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Good morning.<\/strong> Maybe AI and software can be friends. Twilio CEO Khozema Shipchandler just delivered robust Q1 earnings that made his stock jump almost 25% on Friday\u2014and plans to reveal a big initiative for the customer engagement platform\u2019s next stage of growth at its annual conference this week. What a difference from early 2024, when he stepped up to lead Twilio, which lets users integrate voice, video, text, email and other communication channels. \u201cThat was a time of real peril,\u201d he told me late last week.\u00a0 \u201cOur growth had stalled out, we were burning through cash, we were not profitable, and we had a lot of pressure from activist investors.\u201d<\/p>\n I\u2019m thinking about that as I\u2019m in Los Angeles today for the annual Milken Institute Global Conference. Just like fear of an AI-driven SaaSpocalypse can shift in a matter of weeks, the business landscape is ever changing, whether it\u2019s the impact of war in the Middle East or the impact of AI in health outcomes. More on that in the coming days.<\/p>\n I was curious to hear Shipchandler\u2019s take on what he needed to fix in stepping into the top job. Like many leaders coming into the CEO role these days, he knew Twilio well, having served in finance and operational roles since 2018.<\/p>\n First was a failure of focus <\/strong>as cheap capital had fostered a lack of discipline in making choices: \u201cWe would throw effort and resources and money at 100 projects, all at the same time, with equal intensity, and then we\u2019d sort of look at what stuck to the wall,\u201d said Shipchandler, who cut the list to no more than nine bets, knowing that only one to three would become $500 million businesses. \u201cFor those that don\u2019t turn out, we\u2019re very, very quick to shut those down.\u201d<\/p>\n Second was a failure of integration <\/strong>on the $3.2 billion acquisition of customer-data platform Segment in 2020, which some shareholders wanted gone. \u201cWe didn\u2019t integrate the engineering, we didn\u2019t integrate the commercial offering, let alone integrating the products,\u201d he says, which meant customers needed to buy separate offerings to consume communications and then enrich it with data. \u201cWe made it super hard for them to have context-rich, real-time customer interactions \u2026 If you don\u2019t have context, you have a lot more cost and you have a lot more noise.\u201d<\/p>\n And the third key factor is leadership<\/strong>. Shipchandler replaced 60% of his direct reports and up 40% of those at the VP level. \u201cCompanies just outgrow their prior teams. We\u2019re a $5 billion company trying to become a $10 billion company,\u201d he said. But it\u2019s not enough to have the old guard leave. What matters now is creating a structure for the next rung to step up with rotational programs, training and a cultural shift around talent. \u201cA big part of it is grabbing someone by the shoulders and saying, \u2018Hey, in 10 or 15 years, you\u2019re going to be the CEO of this company.’\u201d<\/p>\n Adds Shipchandler: \u201cThe best thing that could happen is, when the time comes, we turn the company over to them, and they feel completely comfortable saying, \u2018I got a good hand\u2014but now it\u2019s my turn to change up the place all over again.\u2019 That would be the most amazing thing.\u201d<\/p>\n Contact CEO Daily via Diane Brady at diane.brady@fortune.com<\/em><\/p>\n U.S. seeks to box out China<\/b><\/p>\n The Strait of Hormuz is just one part of a global chessboard in a <\/span>\u201ccold war\u201d against China<\/span>, geopolitical experts and economists say. The U.S. is quickly moving to cement influence over the world\u2019s other shipping and strategic military arteries from the Panama Canal, Greenland, the Strait of Gibraltar between Europe and Africa, and Asia\u2019s Strait of Malacca.<\/span><\/p>\n \u2018Tank bottoms\u2019 vs. \u2018tank tops\u2019<\/b><\/p>\n Oil inventories among top consuming countries are <\/span>rapidly disappearing<\/span>, and markets could effectively run out of stockpiles and hit \u201ctank bottoms\u201d in a month. At the same time, the U.S. naval blockade has bottled up Iran\u2019s oil exports, sending its own inventories higher as supplies have nowhere to go. If Iran’s storage is maxed out and the industry hits \u201ctank tops,\u201d producers will have to drastically slash output, risking permanent damage to oilfields.<\/span><\/p>\n Huang says CEOs have a \u2018God complex\u2019<\/b><\/p>\n Nvidia CEO Jensen Huang is pushing back against the popular narrative that AI will wipe out huge swaths of the workforce, but he’s also placing some blame on <\/span>overly confident CEOs<\/span>. \u201cThey\u2019re made by people who are like me, CEOs, and somehow because they became CEOs you adopt a God complex, and before you know it, you know everything. And so I think we have to be careful and really ground ourselves to talking about the facts.\u201d<\/span><\/p>\n S&P 500<\/b> futures are up 0.1% this morning, following a 0.3% increase before the weekend. South Korea’s KOSPI <\/strong>is up 5.1% to hit a new record high. Taiwan’s TAIEX <\/strong>rose 4.6%, while Hong Kong’s Hang Seng Index\u00a0<\/strong>is up 1.2%. India’s Nifty 50\u00a0<\/strong>is rising 0.3%, while the Europe STOXX 600 <\/strong>is down 0.3% in early trading. Korea’s SK Hynix, a major supplier of memory to companies like Nvidia, surged 12.5%; TSMC is up 6.6%. Bitcoin\u00a0<\/strong>jumps to over $79,500. America\u2019s twin scarcities: The 4-million-unit shortage in both housing and childcare is breaking families<\/span> by Sydney Lake<\/span><\/p>\n America got rich and got sad. A top economist says 2020 broke something that hasn\u2019t healed<\/span> by Nick Lichtenberg<\/span><\/p>\n Warren Buffett says markets are like a church with a casino attached, but \u2018we\u2019ve never had people in a more gambling mood than now\u2019<\/span> by Jason Ma<\/span><\/p>\n Trump picked a fight with the Pope: The one person he can\u2019t fire, can\u2019t outbid, and can\u2019t outlast<\/span> by Catherina Gioino<\/span><\/p>\n \u00a0One economist\u2019s \u2018radical idea\u2019 to solve the biggest energy crisis in history: a reverse OPEC<\/span> by Sasha Rogelberg<\/span><\/p>\n CEO Daily is curated and edited by Andrew Wyrich, Jason Ma, Nicholas Gordon, and Lee Clifford.<\/em><\/p>\n<\/div>\n #Twilio #CEO #Khozema #Shipchandler #turning #company #beating #SaaSpocalypse #fears<\/p>\n","protected":false},"excerpt":{"rendered":" Good morning. Maybe AI and software can be friends. 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