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Sunday, April 23, 2017

Tomaž Štolfa, Layer: Communication is one of the basic driving forces of humanity and business

Tomaž Štolfa, cofounder of the successful startup Layer, is convinced that communication is the basis of everything and still offers plenty of opportunities. Investors agree with him, which was confirmed with the latest, 15-million investment that Layer received recently. In the same breath, the company acquired the startup Cola that will, according to Štolfa, help Layer develop even faster. 

First of all, congratulations for the latest investment in the amount of 15 million dollars that Layer received recently. So far, Layer has received over 40 million dollars in investments from various investors. What do you always convince them with? 

Investments occurred in rather different stages of company development, and the story is also developing as we learn. Layer’s mission is to improve communication in all (digital) products on the market. Because communication is one of the basic driving forces of humanity and business, investors believe that the opportunity is big. In the past few years, we’ve proven that we can develop the product, technology, and also successfully sell it on the market. With this investment, the company will be able to grow even faster. 

We have a lot of work ahead of us. 

At the same time, Layer acquired the startup Cola, which is also developing communication tools. What did Layer gain with this acquisition? 

Cola was built on Layer’s technology, focused on the so-called rich messages. Even before buying Cola, Layer invested a lot into developing in this field. By merging the work of the Cola team, we will be able to develop this part of our vision even faster. 

Your investors include traditional investment funds as well as big companies such as Microsoft and Salesforce. What are the advantages of one type of investment or the other, and why is it good to have both? 

On a daily basis, there are actually no big differences. Much like venture capital funds, our strategic investors help us with market penetration, employment and getting partners. 

We also collaborate with Microsoft on a product level. At the World Economic Forum in Davos, where Layer enabled communication amongst participants via messages in the conference application, Microsoft offered simultaneous translation of message inside these conversations. 

How important do you find collaboration of startups and corporations? How should startups tackle forming partnerships with the desired partners?

Collaboration of young companies with corporations can be a double-edged sword. If the young company doesn’t have a very strong vision and mission, it can easily happen that it optimizes in the short-term in order to please the demands and ideas of the corporation. These demands are very rarely in the interest of a young, smaller company, and at the same time this is a very big opportunity cost, especially when it comes to the team’s focus. Every situation should be evaluated and decided depending on the given circumstances. 

Building partnerships is, in any case, a long-term process where you need to build on trust and constantly prove yourself with good work. 

Communication is a basic human activity that represents an important part of our private and business life. The importance of communication and your solution is shown in the fact that it’s used by more than 500 applications, and the solution that you prepared with Microsoft was recently used to communicate at the last meeting of economists in Davos. How will the field of communication develop in the future and where do you see Layer’s role in this? 

We see communication as one of the main building blocks of digital experiences. We’re developing products and infrastructure that allow communication functionalities to be very easily included into all products where there is a need for communication between users or between the service provider and the user. 

The field of web communication is developing very rapidly, mostly due to mobile communication applications such as Facebook Messenger, WeChat, Snapchat and similar. Users are increasingly used to rich messages, not only to a few lines of text, and they demand such an experience in all products they use – from online communities and online marketplaces to e-commerce. In all these applications, better communication creates value added, either through more frequent use or through increasing the value of transactions that the communication enables. 

Layer will continue to focus on offering its clients solutions that move key performance indicators and at the same time enable an excellent user experience to their customers. 

You’re predicting more intense focus on the field of machine learning and AI. Why do you think this is the field of the future? 

Machine learning has been rising over the last few years, mostly because of three reasons – some new technological approaches and tools; practically unlimited processing power for parallel processing using GPU; and access to significantly larger amounts of data than before.

In certain scenarios, communication in some apps is rather recurrent but not entirely structured. For example, a conversation between the agent and a customer often starts with a few basic questions. Depending on the answers and with a suitably big learning sample, we can predict the outcome of this conversation relatively well even before the conversation truly begins, and thus we save a few steps to the agent and the client, which can lead to bigger productivity or a higher value transaction. 

Of course that is only one of the examples. 

Where will Layer be in 5 years?

Still working on improving communication in all (digital) products on the market. 

As a Slovenian succeeding in Silicon Valley, you are probably a role model to many young Slovenian entrepreneurs. What would you advise to startups from the region that wish to gain an investment from American investors and succeed on a global level? 

My advice is to build global success without an investment. We recently got proof that it is possible, even in Slovenia. The region has a few incredible companies and entrepreneurs who are building global stories without a single dollar of investment. 

If it’s truly not possible without an investment, they should really strongly think about why the investment is necessary, in what amount, and how it will help them reach the goals that the company has in the long run. Successfully gaining the investment isn’t success by itself, it’s only a step that is sometimes necessary and always comes at a certain price. 


Tomaž Štolfa is the co-founder of Layer. Layer, based in San Francisco, powers conversations of value, through rich in-app messaging for Nordstrom, Staples, Sears, Monster.com, Imgur and hundreds of other brands. Layer has been known to pioneer [hybrid conversational interfaces]. Layer – a TechCrunch Disrupt Battlefield winner in 2013 – is backed by Greycroft, SV Angel, Microsoft Ventures, AME Cloud Ventures and other top venture investors.

Before Layer, Tomaž founded vox.io, one of the first cross platform messaging and voice/video over IP services, after building several value added services for mobile carriers at Marand. He is an alumni of the Faculty of Economics at the University of Ljubljana.

Tomaž Štolfa will be a keynote speaker at this year’s PODIM Conference.