Looking For The Yawn

We spent some time last month talking to Jeff Lawson and his company Twilio, which provides a drop dead simple (five api calls) cloud platform for building voice apps on the web. Jeff ultimately went in a different direction from our firm and closed a round with Founders Fund and Mitch Kapor which was announced yesterday.

We really like what Twilio is up to and introduced Jeff to a bunch of companies who might find Twilio useful, including Tumblr, which built its 'call in audio' feature in no time using Twilio.

So I think Twilio is on to something quite interesting and I congratulate Jeff and his team on building a really useful and simple voice platform and I applaud Mitch and Founders Fund for backing this idea.

But I just saw proof that this is going to be a great investment. Yesterday, I noted Warren Buffett's words of wisdom on this blog:

Beware the investment activity that produces applause; the great moves are usually greeted by yawns.

I always wade into the comments on every blog post I read. In the comments to Techcrunch's post on the Twilio investment, I read the following:

Yawn….

This is nice functionality, but there are numerous people who have come at this problem from similar perspectives.

Here’s what’s right: telephony apps will be delivered via the cloud,
and they will be assembled from pre-built modules on someone’s app
server.

Here’s what’s wrong: this is still a telco play, meaning the company
is in the minutes business. Margins will approach fractions of a cent a
minute, not the $0.05 cent level they’re hoping to get now. So, fingers
crossed these guys can get people to deliver billions of minutes across
their platform.

The comps for this are not TellMe. Ribbit is fair comparison, but
this is really something Telera was doing almost 10 yrs ago. Angel is
probably the best comp.

No way the investors understand what they put money into.

Looks like you've got a winner Jeff and I think you've made an excellent investment Mitch and Founders Fund.

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