Summary: The future of CDPs, as envisioned by Tejas, is a more flexible, adaptable data architecture that Hightouch is actively shaping. Hightouch, even without the data collection component, is recognized by some of the largest companies in the world as their go-to CDP. Tejas stresses that the reconciliation of 'truth' in data between marketing and data teams isn't solely a tech or architecture problem; it requires an operational shift and closer collaboration between teams. The conversation serves as an essential guide for businesses seeking to optimize their data use and enhance customer experiences.
The Software solutions like Hightouch provide a solid framework to tackle this, but the human element—teamwork, alignment, and communication—remains a key determinant in solving these challenges.
From Corporate Travel to Reverse ETL: Teja's Journey Back to Data
When asked about the journey of reverse ETL's inception at Hightouch, Teja revealed the interesting twists and turns of his entrepreneurial path. His initial venture after leaving Segment wasn't directly into the data sphere. He founded a startup, Carry, in the corporate travel space.
However, Teja's departure from Segment wasn't just fueled by an entrepreneurial itch. He had reservations about the future trajectory of Customer Data Platforms (CDP). He didn't fully believe CDPs were set to become the standard for managing customer data across industries. With inklings of impending acquisitions and significant changes in the data industry, he left Segment.
Teja then spent about eight to nine months with Carry until the onset of COVID-19. Despite the inherent challenges of the travel industry—low margins, high human operation requirements, price-sensitive customers—Carry was growing. Yet, COVID-19 brought it to a grinding halt.
With business metrics falling to zero almost overnight, Teja and his co-founders, Auren and Josh, found an unexpected opportunity. They decided to pivot back to their roots in the data industry, tapping into their old ideas and experience from their Segment days. The pandemic, in all its harshness, became a catalyst for their return to the customer data space.
Teja's story is far from a linear narrative. The travel venture, the COVID-19 pivot, and the return to the data industry all added unique layers to his entrepreneurial journey. Looking back, Teja feels gratitude for these unexpected turns of events, which led him back to the dynamic world of data and customer platforms.
Takeaway: An entrepreneur's journey isn't always a straight path. Teja's experiences, from his departure from Segment to his foray into the travel industry and eventual return to data, highlight the unforeseen opportunities that can surface in the face of challenging times. His story underscores the importance of adaptability and leveraging past experiences to seize new opportunities in the ever-changing business landscape.
Composable CDP - The Birth and Journey of a New Paradigm
When asked about the emergence of the term "composable CDP" and the role Hightouch played in its inception, Tejas reminisced about the early days of this concept's birth.
Tejas recalled collaborating with one of their esteemed partners to develop a novel way of approaching Customer Data Platforms (CDPs), distinct from the traditional models. Their goal was to define an architectural blueprint that would resonate with a marketing audience while providing a fresh solution to existing CDP challenges. The result was the "composable CDP."
Despite its somewhat confusing nature, this term became a touchstone for their market positioning. But Tejas admitted, many terms in the martech world like "marketing cloud" or "engagement hub" often induce more head scratching than clarity. Their aim, however, was not merely to coin a catchy phrase but to address a pervasive dissatisfaction within the industry.
At the time, many large enterprises and mid-market companies were investing heavily in CDPs, hoping to enable marketers to freely explore customer data, create audiences, and tailor customer journeys across all channels. Yet, despite the widespread adoption, most were finding little value in these investments.
This stark discrepancy between aspiration and reality was the driving force behind Hightouch. The aim was not just to sell another CDP, but to propose an innovative approach that would enable marketers to leverage data more effectively across the organization. This approach advocated the utilization of the rich data sources already present in company warehouses, and activating it across various customer journey touchpoints.
Tejas highlighted that the core value of a solution should not be whether it's bundled or unbundled, but rather, the tangible business outcomes it can drive. As companies invest in housing their data using various BI tools, from Microsoft Power BI to newer players like Looker, the potential to empower marketing teams with this wealth of data is tremendous. Solutions like Hightouch or a robust CDP should offer infinite flexibility, not limiting themselves to specific data collected for a CDP.
The term "composable" was chosen to reflect this mindset - working with existing resources, scaling with future technologies, and avoiding the rigid, off-the-shelf solutions. While the term may elicit confusion, the purpose behind it - empowering businesses to effectively use their data - remains clear.
Key Takeaway: The term "composable CDP" emerged from the need for a novel approach to CDPs that focused on empowering marketers to use data more effectively. It's about leveraging existing data, offering infinite flexibility, and scaling with future technologies, rather than sticking to rigid, traditional solutions.
Breaking Down the Power of Composable CDP vs Packaged Solutions
Probing deeper into the potential of Composable CDP, Tejas was asked to illuminate the benefits of adopting such an approach over a monolithic all-in-one package solution. Tejas, ever insightful, took this as an opportunity to share the unique strength of a composable strategy.
He started by emphasizing the fundamental flaw in traditional customer data platforms (CDPs) - their reliance on a pre-defined data architecture. Brands using conventional CDPs like Segment, Oracle, or Salesforce CDP are forced to adapt their data into a format acceptable to the platform, and this restriction severely limits the platform's capability.
In Tejas' words, "they can only operate on data that they understand and that was built for them." This myopic vision becomes problematic in the complex, diverse landscape of large enterprises where every business is unique and possesses an array of distinct data.
Tejas vividly illustrated this point by citing the case of a Fortune 500 company that wanted to leverage its pet loyalty program data - a dataset unique to their business - to drive personalization and engagement. Traditional CDPs failed to handle this unique set of data due to their rigid architecture, but Hightouch's flexible and inclusive approach brought the data to life.
The ability of Hightouch to tap into an organization's existing data, whether it's stored in Snowflake, Databricks, or any other system, and utilize it to deliver highly personalized experiences is at the heart of its value proposition. By contrast, the challenges of molding data to fit into a traditional CDP's format have led to a high failure rate, Tejas pointed out, making the novel architecture of Hightouch all the more appealing.
Takeaway: The real power of a composable approach like Hightouch's lies in its flexibility and inclusivity. It's not restricted to pre-defined data architectures and can handle unique, diverse data sets that are crucial to large enterprises, unleashing new potentials for customer experiences.
Unpacking the Legacy CDP: Teja's Insights and Vision for the Future of Martech
The question of the legacy or packaged Customer Data Platform (CDP) was put forth. Looking for a deep dive into the anatomy of a traditional CDP, Teja's insights were sought. Referencing Arpit Choudhry's
informative blog post that delineates eight vital components of a legacy CDP, he was asked to reflect on these elements and offer his unique perspective.
With his extensive experience at Segment, a leading CDP, Teja was expected to provide valuable insights. Choudhry's components ranged from the basic SDK (the infrastructure to collect first-party data) to the advanced reverse ETL (Extract, Transform, Load) process used for extracting customer data from a warehouse to other business tools. His list also included ID resolution, data quality, accuracy, consistency, and governance aspects.
In response, Teja noted the emphasis on comprehensiveness and referred to Hightouch's resources for a broader view of the differences between composable and packaged CDPs. However, he highlighted the importance of considering the why over the what — understanding why companies opt for CDPs in the first place.
According to Teja, companies pursue CDPs to leverage their customer data to personalize the customer experience and drive business outcomes. The ultimate goal isn't necessarily about the different components or features, but about leveraging data to the fullest. Teja emphasized that in his view, the crux of any CDP lies in three core things: a way to collect data, a way to transform it, and a way to activate the data.
Highlighting the advantages of a composable CDP approach, Teja mentioned that instead of using an off-the-shelf CDP platform as the data warehouse, companies could leverage their own data warehouse. This allows businesses to access and activate data that wasn't originally built for the CDP's end purpose.
From the start, Hightouch, focused on large enterprises, emphasizing compliance, privacy, and governance. Their experience with companies such as NBA, Warner Music, PetSmart, and GameStop necessitates a high degree of data accuracy and consistency.
In conclusion, Teja underscored the importance of use case-driven selection in martech. Instead of comparing solutions on a feature basis, marketing technologists should identify the activations they need for their business and then look for the features that enable those activations.
Key Takeaway: Teja's approachable but profound insights bring clarity to the complexity of the CDP landscape. He encourages a shift in perspective — from a feature-based approach to a use case-driven strategy in martech decision-making. In doing so, he positions the future of martech not as a quest for the most comprehensive solution, but as a tailored journey to activate and leverage data for personalized customer experiences.
Hightouch's Evolution and Embracing the Composable CDP Approach
When asked about Hightouch's position in the martech ecosystem, Tejas articulated the company's journey and its dynamic development in relation to the composable CDP (Customer Data Platforms) paradigm.
Initially, Hightouch revolved around the concept of reverse ETL (Extract, Transform, Load), a solution born from the recognition that warehouses brimmed with data requiring accessibility across various business tools. There was debate within the team about adopting the term "reverse ETL", but the gamble paid off, allowing them to catalyze a burgeoning space.
Audience segmentation was part of Hightouch's vision from the beginning, and despite its late incorporation, it has become a valuable asset. Tejas painted a picture of Hightouch's trajectory over the years, highlighting its broadened capabilities. With the exception of ETL and data collection - the pathways for getting data into the warehouse - Hightouch has extended its functionality to encompass virtually all aspects of a CDP.
While ETL isn't currently on Hightouch's menu, Tejas hinted that it may not be off the table for future consideration. Given the rising commoditization and numerous ways for companies to collect events into their data warehouses, Hightouch has not prioritized this feature. However, it’s worth noting that they are not philosophically against its inclusion.
Despite Hightouch's reluctance to enter the data collection arena, the company excels in delivering a wide range of services under the composable CDP approach. It shines in its commitment to offer more than just reverse ETL, providing marketers with an extensive product to facilitate audience segmentation and identity resolution. Tejas confirmed Hightouch's commitment to this path by teasing an imminent announcement concerning their advancements in identity resolution.
Takeaway: Hightouch has emerged as a leader in the composable CDP space, excelling beyond reverse ETL. By circumventing the need for extensive engineering effort and tapping into existing data sources across businesses, Hightouch enables marketers to build audiences efficiently and effectively. This approach, anchored on data warehouses, allows businesses to preserve their unique data structure and offers them the flexibility to personalize based on their distinct attributes and customers' needs.
Can Hightouch Truly Replace Legacy Customer Data Platforms?
When Tejas was asked about the perceived controversy around composable tools and their approach to marketing solutions, the conversation moved towards the role of Hightouch as a competitor or substitute for traditional Customer Data Platforms (CDPs). Critics argue that the popular sentiment surrounding reverse ETL tools only adds to the confusion, veiling the true utility and function of such tools.
Tejas, having authored several thought-provoking blog posts last year on the subject, including "CDPs are Dead" and "Friends Don't Let Friends Buy a CDP", was asked whether Hightouch can indeed replace a legacy CDP today. In the marketing world, Hightouch is often touted as a 'fast, flexible, affordable CDP alternative'. Yet, Tejas pointed out, Hightouch doesn't incorporate components like tracking and ETL, crucial elements of a typical CDP.
Tejas responded to this query with an insightful admission - describing Hightouch as a CDP alternative when used in combination with other solutions like Snowplow and FiveTran would be misleading. However, he did emphasize that less than 20% of Hightouch's enterprise clients leverage such complementary solutions, defying the notion that Hightouch is solely for data teams at technology-forward companies.
Moreover, Tejas provided examples of Hightouch's significant enterprise customers, such as Blizzard Activision and Warner, who have transitioned from other CDPs and now consider Hightouch their CDP of choice. The primary difference between Hightouch and a conventional CDP lies in the data collection component, which Hightouch addresses through partnerships with companies like Snowplow.
Hightouch aims to facilitate data activation success for marketing teams and personalization efforts. The future of CDP, according to Tejas, is an architecture where companies possess their own data and can activate it across different channels, allowing for flexibility and adaptability - a future that Hightouch is ambitiously pioneering.
Takeaway: Hightouch, even without the data collection component, is recognized by some of the largest companies in the world as their go-to CDP. The future of CDPs, as envisioned by Tejas, is a more flexible, adaptable data architecture that Hightouch is actively shaping. With its data activation capabilities, Hightouch is carving a new path for the evolution of CDPs.
Breaking Down the Data Truth: Martech vs Data Teams
When Tejas was questioned about the conflict within organizations, arising due to the diverging understanding of 'truth' between the Customer Data Platforms (CDPs) used by marketers and the data warehouses employed by analysts, his response presented a balanced blend of practical insights and empathetic understanding. The issue he addressed relates to the potential disparities in data interpretation between different teams, leading to complications in metric reconciliation and incomplete data in CDPs.
Tejas readily acknowledged the problem's complexity, stressing the need for a single source of truth across the board. In Hightouch's vision, this unified truth would arise from a data set that's not only flexible but also entirely owned by the organization, fostering more control for marketers.
However, Tejas expressed a level of realism regarding the technology's role in resolving these disputes. The idea that software vendors can eradicate any collaboration issues between teams within a company is simply overpromising, according to him. While Hightouch provides an enabling framework that facilitates businesses in successfully resolving these conflicts, he was clear that there's an inherent human element necessary for this to work.
For any company to succeed in their data initiatives, a robust alignment and collaboration between the marketing team and the data team is crucial. Irrespective of the platform or the nature of the CDP—be it composable or otherwise—those teams must work together in harmony. The role of Hightouch, as Tejas pointed out, is to offer a conducive framework where teams can work on the same source of truth, using the same data set, and capitalizing on the data stored in their warehouses.
Tejas' doubled down on the need for fostering mutual understanding between marketing and data professionals. In his view, communities like
Arpit's Data Beats serve an essential role, bridging the gap between these two distinctive professional arenas. By elucidating data concepts to marketers and marketing concepts to data analysts, they contribute significantly towards promoting interdisciplinary knowledge.
However, as Tejas noted, expecting marketers to understand SQL and data engineering or data analysts to build marketing campaigns is not a realistic expectation. The solution to this problem doesn't lie in enforcing these roles to cross over fully, but in designing and utilizing software that's user-friendly for marketing teams, while still leveraging the data and technical infrastructure provided by the data teams.
Takeaway: The reconciliation of 'truth' in data between marketing and data teams isn't solely a tech or architecture problem; it requires an operational shift and closer collaboration between teams. Software solutions like Hightouch provide a solid framework to tackle this, but the human element—teamwork, alignment, and communication—remains a key determinant in solving these challenges.
A Closer Look at The Rise of Warehouse-Native Approach
Tejas was prompted with a significant question concerning the progression of martech and the potential role of the warehouse-native approach. The heart of this discussion revolves around the effectiveness of martech tools that hinge solely on the data warehouse, extracting real-time insights without creating superfluous data replicas.
Tejas posited that incumbent martech providers are not far behind Hightouch in making a paradigm shift towards the data warehouse as the central data point. This move is not only predictable but also a reaffirmation of the intertwined nature of martech and data. As internal data pots like Snowflake and Databricks gain ground, the idea of siloed marketing data is rapidly becoming outdated.
Despite this, Tejas expressed reservations about a complete sweep of the martech landscape by warehouse-native marketing tools. He brought up the diversity of marketing channels, encompassing advertising, app personalization, and more. This variety makes it impractical to expect a full-scale migration onto the data warehouse. Marketers have intricate needs; while data access is paramount, they also have to deal with aspects such as IP warming, which may not be catered to by warehouse-native tools.
This isn't to say that Tejas doubts the potential of emerging platforms like Castled.io, Vero, and MessageGears to carve a niche in the martech landscape. His perspective isn't grounded in their inability to create robust businesses, but the improbability of these tools triggering a platform shift of a magnitude capable of upending the reign of heavyweights such as Salesforce and Adobe. Despite the undeniable advantages to marketing, data, and IT teams, the chances of a mass SaaS apps swap out do not appear immediate, given the historic hurdles startups face while trying to capture a substantial market share in this space.
Tejas highlighted the ethos of Hightouch, stating that their approach is to tackle the present problem rather than develop new platforms. Their primary goal is to create a bridge between the data and marketing facets of businesses, without the hassles of managing new templates or handling novel platforms for email analytics.
Takeaway: Tejas's insights indicate that while the martech industry will continue to embrace a warehouse-native approach, it does not spell a complete overhaul of the martech landscape. The future likely holds more integration and convergence than a radical replacement of existing tools and platforms. Businesses need to focus on merging their data and marketing efforts seamlessly without being lured into acquiring new platforms unnecessarily.
The Potential and Limitations of AI in Marketing
When asked about the growing influence of artificial intelligence (AI) in the marketing sphere, Tejas provided an insightful overview of the exciting opportunities and inherent challenges. The idea of AI replacing or radically altering marketing roles is a common fear among many early-stage marketers. However, Tejas maintains a more balanced perspective on the matter, acknowledging both AI's potential and its limitations.
Tejas recognizes the transformative potential of AI in marketing, emphasizing how AI could drastically enhance the marketing data experimentation process. Current limitations often restrict marketers to a few trials or force them to rely on gut instincts due to a lack of tools to test every possible variable. However, the introduction of AI can enable marketers to create numerous audiences and launch more sophisticated and targeted campaigns.
Furthermore, Tejas underlines his enthusiasm for providing marketers with access to data platforms like Databricks and Snowflake, which are increasingly incorporating AI capabilities. This approach aligns with his strong belief in the power of AI to augment, rather than replace, the human intelligence involved in marketing strategies.
Despite AI's capabilities, Tejas is cautious about the notion of it replacing the marketing department. Drawing from his experience as a CEO and dealing with the intricate facets of marketing, he emphasizes the enduring importance of qualitative changes. Data-driven strategies can't fully replicate the nuanced insights, intuition, and reasoning that human marketers bring to the table. These qualitative factors can dramatically alter program outcomes.
In Tejas's view, while AI has the potential to radically alter the marketer's role, the most likely scenario is that AI will augment rather than replace these roles. The real revolution lies in how AI can unlock access to crucial business data, empowering marketers to self-service data, build audiences, and understand customer cohorts. The power of AI needs to infiltrate all aspects of marketing, from brand planning and audience segmentation to personalization and experimentation.
Takeaway: While AI continues to evolve and impact various aspects of marketing, it isn't poised to replace marketers in the immediate future. Instead, it stands to augment their capabilities, empowering them with more data-driven insights and decision-making tools. The role of the marketer is likely to undergo a transformation, one marked by the increased integration of AI but still very much driven by human intelligence and intuition.
Balancing Personal and Professional Lives
When quizzed about maintaining happiness and success amidst his multi-faceted roles, Tejas unraveled his approach towards striking a perfect work-life balance. As a co-founder and co-CEO of Hightouch, a developer, and with various hobbies and interests, he certainly has his plate full.
Yet, Tejas manages to juggle these roles without losing sight of his happiness and motivation. He attributes his balanced approach to the significant investment he makes in his personal relationships. Engaging with family and friends, participating in activities outside of work, and pursuing various hobbies help him navigate the demanding nature of his professional life.
Tejas embraces the notion of being a "good amateur" in various pursuits, ranging from trying out new recipes with his girlfriend to exploring powerlifting, and occasionally playing the harmonica. These activities serve as refreshing breaks from the intensity of his professional life and provide him with joy and satisfaction.
Though Hightouch demands his consistent and intense attention, the joy derived from personal life's simple pleasures ensures he maintains a balance. Of course, he humorously acknowledges the possibility of AI eventually replacing him, referencing our previous discussion.
Takeaway: For Tejas, personal relationships and hobbies outside work are critical components in maintaining happiness, motivation, and achieving a balanced life. This illustrates that while professional success is important, investing in personal interests and relationships can significantly contribute to an individual's overall well-being.
Episode Recap
Tejas offered an enlightening tour of the evolving Customer Data Platform (CDP) landscape. His profound insights provide us with a fresh perspective on the role of Composable CDPs in enhancing customer experiences and enabling marketers to leverage data more effectively.
We dive deeper into the practical applications of Hightouch's composable CDP approach, we learned how this tool excels beyond reverse ETL. Hightouch eliminates the need for an extensive engineering effort and taps into existing data sources across businesses, offering marketers a more efficient way to build audiences. What’s more, Hightouch is not just recognized for its capabilities but is also acknowledged by some of the world's largest companies as their go-to CDP.
Tejas underscored a crucial point about the evolving martech industry — that it isn't about chasing comprehensive solutions but about adopting use case-driven strategies. Hightouch embodies this shift by focusing on data activation and personalization. The company carves a path towards a future where CDPs provide more adaptable data architectures, staying aligned with changing business needs.
A key takeaway from the episode is the importance of alignment and collaboration between marketing and data teams. Tejas explained that the 'truth' reconciliation in data isn't solely a tech problem—it requires an operational shift that involves teamwork, clear communication, and alignment. Software solutions like Hightouch provide the necessary tech framework, but the human element remains instrumental in addressing these challenges.
Finally, Tejas' insights caution us that while the industry is leaning towards a warehouse-native approach, it doesn't equate to a complete overhaul of the martech landscape. Rather, businesses should focus on integrating their data and marketing efforts seamlessly without unnecessary diversions to new platforms. This shift should lead to more convergence and integration than radical replacements.
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