Why Twilio May Have a Problem

In the first tech IPO of 2016, communications software company Twilio is going public this week. It’s no Uber or an Airbnb, mind you, but it is a gutsy move. And it’s about damn time that a tech unicorn, any tech unicorn – even a boring one with a measly $1 billion valuation like Twilio – decided to take the plunge. Yawn.

Not to bore you or anything, but Twilio is pretty much your average run-of-the-mill late stage Silicon Valley startup. It’s based in San Francisco but the product lives in the cloud. It raised about $240 million in venture capital from high-quality investors. Revenues are roughly doubling year-to-year and it is not making money. How middling can you get?

Will its offering soar or flop? I haven’t a clue. Actually, Twilio is so ordinary that it’s stock will probably go sideways. That would be fitting.

I did, however, find something of interest. Twilio’s more than 500 employees actually have one thing in common: They’re all leaders. That’s right folks, you heard it here. Every single Twilion (that’s what they call their employees) is a leader. I know that because it says so in big bold letters on the company’s very own website.

Not only that, but Twilio’s management team (can’t call them leaders, since that would include everyone) must consider their nine values and eight leadership principles to be very important – I counted eight mentions in the IPO’s S-1 prospectus, including one in the all-important “Summary” and a full list of all 17 in the “Business” section.

But here’s the thing. While the website clearly states that “Every Twilion is a leader,” that five-word phrase was solely omitted from the prospectus. It refers instead to “leadership traits we all strive to achieve,” which frankly makes a whole lot more sense since, if every employee were already a leader, then what would they have to strive for?

Besides, having been intimately involved in more than my share of SEC Form S-1 drafting sessions over the ages, I can tell you one thing with great certainty: Not a single one of the two or three dozen attorneys involved in scrutinizing every blasted word of that document (we called it “wordsmithing hell” for a reason) would have signed off on that five-word statement. It’s simply ludicrous and indefensible. And even if they had, the SEC would probably have kicked it back. That’s just the sort of thing they do.

Look, I don’t mean to be overly cynical or nitpicky here. I wasn’t happy when our schools started giving every damn student a gold star, an award or an “A” just for showing up, and I’m sure as hell not going to stand by while companies go in for the same sort of pandering, politically correct nonsense. Don’t even get me started on the rebranding of “recruiting” as “talent acquisition” when maybe half the folks they hire have little or no talent.

Twilio co-founder and CEO Jeff Lawson once worked as a product manager at Amazon. He was only there for just over a year, but that was apparently long enough for him to lift – I mean respectfully emulate – the ecommerce giant’s 14 leadership principles. But he seems to have missed one clear distinction: They’re aspirational.

It’s one thing to define the kind of behavior that makes Amazon peculiar (their word, not mine) as an aspirational tool, it’s another matter entirely to literally state that every employee is already there. It removes personal accountability and meritocracy from the equation, just as the schools do.

No real executive should make that utopian leap. It’s unacceptable and concerning, to say the least. And don’t think for a minute that this is about semantics. It’s not. It’s a bona fide business trend that’s well on its way to becoming a cultural norm.

One of the more popular management fads du jour is a non-hierarchical organizational structure where everyone is considered a leader with an equal vote in the decision-making process. Companies are actually considering this so-called democratic nonsense in droves.

In probably half the Twitter and LinkedIn profiles I read, users self-identify as leaders, entrepreneurs, investors or CEOs when they really have no such experience. Why? They’re being taught that there’s an equivalence between trying, or even just wanting, and accomplishing.

Speaking of which, one of Twilio’s leadership principles describes bad leaders as those who “confuse effort with results.” I’d laugh at the irony, if it weren’t so tragic.