Just a few random TWLO thoughts:

(1) We use TWLO on our for texting w customers. To our employee base, since texting is embedded in our, texting looks like a function…yet it’s fully powered by Twilio. One of our developers built it out as a skunkworks project in a couple of weeks. We started it out in Jan 2018 w a handful of users and now have 70 people on it. Each month the usage has gone up. From 514 text messages in Jan 2018, to 4,434 messages in April, 5,709 in Jul, 6,809 in Oct, 12,029 in Jan 2019. The ongoing cost is dirt cheap. The interesting part is we did no internal marketing on it. It’s all grown by departments asking for it. And our employees that might use something like this could eventually be all 18,000 of our company, but more likely a couple thousand would use it… Fits well w TWLO’s 145% net expansion rate/story, doesn’t it?! Out company is living proof of that. Grows like a weed! Recently, our tech folks made some changes in our and broke the Twilio integration. The small handful of current users were in uproar for the few hours it wasn’t around!

(2) I re-read the last earnings report today. What an awesome report that was. As you’ll recall, they spoke to Flex quite a bit in the report. I had this view that Flex was a non starter as larger competitors like’s Service Cloud or Five9 call center capability. And you know, those companies don’t typically sell their products direct to Developers (DEVs)…but more like sales to biz execs/IT leaders. So is marketing Flex to DEVs really the right thing? Marketing to DEVs or as Jeff Lawson says, “winning hearts and minds of DEVs” (one of their three core priorities) makes sense for their core Twilio products (i.e., my point #1 above). But can you really sell a large biz change like a call center product to a DEV? That’s usually a sell to a biz exec or IT leader. However, they got me thinking. Since Flex is totally customizable, maybe DEVs do it just like our company did w the use case on item #1 (above). Perhaps a DEV at a company builds out a skunkworks/free to try Call Center on Flex. Make it fully customizable for the specific business use case. Then the DEV shows it to some biz folks. Then it catches wildfire. Almost like the weed example from #1/net expansion rate strategy that they currently enjoy. So after thinking about it, I think that strategy can work. Note, TWLO is also working w the Partner channel on Flex…so they have that going for them as well. Will be interesting to see how Flex plays out in the earnings report.

(3) Also, sounds like a ~75% GM on Flex. Sendgrid is similar GM%. They’ll take a bit of a hit on GM% on the Verizon quarter of a penny fee starting in Feb, but new products will eventually also help the GM% story. They were clear in last earnings report, they are not a GM% growth story in the short term. Don’t think we’ll see a hit to GM%, either positive or negative in the coming earnings report.

(4) International. It’s 26% of their biz today and growing faster than the US. Good! So they had 1,274 employees at end of last quarter. I see 275 open reqs on their jobs page. Big expansion. Skimming the jobs…many of those 275 are international jobs. I feel that should bode well for seeing the international number grow significantly.

TWLO is becoming one of my largest. It’s ~7.1% of my portfolio today. I’m likely to sell other stocks and grow my position, even w the recent run-up.

Also, I want to say thank you again for this incredible board. Saul has totally changed the way I think. I used to have ~70 equities as close back to Q2 of last year. Am now down to 19. Don’t think I’ll ever quite get to ~10 as the $ concentration is more risk than I like, but I’m very happy w the somewhat/more concentrated view to my port.

I don’t know how many times I hit my “Saul board” bookmark each day!

Best wishes to all.



TWLO appears to be a blue chip in the making.

I am not a techie but from what I have read, it is quite probable that TWLO will continue to compound revenue by 30% CAGR over the next decade, so top line may hit $11 billion by 2029.

Even if the valuation comes down to say, 8 times sales at that point, we are looking at a market cap of around $88 billion or an 8-bagger from here.

Wall Street analysts are projecting around $3.5 billion revenue by 2023.

Anyone on here knows if TWLO can easily be disrupted or due to scale/switching costs/superior technology, it really does own this space now?



Wow Jay, great post.

Your example of devs using TWLO’s APIs and then it spreading within the company is EXACTLY Twilio’s strategy.

I heard Lawson say betting on CTOs/CIOs is like buying lottery tickets… you have 3 or so and are unlikely to win.

So instead, Twilio wants their APIs to be in every developers tool belt so they can use Twilio to solve a problem in a few hours, then have it grow throughout orgs.

Twilio has what’s called an “Engagement Cloud” and Flex was the result of what they saw a ton of devs developing APIs to integrate into/customize contact center functionality.

So all of that demand was a signal to Twilio that they should develop a fully customizable cloud contact center.

Now we have Flex. The company will likely leverage data from the engagement cloud for future products similar to how Amazon leverages data from all their third-party sellers on what products to produce themselves under generic Amazon labels.

I actually view Twilio as the Amazon of communications. Amazon started off selling books and is now making a dent in the massive eCommerce and retail markets.

Here’s a link to a tech conference where Jeff Lawson outlines the strategy above.…


Answering GM’s question separately.

I agree with your sentiment and can see Twilio being a 100+ billion market cap company (or acquired by someone like Salesforce who already owns something like 20% of Twilio and Twilio is actually moving into SF’s old HQ this yearr).

Anyways, they are actually not even the market leader in terms of cloud-based contact center seats.

The contact/call center market is MASSIVE. DMG consulting did a report in 2017 which I’ll link to that identified around 200 sellers of cloud based contact center infrastructure. Many kind of just resold other people’s stuff so there are around 25 actually vendors selling infrastructure.

Of those, Twilio was third in number of seats (agents on the platform) with around 8% behind Cisco and broadsoft who were both around 15%.

This was in 2017 which was before Twilio released Flex. So I’m expecting (and by investing in Twilio) we’re all expecting Flex to hell Twilio win more seats.

Here’s the kicker though.

In 2017 only about 10% of all contact center seats were in the cloud. The rest were on premise because (and this is Twilio’s claim) there was no cloud offering that was customizable enough to meet many businesses needs.

The goal of Flex is to solve that and therefore convince many to move to the cloud which will boost Twilio to that #1 spot.

Here’s the other kicker. The contact center market is just one small niche within the overall communications sector which represented 40% of the $3.5T in IT spend in 2017 (according to Gartner).

Twilio intends to become the AWS of communications which means the intend to grow far outside of contact center sales.

I believe tbem and thing we’re in the early stages of one of those stories that in 10 years, all the finance sites will run stores saying “if you owned x dollars of Twilio 10 years ago it would be worth xxxxxxxxx today”


Oops. Link.…

I haven’t looked into it in detail, but given the ‘amazon effect’, has anyone looked into Amazon Connect?

Dynamic and personal contact flows
Skills-based routing
Real-time and historic metrics
Natural language chatbots using Amazon Lex
Outbound calling
High quality audio

This is also an interesting read on cloud call centers:…

Flex has a bunch of competition, so will be interesting to see how engagement progresses. The amount of competition suggests that margins will be constrained, but so much of the internet/cloud market seems to be a ‘winner-take-most’ environment. Look at Slack for messaging. Lots of cheaper alternatives, but most used Slack.


TWLO, the way I see it, is a combination of

  • replace your old PBX
  • replace your old call center SW
  • replace your old email (with SendGrid)
    … and more
    Agree, just the call center SW is huge market with not much cloud penetration… (I wonder, if its so because a large volume of call centers operate in countries with low internet speed like India)

Having said that, TWLO has may be 100s of companies chasing them… and many are very successful with vertical approaches (e.g. MB created a customer communication and management system for spa / fitness industry)… and from what I anecdotally heard, many of these companies offer upto 50% lower pricing that TWLO…

With all of that, we do not know of truly sizable, horizontal and successful competitor to TWLO… its surprising that Cisco or Comcast type companies havent done this.

To me the biggest risk to TWLO is its own success… if they continue to Uber type situation with their largest customers, where they become such large spend that the customer is willing to take pain to reduce, that will be hard. Hopefully they learnt lessons and will find ways to manage large customers better.


There is a thing called “2-factor authentication “.
This had become popular for web login’s after one enters correct username/password. A code is texted to your phone via SMS and you have to enter it to unlock your account. One usually has the option too choose an email instead. Twilio makes it really easy to set up the SMS part when building or modifying websites that new security. You register with Twilio, get the API they give you, and use it in your code.
They give you code examples for any language you are developing in and every time yoir app uses this functionality, a tiny charge is added to your account.

I am positive there are a million other things that Twilio can do.


Thanks everyone for your explanations.