Twilio: Behind the IPO with Lee Kirkpatrick and CJ Gustafson

Get an exclusive look inside Twilio's IPO journey, the strategy behind their IPO, and discover the key elements for building a tech company that led to their market dominance.

Author

Turpentine Media
May 22, 2024

In this episode of Company Breakdowns, we're publishing an episode from CJ Gustafson's “Run the Numbers” podcast, where he interviews Lee Kirkpatrick, former CFO of Twilio, who was at the helm during their highly publicized 2016 IPO.  Get an exclusive look inside Twilio's IPO journey, the strategy behind their IPO, and discover the key elements for building a tech company that led to their market dominance.

Listen on Spotify, Apple and Subscribe on Youtube

✨ Key Takeaways

Twilio's IPO Journey:

  • Early Preparation: Twilio started preparing for their IPO 18 months before their target date, focusing on key hires, legal diligence, and addressing internal weaknesses.

  • Unique Model: Twilio's usage-based model was considered unconventional at the time, but they were confident in its growth potential.

  • First-mover Advantage: They chose to go public in a challenging market, hoping to capitalize on being the first tech IPO of the year.

  • Branding and Market Awareness: Their IPO was not only a capital-raising event, but a major marketing opportunity that generated significant brand awareness.

  • Pricing Strategy: Twilio aimed for a sustainable price, prioritizing long-term investor relations over maximizing short-term profits.

CFO Insights:

  • CFO Responsibilities: Lee highlights the importance of a CFO's role in internal stability, strategic decision making, and managing investor relationships.

  • Building Trust with Investors: He emphasizes building a partnership with long-term investors, offering transparency and communication.

  • Roadshow Insights: The roadshow process involves a tight schedule, frequent meetings, and learning to anticipate investor questions.

  • Managing Earnings Calls: Lee emphasizes thorough preparation and anticipating challenging questions, even while focusing on answering basic questions well.

  • Metric Disclosure: The key is to disclose enough information for analysts to model the business, and then gradually expand on key metrics to be more helpful.

General Business Lessons:

  • Don't Be Afraid to Be Bold: Twilio's IPO success demonstrates the potential of going public when the market is tough, taking a calculated risk.

  • Embrace Change: Companies that can adapt their business models to fit the changing market trends will thrive.

  • Empower Your Team: Great CFOs are not afraid to delegate and empower their team, fostering a collaborative environment.

  • Ego is a Detriment: Lee's experience shows that letting ego influence business decisions can have negative consequences.

  • Focus is Key: It's important to define your core priorities and focus your energy on them to achieve true success.

Additional Takeaways:

  • The transcript provides valuable insight into the inner workings of an IPO and the critical role of a CFO.

  • Lee's perspective on long-term investor relationships and building trust is invaluable for any company preparing for an IPO.

  • The discussion on the roadshow process and earnings calls offers practical advice for both seasoned and aspiring CFOs.

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Run the Numbers podcast: 

⏲️ Timestamps:

TIMESTAMPS:

(00:00) Intro

(00:18) Behind Twilio's IPO with Lee Kirkpatrick

(02:11) The Journey to Twilio's IPO: Preparation and Strategy

(03:42) Twilio's Unique Business Model and Market Position

(05:52) Navigating the IPO Process: Challenges and Strategies

(09:11) The Big Day: Twilio Goes Public Amidst Brexit Vote

(15:05) Post-IPO Reflections: Pricing, Branding, and Investor Relations

(19:01) Sponsor: Brave

(20:03) Choosing the Right Bankers and Building Investor Relationships

(23:53) The Reality of IPO Roadshows and Investor Behavior

(25:12) Inside the Intense 8-Day IPO Roadshow Journey

(30:16) Mastering the Earnings Call as a Public Company CFO

(36:30) The Qualities That Distinguish a Great CFO

(37:49) Learning from Mistakes: A CFO's Reflections

(41:20) The Craziest Expense Report Story

(42:51) Wrap

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