So, not too long ago I wrote this 100,000-page 87-part tome on why I thought Twilio had the best culture and was poised to return to hypergrowth…
Twilio - A Narrative Analysis
https://discussion.fool.com/twilio-a-narrative-analysis-34886392…
A key part of my thesis was you have an all-star team in Jeff Lawson, COO George Hu, CFO Kozema Shipchandler and new Twilio Segment CEO Peter Reinhardt. As you know, Twilio acquired Reinhardt’s Segment.
Here, on the Invest Like the Best podcast, is Peter Reinhardt raving about Twilio, and how incredible it is to work with great leaders like George Hu and Shipchandler.
https://www.joincolossus.com/episodes/54216780/reinhardt-lea…
Said Reinhardt back in May…
In terms of post Twilio, there’s a lot of things to learn. That’s actually one of the things I’m most excited about personally being at Twilio now is George Hu, the Chief Operating Officer, unbelievable. He was COO at Salesforce before this and just incredible depth of operating experience. It is next level of getting inspected by George or getting inspected by Khozema the CFO at Twilio. Both are just wicked sharp in terms of isolating what the actual business problem is and driving accountability.
Well, since then George Hu left the company. And now we find out Reinhardt is leaving to work on battling climate change.
It is entirely possible that Twilio has a deep bench, that exec departures are not the end of the world. Maybe it is inevitable guys get recruited, just want to lead their own team, or want to use their money to chase passion projects. This may be fine.
But my theory was this is an elite team, with great chemistry, serious enthusiasm for the world-changing company they were building together. They were going to radically increase the effectiveness, reliability, speed, security and ease-of-use of modern communication. And help usher in a new age of personalized marketing. This seems to me like something every company will need - the ability to tailor communication/marketing to customers with extreme detail, agility, by tracking their journeys across all media interactions with the company.
But while the mission may be in tact, for me, the story has radically changed - for the worse. I believe in relationship equity, that top dogs who work together for years make each other better and that this strong bond flows through the organization. The cofounders of Cloudflare and Netflix for example have been together for years, if not the start. It’s not that different than a home with parents who have a strong marriage vs one with a divorce. That Reinhardt seemed so excited to join Twilio was impressive. And I thought he may be in development to run the whole company as CEO Jeff Lawson is very active in many causes. I would not be surprised to see him exit the company to work in politics, or activism, at all.
Bottom line is that two of the four major player are gone. And for me, this is a dealbreaker. I find it exceedingly distasteful when a CEO of an acquired company runs his yap about how excited he is and crows to the heavens about synergy and working with a “next-level” team, and almost instantly races out the door. It’s highly likely he knew about this back then.
It reminds me of the Livongo/Teladoc merger. Livongo’s Glenn Tullman hemmed and hawed about the incredible team they made, then literally ran out door first chance he got. Next level taking the money and running. Business Insider recently had a premium article about how awful that merger has been, how terrible the culture clash is between Livongo and Teladoc workers. And the stock has been an absolute disaster since the merger. (Article below behind a paywall)
Teladoc acquired Livongo to recreate healthcare. A rushed union, a wave of senior exits, and sky-high expectations are testing the $14 billion bet.
https://www.businessinsider.com/teladoc-livongo-insiders-des…
I find it borderline hilarious to see so many Teladoc bulls on Twitter flipping their lids about why the stock is not doing well. They have charts, graphs, growth rates and flowery language about changing health care as we know it. And yet, at the core, is a 1000s of workers who don’t like working together.
Anyway, Twilio was a stock I felt was poised to tear it up in 2022 as the economy moves past Covid and businesses ramp up marketing. I no longer believe this is true. The story, at least from a narrative stand point is busted. I can only wonder what Segment employees are thinking seeing their leader exit so soon. And this is 100% pure speculation - and may be totally unfair - but that Hu and Reinhardt left cannot possibly be a good thing. It may very well mean they currently do not enjoy working with Lawson. This injects all kinds of doubt into the story.
Lastly, we all know that elders of our board were unhappy with some things Lawson said that struck some as flat out dishonest. In best case scenarios I hate growth fueled by tons of big acquisitions. But I felt that was mitigated by great team chemistry. I no longer see that here. This is another mark against the company. And we have too many better ones to turn to. I’m out.
BD