This is a really short thesis I wrote about Twilio on August 2019, before the Segment and Zipwhip purchases, which I think further entrenches them. For as much as I looked into Twilio and liked them, I couldn’t pull the trigger and buy/own the stock due to valuation concerns. Action >>> words.
I think you hit the nail on the head w/ their moat. They are both wide in the number of regions they work in and deep in the number of communication mediums they service. Now with Segment they have a new element which is CDP. Leading in all three of these is key.
But, like you said the main ingredient is trust among their customers (developers) A few stats that reinforce their trust amongst customers.
DBNER is around 138 on average for them since 2016. The golden number for software co's is around 125. What makes this more impressive is the usage based model. On average customers use the product 38% more YoY. It is not like the CIO is just purchasing a more robust version of their subscription business. They also grow customers 67% on average since 2016. With S&M as only 24% of revenue. That is way lower than nearly any other peer. It tells me that customers likely tell other customers about them.
Thanks for sharing. My post was only meant to briefly unpack their competitive advantages, but I ended up writing much more than I intended. lol!
A very short (and old) thesis on Twilio from August 2019
Great write up!
I think you hit the nail on the head w/ their moat. They are both wide in the number of regions they work in and deep in the number of communication mediums they service. Now with Segment they have a new element which is CDP. Leading in all three of these is key.
But, like you said the main ingredient is trust among their customers (developers) A few stats that reinforce their trust amongst customers.
DBNER is around 138 on average for them since 2016. The golden number for software co's is around 125. What makes this more impressive is the usage based model. On average customers use the product 38% more YoY. It is not like the CIO is just purchasing a more robust version of their subscription business. They also grow customers 67% on average since 2016. With S&M as only 24% of revenue. That is way lower than nearly any other peer. It tells me that customers likely tell other customers about them.
Thanks for sharing. My post was only meant to briefly unpack their competitive advantages, but I ended up writing much more than I intended. lol!
-Nathan K.