M&A, competition, pricing, and investing | Julia Schottenstein (dbt Labs)

Podcast: Lenny's Podcast: Product | Growth | Career
Source: whisper-tiny
URL: https://api.substack.com/feed/podcast/133295678/b465ee681cd07181f45cfabbb049597f.mp3
Fetched: 2026-03-05 00:21:01

M&A is always about creating plan Bs, and the way I would think about it is for any one company. There's only ever two to three buyers that find what you're building to be extremely strategic. And the strategy that I would do and how do you get noticed is I would figure out the area that you bring a competitive advantage and I would inflict pain on that potential buyer. Make it impossible for them to not notice you because that's when they're going to have their ears perk up and say, well, what's going on with this company? The really important piece here is you want to do that in a way that's still friendly and open. I see a lot of founders get this wrong. And they prematurely will shut down a conversation or they won't talk to an incumbent or a potential future buyer because they take too competitive of a stance. But that's a mistake because M&A is all about creating plan Bs, and you don't want to shut that door down, prematurely because you don't know if you can really go the distance and be an independent company, so you want to have optionality. Welcome to Lenny's podcast where any of you world-class product leaders in growth experts to learn from their hard-win experiences building and growing today's most successful products. Today my guest is Julia Shotnstein. Julia is a product leader at DBT Labs, where she leads the DBT cloud product. She's also the co-host of the DBT Labs podcast called Analytics Engineering Podcast, a show about data trends that impact analytics engineers work. As you'll hear in this episode, Julia actually led the acquisition of a startup that I'm an investor in called Transform from the side of DBT Labs. And in a conversation, we dig into the M&A process, and get into a bunch of advice to improve your odds of having a good outcome, and just approaching M&A broadly. Bills a dig into the story of DBT, which is one of the most successful startups out there that you probably don't know about, and we talked about what they did right to get to where they are now. We also cover how to best think about competition, what your frameworks for thinking about product, and advice on how to brush pricing, and also open source. Enjoy this episode with Julia Shotnstein after a short word from our sponsors. This episode is brought to you by Vanta helping you streamline your security compliance to accelerate your growth. Thousands of fast growing companies like gusto, calm, core, and modern treasury trust Vanta to help build, scale, manage, and demonstrate their security compliance programs and get ready for audits in weeks, not months. 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Build to work with Gmail and Outlook, teams who use Superhuman spend half the time in their inboxes, respond to twice the number of emails, and save over four hours a week. That's over a month of save time for a year. With Superhuman, you can split your inbox into streams, or VIPs, team members, and emails from your favorite products to reduce context switching and make sure you never miss an important email. You can start reminders if you don't hear back so that you can follow up and never drop the ball on an email thread. You can also work faster than ever before with powerful AI features like writing, editing, summarizing, and even translating. Join the ranks of the most productive teams and unleash the power of Superhuman. Try one month free at superhuman.com slash lany, that's superhuman.com slash lany. Julia, welcome to the podcast. Super excited to be here. So you have a really interesting career path in that. You went from VC into product management. You usually see other way around. Usually PMs become VC's, and it's right to see this kind of version of it. And so I wanted to start with just a question. I'm just sad at that. How did that come to be? I do have an unusual background, but it doesn't surprise me that people who are interested in product are also interested in investing and vice versa. For me, I've always had three interests, broadly, and that's an interest in business and interest in technology and an interest in markets. And I get to express those interests both in investing and in product, but just with different weights. So in product, you go a lot deeper on the tech and markets is less of a focus, but you still get to do all three. So I have an unusual background, and I used to be a professional investor at NEA. I did all of, um, not only having investing in early stage startups that built for technical audiences, so I think dev tools in for data companies. And in 2019, I first discovered DBT, which was an open source data transformation framework. And I got really, very, very excited about DBT because when I talked to people that were using it, the way that they described their experience on DBT was like, unlike anything I had heard before, it is much more of an identity for them than just a tool that they are using to get their their job done. And that really struck me, and as I kind of thought about what was happening in the market, there was a lot going on. In 2019, the markets were changing quite a bit, cloud data warehouses were starting to explode. Like this was the year where Snowflake went from a $4 billion company to a $12 billion company. And I thought to myself, DBT worked, it could work in a really extraordinary way. And I naturally tried to spend all my time getting close to Tristan, who's the CEO and founder, and I wanted to invest. So at this point, you're a specie at NEA, you're trying to invest in DBT. And okay, keep going. Yeah, so I was very, very excited. I thought if this worked, it could work in a really extraordinary way. And I spent all my time trying to get Tristan to like me, uh, so that I couldn't invest in a company. And then in 2020, I, you know, finally got the call that I was waiting for Tristan said, we're going to raise some money. He had a term sheet from a firm that he liked. He was a good mentor fund. But he also liked me, and he wanted to give me a shot. And I was like super excited to get that message, like this is, this is my chance. And unfortunately, I ended up losing that deal to Sequoia. It's a formidable partner. Reasonable. I was, I was just so convicted that if is going to be a special company that I asked to even put my personal money in, and I asked to put like a very irresponsible or rational amount, um, nearly like 20% of my liquid net worth into DBT, because I was so convinced that this was, was special. And you know, sometimes when deals don't work out as an investor, you can create this like narrative in your head, like, oh, good, you know, I dodged a bullet, or, you know, that better off would out them, or, you know, screw them. But for me, like, that was a quite the opposite with DBT. I really felt like DBT was this runaway train, and it was special, and I wanted to jump on board. So a few months later, I ended up calling Tristan and asked him if I could be a part of the company that built the product that I thought was so special. So that was my kind of unique path into product and into DBT. So you invested in DBT, and then you ended up, they're up in an opportunity opened up where you can end up working there. No, I think if I was was able to invest, I wouldn't be here. So I got a, I know the board ended up videoing my personal investment, but it's okay because I ended up dedicating all of my personal time to building the company. Awesome. Okay. So something you touched on there that was really interesting of what you saw about DBT. That was so interesting. And I think this was maybe a broader question. If just in your time investing and finding a company like DBT early, but if you learn about just picking well, finding companies early, especially what are signs in your experience, they're just that this is going to be something really interesting that you might want to join. And this is more for people listening that are thinking about joining a company early on with make they should look for. So the way I would look at joining an early stage company would be the same way I would evaluate investing in one. And so there are four things that I care about when I'm looking at really early stage companies. And it's people market product and distribution. And I'll touch on each of those four to say a little bit more about what specifically I'm looking at. So people, this is really the CEO, the founder of the company, put simply, do you trust this person to lead? And for me, you know, Tristan had this really rare ability to paint a very compelling future of the industry and how DBT was going to be a part of making that vision a reality. But he also was really, really detailed in the day-to-day work of the analytics engineering work. And it was that range and scale that made me feel like this is a founder that's very rare and compelling. The next is markets. We touched on it a little bit. But, you know, what I'm looking for in markets is like, is it growing? Is there space for a new and entrant to make it's mark? And when it came to DBT, it was an explosive time in cloud data warehouses. And it was that chaos that was really the opportunity for DBT because they created some orderliness and structure to the way that people worked with their data in the cloud data warehouse. So that was very compelling. Then the next is product, everyone who's listening, hopefully, either is interested in products or has a product background. So I won't say too much there. But can you talk to users or customer potential customers? Are they building something that's really special? You need, can you hear that spark that enthusiasm and figure out if this is going to be special? And then the last, I think this is more important arguably than if they have a good product, but is distribution. Do they have an advantage on how are they going to get to market? Because that's really, really hard and think about how they think about their competitive advantage on either the ecosystem or distribution and how they're going to ultimately sell the product. You're not going to get a 10 out of 10 on all four dimensions. And so when you're joining a company, you also have the benefit of dedicating your time. And so try to think, you know, if they're weaker on one dimension, what is it that you bring to the table or what are you special at that could potentially risk the success of the company? In terms of spark with a product, I'm doing a post right now on product market fit and how do you know if you have product market fit? And a lot of it often comes down to like there's like a emotional reaction from someone you're talking to about the product you're building. There's like holy shit I want I want this now. Is there anything even more specific you've seen of just like what is a sign that there's a spark that people are just like really enthused. You talk about people made the BT kind of part of their identity. Is there anything else there? Yeah, it's can they not stop talking about it? And that's this like the chatter about a product. They want to share it with like their teammates or to other people at different companies. That just top of mind love and wanting to share what they've found with others is really a great sign that you're on to something. And then that spark will help do a lot of the work on how do you get to market? Because your evangelists are really your users or people that love what you're building. What about in terms of the distribution and bucket? What are some examples of just really important? I don't know unique or effective distribution strategies or I don't know unfair advantages. You've seen maybe with the BT maybe other companies like what are some examples of that? So DBT had an ecosystem advantage and they were open source and this helped really dramatically for lots of people to have low barrier friction to just try it out and spread organically. They first got started with very horizontal people could just get started without ever even talking to sales and think that was a competitive advantage. But you know, not all companies need to be products led. Some companies are enterprise top down sales. And so in those situations think about like does the team really know how to land a complex enterprise sale? Do they have a background in that particular space? Do they have a network of connections? Can be different depending on what the company is selling but you either want to see someone who's a company that's really strong and enterprise or really strong at the bottom's up. Okay cool. So I want to shift a bit to talking about an area that you have a lot of experience in which a lot of people are also really interested in right now which is M&A. I've invested a lot of companies and maybe I don't want some month I'm getting an email from a startup. I've been investor and they're just like we're looking at maybe selling the company. Things aren't working out the way we were hoping. And you've been on I think maybe all sides of the table of M&A transactions including I think you let the acquisition of a company I was an investor in the DBT acquired that I think is public company called Transform. And so my question is just four founders who are currently thinking about M&A, M&A meaning acquisition essentially. What's your best advice for them for how to be most successful in M&A kind of outcome for themselves? When it comes to acquisitions the time to start thinking about an M&A strategy is hopefully when you don't need one. And the best strategy that I could give a founder is to have a really strong offense in building their company. And when founders start their businesses they don't usually set out to start a company to sell it to another business. They start it to be an enduring independent standalone company. And if you have that path then you'll have the upper hand and absolutely every single M&A conversation because you have a viable alternative which is do nothing. Stay the course you don't have to sell. But of course that's not the case for for most companies. Most companies don't have a viable path to being an independent company forever. And so they have to think about M&A. And so M&A is always about creating plan B's. And the way I would think about it is for any one company there's only ever two to three buyers that buy what you're building to be extremely strategic. And the strategy that I would do in how do you get noticed is I would figure out the area that you bring a competitive advantage. And I would inflict pain on that potential buyer. Make it impossible for them to not notice you because that's when they're going to have their ears perk up and say, well what's going on with this company? You know we just bought this company transform. They were doing a they're playing a really good playbook here. And the really important piece here is you want to do that in a way that's still friendly and open. I see a lot of founders got this wrong. And they prematurely will shut down a conversation or they won't talk to an incumbent or a potential future buyer because they take too competitive of a stance. But that's a mistake because M&A is all about creating plan B's. And you don't want to shut that door down prematurely because you don't know if you can really go the distance and be an independent company. So you want to have optionality. I love this term with like pain in your potential acquires or what are some where are some examples of that? Like how are we who's done that well or what does what's an example of that? Yeah I mean I can share the the transform source company we just acquired we announced it in in February. So so DBT labs we build transformations that's our kind of main product and we were venturing into a new product area that we call the semantic player and to describe what that is like quickly it's allowing companies to define their business metrics and so that whenever anyone queries it we always serve back consistent data on those business metrics. And transform they were a pure play company only in this metrics layer or semantic layer and they they they had a really strong product they had figured out some of the technical challenges and they had solved it early on they had the benefit of having worked at Airbnb which which you know and Airbnb in the data world is famous for having a really successful like semantic layer metrics layer called the Minerva and what we had at DBT labs is really good distribution and ecosystem but we were kind of a little behind in bringing a product to market and we felt that pressure from transform because they were doing such a great job at being vocal and loud about how their semantic layer solves these really hard technical problems but they didn't have any distribution and so that was really tough for them and they were putting pressure but they were still positioning their company as a partner to us because they wanted our community to be excited about what they were building and hopefully get lower them over to use their product and so because they had positioned themselves as a friendly partner when when really we'd be weren't we were trying to compete for this similar use case when it came time to do an acquisition we were really excited because we knew their product was good and they had already done a lot of the work to make integrating with DBT possible and that helps us post acquisition do the integration much more easily how do you just think about as a either as as a startup or even an incumbent about how to think about competition how much emphasis how much energy to put into thinking what competitors are doing and just how to that informs your strategy. So we recently codified our philosophy when it comes to competition and I'll give Nick Candle the founder of Transform who kind of led this exercise at DBT labs but we really have like three pillars when it comes to competition so the first is whole true to our vision we're really excited about the path in the journey that we're going on at DBT labs and we don't want the distraction so occasionally you'll have competitors maybe throws shade or throws stones but most of that is just noise if you have a lot of conviction that you're going in the right journey you want to just keep your eyes straight ahead and run your best race and not be too distracted by what maybe some critics are saying the second philosophy we have is really a bro the pie philosophy so we want to work with our partners and our ecosystem to make the opportunity set even larger and we see that today like we mostly serve reporting and the I use cases we're seeing lots of companies start to operationalize their data now with this big wave of ML clean transform data assets are being used to train machine learning models so the the pie continues to grow let's let's focus on that as our target and work with people to make the opportunity set really attractive and not try to slice it up too thinly and then the last one is you know we want to lean into our strengths so so we have an ambition to be a platform company and we know what we're good at but we also want to leave space for ecosystem to offer solutions to our users that that help them out and we really want to foster an ecosystem where we can partner with lots of companies in the modern data stack and generally speaking when it comes to competition we take a really long term view and there are few areas that we do want to hold our ground and that's in our transformation standard as well as our semantics standard because we believe those two are better served together for the user sake but for everything else we really feel like we can work with our ecosystem and accomplish what we want to accomplish and also help them accomplish their goals too. Maybe good time to just chat about DBT and the success the companies had like so many startups have tried to become a standard default layer of what's now called the modern data stack and I don't know any startup doesn't use DBT or doesn't think about planning to use DBT it's just like a incredibly rare success story somewhere just snowflake where it's just like it's just the default for building large data startups and most startups these days work with a lot of data so my question is just like what do you think DBT did most right to win in this and continue to win? So I think DBT did a lot of things right but I'll point out to that really stick out to me and the first is just power and simplicity and the second is a commitment to being open and I'll touch on what I mean by those two things so when DBT was first getting started you would hear a lot from companies like I don't understand like what's so special about DBT we we have a sequel templating tool at our company we built one in house like this is really straightforward and simple and it's true like DBT is really simple but that is the power of it and so our founders trust and Drew and Connor they had a belief that the people who do data analysis work that really work closely with their business stakeholders should also be the ones to contribute to creating clean data assets in production because that data prep work is a necessary prerequisite for any analysis that you do and so DBT was really this belief that if you know sequel we want to invite you to do these work flows that were traditionally held by data engineers but you know you had to earn that right and so DBT has this nice framework where it's harder to mess up keeps data quality really high but it is pretty simple to get started and learn and and and that was really the unlock in the industry there were definitely solving a pain point at the right time and then the second thing is this commitment to being open so DBT is open source and that's the the main kind of guts of of DBT where you write your business logic and it helps in a number of ways specifically it helps with flywheel keep the flywheel running and also with network effects and I'll explain what that looks like so DBT is really easy to get started with at your company with reduced friction you know we were building a product that people like so they talk about it they want to share it both at their organization and with other companies other companies get started with DBT and again with reduced friction we now get to see this really diverse set of use cases for DBT across company sizes across industries and it allows us to build a truly horizontal company as our company grows we get to invest back into our community and our product and the flywheel began to spend faster and then you know meanwhile we have a really large user base so we have 20,000 companies using DBT every single week and that attracts partners to want to build for DBT so they share best practices build workflows and now if you're a company and you've standardized on DBT you really unlocked and integrated modern data ecosystem that wasn't available for you before so that has a flywheel and also kind of benefits everyone that decides to be on the standard and so it's those two really important trends that made DBT so powerful today so I'm hearing there is essentially the product was right for what people needed to solve there's also like a product like component open source free self-serve kind of piece that people adopted used oh let's start working and then kind of scale then start paying for it and then there's kind of like an alignment of the vision of where this was going and how it and it fit with how people wanted this to work for them is there anything else because a lot of startups do that and that all sounds really smart and good but a lot of startups try to do those things and no one cares maybe their product isn't necessarily what people are looking for maybe they don't get the right distribution I don't know is there anything else that you think they did really well that helped them kickstart this to even be a thing like is it timing that was really great is it like specific or influence early on I think timing was really important with the success of DBT that they were there when the cloud data warehouses were really exploding and growing in an enormous way and DBT Labs started as fish town analytics and consulting firm so they worked really really closely and hands on with all of their consulting partners to get the pain point and really solves first-hand challenges that they saw I think that combination of either right place at the right time and also getting to work really closely with people's day-to-day problems created a really special experience I didn't know that that's a really important element of the story is basically they were focused like how long did they do that and I'll let a fish town analytics is consulting part of the business was almost two years okay so they basically spend two years solving this problem like basically manually for people and that's such a great way to understand real pain and figure out how to solve it totally awesome okay so that's a really interesting and say just like spend a few years just like many like it sounds like it was almost manual right like manually helping people transform their data using whatever tools they're already existed yeah well they were building DBT and using DBT to help them do their jobs better in supporting their clients and whenever they encountered paper cuts or friction or the workflow was taking longer than they expected they would build that into DBT and that really matured the experience of the product because people were building at the founders were also day-to-day working with these customer clients that had pain points there reminds me of a story you told me about how you made your inch team do some manual work of an algorithm involved in transformation can you share that okay so I'm going to prep this this story by sharing that I'm a huge math nerd and one of my favorite books on logic is called Gertal Esherbach and in this book there's a fun scene where there's an ant farm that bands together to do the work of a computer flipping bits from zero to one to solve logic geeks and so this chapter of that book was really the inspiration for an exercise that I ran my team through so about a year ago we were doing a big zero to one new project at DBT labs and we were going to change the algorithm for how we built customers data transformation graphs and I needed a way for the team to really internalize all of the changes that we were going to be making I needed them to own it because otherwise they wouldn't be able to anticipate all of the edge cases it wouldn't be quite as durable you couldn't copy paste the algorithm so I showed up to a team offsite with a spool of rope and sticky notes and I think my team looked at me crazy went with two heads when I started to tie people up to create a graph so each note of the graph was an engineer and I the rope was kind of the edges of the graph to connect them and then we worked through the new algorithm extremely slowly step by step and it was a way that you couldn't leave that exercise without knowing exactly what was going on because everyone had a role to play so I think a lot of times when you're starting something new you get into a situation where a few people really understand it and they're running way ahead of the rest of the pack but I needed a way for the whole team to go along for the journey so I'm constantly trying to create these important moments or memorable moments for the team so that it's centered around our mission and they can have the ownership of taking the project and making it successful and so it was perhaps a overly creative or cookie way to spend the day but it was really successful. What was the actual algorithm you were trying to make? We were trying to figure out how to make flipping the way that we run people's dags from an imperative way to a declarative way so instead of like running things left to right when data arrived in your warehouse you think about it as a reverse like what would need to happen to make your data as well as dematerialize in time. Awesome and sounds like the team found that valuable. Yeah. Okay. Reminds of me of a clip from the last season of Ted Lasso where they have used red strings and they I won't get into it but it's a few of you will know what I'm talking about. I want to come back to you're chatting about open source versus not open source so some part of DBT was an open source and some isn't. I'm curious how the team decides what is open source and what should be open source what isn't open source and what the charge for. We think about DBT open source it's really the guts of the data transformation and it's where you describe your business logic and then on the cloud side we build proprietary software that super charges the development life cycle and the production ization of DBT at scale. So what we think about as leaving for our cloud offering is we deal with state so state well interactions and also any kind of cross team or structural collaboration. We want to reserve that for our proprietary offering and I think it's really important to have that distinction of what what you believe should be open source or what is the open standard that really matters ecosystem to us is really important so it's important that that remains open source but then we want to super charge that and experience with an open core model and build proprietary software that makes people much more successful using DBT. Today's episode is brought to you by assembly AI. 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So, you know for for us at at DBC loves I don't claim to be perfect at it but we're trying to get a better muscle around it and I always think about Maradoban who wrote this book pricing innovation. I know you've had him on the show before but he shares that you don't get to decide if you're going to have a pricing or willingness to pay conversation you only get to decide what. So it's much better to have that conversation before you build the product than have it when your sales seems trying to sell something and people are excited about what you've built aren't willing to pay for it. And at DBC loves we have this value it's one of our core values that says we're more concerned with value creation than value capture and we really mean this when we talk about what is the value of DBC loves to our customers they often talk about how it's either 20 to 35 percent as valuable as what they spend on their cloud data warehouse but what we charge our customers is a very small fraction of that 20 to 35 percent and that's that's by design and last year we did our first ever pricing change in the company history and you learn a tremendous amount when you have that event because you get to test the price elasticity of your customers and it's so important to learn that lesson while the company is still smaller the stakes are lower because pricing is always evolving it's not a fixed thing it gets more complex over time and so we have to think about it quite a bit because you know my team builds proprietary software for DBT cloud and when we lose a deal we most often lose it to DBT open source and we like it that way we're happy to lose to ourselves but we have to really think very deeply about water people willing to pay for and what moves the needle for them and and focus on that I'm so curious with that pricing process was like to figure out what to change is there anything you could share but just like what that was for you or what are some just surprises that came out of that process are just like oh wow we didn't expect that in these conversations is really like an all hands-on deck conversation it's pricing is so cross-cutting because it's a finance discussion as well you're kind of modeling out things in spreadsheet it's in figuring out how that might impact the business but you can't just solve these problems in spreadsheets you have to go talk to customers test the waters understand where people's appetites are and sourcing that out is really hard and then of course there's a product piece to it too where you have to affect it and communicate it as well so it was very cross-cutting we learned a lot we we kind of track our conversion rates really carefully we track our turn rates very carefully and I think largely we were we were happy with the the change that we made and we we felt like one of the big things that we were trying to solve for was have our pricing catch up to how people valued the tool. How many people did you end up talking to who is doing these conversations and is there anything really important you learned about the how to ask these questions and these sorts of leaners to pay conversations. So we talked to dozens it was combination of product and product marketing having conversations and you know people aren't very willing to share explicitly like what they will pay but there's some tools that we use on relative value people most think about what is a relative value of DVT in their cloud warehouse and we also tried to employ some of the tactics that we tried to assess out what what do people view as very inexpensive what's a price point that's very cheap or a no-brainer what price point is maybe fair or comfortable for them and what would be too expensive and then we had all the data back to figure out where we landed. I want to come back to M&A for a bit ahead a few more questions there and I kind of moved on from that and so again you've done a lot of work with an M&A realm something that I saw recently and this connects to the fact that a lot of startups now are looking to get sold this vc hunter walk he's a founder of home brew ventures had this interesting blog post where he basically suggested you should actually think about being public about the fact that you're selling your company which is kind of crazy because in the past you never want to come across as to sell it like I know I don't want people to think I'm desperate and his point is like many startups are desperate right now and that's it's okay to be public about that and then in theory create some of a bidding situation or many people know versus keeping it secret in kind of in closer rooms so my question is just what do you think of that do you think that's effective strategy is it not I think it's good advice if you're in a Hail Mary situation where you're you're looking for home or you need an exit for your business it's better to be transparent and cast a wire net and you're right and like previous times founder tried to be a little bit cute or obfuscate that they were evasive the situation that they were in because they wanted to drum up some competitive interest when they're they're really wasn't any but you know unfortunately and in today's climate too many companies are in that spot so it's impossible to hide it and so the better approach is just to be transparent and I see it pretty regularly and there's absolutely no shame in sending a note that says something like hey we're looking for an exit for a company x y and z didn't pan out as we expected we built a really interesting product and we want to keep the team together we're running a process are you interested really just as simple as that I've seen a lot of companies put together these really detailed decks or even websites have just like here's the team here's what we built to be very kind of promotional about it is that's something you've seen as that's something you'd recommend yeah usually in this these situations people are acquiring the teams and so having your data room together really the most important thing is this is these are the team members that are going to come along with the acquisition is the biggest motivator for why buyer would get excited you made this point earlier that a lot of the seeds need to be planted early for you to have the best outcome and this reminded me so I had to start up local mine that we sold to Airbnb and I met Airbnb initially at a year before we actually started exploring the process at a random party itself by southwesters I actually have no memory of this party but the head of product that Airbnb Joe bought remembered it and came back to us a year later and just like everybody is up to maybe collaborate on some stuff and let's do an acquisition so I think that's just just wanted to touch a band on that point of just the power of the way I thought about as a lot of thousand flowers bloom just like meet everyone get the word out that you're around and what you're doing so that in the future when someone has that problem like oh that company maybe we should talk to them yeah you want to make sure that the buyer knows you are before the acquisition moment and you know hopefully that's because you've made an impact and they like what you're building maybe inflicted some pain on them but yeah certainly creating those connections while ahead of an exit event is important and specifically there it's like meet people at your competitors potentially for us like everything he was never even a potential company we would sell to you because I didn't nothing to do with it but ended up making sense down the road what's like the realm of the companies and people that you think people should think about meeting if the company is buying a lot or they're active they often have corp dev teams and so use that corp dev team to your advantage like it's their job to meet absolutely every company that could be potentially interested so take that meeting say you're not interested in in an acquisition just yet but push them to make an introduction to someone that could sponsor the deal so usually that's someone in product or maybe a GM and use that as a starting point for maybe a just a conversation maybe something more like a partnership but get the corp dev team to work for you what if you're at the other end of the spectrum and you're in kind of direst rates right now and you're like oh man what do we do to potentially sell this company I know others are not going to be great but just what do you suggest folks do in terms of I guess finding connections to potential companies that might be a quarters yeah I mean use your user network usually your venture capitalist has a really big network and one of the things that I hear founders feeling the most nervous about is like a duty to return the money to the investors and maybe this is unpopular thing to say on a podcast but like your investors understand that they're not making their money back and what they want to do instead is happy you end up at a really great company like an Airbnb because that will help them down the road so it's all about the long game but user investors to help you find connections at different companies that could be buying and don't worry so much about disappointing them or being really realistic about where you are in your company journey yeah it's a build on that like I'm just an angel investor I'm not like the lead fund and they feel differently imagine but the last thing I want for a founders to get stock at a company they hate and just so that they could return some money or have some kind of outcome like I'd rather they just just give up move on like life is short yeah I think founders for I get that it is so risky investing in early stage companies that portfolios like 50% of portfolios don't return investments don't return anything and that's just part of the game and it's it's a very acceptable path where you know hey we gave it our best shot it didn't work out and moving on which is tough a lot of times for founders that are told like it's all that grit and not giving up and don't quit sometimes sometimes you should quit oh gosh yeah I don't want to be I don't want to say that I love that you know people I think being founders it's extremely lonely role sometimes and it is very hard to to know what your next chapter will look like or what the journey will look like and you know sometimes you really are at a cash and you do have to find a home but you know I hope I hope that you can continue to find and find a way forward agreed specifically for people thinking about selling their company other companies you think are good companies for people to look at right now that are actively acquiring or open to M&A this is a tough one I think a lot of companies are on the sidelines for a number of reasons and it could be on the sidelines because they just did an acquisition and they're trying to digest or integrate that company they could be on the sidelines because they're not growing head count as much and M&A is often worked chart gymnastics of folding the target companies head count into your budget and plan and maybe just don't have a lot of space or probably more common right now is there's just a general uncertainty about the future and in highly volatile markets people want to take care of their own and even the best M&A deals at a level of complexity that a lot of buyers are just not looking to take on right now and so there are a number of reasons why people might sit out but what I would do if I were in a position of wanting to sell my company as I would come up with a buyer set of maybe it doesn't and really there aren't more than a dozen companies that will find what you're doing to be a very good fit. So we're there a buyer set and then start calling the list by looking at some of the criteria that might count people out and then go have those conversations and if you're in a Hail Mary situation be very transparent about it maybe open up the the buyer list but if you still have some room I would maybe focus on two to three partner buyers and really play the different playbook which is in like pain to get really hard for them to not notice you but do it with the smile and be friendly while you do that. Sometimes with M&A discussions there's a lot of like subtlety to the way you communicate where you don't come out and be like please we'd love to sell our company to you. Any advice on just the phrasing and how to approach it or do you think it's just it's fine just tell us we're looking to sell our company or you're sitting in a buyer. Yeah I just wouldn't be too clever here like everyone understands like oh I'm evaluating strategic alternatives means you're looking to sell your company and it depends like are you looking do you have time if you if you have time yeah don't don't come out and say hey I'm for sale like that's not gonna end up in a a good outcome but depends where you are in your your company journey if you have to time then don't talk about M&A at all like that's the last thing that you want to speak about instead you're talking about maybe collaborating or partnerships how to work together knowledge sharing and M&A is a dirty word if you have like a lot of runway and you're in you're gonna try to continue to pursue an independent path but if you're if you're out of time you're you're out of time. That's such a good advice I remember the term we use was we want to explore a strategic partnership and everyone's just like and knows what you mean by that but just kind of do want to say it. Yeah it's like everyone in the room's kind of looking like oh yeah yeah okay strategic partnership or strategic alternative it's like we all know these code words and we understand the situation you're in. Yeah when do you think that many market might pick up again I know it's impossible to predict you have any sense yeah I wish I had a magic ball that'd be pre-sweet I think what is happening though is we're like far enough out from the peak of the markets so the the peak was really like November of 2021 and why does that matter two things one founders are coming to terms with the valuations that they maybe received at the highest of the market or no longer gonna hold in this market and companies are out of cash or maybe out of options. We'll be better assets entering the market soon and at a certain point the opportunity is we'll just be too great that that will incentivize a lot of buyers that have been on the bench to start participating again in the M&A market and I don't know it's actually when that will be but I think we're we're pretty close I think we're pretty close. And you mentioned a value but you have it at dbt I forget exactly what it was but I'm curious what are the other values that you have at dbt whatever you can share always curious what principles and values companies come down to to help drive the way they think. The value that I shared is we are more concerned with value creation and value capture and that really like drives everything that we do we try to put a lot of good out into the world and it pays back slowly. The whole mission of dbt labs is to help analytics engineers disseminate organizational knowledge through data so we really believe in also being participants of sharing that information and getting more people knowledgeable about better that all sorts of things transparency wins we're really transparent company like we share our board decks we have lots of communication and participation in all of our stocks we're writing culture we have hard conversations in the open so that's another a big one transparency always wins we are humble like we don't ever feel like we're successful like we kind of come at this from a very humble space where we feel like we have to serve our community and our users and that really motivates us and then another one has just worked on well as its own end and it's really focusing on the journey and not the end destination. Awesome I want to do a post someday just like here's the values all these different successful companies have come to and see if there's any patterns. I'm actually doing a post right now in snowflake and on figma and way you touched on there's such a connection and a threat of obsessing with your users and making sure they're happy. I figma I forget exactly what it is but it's just like they're just like in this article it's gonna come out tomorrow actually so you people get a sense of when we recorded this where they think of their company is software as a service or service is their number one going actually provide service and software is just a way to do that and then it's snowflake their number one core value is put customers first and they talk a lot about how they just actually informs their participation all the thing in all their thinking and so it's interesting that also comes up a lot in what you're talking about which I think it's easy to say but I think what actually separates companies that succeed is they actually put this into practice. It's really interesting too because a lot of the people who work at DDT Labs came from the community so they feel this real ownership in making the experience an excellent one because they were so compelled to come join DBT Labs because the product changed the way that they work or changed their lives and so that commitment to the community and product experiences really really strong. This isn't another threat maybe we'll go down real quick. We're again a different post around Reddit and how to work with really opinionated users that strong opinions about changes to the product and the way they described it these guys were there for five years working with the community on the product is that like two users the product is their baby basically it's like they think it's theirs versus the companies and I'm curious having a really strong opinionated community was but it sounds like you also have what if you learn about just working with them to build product that makes them happy and avoid you know or volts and and really upsetness. It's hard as you grow I think it's just a challenge because our community gets bigger you can't service like everybody's needs but I think what we've done is like everyone is very deep in our own product I think one of the cool sats is at DBT Labs we have over 30% of our employee had count has contributed to our data transformation workflow and so that's across like every discipline it's in obviously product obviously in our data team like our marketing team also contributes to data transformation and our engineering team will also contribute to our internal DBT analytics project and that sense of like really understanding what the experience is like and then soliciting as much feedback as we possibly can we have a DBT Slack community of 50,000 and all of our employees are like in that Slack channel regularly and can feel when we like mess up or we don't quite deliver an experience that we're proud of like you will just see like dozens of people trying to jump on board and try to make it better. Is there any other frameworks or just general processes that you found to be really useful and building awesome product running teams? Not a big framework person but there's kind of two sayings that I find myself repeating or either to myself or to others and it's worse is better and TechDA is a champagne problem and what do I mean by that? It's really to help me combat this perfectionism because perfect doesn't exist and you shouldn't said go with good enough because when you ship that's the moment when you get to learn a lot from your users and you just can anticipate it. You try very hard to understand exactly how people will use the product and get all the edges ironed out but you can't until you ship and I'll share an example so my team helped support the DBT Cloud scheduler and the initial version of the DBT Cloud scheduler was pretty naive. We were a little embarrassed by it. It was a big old for loop over a big old jobs table and so we would look like is this job? Is it time for the job to run? Yes, run this job. It's not time for this job to run next. Continue on like is it time? Yes, run this job and it would just loop over and it's extremely naive and very simple but it got the job done and I try to remind the engineers like we would be so lucky to have TechDA because that means people are using the product and now we've had to rebuild our scheduler several times over because we do have meaningful scale. We have 8,000 companies using our scheduler. We have to manage 10 million runs per month but what we didn't need at launch was a distributed scheduler with go workers and rabbit MQ. We just didn't need it because we had no users and so these two sayings that worse is better and tech debt is a champagne problem just really reminds people like let's ship let's get it out into the user's hands and then we'll learn and iterate and it'll be a better experience for them. That's a good segue to my last question. So you weren't a PM before this role yet you're struggling experience in investing, investment banking business in general. I'm curious what you think product managers should maybe focus on more or learn more early into to become stronger product leaders based on experience you've had moving into product. I pull a lot on my experience or some other things I did was as an investor in my current role in product and maybe I'll touch on like what is the skill of a venture capitalist might be a little bit foreign for people but venture capitalists they spend all their day meeting lots of different companies context switching they have to know like a little bit about quite a lot of different things and they do this to like refine their investment tastes or find their investor judgment and they're also investing a lot in their network and connecting people supporting people and mining people for ideas that are waste smarter than they are and so you do that all the time in venture and I've brought a lot of those skills with me into product and it translates really well. The first is I still spend a lot of time investing in my network and I think it's an underrated way for a PM to spend their time and I try to build a network of operators and other companies that are like DVT labs that are growing nicely maybe a little bit ahead of where we are and I asked them questions like how to do navigate open source how to do navigate pricing how to do navigate acquisitions and I take kind of the best ideas figure out which ones I can apply and bring it back to DVT labs. The second thing is I really think my special T or my superpower is that I'm a T shape generalist and so I know a lot about you know a little about a lot of things from from finance to business to product I have to go a lot deeper in product in the areas that I specialize in that's where the kind of tail of the T comes in but it's precisely because I've had a diverse background that makes me more effective when I'm trying to get things done within the organization because I have just more credible experiences that I can pull from and then the last thing that I think maybe doesn't shop day-to-day in my product work but in investing you're constantly thinking about risk and the power laws and we touch on this before but like most investments don't work out you lose the dollars that you put in but all their turns come from these rare events that make up for all the losses it's have to think about what are the uncapped upside opportunities in investing I think in product you still have to do the same thing like you can't if 50% of the things I worked on went to zero like we have a problem but it encourages me to continue to make bets for the company that has the chance of bending the trajectory of our business we've reached our very exciting landing round I've got six questions four year are you ready yeah let's do it what are two or three books that you recommended most to other people okay so two books that helped me learn a lot about myself range it's a book about generalist and I also quiet it's a book about introverts and then I like a lot of biographies so a few of my favorites are Snowball that Warren Buffett made in America about Sam Walton and Leonardo da Vinci what is the favorite recent movie or TV show okay so I almost watched a movie in preparation for this podcast but I really don't watch things except in the holiday during the holidays I like succession but I have not seen the latest season wow you're in the store for a treat favorite interview question you like to ask one's last time you had to teach yourself something new and how to do it and so I like to test for growth mindset and a thirst for learning and then also why dbt laughs I think a lot of people who come to dbt labs have very authentic reasons whether drawn to the company and in moments where things are tough it's the answer to that question of why why are you here it's going to make all the difference and sounds like what you look for is just like in like genuine enthusiasm yeah awesome what are some favorite products you recently discovered that you really like I like belly it's a consumer social app that lets you find and discover restaurants and rate them and with your friends it's been a lot of fun looking at the New York City restaurant scene and I heard of that awesome what is something relatively minor you've changed in the way you all do product that has had a lot of impact do fewer things and try to single thread the team is much as possible and single thread meaning like one main priority one mission yeah we're all working growing in the same direction final question you have a podcast first all tell us what it's called but a second of all what's a favorite podcast of yours other than this podcast and your podcast yeah it's called the analytics engineering podcast so if you want to learn more about the data industry I hosted every other week with our CEO Tristan handy it's a lot of fun check it out other podcasts that I really like are in-depth it's first run spotcast by Brett person he interviews a lot of operators about how they do their very best work and my other podcast that I really like is the Logan Bartlett show which touches on timely trends in tech and in depth I think Todd Jackson actually has a lot of the episodes to also each fan of the podcast definitely check it out and then name say your podcast again and how can folks find it it's called the analytics engineering podcast and it's just in podcasting apps yes amazing check it out Julia we've talked about inflicting pain and strategic partnerships and why works is better thank you so much for being here two final questions where can folks find you online if they want to reach out and how can listeners be useful to you you can find me on Twitter j i underscore a shot and seein and you can also find me in the dbt community sock also Julia shot and seein send me a note reach me there and uh love to hear for you if you're I have data problem so we can help serve your needs better would love to chat thank you so much for being here in Julia awesome thanks plenty bye everyone thank you so much for listening if you found this valuable you can subscribe to the show on apple podcasts Spotify or your favorite podcast app also please consider giving us a rating or leaving a review as that really helps other listeners find the podcast you can find all past episodes or learn more about the show at lenniespodcast.com see you in the next episode