starts?
28.
Are open-source options doing enough from a functionality standpoint to be disruptive and deflationary to the market for CDP?
29.
Is there any benefit from going to some of the Fortune 100 and Fortune 50 companies already using both of the customer sets, and monitoring how quickly you can demonstrate a high-value proposition to accelerate the enterprise adoption without driving much of the SMB conversion first?
30.
You mentioned there are so many tailwinds that came in through the pandemic and it accelerated the digital transformation and personalisation story. How much of that is still in an acceleration phase, whether that’s influenced by B2C or B2B? What are the value drivers for the next 3-5 years if we’re in a net new normal?
31.
Who do you think has the biggest existential threat with all the privacy and identity headwinds? Would it be retargeters or DSPs [demand-side platforms]?
32.
Will a time come when CPMs plummet to zero on a programmatic platform such as a DSP? How is DSP’s world evolving, given there is meaningful third-party data reliance?
33.
Will a move away from DSPs be in favour of SSPs [supply-side platforms]? I heard that’s where the shift might happen to when conversations about IDFA and cookies began to happen. Aren’t SSPs at displacement risk as well, given they’re reliant on publishers for data? Why might SSPs have a more promising outlook than DSPs?
34.
Are there any wild card start-ups or disruptors we should monitor?
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