When you get a SMS with a “one-time-password”, it is usually sent by a communications platform like Twilio. This is a company doing the unsexy work of building the modern communications plumbing of the internet that allows other value-creating stuff to be built on it.
I first came across Twilio when my own website software provider (Shopify) rolled out a feature where my customers can get their shipping tracking information sent by SMS. I wondered how they did it, dug deeper and found out that Twilio was powering that function.
Twilio went public in 2016 and I sort of forgot about the company until 2018 when they dropped Flex. When I first learnt about Flex, what it can do, and what it means for businesses looking to build out a programmable contact center, I was sold.
I didn’t buy the stock then unfortunately, a decision I do regret slightly. However, there’s no such thing as “too-late” when it comes to companies building out a Platform-as-a-Service business and Twilio’s still executing almost flawlessly.
After the company acquired SendGrid (I personally thought it was a pricey acquisition at $2bn), they company recently acquired Segment. If you aren’t familiar with Segment, here’s a brilliant article about it.
If you track all the moves from Segment to Flex to Conversations and to their HIPAA compliance, the vision is becoming crystal. Twilio is actively seeking to be the communications service provider of choice. If you’re a company looking for a 1-stop solution to manage your contact center, manage customer data, send transactional emails & SMS and any critical customer comms function, Twilio will have to be your single platform of choice. No competitor has built so much capability into an API-driven suite of products.
From a developer’s POV, Twilio’s focus on making their product developer friendly gives it an incredible competitive advantage over competitors like Bandwidth. When more developers know your company’s products, more of them will recommend and push the product as a solution for their own employers or clients. This is a powerful flywheel that many companies overlook and many investors underestimate.
I can go on and on about Twilio and why I own shares, but the best person to really help you deep dive is Peter Offringa who runs Software Stack Investing. He writes extensively about SaaS (and about software) and you should read his investment thesis for Twilio.
You can also read Twilio’s Master Plan which will give you an insight into what the company’s mission is.
Twilio is making all the right moves and is executing flawlessly on its vision to become the customer communication platform of choice.
**Disclaimer : This is not investment advice and you should always do your own research before buying any stocks recommended here or by anyone else. I own shares in Twilio.