Twilio set to acquire Segment for $3.2B • Hacker News Board

Re: Twilio set to acquire Segment for $3.2B

#71

Post by evrydayhustling » Sat, Oct 10, 2020, 1:16 PM UTC

teej wrote: post #13

esotericimpl wrote: post #3

This seems cheap, segment was doing great especially with sass the way it is now.

Segment (and any other SaaS that wants to own the event firehose) has pricing issues as the customer scales. As a customer you are charged on data volume[0], but your data grows at the rate = (Users x Engagement X Features X Data Sources). That rate can easily be the square of your revenue growth. This pricing issue makes it easy for Segment's fast-growing customers to justify an in house replacement. This puts huge…

This goes against my intuition in several ways, so I'm curious if there are examples to discuss.

- 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?

Re: Twilio set to acquire Segment for $3.2B

#72

Post by throwbacktictac » Sat, Oct 10, 2020, 1:30 PM UTC

Toine wrote: post #60

alexjray wrote: post #43

Earlier quoted context omitted.

Most of that is Ian Storm Taylor. This is what happens when software is treated as a first class citizen and the co founder(s) are technical. It's a specific class of companies like Stripe and Square. The business itself is treated as a software product, internal influences external.

Can you elaborate on "internal influences external" ? I don't get it.

I believe he/she means that the way you practice is the way you play.

If you put your best effort into the things that "do not matter" (e.g. hobby, open source work) then the discipline will show in the external displays of your work (products and services).

Re: Twilio set to acquire Segment for $3.2B

#73

Post by dd36 » Sat, Oct 10, 2020, 1:39 PM UTC

brandnewlow wrote: post #35

rubyfan wrote: post #30

Earlier quoted context omitted.

Who’s a likely candidate for CRM acquisition? Seems like the space is a bit crowded and Salesforce is the big dog and lots of second tier but who’s a good fit for Twilio?

Intercom

Intercom needs SMS integration badly.

Re: Twilio set to acquire Segment for $3.2B

#74

Post by tomnipotent » Sat, Oct 10, 2020, 2:32 PM UTC

hestefisk wrote: post #61

spondyl wrote: post #16

This is the same Segment that started out as a single Javascript file that a couple guys threw together before rebranding right? I mean, they're so much more now (or so it seems) but feels like it was just yesterday... and I'm only 26!

Interesting. What does Segment do?

It's basically a really complex distributed pub/sub tool. It ingests data from sources, say Shopify and Heap Analytics, and can then send that data to 1 or more other supported platforms along with some user-defined transformations. Like a really fancy IFTT.

Re: Twilio set to acquire Segment for $3.2B

#75

Post by [deleted] » Sat, Oct 10, 2020, 2:47 PM UTC

shostack wrote: post #57

peter_mcrae wrote: post #27

Earlier quoted context omitted.

Agreed really good fit. I bet a large % of Segment's customers were using Twilio endpoints. Really nice combination of a data hub / last mile across multiple channels...fully expect they will continue moving up the stack towards a CRM / Marketing automation solution.

Yeah, it's pretty interesting as somewhat of a "bottoms up" approach vs the Salesforce approach. I swear there's some law for these sorts of things where they inevitably end up as a marketing automation platform.

[deleted]

Re: Twilio set to acquire Segment for $3.2B

#76

Post by tomnipotent » Sat, Oct 10, 2020, 2:50 PM UTC

danpalmer wrote: post #65

rubyfan wrote: post #30

Earlier quoted context omitted.

Who’s a likely candidate for CRM acquisition? Seems like the space is a bit crowded and Salesforce is the big dog and lots of second tier but who’s a good fit for Twilio?

Intercom already mentioned may be a bit big. There’s also Vero and Iterable that I’ve used. Iterable was pretty terrible and we ended up replacing it with in house tooling, Vero has been really great and we’re investing more in our Vero setup.

While Intercom offers a great messaging feature set, it's far from being a complete CRM. Many other potential targets with more complete offerings.

Re: Twilio set to acquire Segment for $3.2B

#77

Post by tomnipotent » Sat, Oct 10, 2020, 2:56 PM UTC

soumyadeb wrote: post #64

supergirl wrote: post #63

Earlier quoted context omitted.

is rudderstack cheaper? not obvious from their pricing. unless you go open source but then you don't have all the features

RudderStack ( https://rudderstack.com/ ) founder here. We have a different pricing vector (event-volume vs monthly-users/MTUs of Segment) so it's not directly comparable. Having said that, RudderStack can be much cheaper in two scenarios 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.…

> we don't store any data

Which means your platform can't replay historical data to new sources, which offers a LOT of value for both onboarding new platforms as well as testing tools before signing a contract (since it lessens the cost of getting actual data into a tool to see if it's a good fit).

Re: Twilio set to acquire Segment for $3.2B

#78

Post by paulyacoubian » Sat, Oct 10, 2020, 3:26 PM UTC

mikeyouse wrote: post #9

noway421 wrote: post #7

Last round's valuation seems to be $1.5B, so it looks like the acquisition price is 2x that so everyone hopefully walks off happy. I hope Accel, GV, etc. didn't have a crazy liquidation preference.

Liquidation preference usually just bases itself on the amount of money invested -- If Crunchbase is right, they've "only" raised like $280M, so even with 3x liquidation preference, they're well clear of the $850M number that would trigger any of the annoying rights that strip stock from common sharedholders. Everyone will have done well on this deal.

Only 1x liq pref in this case.

Re: Twilio set to acquire Segment for $3.2B

#79

Post by brogrammernot » Sat, Oct 10, 2020, 3:30 PM UTC

raiyu wrote: post #5

aeromusek wrote: post #4

Genius move for Twilio, honestly. Segment can supply the central hub to tie in all channel spokes Twilio already powers (especially after the SendGrid acquisition from a couple years ago). 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.

With how frothy the public market is for SaaS companies with growth looks like their growth may have stalled out. 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.

The other case is they didn’t want to deal with going through an IPO, got a great offer for their business and a major liquidity event for their employees.

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.

Re: Twilio set to acquire Segment for $3.2B

#80

Post by soumyadeb » Sat, Oct 10, 2020, 3:40 PM UTC

tomnipotent wrote: post #77

soumyadeb wrote: post #64

Earlier quoted context omitted.

RudderStack ( https://rudderstack.com/ ) founder here. We have a different pricing vector (event-volume vs monthly-users/MTUs of Segment) so it's not directly comparable. Having said that, RudderStack can be much cheaper in two scenarios 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.…

> we don't store any data Which means your platform can't replay historical data to new sources, which offers a LOT of value for both onboarding new platforms as well as testing tools before signing a contract (since it lessens the cost of getting actual data into a tool to see if it's a good fit).

Yes, we can :) But we require you to provide an S3/GCP bucket where to dump all the data for replay.

We are also working on a functionality where we can replay from your warehouse too.