Jeff Lawson’s Empowering Influence: Fueling Our Drive to Build What’s Next

,
Jeff Lawson’s Empowering Influence: Fueling Our Drive to Build What’s Next

The moment I crossed paths with Jeff Lawson and stumbled upon his startup Twilio back in 2009, the air buzzed with intrigue. The challenge of providing “cloud telephony” seemed almost audacious—taking on the mighty “Big Telco” and redefining the very essence of telephone numbers. As I grappled with the premise, a question lingered: Couldn’t startups tackle more promising frontiers instead of opting to lock horns with industry titans?

Fortunately, it didn’t take me long to unravel Lawson’s mindset. Each time he shared his excitement about the potential in people’s creations, my understanding deepened. His lasting legacy as a tech entrepreneur would ultimately be defined by the impact of his actions and the innovative paths he paved.

At the beginning of the year, facing growing pressure activist investor, Jeff Lawson stepped down as Twilio CEO, ending a 16-year reign. The company is one I’ve followed closely for years and Lawson’s leadership has redefined how the tech community views software development.

How Jeff Lawson Turned Wanters into Doers

From banking and retail to insurance and finance, every industry is turning digital, and every company needs the best software to win the hearts and minds of customers. The landscape has shifted from the classic build vs. buy question to build vs. die. Companies have to get this right to survive. But how do they make the transition?

— Jeff Lawson, “Ask Your Developer”

Started by Lawson and co-founders John Wolthuis and Evan Cooke, Twilio set out to “democratize communication for developers.” A serial entrepreneur, Lawson said he discovered two things his companies had in common despite being different businesses:

  1. Software helped build a great customer experience, a differentiated product, and iteratively understand customers to build better solutions
  2. While building his company, communication was needed to both reach out and hear from customers

Ultimately, these realizations resulted in Twilio’s creation. It would solve Lawson’s customer communication problem and, in effect, remove a barrier to entry for developers to be creative across voice, text and other telephony services. The company joined Parse, Stripe and the growing Platform as a Service (PaaS) sector in the late 2000s.

The Rise of Software-Defined Communication

To its credit, Twilio not only ushered in a new form of innovation but also played a pivotal role in establishing a new category many call the developer economy. By building technology through the use of Application Programming Interfaces (APIs), app makers were freed from the constraints imposed by the whims of slow incumbent providers. In other words, it enabled app developers to more readily incorporate telephony features without having to endure lengthy processing delays from legacy platforms.

Furthermore, it took another step in what’s known as software-defined communication, empowering developers—not hardware manufacturers—to control the communication stack.

At the company’s 2013 developer conference, branded at the time as TwilioCon, Lawson hyped up the “doer” throughout his keynote. By all accounts, it was an opportunity for him to showcase “how Twilio customers are tackling tough challenges by employing our platform.” Naturally, it made sense to cast a spotlight on key builders as it highlights creative use cases. However, it seemed more like a chance to create a movement.

As I reported at the time:

…Lawson spoke about how communication innovation isn’t happening through traditional stakeholders, but actually through software developers who are tired of the status quo and want to leverage the cloud to make telephony technology work to fit their workflow, not some other company’s vision.

You could say that Lawson’s trying to “rage against the machine” — those legacy hardware and software systems that companies have in place, on-premise, and have become expensive to maintain and lack the capability to scale to the organization’s needs. He’s also against the traditional boxed software and services that companies are purchasing and instead feels that communication capabilities shouldn’t be defined by the hardware, but the software in them.

Jeff Lawson: ‘We Can’t-Wait to See What You Build’

It’s a statement familiar to developers, and one Twilio’s co-founder and longtime CEO utters after every public speech. He’s pushing a revolution whereby companies are no longer encumbered by restrictions set forth by software vendors. Instead, they can just ask their developers.

Lawson explains it succinctly in his book, “Ask Your Developer”:

One of our customers said it incredibly well: with off-the-shelf software apps, you have to change your business to match the software — which is crazy! Really, you should change the software to build the business your customer needs.

You might be able to customize off-the-shelf applications, but it will never be a perfect fit. Worse, you will have to wait for the software maker to deliver upgrades. And even when a new version ships, it will take what feels like forever to roll it out across your organization.

Twilio and other PaaS companies have eliminated those times when workers had to inform executives about the impossibility of implementing certain features or services due to technical limitations of incumbent software. With his departure as CEO, Lawson will likely be remembered for affirming that stagnant tech providers should not impede the “continual inventiveness of humanity.”

Our mission, to unlock the imagination of builders, is one of the most important ideas in the world. Throughout time, builders have shaped the world we live in. And serving them, we power their ideas, their ambitions, their businesses and more broadly – the continual inventiveness of humanity in the digital era.

And of course, we too are builders. So Twilions, I can’t wait to see what you all build next.

— Jeff Lawson, in a linkedin post announcing his resignation as twilio ceo

Category Creator From Startup to IPO and Beyond

Developer adoption accelerated under Lawson’s leadership. Since Twilio started trading on the public market, the number of active customer accounts has grown by nearly 895 percent to 306,000. A big chunk of those likely came through the company’s acquisition of SendGrid, Segment, and dozens of other startups.

While Twilio’s growth started in the same way as most Silicon Valley startups — with developers and hackathons — it made early inroads to appeal upmarket, struck partnerships with legacy providers, and added infrastructure to reduce communication latency worldwide.

Lawson also directed Twilio to own the cloud communication stack, expanding beyond the phone, voice and text to include capabilities like authentication security, programmable SIM cards, Voice over IP (VoIP), MMS, and yes, even fax.

Startups embraced Twilio’s feature set and so did the enterprise. For the former, it lowered the barrier to entry and made it more cost-effective to develop apps. And there was no shortage of rivals vying for the attention of early-stage firms, including MessageBird, Plivo, Avaya, Vonage, and even Amazon Web Services.

As for the latter, the businesses embraced Twilio’s communication APIs because it expedited development, giving businesses the flexibility needed to pursue their digital transformation strategy. They had free reign to build apps how they wanted, no longer subject to software makers who developed tools for a mass market.

Fast forward a few years post-IPO, Twilio would evolve beyond cloud-based telephony. With the purchase of SendGrid and Segment, Lawson would see his company evolve from a cloud communication platform to one focused on customer experience. Now that developers could communicate with their users, it was time to make things more personalized.

Stalled Growth and Fending Off Activist Investors

As a publicly traded company, Twilio has consistently outperformed Wall Street’s financial expectations on a quarterly basis. Alongside substantial user account expansion, the company has achieved remarkable revenue growth, surpassing the $1 billion milestone for the first time in Q4 2022. Despite these accomplishments, Twilio has grappled with a growing net loss — at least until the past several quarters.

Critics argue Twilio’s dream ride has come to an end.

The slowdown in revenue growth and mounting losses due to a weak global economy, combined with Lawson’s stake in Twilio significantly diluted, opened the doors for activist investors to seek change. Representatives from Anson Funds LLC and Legion Partners LLC pressured the company to divest underperforming business units, specifically the data and applications business unit.

Ultimately, Twilio’s desired turnaround remains unrealized and consequently, investors got their way. At the outset of the year, Lawson stepped down, paving the way for Khozema Shipchandler to assume the helm—a seasoned veteran within the company. Shipchandler, with a wealth of experience in publicly listed companies, presents a potential remedy for concerns raised by activist investors about Twilio.

My friend Alex Wilhelm penned an article soon after Lawson’s resignation with the headline: “Jeff Lawson’s legacy at Twilio is about more than a few rough quarters” I agree with the sentiment. Lawson will be remembered for not only launching the cloud communication platform but also transforming the way an industry thinks about software development.

Having bid adieu to the role of CEO and Twilio’s board, Jeff Lawson has ridden into the sunset, leaving us with an air of anticipation. While his entrepreneurial journey may have shifted gears, the curtain hasn’t closed on Lawson’s ventures. No future plans announced yet, but mark my words — this isn’t the last we’ve heard of him.

I can’t wait to see what he builds next.

Photo credit: Jeff Lawson via Twilio

Ken Yeung Avatar

About the Author

Leave a Reply

Discover more from Ken Yeung

Subscribe now to keep reading and get access to the full archive.

Continue reading