The Key Elements of Digital Transformation: A Conversation with Contentful CEO Steve Sloan – Futurum Tech Webcast Interview Series
On this episode of the Futurum Tech Webcast, Interview Series, I am joined by Steve Sloan, CEO for Contentful, for a conversation around the key elements of digital transformation success.
Contentful was born out of necessity. The company’s co-founders realized that a lot of developers replicate content regularly when building apps. They created a way to create and launch content for any device, seamlessly. With Contentful, teams can build new applications, channels, and services quickly and efficiently to help their business grow. It was a fascinating conversation with Steve, and one you don’t want to miss.
The Key Elements of Digital Transformation
In our conversation we discussed the following:
- The future for Contentful in the market
- Where companies are in their digital transformations
- An exploration into the new digital experiences people are looking to have that companies need to provide
- Real-life customer use cases
Want to learn more about what Contentful and what they are doing in this space? Check out their website. Also, be sure to hit subscribe down below so you won’t miss the next two episodes in the series.
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Daniel Newman: Hey, everybody. Welcome back to another episode of the Futurum Tech Webcast. I’m your host, Daniel Newman, principal analyst, founding partner, Futurum Research. Very excited about this interview series, which I will be doing today with Contentful CEO, Steve Sloan. We’re going to be talking a little bit about what’s going on in digital. We’re going to talk about some of the macro, of course, because tech has been in the news a lot coming here into the beginning parts of 2022.
Then we’re going to dive a little bit more and learn about Contentful. This is an exciting company with a lot of growth. Later stage VC back company, but some that you’re going to hear about quite a bit in the months and years to come. Company I’ve been following very closely for the last couple of years. And so as always, I hope you’re strapped in and ready for a great show. So without further ado, Steve, welcome to the Futurum Tech Webcast. Super happy to have you here today.
Steve Sloan: Daniel, thanks for having us. It’s great to be here.
Daniel Newman: Well, I’ve been waiting to have this conversation, Steve, you could ask your team, I think for or about 12 months. I’m like, Hey, when’s Steve going to come on the pod? I’ve got to talk to him. But like everything, it’s been super busy. And while time has flown, you guys have been doing a lot of good things. I’ve seen another round. I’ve been hearing so much about the rapid proliferation of CX and content, and how it’s changing the world. Of course the pandemic sped that along.
But quick background, just say hello to everybody, introduce yourself. I know you’re the CEO, but just talk a little bit about Contentful and your time there. How long you’ve been there, when did you start it or found it, or when were you brought in. Give a little bit of the history, and then we’ll talk about some macro before getting back into Contentful.
Steve Sloan: All right. Thanks so much, Daniel. So Contentful was born in Berlin, so I’m not one of the founders. I joined in 2019. But our two founders, Sasha and Palo, when they started the company, it was really born of necessity. At the time they were building mobile applications, mostly for big companies. And the insight that they had, was that every time you build a mobile app, you have to build the back end of it, the place where you store all of that important information that a customer will ultimately see.
But the interesting thing about mobile apps is you have to build one for iOS and one for Android. And so as any great developer knows, when you find yourself building the same thing over and over and over again, you build a tool or a platform or a product that actually does that once, so you can then replicate it. And when they built that for themselves, they then realized, well, wait a second, A bunch of our other developer friends are probably going to need this. And so that was really the genesis of the company, is figuring out a way to make the content that is going to be on any device in the world, accessible to developers very easily, again, on any device, so you can deliver it at any time.
Daniel Newman: Yeah, absolutely. And the history is, these things always take a little bit longer. You start to hear about a name, and by the time you’re hearing about the name of the company, most people don’t realize, it’s like, yeah, it’s a startup, but it’s not… they’ve been doing it a while. It’s very rare that the company kind of comes out of nothing, and then like in two years gets to where you’re at. It’s usually there’s been five, six, seven years in the background, hard work, ton of tough years and meager years. And anyone that’s been part of a startup knows that end product, that’s what they love to talk about on TV, and that’s what The Fortune and Forbes love to write about, that backend story.
So you’ve come in to really lead something that had a lot of foundation. It’s been built and now it’s sort of ready to explode, and you seem to be in a really good position to do that. And I want to come back to that in a few minutes. But every time I have the chance to speak to a CEO right now, given that we’re in January, 2022. And I always say that, because as much as I like to assume everybody listens to every show right when it comes out, these shows actually have a pretty long tail. So people will be listening to this in six months or a year. But this is January, 2022.
And it’s pretty hard right now not to turn on the news and see headlines about the tech rack. The last three months, really tech has been pretty deflationary, values have been compressing growth, especially startup companies, maybe some that went public. SPACs have all been really hammered. And we’ve even seen some of the bigger tech companies start to compress a little bit. And there’s a lot of various macroeconomic factors, Steve. There’s inflation, there’s potential interest rates. We now have possible war. We have an election this year. We have so much going on. So I always love to chat to CEOs, because of course you’re looking at this, whether it’s to raise your next round, whether it be maybe looking at IPOs, or whether it’s just making sure you’re properly set up to survive any sort of big pivot after a couple very positive years, despite, I don’t know, a massive pandemic. So what are you kind of thinking about? What’s the macro environment got you thinking about these days, Steve?
Steve Sloan: Like you said, there’s so many external factors moving all over the place, interest rates, how people feel. Sentiment plays in all of this in such a big way. Valuation multiples, they go up, they go down. And we really try and ask ourselves, what are the fundamentals? When we look at customers, we have four core values, one of which is start with the customer and work backwards. So when we spend time with those customers, what are the durable trends that are affecting them? What are they trying to accomplish? And let’s stay laser focused on those elements, because all of those external factors are going to move around.
One of the interesting things is that in spite of lots of movement in the public markets with respect to valuations, we have this incredible generation of tech companies that have been born, that are transforming all sorts of industries. And whether valuations go up or go down, that’s not going to change. And so the same thing is true in our world, our sort of corner of the tech world. And a big part of that is, these mobile devices, these have become the front door to every business on the planet. And COVID brought that into clarity for all kinds of businesses, B to C and B to B, both.
And in many cases it really was sort of the crossing of the Rubicon. The companies who really were clinging to their sort of traditional way of doing business realized they had to change. They had to change now, or they had to accelerate the pace of change to catch up with consumer demands and consumer preferences. And so our view is that if we can stay really focused on the durable trends, and as much as we can, ignore the noise of the ups and then downs, we can create value for our customers and continue to build a long term stable, durable software franchise, which is what we hope to do.
Daniel Newman: Yeah. I love that you said that. That’s one of those things that I think just digital experiences, technology apps has given us so much exposure to information. When you were 40, 50 years ago, our parents and our grandparents, they wanted to know how their 401k or IRA, or whatever investment vehicles they had, you had to actually buy a newspaper, open it up, have a look at it. You had to call your stock broker, or whatever it was. And these are assuming you were participating. And of course now with all this technology, with Robinhoods and SoFis, the participation in the market is exponential, both public and private. You got things like OurCrowd now, where you can get involved in startups at a rate that you never could.
And I love what you said though, is like with real estate, your house values go up and they go down, and most people, unless you’re in the market to sell, you don’t think about it. You’re like, my house is up. Unless you need to sell it or you need equity out of it, you don’t really care what it’s worth, because you’re like, I live where I want to live. It’s a good house. Private company’s very much the same. Your business value goes up, it goes down. Some years you had bigger revenue, you had greater margins, you won some great customers. Business value went up. But unless you’re looking to sell it, you’re not thinking about it.
But something about the public market and crypto and all of this fast money has created such a short horizon in people’s mind, that they’re not looking at fundamentals anymore. They’re not looking at, Hey, am I building the right products, and if I do that. So I always think about folks like yourself in these roles, and sometimes in these public companies that have just been… you saw, I think they said 40% of the NASDAQ dropped 50% or more over the last three months. And you think about these CEOs, and it’s like, have they lost confidence? Has anything changed in their business? Are they going to do anything different, Steve?
And I think in the end, most of them, they’re thinking exactly like you, building robust technologies, tools, durable solutions, winning customers. And they figure if they do all that right, in the long run, this will all work out. So I think that’s a great kind of approach that you’re taking, is keep doing things right, and the value will come. Of course you’ll have to deal with those ups and downs related to the private public, kind of the gap that might exist between valuations and when you decide to raise. But those are decisions that people in your role do make. But I love that you gave kind of that broad macro perspective. I think in the long run, great company’s building amazing products, serving their customers and taking care of their employees do always… and I feel confident saying this, always win out.
So let’s turn a little bit to digital now, because you guys were born to really shape this conversation, right? So much talk about digital transformation. This isn’t new, it’s been going on for, I don’t know, two or three decades really, but over the last decade, digital transformation became a word. I wrote a couple of books about it. I’m still very angry that I used the term, because everybody uses the term now. But as you guys really were built to help companies transform, talk a little bit about what you’re seeing in that journey? Where are companies at? How is that sort of shaping your decision making and the development of your products?
Steve Sloan: Well, I actually think it’s great that you used that term early on. I mean, you have insightful writers like yourself, who queue up these ideas, and you know it takes a long time for these ideas to disseminate, A. And then for them to come true, because there’s so much hard work in these transformations, they happen over decades. If we wind back two decades, one of the things about the early web is you had companies like eBay or Amazon, who were born digitally. And so clearly for them, there was no transformation. That’s where they were born. But for many, many other companies, the initial digital transformation wasn’t much of a transformation. They popped up a website and it was a digital brochure. It was this thing that was really separate from their business.
Like even five, eight years ago, if you looked on a lot of websites of B to B and B to C companies, they would give you a phone number or an email to reach out to. So it was sort of this on ramp into their traditional way of doing business. And what we’ve seen more recently in this digital transformation… again, we call it the digital first era, is that companies have gotten very clear that the way in which their customers want to be engaged with is digital first. That might be your bank. That might be the clothing companies that you favor. It could be car companies. We service a number of the premier brands of automobile companies around the world.
And that’s been one of the things that’s been so fascinating for me to watch, which is five, eight years ago, they had a digital brochure. Today, if your customers want to do all of their discovery and evaluation of a new vehicle digitally, how do you create the best elements of that showroom experience to work on a mobile device first, and on the web second? That is a transformation of the business, and it requires you to entirely rethink how to do business. Tesla has clearly done this the best, where you can do everything right from your phone. In fact, our CFO recently bought a Tesla from her phone, which is pretty amazing. But we see many other businesses going through that transformation.
And so the question within all of that then is what are the key elements to being successful in these transformations? Because the ultimate truth lives in consumer preference. What is it that our customers demand from us, and what signals are they giving us about how they want to be served? That is where the world will go. And those of us who don’t listen, do that at our own peril. And we’ve definitely seen venerable brands disappear over the past year or two, like the largest travel agency in Europe went bankrupt. Several actually of the most longstanding premier retail clothing brands in the United States went into bankruptcy, and some went away. And so the companies who aren’t able to make this transformation will go away. And the fact that it’s an existential risk, not just in a binary way, but also in terms of how you compete within that group of companies who have come to this realization and made these changes, is going to be a real difference maker for those who succeed and those who become sort of middling companies.
Daniel Newman: Yeah. I love that you sort of put all that together. I’m thinking back, even my second book was called The New Rules of Customer Engagement. I actually started out with a metaphor about cars. And the fact that you pointed that out, I mean, seven or eight years ago, I was thinking about information parody. Just the fact that the car buying experience, because of digital online data accessibility, the shopping experience had gone, in many ways, from the seller having all the advantages, to the buyer having many of the advantages.
And then what we’ve seen over the last few years, you mentioned is the advent of customer experience being almost entirely digital, meaning everything from designing the vehicle, being able to see what it’s going to look like, being able to move the paint colors, change the wheels and the tires. Being able to get pricing data from various zip codes around the country in real time, having all your financing set up in perfect harmony. You’re literally walking in, there’s no sale anymore. You’re already a buyer.
Steve Sloan: Yes, sir.
Daniel Newman: And the entire thing then comes down to how seamless do you make the experience. Do I have to even go into a showroom? Can I just go into an experience center, like you mentioned with Tesla, and literally just walk in, they kind of hand you the key, they teach you how to use it if you want, or they say there’s another way to learn, you can do it online. And off you go. And they’ve completely eliminated all the friction in the experience, which kind of makes me want to… I wish we had more time, because I’d love to… this digital to CX thing.
But really what you’re saying is that the digital transformation has really all become about being able to create that perfect customer experience, physical, digital Omni blended. Of course, we’re hearing Metaverse, but that’s a little more of a buzzword, but it will be a thing at some point. But let’s pivot here, because I could spend a lot of time with you on this, Steve. But I want to talk about Contentful a little bit here. So talk to me a little bit about kind of how you guys are approaching solving this? Because there are many companies, right? There’s big companies, there’s startup companies. You guys are rapidly growing in this space, trying to solve this exact problem for some really important companies all over the world.
Steve Sloan: Yeah. So one of the most important things that’s really changed, is it used to be that companies had a website. A single property where you could go and see the set of products, learn. But this set of digital experiences means that there are many, many, many digital properties. We serve about a third of the fortune 500. And so in these large companies, you can have thousands of digital properties and digital experiences. That could be a help center, that could be sort of the blog or the place where you have community engagement. That could be the marque site, but it also could be sites for campaigns. And then you have things like… my son and I are about to go skiing, and the place we’re going, they have an app that’s all about your experience when you’re actually on the mountain.
So all of those different experiences are wonderful and engaging. The challenge that so many companies face is twofold. First, you want them to be compelling, and so you really need builders, that is people at your company, or you might have a close partner, some of the big digital agencies who you work with, in order to envision how those could work for your customers, but then to bring them to life, to actually write the code. And so there’s all of that building that goes on. There’s a second component though, which is you want to make sure those experiences are consistent. And the companies, in sort of the half generation ago that really discovered at the early stages, all of this expansion and really explosion of digital properties, was wonderful and differentiated in one hand, but it was very, very hard to ensure a consistent experience across those.
And so Contentful is a content platform, a place where all of that information, it could be images, it could be video, it could be audio, it could be the descriptions of your products, but it also could be information about something about what a customer’s ordered, all of that can live in a single platform. And then it will be consistent regardless of the specific app or website that it’s served up into. And importantly, it needs to be delivered in basically real time every time. One of the things we know is that customers are wonderfully inpatient about their experiences. If it’s not delivered immediately to their device, wherever they are in the world, they will frequently skip ahead to something else. And so we help people store, manage and deliver content on any device, anywhere in the world, in real time.
Daniel Newman: Which, again Steve, is sort of the foundation of what the market is, the leaders in your space are doing, and that’s what you’re doing. So this is the moment where I’m going to ask you to talk a little bit about how you differentiate. Because I can think of some of the smaller players, I can think of some of the bigger players. You have jetted into the market’s eyes. I’m hearing about your deals. I’m reading about companies that are using. The success has been bountiful, if I may say, and I guess as an analyst, that’s probably something you like hearing, but that’s what my assessment has been. But why? I guess that’s kind of like where, okay, I hear what you’re saying, you’re doing the right things, that’s what customers want, but why Contentful and not some of these other big name companies that are trying to do the same thing?
Steve Sloan: Yeah. One of the secrets for us is, we have two developer founders, so builder founders. So we really think of ourselves as by builders and for builders. And that’s really been the change. The generation of products that came before were all about making it very easy to… and by the way, this was the right decision back then in a different set of conditions. But today, you have to serve the builders who are creating these compelling and differentiated experiences. They want the tools to do exactly what they want to do. And so we have a set of APIs, and there are a set of other tools that wrap around that, that make it very easy for both builders, and then secondarily for their builder teammates who are wrapped around the creation and evolution of these experiences, who we serve most directly.
And so we started out as for APIs, directly for those developers. And in the last two years, we’ve expanded the platform. And then last year we released our first two apps that sit on top of that platform. And what that helps us do is start with the developers, the builders, who are going to create the foundation, but then you have lots of people wrapped around the evolution of those experiences over time. So as an example, one of the challenges people have is, sometimes you have to go in and make a really quick, relatively cosmetic change to an app or website. It might be a change of like a disclaimer. It might be that you want to change out an image because the season has changed. And so we’ve created a new app that sits on top of our platform, that we call Compose, that allows someone who’s not as technical to go in and make those quick changes.
One of the other things we have seen is that because people have thousands of these digital properties, you really need almost like an air traffic control system to determine when these different, whether it’s campaigns or sites, are going live, are they approved? What phase are they in? And we’ve seen companies embrace that set of tools to make it really easy to ensure the right thing goes live for their customer at the right time. And so for us, we are going to continue to build out that set, the expansion of the platform, but also the apps that sit on top of us, in order to ensure that our customers have a great experience for all of the people inside of the company.
There’s a third important element, and this really relates to the fact that, again, we started from the developer focus. We’ve built an ecosystem of hundreds of other companies who have built directly onto our platform to create things like headless commerce experiences, to enable things like translation services directly onto the platform. And so we are building out that ecosystem of other partners, so that together with our partners, whenever a customer has a problem and they come to us and say, Hey, Contentful team, can you help us with fill in the blank? Our answer can be, yes. Either we’ll help you, or one of our partners will help you go from where you are today to where you envision you might want to be in the future.
Daniel Newman: Yeah. There’s so many really compelling cases too, Steve. I was kind of just looking through about your publicly referencable customers. You’ve got legacy retailers like Staples that you guys are helping to transform, which are companies that are going to be exactly in the center of that looked at as, will they survive? Because they are really kind of were along big box, and now you’re helping build that kind of experience. And then you’re working with luxury brands like Bang and Olufsen. You’re working with recently acquired companies like Costa Coffee, which is now part of, I think Coca-Cola is where that fits in now. So you’re winning these big customers. You’re helping them transform. You’re accelerating their pace. I only have a couple minutes here left with you.
I did want to say, one of the things I’ve said, and I’ve used this analogy, is I feel like the way you’ve treated your developer community mirrors very closely to Twilio, which I’ve admired a lot, by the way, in terms of how successful they’ve been able to do. They’re still trying to create things that accelerate in speed development, but they’ve also really stuck by the fact that what a developer can add to their experience.
And you guys are kind of doing the same thing, when it comes to really building the best online, digital, mobile experiences. I love asking folks like yourself when you join the show, though, just kind of about what you see ahead. So let’s just end kind of on that, Steve. What do you see for digital transformation experience design? What’s the next, what’s it got in store? What are you sort of looking at?
Steve Sloan: I really think we are just at the beginning of this transformation, where builders are defining the set of experiences, and really helping us bring to life the experiences that our customers demand. I really do think that this digital first era will continue to move forward, but more and more companies we’re seeing have come to the realization that they need builders directly in their company. Again, whether it’s they’re hired and they’re full-time employees, or they have these very close partnership relationships with agencies, where they’re sort of virtual team members. I think that is going to be one of the things that is going to continue to change companies from the inside out.
Because in so many cases, when you don’t have builders inside of your company, you don’t even realize what’s possible. One of the things I love about serving developers is every day they show us a new thing that’s possible with the platform, because they have a brilliant idea about how to use it in a new and in different way. And so in many ways, we sort of follow our developer customers, and they shine a light on what is possible and what can be built. And I think, in particular, more and more traditional companies are sort of waking up to that reality, and inviting more of those developers and those builders into their companies, in order to create compelling experiences for the customers they serve, and those they hope to serve.
Daniel Newman: Yeah, I love that you pointed out just how important developers are. Pretty much every platform or application that all of us use every single day, that we love, that has changed our lives, has been fundamentally built because of what developers are capable of. Of course, there’s always the ideas, there’s always the Jobs and the [inaudible]. But without developers, the visions of the Jobs never come to life.
So Steve, thank you so much for taking the time to join me here on the Futurum Tech Webcast. Love having these conversations. You have really great insights into what’s going on right now. Of course, rooting for Contentful, very interesting company in an important space. I look forward to kind of hearing what’s next, whether that’s your next round and IPO, or just another great year. Always excited to watch what’s going on in the private markets. We’ll have to have you back soon. You in?
Steve Sloan: Absolutely. Daniel, thanks for all the insights you’ve offered us over the years. And thanks for having us on today.
Daniel Newman: Yeah. More to come. I promise you, Steve. So, Hey, everybody, hit that subscribe button and check out the show notes. We’ll put some links in there to some of the things that Steve talked about, and some of the information that I talked about, because love for you to take the time to click and learn a little bit more. Definitely love to have you subscribe to the show, if you haven’t already. There’s so many great interviews here with great CEOs, just like Steve Sloan here, from Contentful. And otherwise, it’s time to say goodbye. So thanks for tuning in, and we will see you next time. Bye bye now.
Daniel Newman is the Chief Analyst of Futurum Research and the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio