Jeff Lawson Check-In

And when I talk to customers, even though they bought into this, 'Oh yeah, we put in Salesforce.' How's it going? It's going horribly. Okay, well, why did you do it, right? Like what did you think was going to happen? And they're getting sold a story by executives and by salespeople about why it's going to work. And it just consistently fails to deliver on the promise. And yeah, not only does it fail to give them what they want in terms of the technology needed to actually build a successful B2C company. They're like, 'And I'm paying through the nose for it.'

Thank you, Dave. Great to be here.

I hated that term. Cuz no customer wakes up and is like, 'You know what I need today? I need some CPaaS today.' Like no, they're like, 'I need text messaging. I need phone calls. I need to talk to my customers.' But nobody wakes up and is like, 'I need some CPaaS in my life today.'

Well, you know, it's funny. After I left Twilio, I just wanted to do some things that brought me joy and that were fun and things I'd been wanting to do. So, you know, I built a car, which was a lot of fun. I just working on a lot of projects. But one of the things that I had always joked about with friends, right? After Benioff bought Time and Bezos bought the Post, I joked with friends that, you know what? I'm going to buy The Onion. Because that's like the market cap equivalent for me. You know what I mean? Like that's the karma of the universe. Like that's just how it ought to work. And I actually looked into it a couple of times, starting back in, I got, I don't know, 2018. But it just wasn't, they weren't interested in selling it. It was owned by Univision actually, for some reason. You know, Univision, somebody classic, somebody there had some idea of what they wanted to do, and you know, they weren't doing it. And then they sold it to private equity. And I remember being bummed when I heard that they got sold. I was like, what? You know. And it was owned by private equity, and they had this stupid thesis that they were going to combine The Onion with Gawker, like the remnants of Gawker Media. And then they were going to centralize things and just juice it for page views and ad clicks. And it was just swirling down the drain because they had no good thesis for how to actually do anything useful with it. And so, it was in this classic death spiral, which was private equity, they want to squeeze it for cash, so they lay off a bunch of people. The product got worse, fewer page views, less people read it, less ad impressions. They laid off more people then, and it was just death spiral. And so, when I in 2024, I looked into it again, and this time they were ready to sell it. And interestingly, I think they'd finally realized that they had no plan, they had no idea what they were going to do with it, and they were killing it. And in fact, it became apparent that they were going to shut it down if they did not find a buyer. And so, it changed like the whole mission changed for me from oh, wouldn't it be fun to own The Onion to fuck, we got to save The Onion cuz

It was being destroyed. And it had gotten very unfunny because the owners, well, they actually dictated the creative element to the team. They said, you can only write slideshows because they generate the most clicks. They loaded up the page with those chum box ads. You know, like the bottom of the barrel AI generated ads where it's like a picture of the weird AI generated tank and it says, check out the 2027 Jeep Wrangler and when you click on it, you're looking at ads for Viagra. You're like, what's going on? I don't even know what the internet is doing anymore. That's what it had become. And so, we bought it, brought in a management team who was really excited to run it, and we basically just hit the reset button. And you know, you've been following the things I believe in for a long time. And so, yeah, we kind of went in there and we said, 'Hey look, writing team, you are amazingly creative. This is an institution the world needs, but the only way we're going to survive is if we get back to basics and focus on who's the most important person in the room here, which is the reader.' And if we don't focus on our customer and give them a great product, I don't even know why we should exist. And by the way, the writers were great. They wanted to do all this. They just weren't allowed to by the private equity overlords that they were working for. So, we got back to basics, and we said, 'We're going to write funny stuff, and we're going to have the most basic business model in the world, which is if people like what we write, they're going to pay us.'

Because who wants print anymore, right? Well, turns out The Onion is funnier in print. Which is a little counterintuitive, like, well, why does the medium matter? Well, it turns out that the joke of The Onion is the juxtaposition of all of these unrelated stories next to each other. It's the president did the stupid thing next to local man did this, next to the horoscope, next to the stupid weather, right? Like, that is the joke. And just seeing one of those out of context in your social media feed, that is funny. And so, we brought back the paper, and we have a $9 a year subscription model, which is going incredibly well. In fact, we've already quintupled the revenue since I acquired it. The revenue had been in decline for many years, and they were losing money, right? So, they couldn't, they were destroying the product, and they didn't even know how to make money with it. They were losing money. And so, when I bought it, we just got back to basics, reader-supported, and now we've quintupled the revenue, and really just done some great stuff that I'm really proud of the team for having really turned around, focused on the thing that really matters, which is our readers, writing funny stuff, and when we do a good job of that, they pay us. And so, it's a great story, and I can't speak highly enough of the people of The Onion. Like, they're such good people. I love working with them. They're obviously, as you can imagine, hilarious, but they're also just like really good-hearted people. And so, it's a great team, and I just love it. It's a lot of fun. And I'm very hands-off, like, I'm not actually involved. You know, I'm like the owner and one of the things that surprised me about The Onion was it's almost like a real journalism publication. Like there is a wall between the creative and the business side.

Well, it's funny because we tell the truth. We just tell it in a different way than the media does, right? Like the media purports to tell the truth, but really it's full of a lot of opinion and it's full of a lot of cowardice in terms of how they actually try to express what's going on in our world. And it's mealy-mouthed and they kind of both-sides everything, right? Like that's kind of what the mainstream media is a little bit, but The Onion I think in satire broadly tells the truth. It says the thing that everyone's thinking, but it says it in a way, in the form of a joke that allows it to cut through our defenses. Allows you to say out loud what you want, or what the media can't say out loud, but in satire you can because you've couched the truth in a joke. And that's the power of satire and that's actually part of the other reason why I felt so inclined to buy The Onion is because I actually, the world needs this institution. The world needs satire to be telling the truth right now in a way that is more important than ever because the truth is harder to tell and we've seen how the Trump administration has attacked the media, the media has backed off. They're no longer telling the truth because they are worried about getting sued. And so it is nice to be an independent media that has nothing else to lose, right? We're not trying to merge with Viacom or something. And the other thing that is nice about it is we don't need the FCC for anything. That's nice. And satire has that ability to not just tell the truth, but you're almost unassailable. And I should say that as I knock on wood, right? But the thing about, obviously the media is supposed to be protected in our country from attack. That's what the First Amendment is all about, but even we've seen that not really hold up. But the thing about satire is it's protected in a natural way, not by the law. Even though it is protected by the law. It's protected by the fact that if someone attacks a satire publication, they look stupid. They look petty and idiotic. If they are attacking you for a headline that makes them look stupid. It almost is self-defending because you can't attack satire without looking like an idiot.

Well, look, we consume more media than ever. Right? It's just changed. And so the question is are media going to evolve with it? Now, I don't believe, here's one of my things that I've come to believe about where we kind of are in this technology cycle. There was an early belief, and I really mean 70s, 80s, 90s, by the technologists of that era who foresaw the coming of the internet, who were part of creating the internet. I'm talking about like Steve Jobs, Stewart Brand, this generation of technologists. And the belief was that with information becoming free, that we would all be better off. You would get rid of the gatekeepers. Bezos has famously said, the internet removes the gatekeepers and provides an equal platform for everybody to speak and to learn and we're going to have this great renaissance of humanity. Okay. Now, here we are in 2026. The great renaissance of humanity looks a hell of a lot like racism and anti-Semitism and hate and people with guns doing things. And you're like, well, it didn't quite turn out the way they thought. This isn't exactly a renaissance. What went wrong? And I think what went wrong here is it turns out that human beings were not evolved to maintain relationships with a billion other people. You know, we are evolved to maintain relationships with give or take 100 people. And so when we are exposed to a billion people, give or take, on the internet with all of their opinions and all of their stuff, we go nuts. We can't handle it and we start hating. We start dividing. We start flame warring each other, right? Like that's what's happened. And then you throw in the incentive for nation-states to muck with our mental state here and you get things like TikTok and the Facebook algorithm getting gamed by actors for, you know, war for our minds. And then you throw in the profit incentive of companies to maximize our attention. You throw all these things together, you don't get the utopia that was predicted. And I think that's the world that we live in right now. And so part of the pushback against the death of media is like actually, I think there was value in having gatekeepers. I think having the professional journalists whose job it was and whose profession was based on the notion of trying to decide right from wrong, trying to have a professional standard to what they do, and knowing that they had job consequences if they did this very poorly and that the network would have consequences if they did it poorly. Like, people thinking this was an important role in our society actually had value. Now, did they get it right all the time? Of course not. But, did they get it generally? Were the incentives generally aligned with the needs of society? Like, yeah, they kind of were.

And so, I actually think the notion that in the same way that we kind of turn back to vinyl and maybe print papers and there's sort of an irony to it and it's like a hipster thing, but there's actually some truth sitting in all of that, which is that I do think we yearn for people who are aligned and sane to help us see truth as opposed to having everybody having to figure it out for themselves based on a continuous feed of shit fed to us by algorithms. That's not healthy. We're all realizing it, right? Phone addiction and social media addiction and the lawsuit that just got settled with the social media companies. It's very clear that all this stuff is not benefiting us as individuals or I think you look around at society as society. And I may be one of the few people in Silicon Valley who actually questions whether or not humanity is better off because the internet exists. And the question is, how do you measure better off? If you measure it as happiness, and you know, happiness can encapsulate, can I support my family? Do I have an income? Am I content with my life? Do I feel good about the decisions I've made and the people I see, right? And if you by many of those measures, on net. Now, people would point to, 'Oh, but there's so many entrepreneurs now who can sell their wares online.' Like, yes, that is true, but I think about this on net. There's worse things, there's better things, but on net, are we happier today than we were 30 years ago? And I think the answer might very well be no.

Okay, so what is the internet? Wait, social media consumption. It's probably the other major bucket here, like consumption, like buying things. Like I don't know about you. I buy more shit on Amazon, like the convenience. Oh, you can, the everything store, you can buy anything. Well, turns out number one, then we end up with all this decision fatigue of oh my god, I can buy any toaster in the world, which one should I buy? And I'm going to research it. Like who cares? We used to be, you'd walk into a store and they had three toasters and you picked one of them and life was fine, right? You didn't need every toaster ever made at your avail. And then the second thing is we buy way more shit than we need. It doesn't make us feel, there's like that you get a little rush when you buy it and the box shows up and then an hour later you're like, why did I buy this thing? Now I got to figure out where to put it and now you're throwing it all away and like it's not making us happier that we have instant access to buy absolutely anything.

I don't remember the exact words, but it sounds like something I would have said.

Yeah, well I mean here's the core of my argument there is CRM in its essence is a tool for salespeople to track their customer conversations and to track the status of sales deals. That's what CRM is. Like that's what Salesforce was born on. That's classically what people think of as that CRM product, which is all well and good. Salespeople should have a tool to keep track of their sales deals, no doubt about it. However, somehow that got morphed into this idea that it was the tool for everything customer facing, customer related. And here's where it crosses a line into lunacy, which is it turned into well that's also the right tool for B2C. And you're like, 'No. It is absolutely not the right tool for B2C.' And anybody running a B2C company knows it. But there's this myth that's just been sitting out there as like, 'No, no, no. This is the right tool for keeping track of things that don't have sales deals at all. That just have a customer and a statistical probability that they're going to buy something.' And how do you actually talk to them in a way that helps encourage them to buy the thing that they want. CRM had no bearing either in terms of the technology required to solve that problem. And particularly on the pricing model of how you would go about building software to solve that problem and how you would price it. These are both wildly inappropriate for the problem that B2C companies needed to solve. Yet, for some reason, they convinced the world that no, no, no, this is the right solution and you should build on us. And when I talk to customers, and again, I'm talking to a lot of B2C companies. And I didn't talk less to sales teams doing B2B, and so I know less about that. For the B2C world, when I talk to customers, even though they bought into this, 'Oh, yeah, we can put in Salesforce.' How's it going? It's going horribly. Okay, well, why did you do it, right? Like, what did you think was going to happen? And they're getting sold a story by executives and by salespeople about why it's going to work. And it just consistently fails to deliver on the promise.

Yeah, not only does it fail to give them what they want in terms of the technology needed to actually build a successful B2C company, they're like, 'And I'm paying through the nose for it.' And the third bit, and then this is the jab of the turning of the knife is, 'And I'm stuck because they have all my data, and I can't get out.'

I mean, look, the easy answer is that it's really slick marketing, you know, like Salesforce has world-class marketing. Marc Benioff, probably one of the best marketers on the planet. His name is literally in the word. World-class sales, great salespeople. And when the decisions are made at the executive level, people who aren't close enough to kind of all the technology decisions, what you get is a sense of like, well, the vendor is promising me success, therefore they're on the hook to help me deliver it. I'm going to go with them. And it's the safe decision, frankly. It's the no one got fired for buying IBM. Like it's a variation of that. Now, that's an oversimplification and that's the easy answer, frankly. But I think it makes sense when you're like, okay, well, here's this big database in the cloud and you kind of wrap it in the story of the cloud and all the things the cloud brings and then you're like, oh, yeah, and then we've got all these tools and an ecosystem of 100,000 companies who build on us and therefore you can go work with any of them. Like it's a really compelling story for why the answer that everyone else in the industry has done is why you should do it, too. And they've brilliantly built up that story over the course of whatever, 25 years.

I think that there's an over-rotation in the stock market, first of all. So, I think people are overly concerned. And look, if a stock price today is the present value of all future profits, do I think future profits of CRM companies and software companies broadly that are especially those that are based on a per seat basis have been curtailed by AI? Absolutely. Right? So, there is an argument that I think is true that prices of equities today would come down because I think the full present value of all future profits has been eroded because of AI, right? So it's not stupid. It's not crazy. Now, as much as it has been or in the short term, are they going to deliver revenues and profits that are going to beat and are some investors going to be like, 'Holy shit, it's a buy opportunity.' I'm like, yes, you're going to see these charts go all over the place. But, the long-term thesis I think is correct, but I think the time frame that investors are thinking about is incorrect.

Call me skeptical, but I don't think that actually this pivot to headless is going to be as impactful to customers as they make it seem. And I'll tell you why. I'm going to tell you a story actually. Early in the day, I don't know if you remember when we launched Flex, our contact center as a service product back in, I think it probably was, 2018, 2019, yeah, somewhere in there. One of our early customers was Lyft, you know, the car company. And at the time Lyft, they had all their customer service on Zendesk, and they were one of Zendesk's largest customers. I don't remember the exact number, but they probably had 4,000 seats, like a huge number of seats on Zendesk. And they built on top of Flex because they needed contact centers more responsive, more integrated, all this kind of stuff. But here's the fascinating thing. I get an angry call, you remember Mikkel, the CEO and founder of Zendesk. I get an angry call from Mikkel one day. He's like, 'Jeff, what the fuck are you doing?' I'm like, 'What? Why are you calling me?' He's like, 'Why did you tell Lyft they could go down to one seat?'

I don't know what you're talking about, Mikkel. I've not talked, I'm just the CEO. That's the other thing. I don't have any... I'm like, 'What are you talking about?' He's like, 'Yeah, like Lyft says that because of Flex, they can go down to one seat, and they can just use us like an API.' Okay? Like they don't need our UI anymore. In fact, we're just a database to them, and they can hit it with the API, and they just need one seat. And so, my answer to him was like, 'Look, Mikkel, I don't know. I've not been in any of these conversations. I don't know what's going on. But here's the thing. If that is actually true, seems to me like you have a business model problem. That's not my fault or Twilio's fault for telling them they could do this. Even if we did, I don't even know if we did. If they figured it out on their own, whatever, it's not my problem. It is your problem. You have a business model problem if that is in fact the case.' And that is true. Like that was an early precursor, I think, of what you're seeing now.

So, if it turns out that people don't need seats anymore for Salesforce, and they can just use it like an API, and Salesforce is pretending to say, 'This is great. This is the future. We want you,' do you really think that they're going to allow the revenue to get cut by a thousand X because of this transition? No. They'll price it differently. You'll pay the same, in fact you'll probably pay more. And that is the history of what Salesforce has always done. And they will expertly figure out how to get their sales team to convince you to go, even if you do adopt headless, you'll end up paying more. But I think the reality is most companies are like, 'Oh no, I'm still going to be buying a bunch of these seats, but now I'm also going to be putting whatever the headless thing actually means.' You know, Salesforce also has a great way of announcing products that don't yet exist. So I think that's probably the case here given that the stock price decline is a relatively recent phenomenon. They had to announce something to... so probably they're now scrambling to go build whatever it is that they just announced. And what it really is probably going to come down to is an MCP server. Which makes sense. At the end of the day, like it'll be an MCP server, they'll charge you to access it, and they'll say you don't need seats. And maybe if you were starting a brand new install of Salesforce today, that would be true. But for most customers who already have a ton of seats and a ton of data, like it'll be no change, but if you want to use the MCP server, you're going to pay for that, too. Is the reality of what it probably will end up being. And this, by the way, this was my thesis about why Salesforce was vulnerable to somebody to come along with this notion of a headless CRM, which is why we bought Segment at Twilio, which was the notion of they can't pivot because you've innovator's dilemma. They would lose too much revenue to make this pivot, so they will protect the core business. It's just the antibodies of a big company doing what they do, right? They have to protect the revenue, they have to protect the current business. And so just because they've

Announced headless, I think does indicate where the industry needs to go, but they will not be the company that'll be able to do it in a way that will disrupt themselves. So somebody else can.

It should cost less. In fact, it should be a different feature set that is much like, you know, I always thought it was interesting. I think one of the things I pointed out maybe in that signal setting was, do you know how much it cost to store a gigabyte of data on Salesforce? Do you know what the price is?

It was about $1,000 a month.

You know how much it cost to store a gigabyte of data on S3?

So, when you've got that many orders of magnitude

between what some customers are doing and what other customers are doing, you know there's an opportunity to bridge that gap and create a better solution.