84: Tejas Manohar: The past, present, and future of Composable CDPs

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...