[1]: https://news.ycombinator.com/item?id=4912076 "Analytics.js"
[2]: https://news.ycombinator.com/item?id=5116832 "Segment.io"
I can't help thinking Segment had much more room to run though...everyone I know who uses them loves them, and they were still only just scratching the surface of the addressable market.
https://segment.com/blog/customer-data-platform/
This is not surprising. The personalized SMS/push notification use cases (for which you need Segment data) are commonly implemented via marketing platforms (like Braze etc) as opposed to directly via Twillio.
I think this was the other way around. Twillio is powering a lot of these new age marketing automation tools. Instead of just being at the infrastructure layer, it wants to go up the stack and own the marketing applications. Sendgrid and now Segment acqusitions are part of the same strategy.
They did the same thing for the contact center (call center) software space. Lot of the cloud contact center companies were using Twillio and now they launched their own contact center product. That has been one of the key drivers in their 3x increase in valuation in the last 1 yr.
https://www.twilio.com/use-cases/contact-center
Segment's partners like Braze etc should be worried.
I swear there's some law for these sorts of things where they inevitably end up as a marketing automation platform.
Usually board will look to make changes, replace founder CEO and if that doesn’t work then push for a sale.
Very smart acquisition for Twilio though.
Going public, despite profits made, really sucks the soul out of a company.
Twilio and Segment’s visions align pretty well so I think that played a role as well. Outside of golden handcuffs, a large portion of their employees are liquid immediately as opposed to an IPO with a 6-12 month lockup for employees plus the rise/fall of a stock price during that time.
All in all, I think they made the right choice to sell instead of going for an IPO.
Can you explain what this means. Why does the first part of the sentence imply the second?
Show HN: Analytics.js (2012)
https://news.ycombinator.com/item?id=4912076
via @rauchg
My point is, yes, the analytics market is crowded, but it's mostly crowded by low-effort players or archaic products. That being said, someone reading this will probably think it's a good idea to enter the market, thus leading to another below-average product.
This goes from using Metalsmith early for their single page web sites, some coding practices (mono vs micro), some CSS frameworks and design patterns and other library choices when there always seemed like a barrage of new choices (like css in JS ) and React.
Anyway I much appreciate their efforts in this area as inspiration and real world examples published on OSS sites. Even if it was simple stuff like their marketing websites.
They clearly had respectable and internally influential talent working in this area.
It’s been a while since I’ve explored their GitHub repos for fun but the I still respect the stuff I learned.
He is a wonderful software maker. All the best to him!
I first encountered Segment when they were a young company and would frequently chat directly with Ian if I needed support or needed feedback. He was always gracious and humble, despite no doubt being ridiculously busy.
Twilio has gone from strength to strength - they have an agility that is only possible from a company that is willing to deeply listen to the market and stay one step ahead. Very excited to see where this leads!
Jeff Lawson continues to follow the SFDC playbook of buying companies (and existing revenue growth) with stocks everytime their stock pops ;)
Separately, when George joined Twilio, they didn't really have a sales team. Started working on contract terms, raising prices and a host of other things. He's very systematic.
* https://www.posthog.com/ (more mixpanel alternative, can auto-track events too)
* https://snowplowanalytics.com/
* https://rudderstack.com/ (explicitly say it's Segment alternative)
The founders deserve every penny of that $3.2b and deserve the very nice lifestyle that will afford them. A great story that will inspire others including myself.
I find it interesting that Segment (and thus the entire downstream ecosystem) has gone this far while staying strictly oriented around users and accounts, without first-class support for other entities -- namely a notion of workspace/team/contract/opportunity/etc. "Groups" was sort of a false start that didn't get a new direction. There's still a ways to go connecting all the dots between how companies structure their data and how all third-party products are prepared (or not) to mirror that structure.
If they are successful, it is extremely costly for you (primarily in terms of IP reputation, which is very difficult to maintain) and cheap for them.
If they are unsuccessful, well, they'll keep trying and stopping them continues to be costly for you and they only need to get lucky once every so often for it to be worthwhile for them to continue.
Exacerbating all this, it's extremely commoditized, so even fairly large customers aren't going to make you that much money, especially given all the hassles of maintaining it.
Though, I suppose the margins are much higher there.
“If I had a billion dollars...”
This pricing issue makes it easy for Segment's fast-growing customers to justify an in house replacement. This puts huge down-pressure on their "revenue retention" rate and makes it hard to raise more VC or go public.
[0] - Segment technically prices on user volume but in reality it's a mix of users + objects depending on what your sources are
- Scaled deployments have Segment connecting many systems run by many teams, so the cost of coordinating a replacement can go up just as fast as Segment's.
- High growth companies have fires everywhere, including other infrastructure, so it's not obvious that Segment makes it to the top of the list.
- I expect the bulk of Segment revenue is not from companies with "high growth" by HN standards but scaled enterprises with high complexity and lower growth. These can dominate net rev retention even if there are smaller companies growing faster.
Again, no data to support the above, just a different narrative. Anyone have facts?
Are you eventually running your own cluster? Or, are you paying per Gb per second how GCP bills with decoupled compute / memory / storage? Or maybe with a little bit more overhead with the orchestration cost on top of consumption with how azure bills for ADF.
Just from reading blog posts, Spotify’s move was interesting, regarding their annual “songs you liked” at the holidays, where they sort of ran a hybrid.
Sorry to digress but what is the end state. Is there just a number where it makes sense to hire people and build and/or shift vendors? And if yes, what vendor is “after” stich? Astronomer maybe. Sorry if that’s basic.
after a certain sales price, there are very few potential buyers, and unclear if the usual top acquirers would want to pay the premium (google, ms, salesforce, ...). likewise, always risk of things going sideways wrt ipo. $1-3B exit in this situation makes a lot of sense.
more interesting to me is twilio seems to be such an operationally awesome company, going through each phase of growth so well
1) Low # of events per users. For example, if you have a lot of anonymous users who don't do many events and leave. In this case, you may have a lot of MTUs but low number of events. True for a lot of consumer businesses.
2) You have a huge scale (10s to 100s of millions of events per day). In that scenario, we support deploying enterprise RudderStack inside your VPC but still managed by us. In this case, we don't have to incur infra/data-transfer cost (and charge 80% margin) so can be much much cheaper. We have a couple of customers in this model. Some choose this for privacy/security reasons.
In normal scenarios too we can be 50% or more cheaper. Unlike Segment, we don't store any data (which is a major cost) so our COGS are quite lower. We use your warehouse for all the CDP features.
> Segment is an American customer data infrastructure company based in San Francisco, California. Its software allows enterprises to combine the collection of data from their customers, whether through a mobile app, by e-mail or in a store. Segment was founded in 2011 and accepted into Y Combinator in the same year.
So nobody feels comfortable talking about what they do.
> Segment | Customer Data Platform (CDP)
> segment.com
> Segment collects user events from your web & mobile apps and provides a complete data toolkit to every team in your company. Marketing Single view of the customer.
