Jeff Lawson: Now what you’re seeing in Web 2.0 is this more vertically integrated approach where instead of just veneer on top of the existing industry, you actually have companies that are cutting all the way through the stack and existing industry to provide a better solution overall. Coming back to homes, I can now buy a home, end-to-end, using WebGen. I can even buy a Tesla e-commerce on their website. That’s the end-to-end experience of Tesla using software. Look at Airbnb. It’s actually getting me in the room that I’m going to be renting. Same thing goes for Uber. It’s actually the means and the entirety of the customer experience. That’s a fascinating trend. This is the next evolution of using software, the Internet, and technology to disrupt businesses. The first one was just the veneer on top. Now we’re cutting deep into actually providing the service as well, which is on the consumer side.
To me, the most interesting trend on the B2B side is the notion of the composable enterprise. IT overall used to be characterized by providing the complete end-to-end forklift solution that you bring in to an enterprise. Now I believe we’re moving into a world where enterprises are going to buy much more granular solutions. They’re going to buy smaller building blocks. They’re going to compose those building blocks into a unique customer experience. That’s the composable enterprise. I think it’s going to drastically change how companies buy their technology.
You see this in Amazon Web Services. I’m actually buying compute capacity for an hour that can be rapidly reconfigured and changed to be deployed to keep up with the agile environment. I think that’s a major trend. Every piece of technology that enterprises have are to be re-thought through that lens of more composable, more granular, and more flexible solutions than the legacy solutions. The good news is it’s a transition that is hard to keep up with because you’re selling a very different kind of product at a very different kind of, oftentimes, price point or on a contractual basis.
If you look at what legacy vendors did versus what Amazon did, Amazon was very disruptive because instead of selling you a million dollars SKU, they’re selling you an 8 cent per hour SKU. It completely changes the sales model and the go-to-market. It’s quite powerful and it creates a lot of opportunities for a lot of entrepreneurs to go in and challenge incumbents by providing a much more flexible and generally more cost-effective solution. That’s what Twilio is doing to the communications industry.
Sramana Mitra: On the B2C discussion, do you have any specific white space areas like the workflow of a certain industry that strikes you as something that should follow this route as Uber has done with the transportation sector. Airbnb has done it with the vacation rental or whatever they call it. Is there any specific industry that has struck you as one that should go through that transformation?
Jeff Lawson: That’s a good question. I think banking is going to go through that transition. A number of people have tried and started.
Sramana Mitra: It’s highly regulated. That’s a problem.
Jeff Lawson: That creates more opportunities once you cut through that regulation.
Sramana Mitra: Once you cut through that, there’s no more barrier to entry. It’s also hard to cut through the regulation in the banking industry.
Jeff Lawson: But there are a number of ways to go about that transition. Let’s look at Coin for example. Have you heard of Coin?
Sramana Mitra: Yes.
Jeff Lawson: Coin could be an entry into actually providing you your credit services or Apple doing the same thing.