The NFX Podcast

Jeff Lawson on Ask Your Developer, with Pete Flint

Episode Summary

Jeff Lawson, software developer turned CEO of Twilio, creates a new playbook for unleashing the full potential of software developers in any organization, showing how to help management utilize this coveted and valuable workforce to enable growth, solve a wide range of business problems, and drive digital transformation. General Partner at NFX Pete Flint talks with Jeff about his new book, his Twilio Founder Journey, running a public company through a recession, decision frameworks, and much more. Jeff's new book is released on Tuesday, January 12th and discusses how to use the creativity of code to solve business problems. Developers are the creative workforce who can solve major business problems and create hit products for customers — not just grind through rote tasks. The landscape has shifted from the classic build vs. buy question to one of build vs. die. Companies have to get this right to survive. But how do they make this transition? Read more about Jeff's book here - Follow Jeff on Twitter here -

Episode Transcription

Jeff Lawson:

And so, it's no longer build versus buy. It's really become build versus die, as this Darwinian evolution is occurring in every industry. Therefore, the role of software developers and the importance of unlocking that talent has never been more important.

Pete Flint:
Jeff, great to have you on The NFX Podcast. Happy new year to you.

Jeff Lawson:

Thank you, Pete. It's great to be here, and happy new year to you and to all the listeners. I hope that folks are waking up for 2021 and believing that it's going to be uphill from where 2020 was.

Pete Flint:

That's for sure. We certainly hope so. Rewinding, so we met, gosh, more than a decade ago, I think, so when I was running Trulia, you were running and still are running Twilio. We were at Trulia one of the very early customers of Twilio, and was just such an important tool for us in the early stage, trying to connect consumers and real estate agents with the web platform in this offline, online world. So it's amazing what you've achieved since those really early days.

Let's take 2020 as a context. It's been a crazy, crazy year. You said on Mad Money that you think Coronavirus has sped up digital transformation by as much as six years. Tell me what you saw in 2020 for your business.

Jeff Lawson:

Well, if you think about what Twilio does, we've really always offered three things to companies, and it turns out they've been particularly relevant for the era of a pandemic. Twilio offers, first of all, digital engagement, so the ability to use all these digital channels like voice, messaging, chat, video, email, to engage with customers and really any stakeholder, and to do so with a lot of flexibility.

The second thing that we offer is digital agility, the idea that with software, you can build anything and you can build anything relatively quickly. APIs are key enablers of that kind of agility. The third thing is cloud scale, the idea that when you build something, you're not thinking about racking up servers or doing capacity planning. You just build something, you push it out to the cloud and it works everywhere.

And so, those three things, digital engagement, software agility, and cloud scale is what Twilio has offered. And it turns out the world has needed those things really more than ever in the era of a pandemic, because we had to really rewire the world in so many ways, in such a short period of time. New challenges arose that needed people building solutions to them ASAP was really the story of the builders of 2020. You think about some of these industries that were really reinvented on the fly.

I think about healthcare, and as a fortuitous coincidence, Twilio announced HIPAA support for healthcare workloads in February of last year. And that's something we had been working on for like 18 months and we happened to announce it just in time for the healthcare world to embrace telemedicine like never before. And so we saw so many companies, whether they were technology providers or medical systems themselves, adopting telehealth.

Early in COVID, a huge percentage of doctor visits turned into telemedicine visits. And I think we saw a massive acceleration. Telemedicine is not new. There had been companies building telemedicine.

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There had been medical systems experimenting with telemedicine, but relatively small percent of doctor's visits were done over video. Well, suddenly it was like half or more visits became video visits and that has accelerated in one direction the adoption of telemedicine now in the world.

You think about other categories, like e-commerce saw a massive acceleration of adoption. Not just obviously your Amazon, but every company that offers e-commerce saw a huge acceleration. I remember talking to the CIO of one of the major big box retailers mid year. He said that they saw a five- year acceleration of their e-commerce traction, of their eCommerce adoption in one quarter. So many companies were dealing with then the challenges of, "Great, how do we scale it up? And what are all the other problems that then arise?"

That executive was talking about how contact center for e-commerce was completely overwhelmed with customers asking about orders and returns and all that kind of stuff. All the things that you typically would play out over the course of multiple years of slowly building that infrastructure and staffing those teams played out over the course of a quarter. And so, companies had to catch up and build.

And so, that's really the story of 2020. When I look at it, companies had these digital transformation plans, and the whole industries did, like telemedicine, and e-commerce, and these curbside pickup workflows, and all these things, and they just got accelerated. Most of these workflows are not special one-off things that we did for COVID. These are the natural course of the digital transformation of nearly every industry that just got accelerated out of necessity, as we had to remove all face-to-face interactions in society and make these industries work as completely digital businesses.

And so, when I talk to a wide variety of leaders, they basically say, "Look, this gave more prominence to these projects. It accelerated budgets. It accelerated executive attention on these projects, that would have potentially taken years. Got done in quarters, or sometimes even weeks." And that's really amazing.

Pete Flint:

It's totally amazing. It's amazing how this infrastructure that you've built up over time becomes this essential piece of infrastructure for communication, for work, for everything. It's remarkable. And so, maybe just take a step back into 2008 when you were first starting Twilio. The vision has become a huge part of a society and the reality today. But back in 2008, maybe just thinking through where you were back then and recognizing that our audience has a lot of early-stage founders, what was the starting point? How did you think about the business back then and what was the original idea?

Jeff Lawson:

Think that when you look at companies with a big world-changing vision or mission, those are usually retroactively put in place, to be honest. That's the secret, but like the dirty secret of every startup ever. There's a certain selection for companies, because I think it is probably the startups that have this giant world-changing vision on day one, probably get so blinded by this. "We have to change the world and we have a vision," and blah, blah, blah, blah, blah, that they actually miss the opportunity right in front of their noses.

And so, I think probably the best startups are those that aren't founded with this idea of this giant mission. They're founded with a relatively simple thing, is "I know a customer segment that has a problem and I'm going to go solve it." And if you do that really well in the early days of a startup, you earn the ability to say, "Okay, we did that. We're making money and we're growing. What's next? How do we decide how to take our early success and turn it into future success?"

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That's when you start thinking about, okay, so what is the real north star of our company? When we have to pick the next thing we're going to do. Should it be over to the left or should be over to the right? Well, we need some sort of guiding vision. Now we're going to install a framework to help us make those decisions. And so, that was how it was at Twilio, which was, what we knew was I'm a developer. I've been a software developer and I learned to code in the '90s.

I'd started three companies before Twilio, and I was one of the first product managers of Amazon Web Services. When I left Amazon, I knew I wanted to build my next company around something that I was passionate about, something that I get really excited about. And I thought back to my time as a developer and as a company builder. I realized that every company I had started prior to Twilio, there are really two things in common, despite the fact that they were very different businesses.

But the common intersection of all the different businesses I had started was, number one, at every one of those companies, we were using the power of software to really build a great customer experience, a differentiated product, and iteratively understand our customers and build better and better and better solutions using software. To me, that's the super power of software, your ability to listen to a customer and quickly iterate your way towards a better and better customer experience or product or solution for that customer.

The second common thread, though, that I had at every one of those companies was in the course of building those companies, those experiences, those products, we had needed communication because we had needed to reach out to customers and let them reach out to us for a wide variety of things. Sometimes it was in our marketing, sometimes it was during our sales process. Sometimes it was customer support. Sometimes it was while they were using our product.

There were all these places where we'd say, "Oh, wouldn't it be neat if a customer could reach out to us and we could get them this answer? Wouldn't it be neat if we could practically notify them of this or that?" Every time we'd have these ideas, we said, "Yeah, that'd be really neat, but I'm a software developer. Well, I don't know the first thing about communications." That's like copper wires and satellites and space.

So you'd call the companies who seem like they did know this realm. You'd call the hardware companies or the carriers and you'd say, "Hey, we have this idea. We're trying to build it," and you explain it to them. The salesperson would say, "Yeah, we're happy to help you with that. First step is you're going to run copper wire from the carrier to your data center. And then step two, you're going to buy a bunch of hardware and rack it up. Then step three, you're going buy a software stack to pop it on top of that telco hardware.

And step four, you're going to bring it up whole professional services army to come bang the whole solution into shape. We think we can do that for you, but it'll take two to three years and two to three million dollars. Sign here, we'll get started." Every time I had this experience, I said, "Wait, hold on a second. We're a startup spending millions of dollars on this one future idea. We can't really do that."

More important than that, because maybe there are some companies, some big enterprises, maybe they could sign that check pretty easily. The more interesting part of that answer was years. It would take years to build this V1 of this idea we have, and customers would never get to play with it until we had built the whole thing and spent millions of dollars and years? And then once customers told us all the things wrong with it, then we have to embark on the next version, which is again, would be millions of dollars and years spent?

This is the complete opposite of that software ethos. Everything we do in software, we can measure it in like weeks. And that's what sprints. That's what agile is all about. It felt like everything in the world of communications was like the old waterfall model, which makes sense. It's an industry

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where they've been accustomed to launching satellites and putting up towers and buying spectrum for

billions of dollars and laying down millions of miles of copper wire all around the planet.

You're like, "Yeah, those are hard. Those are slow. Those are high stakes things, so I understand that. But how we get value out of communications isn't about all that anymore. It's really about the software now. And so, started Twilio to solve a relatively simple problem. How do we bring communications into the realm of software and enable every software developer in the world who has an idea like we had always had, to be able to build it quickly and easily? And that was where we started.

Having done that, and the key thing though, is if I was the only developer in the world who would have that problem, then we probably wouldn't have built a meaningful business. And so, I did a lot of research before we started Twilio, of talking to other developers, basically describing the solution we have in mind and asking, "Would you have a use for it?" Every time I talked to a developer, they'd scratch their head for a minute. They'd say, "Ah."

Then eventually they'd say, "Well, wait a minute. I have a question. That idea that you talked about, the telephone API, could I..." And they'd explain some use case they had recently. Could I notify my customers when a package ships for my e-commerce website so that they don't keep calling customer support to ask for the packages? And I would say, "Yes, yes. That'd be really easy." And they'd say, "Oh yeah, great. Well, let me try it when you build it."

After having that conversation enough times, realized that I was not alone of seeing these use cases needing a way to solve it. And that's what gave us the conviction to start the company. It turns out now we've got over 10 million developers in our ecosystem and over 200,000 businesses who are customers of Twilio. And so, the key, to me, was, one, solve a customer problem, and, two, make sure that the customer problem you're solving has legs to be big enough to solve many customers' problems so that ultimately it's a big opportunity worthy of your time and energy.

Pete Flint:

Yeah. I mean, I think the original vision is truly born out and I think there was a simple problem to solve. I think a lot of people didn't realize how big an opportunity was. And the timing, obviously, with the rise of the smartphone was where you have this telephony meets software environment was obviously hugely impactful.

Obviously, during that time in 2008, we went through a recession back then, and now we've got this crazy... It doesn't necessarily feel like a recession in the same way, but clearly there's a economic challenge going on. How have you personally navigated this change with impact of Coronavirus and remote work, and how have you, as a founder CEO evolved your leadership to successfully navigate in these crazy times?

Jeff Lawson:

I think in a time like this where there is so much pain, suffering, or at the very best, discomfort that everybody is facing, the way to lead is with empathy. I think about it. I talked very early on in COVID. Obviously, we closed all our offices the first week in March. Everybody started working from home. Now, luckily, our business is one with a lot of knowledge workers. So we're able to do that relatively successfully.

But talking to a lot of employees, realizing how everybody is struggling with something. Nobody is immune to this. You think about people with kids, they were struggling with homeschooling their kids. People who were single and lived alone, they're struggling with loneliness. People with roommates are

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struggling with the fact that they did not pick their roommates because they wanted to spend 24 hours

a day with them. And so, many of them were very sick of their roommates very quickly.

Introverts were oftentimes in a home with no escape to be alone, and extroverts, they were trapped in their home with no one to talk to. Everybody was struggling with something. And so, as a leader, starting with empathy and starting with just hearing where people are at and how best you can help people through the very real and very personal struggles that they're having, while also helping them to be productive people in the company to achieve the company's goals.

You can't strike that balance if you don't have empathy and don't know where people are. I think encouraging not just myself, but encouraging all the managers inside of the company to approach their job in that way was really important. And we kept emphasizing to manage... One of the things that I said early on in COVID, which I think turned out to be true, is I find, oftentimes, you start a call... In normal times, you call a friend, a family member, a coworker and say, "Hey, how's it going? How are you doing?"

In COVID, I would start calls like that, "How are you doing?" And then realize that throwaway question that often we started our calls with actually took on real meaning, and you'd follow it up with, "Ah, how are you really doing?" And actually get to a real conversation with folks about how they're doing, what they're struggling with. Are they feeling good? Are they feeling bad? And encouraging every leader in your company to really approach their conversations that way and to moderate the work, to meet people where they're at.

Some days I'm feeling down and you can take up some slack. Other days you're feeling down and I can take up the slack. And that is how we together are able to actually push the company through and how we're better together.

Pete Flint:

Yeah. Kudos to you. We'll get onto it in a bit, but you've been so thoughtful about company building and culture building, and it sort of really shines through. I think that the investment that you make early on when times are good, pays off dividends when times are challenging. So kudos to you.

Maybe switching gears to a little bit to the early stages of reaching developers and scaling, like developers were the ones that were really spreading the word for your product. How did you start that? And was that very much an intentional approach of the bottoms up developer strategy or something else?

Jeff Lawson:

Well, what's interesting, part of our strategy here was driven by two things. One, I had a conversation with an early venture capitalist who I had known from prior endeavors, and I pitched him on the idea. He was like my safe pitch because I knew him really well, for feedback. His feedback was, "Wow, you're going to need a lot of salespeople for this thing." And I said, "Oh no, no, no, not at all. Developers, they're going to buy it. We're not going to need sales. It's going to be amazing."

He literally laughed me out of his office. He said, "Yeah, yeah, right." But I did start the company with very much a bottom-up developer focus mindset. Now, of course, we have since come to add a lot of salespeople. And so, the venture capitalist was right. But initially, we did focus a lot of our energies on just how do we get the word spread? How do we get Twilio into the tool belt of every developer in the world?

That's the goal because if they're anything like me, once it's in the tool belt, they will have all these opportunities to use it because the business problems that arise that developers are tasked with

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so often need communications, that if it were there in the tool belt the moment that problem arises,

they will use Twilio. And that has proven out to be true.

And so, we just started by treating developers like customers. It sounds really simple, but there's a lot to it. Most companies who claim to serve developers actually don't see developers as customers. They see them as a strategy. They see them as like... You think about the big platforms that add a developer element to what they do, it's about, how do developers make our platform better?

And so, developers, aren't customers. They're like an audience that you try to win over in order to actually add more value to the company. And if it works great, if it doesn't, then you change strategies. That's why a lot of the platforms so frequently say, "Hey, you know what? I know we put out that API last year, but it's not working. We're going to pull it back." And developers mistrust those things because they are not the customer. They are a part of a strategy.

And so, we always said developers are the customer and you treat them like a customer, and you treat them as the source of your revenue and the source of your success as opposed to a strategy. And so, part of what that is... Like I actually took a lot of inspiration. One of the companies I started before Twilio was a extreme sporting goods retail business, actually bricks and mortar retail business in Los Angeles, a store called Nine Star.

We were doing skateboarding, snowboarding, surfing, BMX, biking, all this kind of X games type sports. Yeah. It was totally random. I don't do any of those sports. It's a long story. But one of the things that always struck as super interesting about that is that those are lifestyle sports. P People who skateboard, they wrap their life in the ethos of that sport. They wear the clothing, they visit the stores a lot because they love hanging out with other people who do that sport. They are always interested in the new gear. They watch the sports on TV. They've got their heroes. It's a lifestyle.

I think software developers are actually like that. Not all of them, but a lot of them, where they actually think about. They go to work, they write code, they come home and they've got their side projects. They write code. They love reading things like Hacker News just to learn new tips, new tricks, and always get better out of this sense of curiosity and enjoyment of this field that is both a profession but also a hobby.

And so, we treated it like that. We did a lot of things, I think, to help encourage that. We sponsored a lot of hackathons. We ran hackathons. We gave out a lot of t-shirts. At one point, I predicted that we would give... I don't remember the exact prediction, actually. It was actually Blackberry. It was when the iPhone was launched and you could see the writing on the wall for Blackberry.

I said, "Prediction, in five years, Twilio will ship more t-shirts than Blackberry shifts phones."
That may have been true, but track jackets were a big part and they still are a big part of our culture. The idea was to create this sense of pride as like, "I'm a builder and I want to connect with other builders, and I've got my tools, and I've got companies who really understand that and help me unlock the best."

I'm very inspired by Nike as a brand and as a company, the idea that they took the idea of mocking the athlete in every person is their mission give or take. It's not exactly the wording, but that's how I interpret it. I think that idea of how do you let something come out of people that is inside them and a part of their life and a part of who they aspire to be. And I think that every company in many ways wants to be builders and wants to be builders of technology, and wants to be able to compete with the likes of Google, and Amazon, and Uber, and Facebook, and be an amazing technology company, and it's hard.

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But it's aspirational. I think part of how we thought about it, both at the individual level, as well as at the company level is like, "We're going to help you do that. We're going to help you be great at this thing that is aspirational for you.

Pete Flint:

Yeah. I mean, back in the day, the developer conference, the event, I mean, the word was out and it was clearly their tactics were highly effective. As you think about the strategy, I know from Trulia's perspective, we implemented Twilio during a hackathon, and suddenly it was implemented and then it was just irreplaceable. I'm sure that embedding defensibility has been hugely valuable. But as you think about network effects, and obviously it's something we at NFX think a lot about, what do you think about the broader platform opportunity here?

I know that the company has been very active in M and A over the last couple of years. How do you think about order defensibility and the network effects you're building at scale today?

Jeff Lawson:

I think that a lot of people hang a lot of their hopes on network effects and like, "That's what will make us succeed." I'm a little less of a believer that there's the silver bullet, if you will, of success. And a lot of people look at the success stories of network effects, like Facebook, and believe that if they can only build that, then that's the key to their longevity or their success. I don't totally buy into that, to be honest.

I think that that is one tool in the toolkit of trying to make it, that the more people you serve, the better off all of your customers are. But that's certainly not the only tool in the toolkit. I think a lot of people put too much into that one tool because you look at some of the successes of, say, a Facebook and all that kind of stuff. I just think you've got to have a multi-pronged approach to add more value to your customers every day. And it's as simple as that.

And so, network effects are often thought of as, how do I create a stronger company? What's my moat? Really I'd be asking the question, "How do I add more value to my customers? And as I grow, is there a way that the rest of my customer base or the rest of my... Whatever I'm building makes my solution better for all of my customers. There's a lot of ways to do that. One way is to build a comprehensive product that moves quickly.

As I think about Twilio, we very quickly went from a one product company to a multi-product company. That bucks the conventional wisdom in a lot of ways. A lot of conventional wisdom is like do one thing, do it well. Find a niche, get rich. There's a lot of fancy sayings for it, but I'm a believer that in the world of software, you have to try a lot of things because it's relatively inexpensive to try things.

And so, we very quickly, Twilio Voice was our first product. We pretty quickly, on the 18 months into the life of the company announced our second product, which was Twilio SMS. It turns out that SMS's play a bigger product than voice. And today it certainly is, because the number of use cases for it were really exploding and were really unexplored because SMS had been a really pretty esoteric and difficult-to-use technology up until Twilio.

And so, we unlocked a lot of innovation around what is possible with messaging. And so, I think that's a way, and then we continue to invest and we've got now video, chat, email, as well as now data infrastructure, and a lot of facets to our platform. The idea is, once you get to know Twilio, there are so many ways you can adopt us and use us. We just solve a bigger and bigger set of the challenges that a developer has.

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But for a company, what they're looking for is more comprehensive solutions. And that's where having one platform that shares all of these different attributes instead of having to go cobble together lots of different things, really helps a company to pick a vendor that they trust, that they want to work with, and allow that company to go solve more and more challenges for them. I think that ultimately the key to success, especially in B2B, is trust.

Trust is the number one thing that you sell. If you think about what the cloud is, the cloud is saying to your customer, "Hey, you know this part of your business, whether it's your infrastructure or whether it's some app, whatever it is, trust that we are going to execute on this idea better than you can do it internally. Trust that we are going to keep building, that we're going to keep it reliable and secure, and we're going to add features and functionality, and we're going to do it better than you can do it yourself."

That is essentially asking for your customer's trust. And so, fulfilling on that trust every day, that's ultimately how you build your business, how you retain your customers. I like to think that we earn our customer's business every day. So there's no idea of like... At Twilio, we don't think about lock- in and we don't think about any of those things. All we do is think about, how do we earn our customer's business every day? With a combination of trust and execution. That's how we do it. And that's how we stay ahead of anybody else. That is scalable. It's like every business, if you will.

Pete Flint:

I mean, it's such a terrific job. I think just from a network effects perspective, we think about this very broadly. So I think exactly what you just said, which is, as you add more users, how does our service become more valuable for every other user, is exactly what you've done. Exactly the same process. We think about network effects. And then, also defensibility, clearly you've built a very enduring company, which is... And defensibility is really coming from embedding, from scale, from network effects, and also brand, which is really a proxy for trust. So kudos to you.

It does seem I think a lot of... You may have seen this in your journey, but early on, investors, I think might have perceived what you're doing as plumbing for services that could be easily ripped out, or doesn't provide scale benefits or isn't trusted. I think they probably misunderstood how big the market was. That's been born out clearly that this is an enormous market and this is not a commodity process or commodity product in any way.

Jeff Lawson:
It's interesting. There's a good book I've recently discovered called 7 Powers. Have you heard of it?

Pete Flint:
I have not heard of it, no.

Jeff Lawson:

I'll make a book recommendation here. 7 Powers by Hamilton Helmer. He talks about, essentially, what is power? Power is your ability, building your company to achieve essentially long periods of outsized returns for your shareholders. Then he says there's basically seven fundamental powers that enable you to do that. Most businesses don't have all of them, but thinking about these in terms of how you are building power in your business, i.e. the ability to have outsized returns is important.

He's got several ones, counter positioning, scale economies, and that's what network effects often goes to switching costs, or networking economies actually is probably more of the network effects

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one, process power, branding, and cornered resources. And so, I would give that as an interesting book recommendation to any listener who's interested in thinking about, "I want to serve customers, but I also want to make sure that I don't give all the value to my customers, because if I'm starting a company, I need to create value for myself and my shareholders too," which is absolutely fair. And I think there's a pretty interesting framework that I've recently become a fan of.

Pete Flint:

Cool. Okay. Check it out. Okay. Book that's on the Amazon order list. Talking of books, you are releasing a new book called Ask Your Developer. And so, what's the genesis for this. You mentioned the prologue that there's a... And I've seen it so many times. Also a developer billboard and this is quick code for developers. Tell us the story about that.

Jeff Lawson:

Well, it was about 2014, I think. We had bought a billboard and we needed to decide what to go on it. We'd hired a firm, a communications firm or whatever. They did a lot of work. They talked to a lot of our employees. They talked to customers. They basically pitched us like, "Here's the best idea. Great companies use Twilio," and put a logo. And I'm like, "Really? We just spent six months to figure that one out?"

And so, we're stuck with, "We've got a billboard. It's going up on Monday and we need the creative. What are we going to put it on it?" Something that had been in the back of my head for a long time, like one of the things I just would think about in the shower or whatever, it was the whole idea of those commercials for drugs, they say, "Ask your doctor if [inaudible 00:25:44] is right for you." I was just, for some reason, my brain just always went to, "Ask your developers if Twilio is right for you."

And so, we're in this meeting and we literally just had to... We could not end the meeting without deciding what went on the billboard, because it was going up on Monday. I just blurted it out, "How about, Ask your developer? And everyone's like, "What do you mean?" I'm like, "Well, it's just like developers know about Twilio and the executives should be listening to their developers.

That's one of the mega trends that's really going on is developers are able to adopt services and tools very quickly, very inexpensively, things like Stripe, or Amazon Web Services, or anything else that are allowing them to innovate faster and drive the businesses forward. And so, really I think that executives should be listening to developers, both in terms of like... It's like this wink and nod to the developers of the world, like, "Hey, you know about Twilio, good for you."

But also this bigger message around developers should be thought of as leaders inside of companies who actually know a lot about what companies need to do to innovate and to win in this world and businesses consult them. And so, we did the billboard and it's interesting because you go back and forth. Some people are like, "What an idiotic billboard. It doesn't tell me what you do." Obviously, we have our tagline on it that says Twilio communications platform.

But in some ways, it is so simple that it's easy to consume, but it has profound implications. And so, over the years thought a lot about this notion of asking your developer, like what does it really mean? It's a fun tag and it's a fun billboard because it's a wink and a nod, but also I've thought a lot about the implications of it. Over the years, Twilio has 10 million developers in our ecosystem and 200,000 customers.

I've had this conversation with so many different customers through the years, asking me, typically their business executives saying, "Jeff, I have a question. We're struggling to figure out like, how do we get really good at building software? How do we hire great developers? How do we organize the

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team? How do we make sure we retain those developers, because, hey, we're not like a Google or

Facebook or someone who's known for being a great engineering culture.

And so, I've shared my tips over the years, and I thought about it some more, and I'm in a somewhat of a unique position, being that, A, I'm a software developer myself, but now I'm also the CEO of a public company. And I see the division between that developer mindset and the business mindset because I live with one foot in both of those worlds, generally speaking.

And so, I took my unique vantage point and wrote down in this book, essentially, how do we create a shared parlance, a set of understanding between what business executives are trying to accomplish and what developers and technical talent, what they want to accomplish and how will they go about doing their job? Because there's so many things about how developers do what they do that I think are not really fully understood by especially business executives in the world.

And so, by starting to create the shared understanding, I think it can help businesses to execute better in the digital realm. I start the book by drawing the comparison to, "Look, it used to be that IT was something you outsourced, that this stuff, back in the era of, "I need to manage the laptops or deploy the ERP system." You're like, "Yeah, that's something that's outsourced. It's not a source of competitive advantage. In fact, it's a cost center. We just need to be as cost-effective as possible." It made sense you would outsource all that stuff.

But about 15 years ago, what started to happen with the web and now with mobile is the interface that most companies have with their customers is suddenly a digital interface. It used to be your bank. You thought your bank was a good bank if you walked in the branch and it was well capped. It was designed nice, it was clean, the teller was friendly and they gave your kid a lollipop. Now you like your bank if they have a fast mobile app that adds new features and functionality that helps you in your daily life, if they're listening to you, and they're building new things, and the mobile app is easy to use and always getting updated.

That's what makes your bank seem like a good bank to you because your bank is now an app. It's no longer a branch. And in that world, every company needs to be able to listen to customers and build. That's how you differentiate in the eyes of your customer. You can't just buy a solution off the shelf, the same solution that every other one of your competitors has and assume that you're going to be differentiated. No, you have to build it. You have to listen to customers.

And so, it's no longer build versus buy. It's really become build versus die as this Darwinian evolution is occurring in every industry. Therefore, the role of software developers and the importance of unlocking that talent has never been more important.

Pete Flint:

Yeah. That's so clear today. I mean, you see it from the most famous and most successful people that are mostly software engineers, or spend time being software engineers today are the most successful people. I guess, do you see that? Is that message still not resonating today or is it just that people don't have the capabilities to execute in that way, to turn their business into digital businesses, just because they don't have the skillset?

Jeff Lawson:

Well, I think that a lot of companies have realized that. As the years have gone on and people have seen disruption in industry after industry, I think people realize that it is hard to actually create a world-class engineering culture. It's hard to hire developers and make them successful. And so, that's really why I

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wrote the book, is just try to share some of the things. I find that software development is this weird

esoteric and complex thing, and it's relatively new.

We've only been doing it for, what, like 30, 40 years. But in the modern, agile sense, we've only been doing it for 20 years. So it's a new addition to the economy and to the world, and a lot of mystery around it. Software developers don't always help this. There's mysterious questions that we don't have great answers to, that can really infuriate, I think, business leaders, and myself included. I've been in these conversations. Be like, "Oh, this is infuriating."

Questions like executive says, "We've got our big marketing, or we've got our big conference. We need to ship the thing." And the technical leaders will say, "Well, I can tell you when we're going to ship it, but I can't tell you what we're going to shift. Or I can tell you what we're going to ship, but I can't tell you when we're going to ship it." And you're like, "Oh, I want to pull my hair out," because it's such an infuriating answer.

But it is largely true that there's unknowns, and the way you account for unknowns in software engineering is by relaxing either features or timeframes. And so, there's a trade-off. Any engineering leader who... By the way, there's a third one too, quality. Any engineering leader who will tell you, "Yep, I promise you all these features on this date," guess what they're giving up, quality. And there's often the unspoken thing that's getting relaxed there.

And so, it's like what I'm trying to do is explain to executives like, "Here's how software engineering works so that you can have a mature and realistic conversation with your teams instead of the pound the table, 'I demand it.'" And they're getting a crappy product. That also wasn't something you wanted, but if you don't articulate it, then that's probably what you're going to get if you demand features on a date.

Another one I think is interesting is as business executives, one of the main tools that we have, if not the main tool, is budget. That's how we can make decisions. Actually, we can give budget or not give budget to various initiatives or teams. And so, oftentimes, an executive might hear, "Oh, this project is running late," and their default reaction is to say, "Well, great. Let's throw more money at it and hire more people. Let's get it back on track." It's counterintuitive, but that actually will typically make the project even later.

And so, I go into explaining why. Why is it that you can't just throw money at a late project and expect it to catch up, when in fact you'll probably actually do more harm than good? And so, setting out to create this common parlance between like, how does great development work, and what are some things you need to invest in? You invest in engineering infrastructure to make them successful.

I draw a lot of parallels to fails, actually, because I think a lot of executives had to learn how sales works and they know what their great salespeople are capable of. They can draw the line between what really good sales looks like and how it impacts the business. And so, I draw a lot of parallels to things that we've learned about how sales processes work and try to map it to how development processes work, and how engineering culture and engineering capabilities will help you build a great business, but you need to be able to speak the same parlance.

Like if you just yell at a salesperson, "Why didn't you close the deal yet?" It's like, well, understanding how a sales cycle works is really the key to understanding if your sales process is healthy or not. But just yelling at them about closing the deal isn't really going to get it done. The same thing goes in engineering.

Pete Flint:

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You wrote in the book, "Don't treat developers like digital factory workers. They're the new creative workforce." I guess two questions. Was that something that you experienced personally, your time as developer. And then, also, as someone who's spent some time coding as well and managed a lot of engineers, there's something quite special about the developer mindset, which is quite different from the sales mindset or the finance mindset. Where do you see is the superpowers of the developer mindset? And then, also, what are perhaps some of the challenges with that mindset?

Jeff Lawson:

Well, the interesting thing is that code is a creative endeavor. What you do when you write code is you do a lot of creative problem solving. That involves, obviously, figuring out how best to solve the problem with code, writing that code, debugging that code. I mean, these are all creative problem-solving endeavors. Yet a lot of businesses assume that the only type of creative problem solving developers are capable of is turning a specification document into a piece of code.

And so, literally, a lot of businesses are constructed in a way where it's like, well, we feed in product requirements documents on one end and some mountain dew and the other end we get some code. I think that is totally discounting the capabilities that so many developers have as creative problem solvers. So my biggest thing that I advocate is don't share solutions with developers, share problems.

What you do is unlock the full creative problem-solving ability of those developers. And so, what I mean by that is a lot of businesses create walls between, okay, these are the customer-facing people. Let's say you've got product managers, and their job is to write a specifications document for what we need to build and to throw it over the wall to the engineers. Then the engineer's job is to write software that matches that specifications document.

And so, what you're doing is you're sharing a solution, "Build this thing. I want a form with a field that says "Name" and 40 characters long, and I want you to go build that." If a developer has no idea why you need that form and doesn't know anything about the customer, there's problem that's getting solved, well, they'll dutifully build you your form, even if there could be much better ways of solving that problem.

But if you share with the development team, with the developers, "Here's why we need to build this thing. We're trying to reduce the friction in our signup form and make it so that a customer can get started in 30 seconds instead of half an hour, which it currently takes." Now you've got developers say, "Wow, there's a lot of good ways to solve that problem." By the way, whatever we think of as our first step, there may be a hundred steps after that that can make it better and better and better.

If you take the problem and put it in front of the team, that enables them to use their full brain and come up with things that connect both their understanding of the technology, the understanding of the architecture of what you have, and find the least path, highest impact way of getting to a solution to that problem that may not be available to them if they either, A, don't know what the problem you're trying to solve is because they just were handed a spec, or B, the spec doesn't give them the leeway to actually come up with a better way to solve that problem.

And so, that's where sharing problems instead of solutions really accelerates your development and gets the most out of your talent. The other thing that it does is it treats developers like full human beings with full set of capabilities. The best developers want to work at companies where they use their full brain. And so, if you hire developers and don't allow them to do that, I suspect that many developers won't stay in those jobs for very long because they don't feel like they're getting fulfilled by the work.

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This transcript was exported on Jan 12, 2021 - view latest version here. Pete Flint:

I couldn't agree more. You're under pressure as a CEO, to be the person with all the ideas and the solutions, and that's complete disaster. I know, personally, when you open it up and you share the problem, not the solution, then the creative, you get the full creative force in the organization and it unlocks remarkable ideas. And it's a necessary ingredient for startup success.

Switching to culture and communication, I remember hearing you speak at a conference about draw the owl, and it was a part of, you be very thoughtful. This was many years ago, very thoughtful about culture building. Can you explain, just firstly, about how you think about the internal culture at Twilio and then perhaps into the book, what are the cultural changes that businesses need to make to fully... Other than sharing the problem, not solution, to really unlock the full power of this digital transformation?

Jeff Lawson:

People often use the phrases culture and values interchangeably, and here I think about it. I actually have a third one to it, the operating system. The culture of a company is what you feel when you come to work every day. You interact with your coworkers, you interact with customers, and you go about doing your job. How do you feel about that? That's really the culture of the company at work. That's a very amorphous thing, how do you feel?

And so, what leaders need to do is to put words to that feeling, and I think of those words as handles that let you guide it, that let you steer it, that let you maintain it. Those words, those are values. That's taking a feeling that you have and you want people to have, and putting words to it so you can ensure its proper development. Because if you don't have handles on the culture, then it can go off in all sorts of directions.

Because you think about it. If you're growing your company, there's lots of different people who come from lots of different perspectives and mindsets, and they will just bring who they are. But if you have handles on it, you can actually guide what we do together and what we accomplish together, how we work together. That's the goal of having values and making them actively used as handles to guide the culture of the company.

As I think about values, you mentioned one of our values, draw the owl. That comes from an old internet meme, how to draw an owl. Step one, draw some circles. Step two, draw the rest of the owl. In the early days of Twilio, that just tickled us. We thought that was so funny. But it kept coming up strangely in building the company. Somebody would ask a question, "Hey, does anyone know how to do this?" And someone would just say, "Draw the owl," which basically means figure it out. Chip it. There's no instruction book. It's ours to write, so chip it and figure it out, and iterate.

And so, one thing I found is that you articulate the values of the company, what you're really doing is you're creating the unique parlance for this group of human beings. Every group of human beings has essentially a set of heroes, rituals, and symbols that they come to identify that group of people. You see it in religions, you see it in countries, you see it in colleges. When you affiliate with a group of human beings, there are symbols, heroes, and rituals that help you to become a part of that group.

In many ways, that's what you're doing, because you want to create this sense of pride and affiliation in the group of human beings that are going to work at your company. And so, that's how I thought of it. You think about typical company values where it's like integrity. That's fine word. I know what it means in the dictionary, but is it really one that you use in your everyday language? Is it really one that differentiates your group of human beings from the next one? Not really.

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And so, it ends up becoming one of those empty words in the wall. And so, the way I've thought about it is we have a value, no shenanigans. First of all, I think it's more actionable. You have the sense of like, "Is what I'm doing shenanigans? Yeah, maybe it is." You could actually think about that. But number two is it's a unique word, no shenanigans. That's why people say it a lot inside of Twilio. Because it's unique, because it's memorable, you want your values to be almost hashtag-worthy so that people will remember them and can invoke them in making decisions, because that's where the values really become a part of your company, when people invoke them regularly to make decisions as teams. That's where the values are doing their work.

The third thing I mentioned is the operating system, which is a newer part of my thinking here. You need an operating system that speaks to... The values and the culture really come about when you're doing the work of the company. A lot of people think of culture and even values as some things that are like in the hallway, the conversations, the watercooler type stuff, or the people hang out, and that's not really where the culture is made. The culture is made in getting the work of the company done.

How do we make decisions together that everyone's not going to agree with? How do we hold each other accountable? Those are the real things where people are going to disagree, people are to have different ways of solving problems and it won't be clear. How you resolve those tensions, that's really where the culture is made. And so, I've started to think about, you need to build a set of mechanisms and take those values and turn them into mechanisms or practices within the company that actually put them to work and help the company to resolve those tensions in a way that is the way you want to do it for your culture and your values.

For example, one of our values is ruthlessly prioritize. We put that into practice with a system we call BPMs, and it's our planning tool. It's like, okay, ours, but it adds one very important thing to the OKR system that OKRs don't generally contain, prioritization. So you've got your list of goals. We call them priorities, and they're in order. And you force the conversation, what is more important than what? When we inspect teams, BPM documents, or we write one for the whole company, there's a lot of discussion about why, number one, why is it better than number two, or number three?

And actually, the ordering of those things is super important. So we took this value of ours, ruthlessly prioritize, and we turned it into a practice that is not used throughout the company to make those hard decisions and communicate them to other people. And so, that's the third part I think of building a great company culture. It's actually taking your values and putting them into practice with these mechanisms that are used throughout the company.

Pete Flint:

Yeah. And then, obviously, it changes over time how you think about the operating systems you need to build from early stage, to mid stage, to late stage, to public. Jeff, you make a really compelling case about the need to think like a developer. And then, perhaps there's Brian Chesky at Airbnb who's banging the table saying, "You need to think like a designer." Are these things in conflict?

Jeff Lawson:

They're not. There's a place obviously for both. You don't need to think like a developer. There's just a lot of different personalities in the world. But what you need to do is respect the things that developers can bring to the table and how they can help you be creative problem solvers in the business, as opposed to just feeling like their code monkeys. The same way I feel about designers. Designers have a role in so many processes.

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I think of designers as people who tend to think outside in. They think about the interfaces that customers are going to use, not literally interfaces, but designers tend to think about what the external appearances of a thing are. And they think less about maybe the internal machinations of things. And you need that. If all you do is think about how it's built, which is what engineers often think about, and they don't think about how it's used, well, you'll often end up with suboptimal outcomes for your customers.

But if you just think about the exterior appearance is how it's used, you don't think about how it's built, well, that can take you on a path of a lot of pain with bad architectures or the things that aren't scalable, or things that don't actually work. And so, you need both mindsets. You need the mindset of creative problem solving in terms of, how can this technology be used to solve a big, hard customer problem? And you need the designer mindset of saying, "If we build a thing to solve a customer problem, are we sure that the users are going to get the value out of it that we think they're going to get when we started out?" And so, I think they're very complementary mindsets.

Pete Flint:

And then, obviously going back in history, so Leonardo da Vinci, he was both an amazing visually minded designer, but a remarkable engineer as well. So I think over time, we've separated these disciplines.

Jeff Lawson:

I think that if companies hinge their success in being able to hire the next Leonardo da Vinci, I think that it's not a strategy probably for building a business. Yeah, I think you need to accommodate the fact that most people are not going to be great at both things. You need to build a team that has all the skills you need.

Pete Flint:

Yeah. I agree. I do think that many of the best developers have a designer mindset and vice versa. There's just this curiosity and customer orientation, and how they think about solving problems in different ways is hugely valuable.

Jeff Lawson:

The customer orientation part, absolutely. Part of the book, I do talk about how do you get your small teams to be really customer focused? Organizations, if you think about it, as they grow up, they tend to build a lot of silos, a lot of walls that are designed to shield technical teams and developers from customers. Customer support, or your sales team, or your sales engineering team, or product managers themselves are all designed in some ways to prevent your engineers from talking to customers.

I think that's a big disservice to your customers, to your engineers, and ultimately to the mission of the company you're building. Really what you should seek to do is the product managers in particular, they should be the ones who their job is seen as, how do I facilitate the right engagement between the engineers, the people building the products, the people who want to solve those problems, and customers.

Obviously, you can't put developers all the time on the front lines of every sales cycle or every customer support interaction. Clearly, you need to have those functions. However, if you let those silos go up, poke some holes in those silos and make it so developers do get opportunities to interact with the right customers and to take those learnings away. It really inhibits your ability to design and build things from that customer perspective.

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Yep. We've talked a lot about software development as applies to business, and it clearly is true that the digitization and the software processes are embedding everything that happens in business today. I'm curious, did you think about how this mindset and software development is applied to broader life, and the decisions we make in terms of how we live, who we spend the time with? Is there any insights that you have about applying this mindset to one's life?

Jeff Lawson:

I think there's a creative problem solver mindset in a whole lot of people. I think if you try to let that come out in your work and in your personal life and embrace it, whether it's personal things you're doing, hobbies, whatever. I think that if you can actually figure out how to apply it to your work and your personal life, I think that leads to a fulfilling life because I think human beings I think we're wired to build. I think that's part of one of the defining attributes of humanity.

And so, giving yourself places where you can exercise that I think is... I think, for a lot of people, not everybody. There's no number one rule for every human being, except we need oxygen and calories. But I think there's a whole lot of people for whom they would benefit from being able to exercise that creative problem-solving ability, but who your job doesn't necessarily involve it on a day-to-day basis. Think about how to incorporate that into life.

Pete Flint:

That resonates with me. I think if you look back and the industrial revolution, it was focused on mechanization of everything and really humans doing robotic tasks. Thankfully, computers are doing a lot of those robotic tasks today. And now it frees up the creative juices and ability to really apply what is fundamental to us. So maybe we end on that.

This is the opportunity to build, as we go into 2021, develop a mindset to use creativity, to build something remarkable is truly a good for the world.

Jeff Lawson:

It is time to build. The world has bigger problems than we've seen in a long time. And so, it is a time to build, and that's a great way to end.

Pete Flint:

Well, Jeff, thank you so much for spending time with us today. Looking forward to reading the book Ask Your Developer. I'll be sending a few copies to our NFX portfolio companies for sure. Thanks again for joining us today.

Jeff Lawson:
Thank you, Pete. It's great to be here. And to everyone listening, I hope you have a fantastic 2021.

Speaker 3:

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