SendGrid Breaks the Chain
Surviving Feature Fatigue on the Martech Expanse
Denver’s hottest tech company is SendGrid. The rare software startup, from Colorado no less, to achieve a public market exit. This is a study on the origin of SendGrid.
A startup guy walks into Steve Jobs’s office. They exchange the briefest of pleasantries before Jobs floats an acquisition offer. The startup guy balks, says he wants to build a bigger company. Rebuked, Jobs starts in on a bit of “trolling.” What you have is “a feature, not a product,” he shades the startup guy. Not so subtly implying, if we can’t buy you, we’ll have no choice but to build a platform to kill you.
Jobs, in his eternal wisdom, was wrong this time. DropBox, that guy’s startup, is today worth $10 billion. Just last month, the company filed for IPO. An alumnus of the renowned Y-Combinator program, DropBox will become only the second graduate of that, or any tech accelerator to go public. See if you can guess who the first was.
Ecosystem is one of those words tech culture has fully appropriated. Something you’re bound to hear at a panel discussion, or a meeting masquerading as a “jam sesh.” Though not a miracle of the wild, like the wolves that saved Yellowstone, the industry of technology has at least the structural components of a natural ecosystem. Products and features pass for flora and fauna, predator and prey. Platforms to build, clouds to habituate. A dense latticework of interdependent species of stakeholders, caught in a violent lifecycle of scale and decomposition. Or whatever.
So then, if tech sectors are ecosystems, and companies their organisms, Marketing Technology (Martech) is the Amazon Rainforest. There are 5,381 solutions in the Marketing Technology Landscape. This according to the widely-circulated graphic charted annually by Scott Brinker, editor of Chief Marketing Technologist and preeminent SaaS cartographer.
The diagram itself is daunting, a veritable Magic Eye poster of graphic design core, lowercase wordmarks and minimalist logos. Just zoom in your browser about 3x, from the top left scan your finger three boxes across and one box down. There, right beneath the “ing” in “Email Marketing” you’ll find our friends at SendGrid. While here a seeming speck of dust on a static plane, SendGrid is in fact among the largest players in a fiercely competitive industry.
That each of these tiny symbols represents a company — in the case of SendGrid one with hundreds of employees, thousands of customers, millions in revenue, billions in market cap and trillions of messages-sent. And that just one of these companies with a single strategic decision can set off a cascade of events that shifts the entire equilibrium — well its a phenomenon worth exploring. So strap on your helmet and come along on a software safari. Through cataloguing its closest co-habitants — customers, collaborators and competitors, oh my — we can retrace SendGrid’s remarkable evolution from good to great, through features to products on platforms.
Isaac Saldana grew up in Mexico. Driven to pursue a better education in the States, he went live with relatives in California, where he attended high school and college. After graduating with a double major in Computer Science and Electrical Engineering, he immediately got to the business of founding tech companies. Bouncing around for a bit as a consulting, hired-gun-CTO, he observed this recurring issue with emails. Basically that they’re hard to send. Much harder than you’d think.
Some cursory market research confirmed that 20 percent of emails sent by tech applications don’t reach their intended recipient, either getting caught by SPAM folders or otherwise lost amidst the shuffle. Here was the customer pain point from where to form the basis for his next venture. Learning from past mistakes, Isaac knew this company would require serious mentorship to gain traction and ultimately secure funding. So in 2009, when he applied and was accepted to the TechStars accelerator program, Isaac packed up his worldly possessions and left California behind for Colorado, his wife, kids and two freshly-recruited co-founders in tow.
From what I gather, the counsel they took away from TechStars, and other advisors in the surrounding Boulder tech community, manifested in three big ways. First, and most cosmetically pertinent, the name. Originally they called the company SMTPAPI.com, as in Simple Mail Transfer Protocol Application Programming Interface (totally knew that). Some advised this could confuse tech-laymen outside Isaac’s “developer geek bubble.” Brad Feld teasingly nicknamed them “Smit Papi” until they relented to rebrand, settling on “SendGrid.” Second, with an eleventh-hour term sheet, Feld’s Foundry Group partner Ryan McIntyre dissuaded them from accepting an acquisition offer, and instead emboldened them to hold steadfast to the “courage of their conviction.”
Third, and most relevant for our purposes, mentorship focused Isaac and SendGrid. To them at the beginning, email was this wide open world of possibility on which to build a platform of dizzying features. We could convert email text to voice, or even translate in different languages, they thought. Pump the breaks, they were warned. “Start small, find one thing you can become the best of the world at,” Isaac recalled learning. “Expand from there.” Thus, over their rigorous three-month curriculum at TechStars, they refined their pitch and targeted their offering toward a specific unmet market need.
Your Friday evening trip with Uber. SendGrid sends a billion emails a day, across a diverse range of customers and use cases, but this is the one they’ll tell you about at a cocktail party. Every time Uber sends you an email, for an account activation or a password reset or most often a ride receipt, it was SendGrid that delivered the message on Uber’s behalf. Why does this matter? As posited by Mike Kadin, Senior Engineering Manager @ Uber, say a potential rider is waiting out in the rain, but forgot his password, and the reset link won’t show up in his inbox … well maybe he’ll just say to hell with it and take a Lyft.
Sending emails that matter, with confidence. This is what SendGrid does for its customers. More technically speaking, its flagship product enables developers to programmatically send emails via its API or a relay setup. The core value proposition for using SendGrid, as opposed to say SMTP DIY, is deliverability. To reiterate Isaac’s light-bulb moment, sending email is harder than you think, especially when you’re a big company that blasts out millions of them every day.
You see email has been around since the early seventies, when Defense Department engineers hacked a fairly simple program that would allow for leaving messages to one another on ARPANET, the precursor to the Internet that connected all their computers. In the nearly half-century since, while those basic protocols haven’t changed all that much, obviously way more people are out here sending way more email.
Therefore to cope with increased traffic, a heap of clunky auxiliary tech has been somewhat crudely affixed to the underlying foundation. IP architecture, ISP relations, SPF Authentication, DCAM digital signatures, DMARX MX records. According to Scott Heimes, CMO @ SendGrid, these and other acronyms are now decisive factors that determine whether or not an email makes it to the inbox. SendGrid not only understands what all of those letters mean, but has the expertise and infrastructure to manage them at scale.
This practice of sending emails triggered by a customer action, such as various confirmations of online purchase or signup, is called “Transactional Email.” From a SaaS standpoint, SendGrid more or less invented the category. It now sells a second tangential product (much more on that later) and offers expert consulting, but since the very beginning this original “Email API” platform has been the bell cow, currently accounting for 80 percent of revenues, which surpassed $100 million last year. On the strength of transactional email, SendGrid made its initial public offering on the New York Stock Exchange (NYSE: SEND). Now for only $24.67 per share (up from $18, its opening price in Nov-17), you can own your own piece of Colorado tech startup history.
In their S-1 registration (SEC disclosure required for new securities), SendGrid appraised the global transactional email market at a cool $9 billion. Better still, despite being the market leader, SendGrid only maintains 3 percent penetration. Certainly a massive opportunity for a company hot off an IPO, with a $130 million influx of public capital. Yet in an ecosystem so lush as this, competition restores balance, and danger lurks around every corner.
You might be surprised by how much software companies beef. Like as in openly feuding, lobbing petty shots at one another, real down in the mud type stuff. Suppose it’s no wonder emotions can run hot, what with all that money at stake. Anyhow, if SendGrid is Bad Boy Records circa 1995, as I like to think it is, then SparkPost is Death Row. Let’s find out who the realest is.
First off, in the media blitz heralding the NYSE-debut, SparkPost of Maryland piped up to publicly proclaim itself as SendGrid’s “primary competitor” in the transactional email space. Among other supposed differentiators, SparkPost is very boastful about being the only “cloud native” offering on the market. Kind of a weak flex to be honest, but in any case, this seems to be their main knock against. “Unlike other email delivery providers who continue to expend resources and focus on building and maintaining their own data centers,” CEO Phillip Merrick cryptically blogged in a 2016 post. “SparkPost is the only full-featured cloud email delivery service built 100 percent for the modern cloud.”
What he’s alluding to, I’m pretty sure, is that initially SendGrid ran its operations off a sophisticated private cloud, instead of using a public hosting provider, for example Amazon Web Services (AWS). Per Merrick’s fire diss blog, leveraging proprietary servers is inefficient, and could allegedly compromise service reliability and flexibility. Whether or not that’s accurate, now the point is probably moot, as SendGrid spent the better part of 2017 migrating away from its private cloud, and onto the AWS Marketplace, where it fights for digital shelf space right alongside SparkPost.
Effective this past fall 2017, SendGrid and SparkPost are both available for subscription, and highlighted as “Advanced Technology Partners” on the AWS Business Applications Discovery Page. As the self-touted “native” offering, SparkPost is obviously all-in on the cloud, where two-thirds of its revenues are already generated. For its part, SendGrid seems just as bullish about the opportunity to extend its new business pipeline via Amazon and other cloud channels, particularly internationally (also hold that thought).
Hip hop parables notwithstanding, the pissing contest for who holds more cloud clout isn’t all that interesting to me. However, SendGrid and SparkPost’s dueling channel partnerships with Amazon raise some hard questions about the future viability of transactional email, at least as a growth-sustaining SaaS product.
Remember from a couple thousand words ago, that whole ecosystem metaphor we beat to death? Amazon is the apex predator. Scratch that. It’s the erupting supervolcano or the asteroid hurtling toward Earth (pick your apocalypse event), posing an existential threat to all industries in its ever-widening blast radius.
Oh I’m being melodramatic? Ask a retailer what they think. From books to electronics to now even groceries, Amazon has surgically dismantled the status quo and taken a dominant position in every vertical its entered. The playbook is simple. Partner with the best manufacturers and distributors in a given category, who provide their product competency in exchange for access to Amazon infrastructure. Seize the opportunity to learn the ins and outs of those partners’ operations and unit economics. Cherry pick whichever of the businesses are most attractive. Muscle in on your partners in those markets and crush them on price. Bingo, bango, bongo, Bezos.
Now in recent years with the explosive growth of the Web Services empire, Amazon’s thirst for untapped revenue streams has flooded beyond B2C ecommerce into B2B SaaS. Especially with the market pressure being applied by Google with its recently announced Cloud App Marketplace, among other combatants in the intensifying cloud wars. So, software providers that co-sell their products via the AWS Marketplace find themselves in a precarious position. The better their sales perform on this increasingly crucial channel, the greater risk Amazon will find their business appealing, and attempt to vertically integrate them into oblivion.
For SendGrid and SparkPost, this pattern would appear eminently troubling given that Amazon has already gone to market with Simple Email Services, its proprietary transactional email tool available as an add-on for AWS customers. Not unlike the Amazon Basics line of consumer packaged goods, SES has the trappings of a generic, low-cost alternative to a premium solution the caliber of SendGrid, which is priced 3–4x higher.
Regardless, despite the tenuous nature of their “co-opetition,” SendGrid CEO Sameer Dholakia isn’t sweating Amazon. He assures that both parties have had “candid conversations,” for they are “integrated very closely,” and this is not one of those “Barney relationships.” His comments hint to the existence of some handshake arrangement we’re not privy to, which on the one hand inspires confidence. On the other hand, this is Amazon we’re talking about! Kiva, the Destroyer of Worlds! To whom no deal is binding, every partnership is expendable and your margin is its opportunity.
Look, even if Amazon is friend not foe. Even if SES is just an add-on feature, not a competitive product. SendGrid is absolutely prepared for the possibility, however remote, of Amazon making a more serious play to bolster the email pillar of its encroaching SaaS platform. An entry that might very well have the effect of commoditizing SendGrid’s core product. Such is the nature of things in an Amazonian Era.
Without question, Isaac and company accomplished something remarkable when they nailed the product-market fit all those years back. I mean shoot, their Email API solution has carried this company all the way from Pearl Street to Wall Street. But if market forces dictate a shift away from transactional email, then evolve yourself a pair of wings and fly right over that sunk cost trap. Adapt or die. Nostalgia is weakness. Only the fittest survive.
Jobs, not features. This was the guiding product design principle at Bizzy. A rejection of the sameness co-founders Jen Kessler and Chiara McPhee saw as pervading the martech landscape. Non-differentiated providers compiling feature checklists, more to outpace competition than satisfy any end user. All devolving into an ever-meandering arms race to the bottom.
Bizzy believed in a better way. Through focusing on the every-day jobs every business person does, it set out to “democratize access to good behavioral marketing,” giving customers a chance to focus on what matters, namely their brands and products. Like SMTP API, they started with a singular task: building the initial customer funnel. From there they formed a digital conveyer belt of complementary job stations — measuring funnel results, linking them back to specific contacts, sending those contacts targeted messages and on down the assembly line.
As fate would have it, the Bizzy solution was built atop the SendGrid platform. Through their collaboration, the founders, their product and the philosophy behind it, garnered the affection of Steve Sloan, Chief Product Officer @ SendGrid. Steve introduced Jen and Chiara to Sameer. Their exploration of a deeper partnership led to an acquisition offer in March 2017.
The Bizzy team was recruited to lead SendGrid onto a second horizon, applying its expertise and vision toward accelerating the roadmap for the company’s big follow-up product to Email API, Marketing Campaigns. Since rolling out year-end 2015, some 7,500 users have onboarded the new campaigns service, constituting about 20 percent of the total customer base. Just a first small step toward expanding the SendGrid footprint, that nonetheless represents a giant leap into its envisioned future.
Marketing Campaigns works the job of email marketing, a close cousin of transactional in the email sub-classification of the broader martech genus. Powered by the same advanced technology that made Email API an industry standard, Marketing Campaigns is engineered to run equal parts powerful, flexible and intuitive, delighting marketers and developers alike. However, while SendGrid’s email proficiency is surely synergistic, the horizontal move from transactional, to marketing, presents an entire new set of challenges — for targeting a separate albeit overlapping segment of customers, against an even more hotly contested field of competitors.
Hailing from half a world away, Campaign Monitor stands out with a distinct few among the fragmented many in email marketing. Serving 200,000 global subscribers, concentrated predominantly among small-to-mid-size businesses, Campaign Monitor is constantly innovating its product toward perfect personalization, thought to be the “holy grail” of the discipline. With its latest “1-to-1 Email Marketing” feature, unveiled October 2017, Campaign Monitor claims to have unlocked a level of behavioral personalization before known only to enterprise marketers, and made it accessible to its SMB customers.
Call them best-of-breed, best-in-class, pure play, point solutions. They all translate to a software company that specializes on one job. In this case, the job SendGrid Marketing Campaigns is applying for. Campaign Monitor is one of these highly specialized providers, which is to say Jen, Chiara and the rest of the team have their work cut out for them. Perhaps if SendGrid were fast following they’d have an easier go, but email marketing software has been a highly sought-after space for a decade and change. It would also be another thing if it were only Campaign Monitor, but recall Brinker’s MarTech 5000 … there are like ten Campaign Monitors! Constant Contact, SendinBlue, MailTime, GetResponse, Emma. All fancy themselves best-in-show for SMB Email Marketing.
That aside, with its resources, talent and momentum, if SendGrid wanted to be king of email marketing hill, I have no doubt they could wear the crown. Hell, it’s a good business, particularly for private equity investing or holding group consolidation. But for a hyper-growth company on the trajectory of a SendGrid, I see email marketing, and for that matter email in general, as the foundation for something greater.
“There’s a billion fucking things you have to do in your life, and email is the distillation of the other stuff that other people want you to do.” About sums it up doesn’t it? More telling than the words themselves is who spoke them. Stewart Butterfield, Founder and CEO @ Slack.
Put more mildly, our relationship with email is complicated. Echoing Butterfield, besieged recipients associate their unread messages and incessant notifications with obligation anxieties, often to the point of psychosis. Product design critics begrudge email as overtasked, coalescing too many jobs across our personal and professional spheres. As such, its one of those institutions many speculate is ripe for disruption. The haters, of which there are many, are declaring the emergence of Slack and other productivity tools a signal to the beginning of email’s end. That we as a society are nearing an eternal resting state of inbox zero. The long night.
Not surprisingly, SendGrid is our watcher on the wall, staunchly defending email and its role in the digital culture. Foremost as a marketing instrument, SendGrid is eager to champion email’s unrivaled efficiency. That email marketing is proven to produce a $38-return on every $1-invested is a frequently revisited talking point. On a more macro level, advocates will cite evidence for email as a vital function in our lives online. “I think it will outlive us all,” proselytizes Sameer, who oft-likens email to a social security number for web citizenship. “I deeply believe it remains the center of gravity for digital communication. For many of us, we change home addresses more frequently than our personal email address.”
For what it’s worth, Slack denies it aims to “kill email.” On the contrary, Butterfield says he spends four-to-five hours in his inbox per day. “Its virtue is that it crosses organizational boundaries,” he expounds. “It’s the lowest common denominator … the lingua franca of computer-mediated communication.”
Indulge me for a moment. Has any single advertisement in history generated greater ROI than the “MailKimp” spot on Serial? Was it lucky to stumble on the first ever viral podcast to really pop a wheelie on the zeitgeist? Sure it was. Give MailChimp credit though, at least for the so-bizarre-it’s-memorable copy. If that were your garden variety ad read, no way it gets an SNL shout out.
Anyway, thanks in large part to Adnan (1000% guilty btw), MailChimp is now the 800-lb gorilla in email marketing. The statistics are staggering, spanning 15 million customers sending an aggregate billion-plus emails per day, pushing $400 million in annual revenue. With such big skin in the game, MailChimp had naturally joined SendGrid and other ESPs in the chorus of email-stanning. “I think [email] is in the prime of its life,” said Ben Chestnut, CEO @ MailChimp, towing the party line. “Just try to remember that the ‘e’ in email stands for employed.”
But then a funny thing happened. In March 2016, to the utter disbelief of email enthusiasts everywhere, MailChimp mobilized plans to roll Mandrill, its transactional email offering, into its monthly paid premium accounts. Among customers, the announcement triggered a mass exodus, and among providers, such as SendGrid, a corresponding mad scramble to corral displaced users. Alas, from the dang clouds, SparkPost won a coveted endorsement as a suitable migration destination directly from MailChimp. Bastards.
To MailChimp, the move amounted to punting on transactional email, for which it commanded a significant market share. Gradually thereafter, with subsequent platform updates, the Atlanta-based provider has further diversified beyond its central email marketing capabilities. Come January 2017 the shift was on, when MailChimp began helping small business customers buy Facebook ads. Just a simple repurposing of the same friendly interfaces for streamlining an otherwise confusing process of navigating Facebook’s marketplace. “Take the magic we give to email,” Chestnut explained, “and sprinkle it on other marketing channels.”
Post Facebook feature, MailChimp has introduced comparable tools for purchasing ads on Instagram and Google, hence completing the holy trinity of SMB digital advertising. Going forward, MailChimp plans to implement additional ad services and solutions integrations. It’s even gone so far as to insinuate the possibility of a Direct Mail partnership with the US Postal Service. Meanwhile, regarding its email bonafides, it’s no wonder MailChimp is singing a different tune. “For me, it’s always been about building a great brand, no matter what the channel,” says Chestnut, who evangelizes his brand to represent something much larger to small business customers: “The thing that helps them look professional.”
Imagine that this is the future SendGrid strives toward. A platform in the mold of the broader CRM suites sold to enterprise customers by Salesforce, Adobe and the other marketing clouds. But down market-oriented, with a feature and pricing flexibility more attuned to small business needs. A solution that thrives like any entrepreneur worth her salt — wearing many hats, seamlessly and cost-effectively excelling across a range of jobs.
Just this week, SendGrid announced “MultiChannel Display Ads,” a pilot program for cross-pollinating email marketing with paid social media. Could be a one-off experiment. Could also be a major brick in constructing what Sameer has called a “multi-channel engagement platform.” If that’s indeed the blueprint, where better to build out from than email, the “center of gravity” for all digital communication. After all on the Internet, whether you’re creating an account, signing in or making a purchase, what’s the one thing you need to do anything else?
In the absence of more concrete data, you can tell a lot about a software provider’s ideal customer persona by the brands it showcases on the homepage. Unfortunately for this exercise, with one exception MailChimp.com is completely logo-less. The lone highlighted use case, just below the fold, is a cross-platform ecommerce strategy for Hem & Hers, what looks to be a women’s fashion boutique. Only there is no Hem & Hers. MailChimp mocked it up.
How convenient. instead of having to reverse engineer MailChimp’s target customer persona, here it provided to us in all its glory. An independent retailer leveraging marketing automation to build its brand and boost sales. Assuming we’re correct, and MailChimp has its sights trained to the online retail vertical, well then its doing a swell job. The company’s ecommerce business increased 46 percent in 2016, growing to account for nearly half its annual revenue.
Going head-to-head in B2C Retail with a household name-brand the likes of MailKimp. That would be a no for me. Then we need a Plan B. According to a 2016 study commissioned by Goldman Sachs, retail represents the largest industry category (14 percent) of US small businesses. Makes sense that’s where MailChimp planted its flag. Looking down the list to second place, finishing silver with a respectable 12 percent of the 28 million modestly-sized private American firms, we have “professional, scientific and technical services.” A segment increasingly comprised of B2B tech.
Spotify, AirBnB, Yelp, Glassdoor and the aforementioned cocktail hour case study, Uber. These are the logos you’ll find on sendgrid.com/customers/. Tech startups that hit it big. Should we infer that SendGrid’s target customer is the industry-disrupting unicorn? Unlikely. There’s a pretty limited TAM. More likely, by brand-associating with the world’s most famous tech “startups,” SendGrid is marketing to the companies that themselves want to be that Next Big Thing. The more-and-more small businesses that self-identify as “startups,” and proprietors as “entrepreneurs.” To be the best tech company, they want-nay-need the software the best tech companies use. Same reason people wear Jordans.
The SendGrid brand is “start up.” Or maybe more like “scale up.” Don’t get me wrong, the brand is 100-percent authentic. But, at the same time it’s careafully curated for public consumption. A compelling creation myth starring accelerator-reared founders, mission-driven to alleviate a customer pain point. Products built for developers by developers. A Silicon Valley-veteran Chief Executive, with a signature leadership style. Acronymic culture ethos, instilled with the usual day-to-day perks, a swaggy downtown office, and best-of-all an annual retreat to Mexico. Not to mention a high profile public exit. Congratulations, SendGrid. You win startup bingo.
But brand narrative is only half the battle. SendGrid is actively engaging startups around the world, an effort spearheaded by the on-staff Community Development team. They’ve even got their own mentorship program, SendGrid Accelerate. Among other incentives, SendGrid grants a year of free sending to all Accelerate members, which are usually promising growth ventures, that will hopefully get hooked on email to the extent they convert into meaningful customers.
To see the startup-as-marketing position bear fruit, look no further than our own thriving Front Range tech ecosystem, where SendGrid has established a robust presence. Ibotta, FullContact, HomeAdvisor. A regular who’s who of the Colorado technorati. All SendGrid customers. If you’re a true TFR die-hard, maybe you recall our scouting report on TeamSnap of Boulder, the global leader in youth sports management software. As attested to Frank Watervoort, Chief Engineering Officer @ TeamSnap, email is the primary channel for coach-parent communications, and therefore reliability is paramount. With SendGrid’s scalability and expertise, TeamSnap successfully delivered 99 percent of its emails. So, instead of driving a van full of crying kids out to an empty field in the pouring goddamn rain for no reason and cursing himself for ever settling down in the first place, dad receives the automated email notification that the game was cancelled.
By my estimation we’ve addressed the what, the who and the why. SendGrid is evolving into a multi-channel engagement platform (what), for tech-centric SMB customers (who), because they require versatile solutions for doing a variety of marketing jobs (why). That leaves two important questions — where and how. Starting with the latter, to date, a self-service ecommerce model is how SendGrid wins 75 percent of net new revenue. Meaning rather than buying from a human salesperson (outbound), the lion’s share of customers finds SendGrid on its own volition (inbound). To facilitate that discovery, SendGrid runs a very sophisticated tech stack calibrated to drive website traffic. This demand-side platform consists of SEO, email marketing, advanced analytics, social media advertising and other elements, as well as a busy editorial calendar of content marketing — how-to guides, case studies, blog entries, e-books, webinars, podcasts — you name it, they create it.
My friend TJ is a brewer (lol Denver amirite), and he drinks a healthy amount of his own beer. If the brain trust at SendGrid is to build a channel-agnostic engagement platform, it figures they would use it to market their own products, assuming it’s any good. To that end, the company’s success is encouraging. However, recall from the IPO disclosure that it only has 3 percent penetration. To capture the other 97, SendGrid must seek distribution assistance.
AWS Marketplace, which we’ve previously covered, is a big part of that ongoing channel strategy. Additionally, SendGrid has discussed plans for augmenting its network of agencies. These are third-party sellers that provide software products and technical support to business customers. This intermediary channel could be especially useful for selling internationally, where SendGrid has also identified an immediate strategic priority. Today 36 percent of customers are headquartered outside the US. Besides a small recently-opened office in London, SendGrid does not deploy boots on the ground to these foreign markets.
Ciao Neticon. Based in Milan, Neticon helps brands with digital marketing. Its fancy Italian fashion clients include Versace, Ray Ban and Roberto Cavalli. Instead of arduously building its own email deliverability solution from scratch, or even worse winging it with batch-and-blast (aka spray-and-pray), Neticon uses SendGrid to scale its email solution to 100 million plus messages per year, with increased open and click-through rates to boot. SendGrid, meanwhile, is saved the massive capital expenditure of having to open an Italian office (although if it does and they’re hiring I would be pleased to be considered).
Artificial intelligence. So hot right now. The talk of email and martech in 2017. For SendGrid, according to CMO Scott Heimes, 2018 will be the year of doing.
There exists a myriad of conceivable AI applications for email marketing, all converging to cut the cost and time required to identify and segment customers, so that they receive the most relevant content to their interests, Scott explains. AI and ML (Machine Learning, catch up) allow for mining millions of customer interaction metrics and processing them at the blink of an eye. Good news for SendGrid, which has amassed very big data on the trillion-and-change emails its sent over the last decade.
In the nearer term, on account of their resource advantage, the marketing clouds have a considerable head start on AI. IBM Watson for example wasn’t created to win Jeopardy, though that would be worthy a purpose as any. It was created to power IBM’s vast business services software fleet, and/or enslave the human race depending who you ask. Either way, Watson is for now fully-integrated into IBM’s Campaign Automation Email product, joining Salesforce Einstein and Adobe Sensei as AI-equipped-engagement platforms.
Of course to SMBs, the enterprise solutions from the marketing clouds are for the most part cost-prohibitive. However, if advanced behavior-based personalization is mission-critical to your business, there are point solutions that specialize in the emerging AI practice. Such as Bay Area-based provider BlueShift, which agreed to a technical partnership with SendGrid in September 2017. I regrettably missed the announcement webinar, but presumably joint subscribers can now integrate the APIs and share data across platforms, forming a best-of-both-worlds outcome.
Partner integration will need to suffice for the time being, but as the multi-channel engagement platform of the future, SendGrid is hard-at-work on AI capabilities of its own. In fact, the SendGrid Adapative Communication Engine, or ACE, which now comes stock with every subscription tier, has recently introduced a “neural protection” innovation. Live as of February 2018, the technology further improves email deliverability through real-time cross-referencing of sending patterns with ISP rules monitoring. Neat!
I’m loathe to bring this home on a sour note, but the diabolical playa-haters at SparkPost have some thoughts on SendGrid’s ambitionz as a platform. First they came at SendGrid on some cloud shenanigans. Now they’re calling SendGrid a bad ecosystem partner. Accusing SendGrid of developing cross-platform capabilities that create a conflict of interest with the other martech vendors that use the service. SparkPost even launched some phony “Jump Start Program” initiative, with the stated objective to “assist those that fear their email vendor is competing with them.” All in a very thinly-veiled SendGrid slight, disguised as business development. Hate hate hate hate hate.
Again, some pretty churlish tactics from SparkPost, but for argument’s sake, let’s evaluate the attack at face value. SparkPost’s counter-pitch breaks down to: ‘(1) SendGrid is growing beyond transactional email (2) you deserve a provider that’s 100-percent focused on email (3) Come to SparkPost.’
There you have it. The age-old SaaS conundrum: best-in-breed versus all-in-one. So once more, let’s play out the string. For the small business marketer, or the entrepreneurial marketer if you will, every decision comes down to two factors — time and money. With the precious limited quantity we possess, should we painstakingly compile a stack of disparate point solutions for each ingredient of my marketing mix? Or would I naturally select a more versatile multi-channel engagement platform that can adapt to my needs and grow with my business?
At the end of the day, SparkPost can bellyache all it wants about SendGrid losing touch with its email roots. The fact is, SendGrid has decided that the best way to serve its customers, and deliver shareholder value, is through growth and progress. Thus it has a fiduciary obligation to execute. “Marketing technology has been dramatically over-invested in,” as Sameer told Baron’s in 2016. “There are a lot of great companies out there, but many are more features than they are companies.”
A consequence of overpopulation in MarTech is that only those with the best fitness will produce and survive. SendGrid has delivered at such a high level that it’s reached a phase in the SaaS evolution that seldom few live to see. A phenotypic variation has occurred. No longer a feature or product. SendGrid is in the land of platforms.
Thanks for reading!
In the spirit of SendGrid, you can email the blogger at TheFrontRanger at Gmail dot Com.