This past weekend I finally tackled two projects that I had on my to do list for quite a while. Had I known how easy they would turn out to be I would have worked on them much sooner. The first was setting up the 212 area code number I had bought for Susan a while back. As a longtime New York resident she really didn’t like that we got a 646 number when we moved back from the suburbs. As it turns out you can buy unused 212 numbers. All I wanted to do then is to forward that number to our 646 number. So I ported the 212 number to Twilio, which was painless but takes a bit of time. Once that was done though, all I had to do was log into Twilio and use the forwarding Twimlet. Twilio provides these as a way to route and respond to calls without having to run your own server. In fact, I wound up chaining the forward Twimlet together with the voicemail Twimlet so we can get recorded and transcribed voicemails. From logging into Twilio to having it all up and running was a matter of minutes.
The second project was to find a cloud backup for all the stuff stored on our aging ReadyNAS drive array. I have a Dropbox account but this really isn’t a case of wanting to sync something. I don’t need a local copy of these really old files. Now I could have set up a folder in my dropbox and used selective sync, but it occurred to me that I could just use Amazon S3 directly. I found a nice little Mac OS utility called One Way that lets me right click on folders and upload them to S3. From there it was just a matter of a few minutes of logging into my AWS account, creating a bucket in S3 and starting to dump stuff into it.
In both of these cases I was using developer infrastructure to solve essentially a consumer problem: a routable phone number and cloud backup. In both cases it was super easy to do and took only minutes to set up. While this won’t become mass market consumer behavior it speaks to the power and ease-of-use of the respective platforms. Instead of developer infrastructure I am beginning to think of these as power user infrastructure. That may well wind up being a category to itself with services such as IFTTT. Would love to hear if anyone else has examples that might fit this category (btw, I also love how easy it is to host a static website on S3!).
Earlier this week Twilio announced that their SMS service is now available for delivery to 150 countries. That’s a big deal because many Internet companies have users around the globe with international audience often growing as quickly or faster than US. Not only can Twilio now deliver SMS to those international audiences but it can also do so in local language by providing unicode support. The SMS announcement follows on the heels of voice being made available in Italy and Germany going into beta. They are all part of Twilio’s push to go global with their services. Unlike the Internet, the existing telecommunications infrastructure is not at present API accessible from a single point because of all the carrier relationships that need to be in place. Congrats to the team at Twilio for making such terrific progress!
Twilio has been growing rapidly in the US and they recently launched in the UK for voice with text coming soon. In addition to geographic expansion, Twilio has also been adding awesome new services such as Twilio Client and Twilio Connect. We are excited to be supporting Team Twilio together with the fine folks from Bessemer with a $17 million Series C financing. Congrats to the entire team on a fantastic year!
The team at Twilio has done an amazing job making telephony accessible to developers. Making and accepting calls, as well as sending and receiving texts is now as easy as a couple of lines of code. The simplicity of Twilio’s API is such that most developers are literally up and running within minutes. At the same time because of the ingenious REST API which makes calls and messages addressable, there is no limit to the complexity of the applications that can be created using Twilio.
In typical Twilio fashion you can try Twilio client right from the product home page. So head on over there and try it out!
We are excited to be investors in Twilio as they transform telephony from cumbersome, proprietary and expensive into an easy-to-use web service. We also love the team’s creativity in promoting Twilio to developers, including the idea for this week’s contest: lunch with the USV team. We will be working with the Twilio team to pick the winner from this week’s entrants. As such, I thought it would be helpful to point to some of the criteria that we look for in evaluating innovation on the web. Fortunately, this is an easy task for me as we have written about it extensively on the USV blog. Since much of these points were written some time ago, I was pleased to see that we still believe in them as much if not more so than when originally posted.
Two points that are conspicuously absent from our list are the technology itself and features. And that’s with good reason. We believe that on the web technology provides little or no sustainable competitive advantage. First, when something is delivered over the web, endusers tend not to care about how it’s done (which is different from installed software, which had to fit into someone’s existing environment). Second, your competitors can generally see what you are doing in terms of features. So if you are competing on features, they can add similar features quickly. So as we look at projects for this contest we will not care about whether you wrote it in Java, PHP, Python, Perl, Ruby or something else altogether (Scala? Clojure?). We will also not look for whether you have more features than another project.
Instead, we will look at how you have leveraged Twilio to create something that could have a network effect or result in accumulating a data asset. We are looking forward to see what folks come up with!
Last week, I participated in a panel on the implications of SaaS/Cloud for SMEs. One point that was made by several of the panelists is that a big advantage over on-premise software is that you are always on the latest version and thus get to benefit from improvements over time. Those improvements can be additional features but they can also come in the for of reduced prices. Amazon for example has cut their prices for EC2 and also made such cost savings available as reserved instances and most recently micro instances. As Amazon’s resource pool grows they can drive down the cost and they are passing some of those savings on to their customers.
Our portfolio company Twilio is taking a page from the same playbook. They just announced new pricing that will result in cost reductions of up to two thirds for some applications! In Twilio’s case too, the advantage of customers from participating in a cloud solution is that everyone’s resource demands can be pooled allowing Twilio to drive down cost overall and pass some of these savings on. Expect more of the same as Twilio continues to grow!
For all developers and entrepreneurs: Twilio is offering a creative contest prize - lunch with the USV team. So fire up your editors …
I have previously written about non-linearity and how it messes with our reasoning. In business non-linearity abounds. One example that has been discussed a lot is the change between going from a price of 2 cents to 1 cent compared to the change with going from 1 cent to free. Twitter wouldn’t be twitter if it had charged just 1 cent per tweet.
One area where this is also true but more subtle and less well understood is product simplicity. Steve Jobs is clearly on to something very powerful by insisting that the iPhone (and now iPad) have exactly one button on the front. The iPhone’s simplicity went beyond that initially by launching with a bare bones version of what could be done on the phone (remember: no copy-paste). The simplicity was at the heart of a huge non-linearity — the iPhone rapidly got many users which attracted developers setting off a self-reinforcing cycle.
The same can be true for something as technical as APIs. The simplicity of Twilio’s API is such that adding previously complicated telephony applications becomes possible in a matter of hours. I already knew that from the due diligence we had done prior to our investment, but when I finally got around to using it in an application (see Preditter or text “Jets” to (585) 466-4919 before the game starts tonight) I was still completely blown away. From the point of hitting the “Get Started” button on the Twilio home page to being to having the functionality live for the world was less than 10 minutes.
The iPhone was not just a simpler Windows Mobile phone. It was so much simpler it was totally different. Twilio is not just a simpler IVR platform, it is something entirely different. In each case, the simplicity of the offering unlocks entirely new set of users and use cases, which results in a hugely non-linear change in adoption.
When investing in consumer services, we try to be active users of the services. That tends to provide a fair bit of insight about what is working and what is not (as long as one keeps in mind that one may not be the exact target user!). To do something similar for our more developer directed investments, I have long been meaning to build a little project using MongoDB and Twilio. But usually the extremely rare cycles that I have available for code go into fixing something on DailyLit. Over Labor Day weekend, however, I had some unexpected extra time and used that to hack together a little experiment which you can check out at http://preditter.com (warning: very raw at the moment). It was a terrific learning experience and I will post some follow ups with lessons learned.
The amazing team at our portfolio company Twilio has done it again: taken something that was previously complicated and made it super simple. This time they set their sights on business telephone systems (formerly known as PBXs, which — if anyone remembers — is short for Private Branch Exchange).
Most legacy PBXs are incredibly hard to program. For instance, the one we have at Union Square Ventures, has some completely proprietary setup which essentially requires us to pay someone every time we want to add or remove a line or change a call flow. Thankfully, over the last few years hosted PBXs have emerged, such as OnSip which are easy-to-use web applications. Another example on the consumer side is Google Voice.
But even the modern hosted PBXs leave quite a bit to be desired. While they are easier to use, they are generally closed which makes it difficult if not impossible to integrate them with other business systems. Enter Twilio’s OpenVBX. OpenVBX is an open source hosted PBX (the VBX comes from virtual). It is easy to download and run on any server — in fact, DreamHost offers 1-click install already. Like Wordpress, OpenVBX has a plug-in architecture that makes it super easy to extend functionality and to integrate other systems.
For instance, suppose you want to set up a PBX for a trucking company. With OpenVBX you get all the PBX functionality out of the box. But it is also trivial (at least from the OpenVBX side) to integrate with the dispatch system so that a caller can check the status of a shipment right over the phone in a fully automated fashion. The beauty is that this is now fully integrated so that if the caller needs assistance they don’t need to be transferred to some completely separate system (how many times have you punched in a bunch of information to an automated system only to then have to repeat all the information when you get an operator on the line?).
I am excited to see all the plug-ins that developers come up with and the vertical applications (e.g. trucking, medical) that get developed on top of OpenVBX. And of course I can’t wait to get rid of the existing PBX at Union Square Ventures and replace it with an instance of OpenVBX. I can then connect the foursquare plugin to let people now which city and time zone I am in!