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Twilio set to acquire Segment for $3.2B
- arrty88 6y agoWho's gonna pick up Zapier??
- mercwear 6y agoI hope they stay independent as long as possible however if I had to take a guess I would say Salesforce.
- tosh 6y agoTwilio feels like a great fit for Segment, all the best to the team and the next steps. Show HN: Analytics.js (2012) https://news.ycombinator.com/item?id=4912076 https://news.ycombinator.com/item?id=4912076 via @rauchg https://twitter.com/rauchg/status/1314709848030756864 https://twitter.com/rauchg/status/1314709848030756864
- tootie 6y agoIt's kinda nuts. They have some videos on startup school. They basically just threw spaghetti for months building random products for markets they barely understood until they landed on analytics and it just snowballed. This isn't even a brilliant idea. They entered a crowded market with a solution that was just a bit better than everyone else and now have a $3B exit.
- kfichter 6y agoThe invisible hand of the market sprinkles its fairy dust
- adventured 6y agoIf we capture just 0.03% of that fast growing cloud stuff... And then they actually did it.
- fblp 6y agoHow was this market for customer data platforms "crowded" in 2012?! :)
- tootie 6y agoThe original product was really just a javascript utility allowing you to instrument your site and funnel data to other analytics platforms like GA or Adobe. The industry was coalescing on another approach (data layer) which still exists and probably has wider adoption. Segment used their position as a middleman to add more and more value as they matured and acquired customers.
- XCSme 6y agoI am currently working on a self-hosted analytics platform, and even though the space seems crowded, there are only a few good players. The thing is everyone started creating an "analytics platform", only that they just do it for money, thinking it's really easy to implement and don't care about the actual product, user experience or quality in general. 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.
- tito 6y agoSo cool. "We did it HN!" hehehe
- esotericimpl 6y agoThis seems cheap, segment was doing great especially with sass the way it is now.
- lmeyerov 6y agocongrats to the team! 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
- teej 6y agoSegment (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 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
- texasbigdata 6y agoSo what’s the end state solution? The tools change and/or mature slower than a fast company will grow. Where are you going from here? 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.
- aeromusek 6y agoGenius 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.
- raiyu 6y agoWith 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.
- rasen58 6y ago> With how frothy the public market is for SaaS companies with growth looks like their growth may have stalled out. Can you explain what this means. Why does the first part of the sentence imply the second?
- cheriot 6y agoIf they could show strong growth continuing they'd have made more money with an IPO than an acquisition. At least that's what the comment is suggesting.
- brogrammernot 6y agoThe 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.
- knes 6y agoThat sounds like a sweet deal, especially as Twilio stock is current "overvalued" (like most tech stocks right now). Jeff Lawson continues to follow the SFDC playbook of buying companies (and existing revenue growth) with stocks everytime their stock pops ;)
- hlth 6y agoI'm not sure that it's Jeff Lawson as much as George Hu. 13 year SFDC veteran and credited by Benioff for many successful initiatives in his cloud book. 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.linkedin.com/in/georgehusf/ https://www.linkedin.com/in/georgehusf/
- knes 6y agoYes you are correct that he probably played a big part in all of this.
- noway421 6y agoLast 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.
- mikeyouse 6y agoLiquidation 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.
- paulyacoubian 6y agoOnly 1x liq pref in this case.
- sqs 6y agoCongratulations to all Segment folks! I’ve met so many amazing people at Segment.
- soumyadeb 6y agoWow, congrats to the team @ Segment. This is very well deserved - they created this category. Also, looks that Twillio is investing big time in owning the marketing stack.
- siquick 6y agoHopefully this means Segment dropping their prices - $120p/m for 10k users is out of the range of a lot of potential customers, and changing around an established analytics setup later on is always a pain.
- e_commerce 6y agoAnother finished web product that Twilio can overcharge for! This company is aiming to become the Oracle of SaaS. Stay away.
- spondyl 6y agoThis 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!
- tito 6y ago10 bajillion percent HN / YC success story. Congrats to all -- especially the person on the original thread who said "this is a cool idea"
- divbzero 6y agoHere’s the original post [1] and another early thread [2]. Always fun looking back with 20/20 hindsight. [1]: https://news.ycombinator.com/item?id=4912076 https://news.ycombinator.com/item?id=4912076 "Analytics.js" [2]: https://news.ycombinator.com/item?id=5116832 https://news.ycombinator.com/item?id=5116832 "Segment.io"
- sjg007 6y agoYeah I agree, amazing.
- hestefisk 6y agoInteresting. What does Segment do?
- guessmyname 6y agoSegment is a customer data platform (CDP) that helps you collect, clean, and control your customer data. Here’s more information [1] from Peter Reinhardt, one of the co-founders. [1] https://www.quora.com/What-is-Segment-io-all-about https://www.quora.com/What-is-Segment-io-all-about
- tomnipotent 6y agoIt'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.
- Sebguer 6y agoStep one towards rebranding Sendgrid as a marketing platform and getting them away from the cesspit that is transactional email.
- deleted 6y ago[deleted]
- bertjk 6y ago(real question) Why is transactional email considered a cesspit?
- Sebguer 6y agoA few reasons that all connect to each other. The biggest, most foundational one is that spammers are highly sophisticated criminal organizations, and will constantly be trying to figure out how to leverage your product for spam. 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.
- dropofwill 6y agoThat’s all true, but it equally applies to marketing email.
- Sebguer 6y agoYes, but you can charge a lot more for marketing email, especially enriched marketing email.
- noway421 6y agoI sort of disagree that it's commoditised, since the most popular email API would have the moat of being included in every spam filter whitelist. By choosing Sendgrid, paying them for the service and getting their IP ranges you guarantee that you get the greatest chance of getting your email delivered. That commands a premium. Yeah you can go for Amazon SES or Mailgun or something, but they are used to spam too, Amazon SES to an even greater extent. You are also guaranteed to get whatever the latest email innovation of email delivery they come up with as one of the early adopters. If they decide to deprecate SMTP and build something more secure, private, easier to authenticate and identify, you get that for "free" without having to change your code. I see Sendgrid as a relationship maintainer between developer and Gmail/Outlook/Yahoo/long tail of other email providers. You pay them and they make sure your emails show up in those inboxes. Sendgrid has issues with hacked accounts, which is probably their biggest struggle right now, but even then they have things like reputation. A hacked account would very quickly dip their reputation and be excluded from delivery anyway, without affecting the platform at large. They push 2FA tho, and I think some sort of automatic api key rotation system would be a nice remedy too. Ultimately, Sendgrid maintains risk on per-account basis. Email providers understand that too, even though SMTP as a protocol and spam filters don't necessarily reflect that. Sendgrid as a platform is never under threat, individual Sendgrid accounts are.
- dmix 6y agoI follow(ed) Segment’s GitHub branches and always felt they adopted the latest and best front end tooling. I usually let them being the testing ground at a real company in between the stuff they developed themselves. 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.
- alexjray 6y agoMost 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.
- Toine 6y agoCan you elaborate on "internal influences external" ? I don't get it.
- throwbacktictac 6y agoI 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).
- fblp 6y agoIan Storm Taylor departed the company in ~2013 i think - but was all a technical team with strong opensource culture.
- 6y ago
- zed88 6y agoHopefully they drop the pricing after this, else I am moving to Rudderstack.
- supergirl 6y agois rudderstack cheaper? not obvious from their pricing. unless you go open source but then you don't have all the features
- soumyadeb 6y agoRudderStack (https://rudderstack.com/ 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. 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.
- tomnipotent 6y ago> 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).
- soumyadeb 6y agoYes, 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.
- est 6y agoOfftopic: what's the best self-host tool for Intranet analytics? Would be best if can track user keystroke/mouse without predefined events, like what heap.io do.
- huy 6y agoI know of three (all OSS) * https://www.posthog.com/ https://www.posthog.com/ (more mixpanel alternative, can auto-track events too) * https://snowplowanalytics.com/ https://snowplowanalytics.com/ * https://rudderstack.com/ https://rudderstack.com/ (explicitly say it's Segment alternative)
- robbiemitchell 6y agoReally happy for the team. Huge fan of Segment from the start, and Twilio is slowly getting itself into the middle of everything. (I realized only recently that they've owned Authy for years following the recent rebranding.) 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.
- gigatexal 6y agoThe article is so dumb. Not a single sentence on what Segment does.
- m463 6y agoFrom wikipedia (deleted?) > 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.
- seejc 6y agona
- fancyfish 6y agoReally happy for the team and especially for the founders. They proved to be very technical and assembled a truly impressive engineering team, culminating in a huge exit. 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.
- emdowling 6y agoA fantastic outcome for a fantastic team and product. I've worked closely with both Twilio and Segment for a number of years as the internal driver behind large enterprise deployments. 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!
- maerF0x0 6y agoAll the parties declined to comment. How can forbes report on this if no one is willing to say it's happening?
- lasky 6y ago/strums G, D, C on guitar/ “If I had a billion dollars...”
- ajit_singh 6y agoWas a segment user around two years ago. Felt like a software that is made at exactly the moment when it should have, for a really hungry audience. Their success never surprised me. They also had a capable alternative- mParticle. Not sure what are they upto.