Twilio CEO Jeff Lawson reveals how founding StubHub and a skate shop led him to Twilio

Some entrepreneurs take a long time to find their feet. Not Jeff Lawson. At six years old he built a functioning digital address book on an Apple 2E.

“When you turned off the computer, the address book was gone, which is appropriate for a six-year-old's address book I suppose,” says Jeff. But he was hooked. “‘I thought, ‘Wow. There’s this machine, I can tell it what to do, and it does it.’ It was a somewhat magical experience.”

In college, Jeff took another crack at entrepreneurship and this time, his idea got traction. Determined to start a business using a new technology known as the internet, he and some friends coded an app called Notes4Free which provided lecture notes to students. "We thought, ‘Oh, this is brilliant. Notes4free—it says what it does,” says Jeff. “We could have had any domain and that’s what we chose. But students loved it.”

Then an incredible series of events unfolded. They raised a round and then were acquired … just in time for the dot com bust to put their new parent company out of business. “We went from zero to five million, then to 125 million, and back down to zero all in the course of 18 months,” says Jeff. And it was only the first of several wild rides.

In this deep dive conversation, Jeff shares how all these experiences led him to starting Twilio—plus what other founders can learn from his journey.

Leadership lessons from Jeff Lawson:

• Entrepreneurship is a series of setbacks, problem solving, and finding your purpose.
• Internal tools are the inspiration for many billion-dollar SaaS businesses.
• To build a world-class product, ruthlessly remove friction and barriers to experimentation.
• Creating a meaningful place to work means your product contributes back to society.

The search for purpose can go on for as long as it has to

As Notes4Free crumbled, Jeff began looking around for the next opportunity. A few friends had the idea for a company that would become StubHub. They were both bankers and needed an operator to get the thing off the ground. Jeff joined as founding CTO.

“We went from the first line of code to launch in six weeks,” says Jeff. “That’s how fast we were moving.” Only this time, he didn’t stay long. “When you’re building a company it takes blood, sweat, and tears. Physical, emotional, and intellectual work. You have to love what you’re doing,” says Jeff, “so you can get through the lows. I realized that while StubHub was a great business opportunity, it wasn’t a product I felt passionately about.” Jeff left to start a skate and surf shop in Southern California.

Yet this wasn’t quite the perfect match either. Around the time Google went public, his doubts about his personal mission resurfaced. “I remember sitting in the back of the shop in Los Angeles writing code for our point of sale system, watching these companies IPO, and thinking, ‘What am I doing here? Why am I grinding out code with these skate kids all around breaking my flow? I belong in tech.’” Jeff applied to fast-growing, well-run companies where he could learn—first Google, from which he never heard back, then Amazon, which hired him as a product manager.

But after several years, Jeff finally settled on the thing he wanted to build. When Amazon wasn’t interested in building it, he left to do it himself. It was a problem laying in plain sight—solving the issue developers and product teams had reaching their customers. The thesis was that calling and texting could be much, much simpler. The idea would become Twilio.

Ruthlessly remove friction to attract customers

What united Jeff’s businesses up until this point was that though they were very different from one another, there was one common thread: Software. “It’s the power to quickly iterate and serve. You listen, you build, you solve, and your work is never done—you can always build a better product,” says Jeff. “And one common thread among all of the companies I’d started was we needed great communication to engage with our customers—sometimes in marketing, sometimes in sales, often when we were trying to fulfill a product.”

Software is the power to iterate and solve.

Jeff and his co-founders kept dreaming up new uses for better communication. What if you could notify a customer their ticket was shipped or their repair order was ready? What if a customer who called a store could find out whether something was in-stock without having to talk to someone? The ideas were endless, and they called a few telecommunications companies to pitch joining forces.

“I was a developer. What did I know about making the phone ring? It was magical. I had no idea how it worked,” says Jeff. But seeing how the phone and telephony hardware companies treated customers it was clear there was room for improvement. “We asked AT&T and Cisco if they could build it. They said it would take two years, cost millions, and would all begin with rolling out copper wire,” he recalls. “With a developer mindset, we thought, maybe we can just do this.”

The resulting company, Twilio, was an opportunity for Jeff to be what the phone company wasn’t: utterly customer-obsessed. Everything they built, they did with their developer user in mind. They put all pricing and documentation on the website, so a developer working on a problem late at night wouldn’t have to wait to reach someone on the phone. They launched an API with public documentation. Jeff wanted to give developers the tools to solve their problems using Twilio.

“I used to give a talk called, “Self-Service Pricing and Documentation, The Mating Calls of the Northern Spotted Doer,” laughs Jeff. “We ruthlessly removed friction and barriers to experimentation and that became our guiding principle. The fact we were building software made that possible.”

Give the customer what they want—even if it’s a sales team

Flush with a successful beta product and happy customers, Twilio finally began raising money in 2008—right as the market collapsed. “Even before that, things were tough. We’d hear, ‘Developers aren’t a market. Developers don’t have a checkbook,’” says Jeff. “With the financial meltdown all the conversations we’d had all summer went down the drain.”

“We looked at it and thought, ‘We've got all these early customers, and they are loving the product. They're giving us great feedback and they're building on it. Some of them have even launched our stuff when we told them not to because it's still a prototype.’ So we decided to listen to our customers,” he says. The founders’ parents put in a small amount of money and momentum continued to build.

At first, they leaned so hard into the developer self-service use case that there was no sales team to speak of. It got to a point where the phone was ringing off the hook. Rather than answer it, they unplugged it.

“We considered the phone ringing a bug. We had a support line, but people kept calling the support line with sales questions. So we stopped answering,” recalls Jeff. He attended a B2B tech summit where, in a roundtable, he sheepishly revealed that Twilio was getting 100,000 leads a month. “Everyone said ‘Wow, your sales team must be incredible’ and I told them, ‘We don’t have salespeople. Nobody calls them back.’”

But eventually Twilio did hire a sales team, and it has grown into a core function of the business. There was initial fear within the company that having sales would fundamentally change the culture for the worse—that somehow, selling would take Twilio away from its customer-obsessed mission. But as Jeff realized, the sales conversations were happening anyway.

“A really exciting company asked if we could help them with a proposal, and I did. I got off that call and thought, ‘I’m pretty sure that was sales.’” For Twilio, like many companies, some people need sales’ help to buy. “Some people need to talk to us,” says Jeff. “Some people have rigorous procurement processes. Sometimes having a sales team is serving the customer.”

Give back to the society that made your business possible

Twilio has taken the 1% Pledge, where they give a fraction of their profits, time, and services back to worthy causes. They give Twilio’s product away to non-profits that need it, and consider giving back a core of their culture. Jeff feels that’s part of what it takes to create a meaningful place where everyone knows that their work contributes something back to society.

“It’s an amazing society that we have the privilege of building our companies in,” he says. “The cities we live in, the countries with freedoms and protections and property rights. I believe that one of the responsibilities of building a company is giving back to that society so others can do the same.”