I work at a company within the Fortune 10 and we use Twilio in some isolated products, and they are pushing hard on a few potential deals/opportunities to expand further.
Technical foundation appears solid to all their stuff, but their enterprise sales/account folks seem very green - unsure of how to navigate large enterprises, not connecting with the right folks at the right level within the org, not understanding who or how decisions are getting made, etc.
We see this alot - deals with tens or potentially hundreds of millions of dollars at stake where potential vendors have a couple sales folks working the deal, not getting traction. Get a few more folks working the deal and figuring out the right angles and they could have it locked down in a matter of months, but they never seem to figure this out and a year later they're still dicking around with the wrong people at the wrong level not making progress.
I work in sales at Twilio and manage the account of a huge enterprise customer. We've sold to a few of their departments and what we've done so far has been successful.
But every time I call my contacts at this customer, something seems to derail us from the path to further integrations. They know our products work and save them money. But just last week I called Glenda in accounting only to find out her phone number now goes to some guy named Bob who refused to tell me what desk he works on or what happened to Glenda.
So I fired off a quick email to Vincent, the CIO, asking for an updated contact list since Glenda is gone and I heard Sally moved to outside sales. Vincent's secretary wrote back to me saying she'd "ping" him and "circle back". That was two weeks ago.
Last year when we closed a bunch of deals with this company I was recommending to my management that we spend even more effort to get further with them this year. But here I am halfway through the year and I feel lucky that my proposal was turned down because we were already too busy with other clients. What would another sales guy have done anyway, apart from dogfooding our sweet new IP phone stack as he wasted his time trying to navigate an endless megacorporate morass?
Do you guys have top tier enterprise sales guys? Maybe people in their 50's and 60's, who have a lot of contacts, and relate to C level people better than millenials? Is commission capped or uncapped? By uncapping commission sales is driven to maximize deal size and be hardcore about closing, even if that means one guy gets a $700k bonus. He still brought in way more!
Really solid enterprise sales guys see the corporate morass as a challenge and have developed and learned tricks to overcome it. It's a very psychological game. You need to create urgency, you need to think up reasons to call, reasons you need meetings. For a huge, fortune 100 client, you should treat the sale as an orchestrated project, not something you casually shoot an email off to and forget about for 2 weeks
I see this a lot at start-ups as I come from automotive (similar to large enterprise sales, engineering teams with product teams make calls on buying 10's of M to 100's of M in product.)
The biggest problem I see is you're not on site. You're not there physically and haven't met Glenda and her manager or immediate peers. Because if you were on site Glenda would've let you know she's thinking of leaving and would've referred you to her manager in charge of her replacement. There's so much gained in just showing up and being present.
It doesn't feel scalable or meritocric but it is how a lot of humans work.
Without more context, my suggestion is to sell to the CIO instead. You are already in contact with him. Get him to initiate a project.
Blueprint-sell, solution-sell, or whatever is the current hotness in enterprise software nowadays :)
Joke-aside, engage with the CIO. If the current sales rep thinks he or she is too "low-level", involve someone higher up in your company, get the VP of sales involved. Hell, get your CTO, chief architect and/or CEO involved. CEOs make great salesmen in enterprise software. Get the CIO and higher ups excited about using Twilio throughout the organization. If you want to hit it big, don't start from the bottom (only). Start from the top.
As for this problem:
> since Glenda is gone and I heard Sally moved to outside sales. Vincent's secretary wrote back to me saying she'd "ping" him and "circle back". That was two weeks ago.
Build a sphere of influence and expand on it. I found out the hard way that it was absolutely terrible for me that I had only 1 or 2 points of contact in a company. What if they moved on (suddenly)? Build contacts within the company, and expand. Keep in contact with them.
It's really interesting to hear you say that. I'm in sales and have to make decisions like this all the time. On our side we're constantly making calculations about which accounts to invest our resources in. It's really hard! There are so many variables. We're acting on imperfect information. We're considering the other accounts we're working on, and doing a cost benefit analysis.
Bigger companies like MSFT and Oracle are usually better at this because a) they've been doing it longer, b) they have more resources to burn. If they throw 10 people on a large deal and it doesn't go through the company itself typically isn't hurt that much (the reps, that's a different story).
The decision to put that many resources on an account that may or may not bring in revenue in the short-term is an enormous decision for a company like Twilio. This is the hard part that they have to go through. Trying to place the right bets on the right accounts. Sounds like they may have gotten your account wrong, unfortunately.
>>> b) they have more resources to burn. If they throw 10 people on a large deal and it doesn't go through the company itself typically isn't hurt that much (the reps, that's a different story).
Basically, you're saying that your company is flimsy and doesn't have the resources to execute a sale. It's probably not the impression you want to give to clients ;)
MSFT/Oracle win because they have a) decades of experience in selling b) branding c) already in the door of most companies.
Did I strike a nerve or something? The personal insult makes you look defensive.
And no, that's not what I'm saying.
What I am saying is self evident. Large companies have more resources to spend, and they do. Smaller companies have less to spend, which results in experiences like OP's, as they have to pick and chose their battles more selectively. MSFT has laid off more sales staff in the last year than Twilio employs.
I mean if (1) what you say is true, (2) you have the know-how and ability to navigate such structures, and (3) you can build a team that closes these deals, then I'm positive Twilio would spend a small fortune to hire you.
I never understood this. Why do companies cut deals for services like twilio offer? Fair & progressively discounting pricing backed by a market leading product would save on sales salaries and commissions while increasing deal flow. I understand the corporate culture around deal making is also too ingrained on the buyers side too however it's long term detrimental to all parties involved. Everytime I've been involved in this type of exchange the only thing on my mind is how useless and irritating the sales team are, while i wonder about competitors with up front pricing who will help speed up delivery of the actual feature /product.
"bottom dollar" probably means the cheapest price. When resellers come, then the prospective customer can gain more knowledge through the bargaining and negotiation process. This is bad for Twilio salespeople because they can't push for a higher price.
Many CTOs, CIOs, C*Os, VP of product, etc. ask at least some of their developers which platforms they prefer. Most people in those positions won't admit they don't know the latest tech, but they do look to the people working for them. This billboard taps into that and establishes authority, so I don't think it's worth ripping on.
This is not how most large companies I've worked with operate. Large IT decisions are driven top down, not organically through the engineering front line. The CTO, CIO, etc. work with vendors that market to them. It's the way organizations like Salesforce, Workday, Cisco, and Concur operate. The consumer/developer first organizations like Dropbox, Twilio, and Stripe can only get to a certain stage before they need to target the big fish. It's this huge cultural shift (focusing on making something users want vs figuring out how to sell to behometh organizations) that will make or break these companies.
If they figure it out, they will own their markets because frankly their products are better since they were user first.
I think it's important part of building a company - recognizing that the heart and soul that led you to say $100M sales can completely differnent from what leads you to $1B. It's almost like a mini innovators dilemma for startups.
Extremely well said. Yours is a more in depth and eloquent version of what I wrote in the first section of this essay:
"This is an essay about go-to-market strategy and market development. It’s also an essay about company culture.
Specifically, it’s about how the market focus and culture that helped a company reach significant heights can rapidly transform from critical assets into potential liabilities…and what to do about it.
While Twilio is the focus of this essay, this essay is not just about Twilio. It could be about about ANY potentially disruptive company with brilliant founders, venture-scale ambitions, great products, a top-notch team, and traction to die for."
Yes, absolutely. However, does this change over time? With:
+ increased decentralized decision making
+ less monolithic systems architectures and complex integrations
+ quicker/cheaper ability to take software from pilot to production
Do developers become the new gatekeepers of the large enterprises?
"Do developers become the new gatekeepers of the large enterprises?"
I doubt it. From what I see is that developers can do a few things but as soon as the IT department hears about it they will try to standardize on a solution. And you are back in big Enterprise sales. In the end the CIO wants to keep his/her budgets and power.
I just went through this. We prototyped a system and thought it would work. IT jumped at it and made that supplier the company wide standard. In the meantime we got some doubts and will probably jump ship. But IT is sticking to their decision.
Most examples (Stripe being the exception) are for internal use, and I think there is a difference between software used internally and API's / libraries used in the product.
Stripe is about payment and payment will be at the core of most businesses so it makes sense for the higher ups to take an interest.
I've read the article and that's one more argument for me that IPO is a very toxic thing sometimes.
mass marketing strategy/creating a commodity is a very hard longplay game. the prize is a huge stake of the market, but it's very challenging to get there.
now assume you have your revenue and then you get two customers that are going to pay you 25% of your current revenue (20% of the revenue after they start working with you). if you're private you just stick to your strategy and count these two clients as some random money (as they don't fit your main strategy). being public, now, if you lose these customers - you're at risk, the market forces you to make decisions, to keep these customers, to go to the enterprise market, hire sales people etc.
"In Twilio’s earliest days, multiple angel investors and VCs told Twilio’s founders that focusing on software developers would never lead to a venture-scale business. To make their case, Twilio’s skeptics pointed out that software developers have no control over budgets in the enterprise.
But Lawson, Cooke, and Wolthius were undeterred. They believed deeply that software developers held the keys to the future…and not just of telecom, but perhaps the whole world."
well now, being public you can't just do this.
imagine Amazon listening to advise to use retail-chains (system integrators in Twilio case), or should Amazon do really care about revenue coming from one specific customer (even if it's huge)?
it's really hard to keep doing what you believe you need to do when you're under pressure of the public market. I absolutely understand why do such companies go public, but that makes me sad.
I was thinking about the 'systems integrator partner' strategy before I even got to the end, without knowing that 'systems integrator' was what that was called.
After getting to the end, I realized a very common path would be to start with the 'systems integrator partner' strategy, then realize, hey, these guys took the risk and proved it could be done, but now they're taking a huge slice of our potential revenue -- let's build our own products, end our partnerships, and screw the partners who got us here. Sometimes it "works", sometimes it doesn't.
Twilio is wisely selling axes during the gold rush. Interesting article but I've bet my company and $50k that this is wrong. (I buy their stock on dips)
Rather than trying to deal with all the costs/conflicts and intricacies of selling their services directly to each client they are smart to empower others to handle that last mile for them. That's the true essence of a platform. When offering a platform like iOS you invite others to make money handling all the stuff that you aren't uniquely qualified to deal with and/or that isn't worth your time. I've talked to Google employees who consistently say if it's not a $100M/yr opportunity we won't even look at X.
You could argue, as I think this article does that Twilio is leaving billions of dollars on the table with this approach but they are getting something for that money... an ecosystem of fiercely loyal clients invested in their success (because companies like mine make money off of them).
Finally, does Twilio (or anyone) really know what the future of enterprise telephony will look like? I would argue they don't, and anyone with any technical experience knows how VERY dangerous + expensive it is to start building a client facing product without a clear vision for what it should be. Better that they provide the API and let other companies fight to figure out the rest... which of course we are happy to make money doing for them :)
"Crossing the chasm"... now there's a phrase I haven't heard for a very log time. Although I enjoyed the book, even the author says that the "chasm" no longer exists (in part, cured by his book).
Though he's right about consumer products due to direct access to consumers via internet, it may still exist for B2B suppliers, especially for the enterprise, where high-value purchases require an involved and cautious organizational process.
Twilio is great and we used it on my last team, which is a fortune 50. However, I saw the issues with having a subpar sales team. As I was leaving the communications team, "management" decided they wanted to replace Twilio with a Salesforce product. That Salesforce product uses Twilio for sending e-voice calls and text messages. Unfortunately my arguments against the switch fell on deaf ears
Side note, please don't hijack normal navigation keys to do something unexpected. In this case, page up/down navigates the sections instead of the normal behavior.
Oh. I looked into it a bit, looks like that's something "Aesop Story Builder" does. Not sure if they have settings that you can control through their interface. If they do, it looks like the relevant option might be called "arrowKeys".
I'm the author, and am not even the least bit bitter. I love Twilio. I wrote this because I want them to succeed.
A successful IPO has no necessary correlation to having crossed the chasm.
You've successfully crossed the chasm when you are the clear market leader in the a "mainstream market" segment.
In Twilio's case, that would be Being at the center of communications infrastructure for Fortune 500-1000 companies.
They've made some inroads (ING, etc). But most larger enterprises are still using Cisco/MSFT/Avaya and other on-premise tech for call centers, conferencing, video chat, collaboration, etc.
Also: Twilio is not profitable and it just lost one of its highest volume customers (Uber) who had been using it for "point solution" use cases, mostly around automated SMS and voice.
So if you disagree, that's fine. I'd find it much more productive to know what you disagree with and why than the ad hominem accusation that I'm a "bitter former employee" which is a. Not useful and b. False.
I think it's important to remember that what Twilio offers is a commodity, and there are no switching costs, which limits their market value.
Just as it's easy to spin up comms on Twilio, it's getting easier by the day to spin up Twilio-esq infrastructure itself. They had first mover advantage, but it doesn't seem good enough (not taking into account their largest customers deciding to internalize the functionality to reduce costs).
> what Twilio offers is a commodity, and there are no switching costs
There are plenty of switching costs. Porting numbers from one carrier to another with zero downtime, for example. Negotiating a contract with a new carrier. The new carrier may not support numbers, calls or SMS in some countries you are currently supporting. Testing deliverability and call quality across multiple carriers in multiple countries; you might discover that the new carrier routes messages/calls using unreliable carriers. The new carrier may not have good procedures for avoiding toll fraud. Sending SMS messages that contain Unicode might render like à on some phones; Twilio put a lot of time into figuring out how every carrier treats those on the wire and ensuring that messages get rendered properly. Fallback procedures may break.
If you want to host it yourself now you probably need a NOC, and to test binds, and to test the fallback protocols, and to figure out every edge case that carriers have with respect to certain numbers, messages or routes.
Ex-Twilio here too.. and worked for an SMS aggregator before that.
While working with one carrier is easy, working with 5, 10, or 100 is a horrible pain in the ass. In addition, you need a compelling reason to convince higher ups in your org to sink $texas-sized dollars into this.. long before you can send that first message.
Uber is a special case as they needed coverage in countries that Twilio didn't support. Further, they had a ridiculous pile of money. Since they had to stand up the architecture anyway, adding the "easy" countries made sense.
I'm curious why you think having IPOed means you'll successfully sell to the enterprise market, which clearly is the "chasm" the author refers to? Without much knowledge about the details, the article seems like a fair representation of "I see this issue for them if they want to grab this large market (which would help them resolve some of their current risks), here is why".
I think it's twisting the meaning of crossing the chasm to insist it means you have to be doing traditional enterprise sales. Twilio, along with Atlassian and others showed that you could build a business by marketing directly to developers and bypassing the C suite.
I've got a friend who is very plugged into the enterprise telecom world. He's been using Twilio since the beginning and told me that no one in that world even knew what Twilio was until two years ago. Now he sees telecom execs being routinely asked what's your strategy to respond to Twilio?
I did not insist anything about "doing traditional enterprise sales."
I said that when a company successfully crosses the chasm, it has established a leading positition in a mainstream market.
What that mainstream market is or the channels the company uses to win it is entirely dependent on its products and the landscape of products it either must displace (in an exiting market) or pre-empt (in a new market).
For example, Facebook crossed the chasm after it opened up beyond .edu and pushed MySpace into complete irrelevance.
Salesforce, when it closed a huge deal with Merrill Lynch (I think), made "the cloud" safe for everyone.
And as a counterpoint, Snap has not crossed the chasm, despite a $25b IPO.
And arguably, neither has Twitter, despite over $2bn in revenue and being public for years.
> And as a counterpoint, Snap has not crossed the chasm, despite a $25b IPO.
I think it is a bit too early to call this one. I'd rather give Evan Spiegel and his team a few more quarters to see what they've got in store against Facebook now with IPO money in the bank.
> And arguably, neither has Twitter, despite over $2bn in revenue and being public for years.
Granted you qualified your statement with "arguably", but why do you think this when there is no corollary for "tweeting" outside of Twitter's service? If Twitter goes belly up today, who will step in their place?
I don't mean to say that Snap won't cross the chasm, just that it hasn't yet.
If it had, its position against Facebook would have been strong enough that Facebook would not have been able to clone its core feature into Instagram and cause Snap's growth to stall.
Twitter is a more interesting question.
Twitter's product and position are unique, yes, but IMHO, the company pursued a market (advertising) where they had no clear advantages over Google or Facebook.
The result of that mistake has been stagnation. Barely evolving product, flat user growth, declining revenue growth, and no clear path to long term profitability.
In other words, Twitter not only did not cross the chasm...they fell into it and got stuck.
Technical foundation appears solid to all their stuff, but their enterprise sales/account folks seem very green - unsure of how to navigate large enterprises, not connecting with the right folks at the right level within the org, not understanding who or how decisions are getting made, etc.
We see this alot - deals with tens or potentially hundreds of millions of dollars at stake where potential vendors have a couple sales folks working the deal, not getting traction. Get a few more folks working the deal and figuring out the right angles and they could have it locked down in a matter of months, but they never seem to figure this out and a year later they're still dicking around with the wrong people at the wrong level not making progress.