Specialist
Former Director, Business Development at Zipwhip Inc
Agenda
- Zipwhip's operating environment – B2B and B2C messaging demand trends over the next 12-18 months
- Competitive dynamics vs Podium, Plivo, Birdeye and others
- Synergy potential for Twilio (NYSE: TWLO) – product integration opportunities and carrier relationship improvements
- Outlook for H2 2021 and beyond – integration challenges and potential wildcards
Questions
1.
What do you think are the 2-3 main drivers of the operating environment for the broader business text messaging industry?
2.
What’s the best way to segment the market? Is it toll-free vs single code vs 10-digit number, US vs other regions, A2P [app-to-person] vs P2P [person-to-person] or SMS and traditional messaging vs RCS [Rich Communication Services]?
3.
It seems growth is probably driven by text volumes and price per message. How have volumes and prices trended over the last few years and how might it evolve over the next 2-3 years?
4.
Do you think the regulatory developments around the industry could be positive, neutral or negative for Zipwhip? Is there anyone you think it impacts the most negatively?
5.
Which one of the many players in this market, including MessageMedia, Podium, EZ Texting and Burst SMS would you highlight as the biggest potential threat vs Zipwhip?
6.
How easy is it for Zipwhip to catch up on features? Will data reporting and analytics be the most differentiated aspect of the industry? What else differentiates these players?
7.
How might messaging develop on a vertical-specific basis, perhaps where the functionality caters to a specific vertical or industry?
8.
You nuanced between SMB and enterprise. Is the big sticking factor there that companies such as Zipwhip and TextUs are out-priced for an SMB customer? Why else might a company such as EZ Texting be more of an SMB product than an enterprise one?
9.
How do you think about CPaaS [communication platform-as-a-service] players – such as Twilio, MessageBird, Sinch, Bandwidth and Nexmo – as part of the wider ecosystem? Will they increasingly be direct competitors?
10.
Is Zipwhip largely paid for from companies’ marketing budgets or IT budgets? Does that have a role in why you think there’s a lack of desire to put in the developer hours, because it’s a CMO or what have you, because they’re controlling the customer experience and the relationship aspects? How does that play into Twilio’s lower presence?
11.
Is the main nuance to consider between Twilio and Zipwhip that Twilio is just an underlying programmable API and lacks a UX? Is there anything else you’d call out that’s very different from a product standpoint?
12.
What are your main takeaways for Twilio buying Zipwhip? What do you think are the main strategic benefits on either side?
13.
You described the deal for Zipwhip as expensive. Why do you think Twilio didn’t try to establish such a bespoke toll-free network itself?
14.
Why do you think telcos are so resistant to up-and-comers such as Twilio? Why wouldn’t Twilio be able to do this on its own, given your points around how scaled the business is vs Zipwhip? You’d think it might be able to do it more expediently. Why else might telcos be cautious of Twilio?
15.
What do you think pulling Zipwhip under the umbrella and deleting the go-between does to Twilio’s SMS gross margins?
16.
Do you think that a company such as Sinch could reach parity with Twilio from an underlying network standpoint if they were to make a similar acquisition? You mentioned TextUs being the biggest up-and-comer whereas Sinch, a predominantly European-based company, is increasingly becoming more of a US-centric revenue generator.
17.
It seems that Twilio’s goal is to roll up as solid an underlying super network as possible, Syniverse and Zipwhip being the most recent examples of that. What else do you think the company wants to do to improve carrier relationships, densify the network or minimise?
18.
Press releases talk about Zipwhip growing north of 400% over the last three years. What do you think are the key drivers behind such a high growth clip?
19.
Does Zipwhip being plugged into new APIs mean a lot of the growth comes from new logo wins vs land and expand? Is it experiencing a massive uplift as soon as it is on a new app, which then wanes over time? Alternatively, is there a lot of consistent growth as APIs are added?
20.
Do you think Twilio will be a positive contributor to thinking about more visionary API partners? If you run out of API integrations, then presumably the growth would start to stagnate. How might Twilio partake in trying to maintain recent growth levels?
21.
Have you thought about a normalised growth rate once Twilio exhausts new API partner opportunities?
22.
How do you think Twilio is considering e-commerce partnerships, thinking about the rise of e-commerce and the D2C approach to CRM there? Do you think a lot of runway exists?
23.
What do you think will prop pricing up, especially given the looming possibility that volumes will be dependent on price if APIs run out? Will this industry inherently face 5-10% pricing compression on a YoY basis, or is there anything that allows Zipwhip to maintain prices with customers? Is it adding enough value proposition to keep price up?
24.
How much do you think security matters to Zipwhip as it increases budgets with enterprise customers? You hit on the spammy aspects. How well-suited is it to avoid DDoS [distributed denial-of-service] attacks or personal information hacking if it were to grow budgets meaningfully?
25.
Why do you think business texting isn’t a more material portion of CMOs’ advertising budgets? Global ad spend is north of USD 600bn. How scalable do you find that to be, relative to Facebook or Google? Would you expect texting to be an increasing point of interest for D2C interaction at the CMO level?
26.
Could you suggest an inflection point where budgets start to ramp up? Why wouldn’t it be three vs five vs 10 years from now? Why doesn’t every CMO spend at least 10% or more of their budget on texting?
27.
Twilio now owns the CDP [customer data platform] asset Segment. That seems to potentially be more entrenched with the CMO as a decision-maker. Does that help facilitate that discussion a little bit more? Do you think that’ll help accelerate the awareness of the importance of texting?
28.
Could you go through a few verticals demonstrating the various customer use cases, how they would typically implement Zipwhip and how the land-and-expand story would actually work?
29.
How penetrated is Zipwhip around contact centres? How much of a boost could come from Zipwhip being integrated seamlessly with Twilio’s Flex contact centre solution?
30.
How much developer tooling already exists for Zipwhip vs being an out-of-the-box product? Is much developer tooling used for the more tech-savvy customers? Could that occur more over the next few years?
31.
Could you outline the state of switching costs in this market? If a customer is entrenched with Zipwhip, how easy would it be to move to a competitor? What does that mean for average customer stickiness?
32.
What technology are you monitoring as a potential disruptor to Zipwhip, whether it’s RCS or any impact from 5G?
33.
Why do you think there hasn’t been larger-scale consolidation, given there are so many different adjacencies vying for the lead in customer experience, considering Microsoft vs Salesforce vs Five9 vs RingCentral vs Twilio? How might the broader industries converge in the longer term?
