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David Schneider: Why the Worst VCs are "Seagull VCs" & VC Value Add - Is it Real? | E1200

David Schneider is a General Partner @ Coatue and one of the great operators of the last 20 years. Prior to Coatue, David was instrumental in ServiceNow’s growth to over $100B+ public market value. David led the growth of the company from $100M to $5BN in revenue. Before joining ServiceNow, David held senior positions at Data Domain, the company he joined at $0 in revenue and scaled to $1BN in revenue and an IPO and acquisition. ----------------------------------------------- Timestamps: (00:00) Intro (01:06) Highlighting Key Achievements from an Operating Career (05:41) Biggest Takeaways in Hindsight from David’s Career (06:42) Is Adding or Removing a Line Item Key to Successful Tool Integration? (09:45) How David Approaches Competition When Investing (14:20) Balancing Transparency and Morale as a Leader (16:45) ServiceNow's Success Highlights (20:42) External Hires vs. Internal Promotions: Founder Advice (24:22) Hiring & Ramping 180 People in 90 Days (27:09) How Important Market Size in Investment Decisions Today (28:33) How Sales Leadership Sharpens Diligence & Referencing Skills (30:20) Biggest Mistakes Made at ServiceNow (33:30) Lessons from Tackling the Multi-Product Challenge (40:05) Given Advice to David on Entering Venture (42:21) Reasons Why Businesses Plateau (51:27) Is Feedback to Founders Still Valuable? (57:51) David’s Top 3 Board Members Likes Working With (01:02:09) Quick-Fire Round ----------------------------------------------- In Today’s Episode with David Schneider We Discuss: ServiceNow: Secrets to Scaling to $5BN in ARR: What are David’s biggest lessons from scaling ServiceNow to $5BN ARR? What worked? What did not work? What are the most common reasons companies plateau? How did ServiceNow roll out so many different products so effectively? How did David hire and ramp 180 people in 90 days? 2. From OG Operator to Newbie Investor: What have been the single most challenging elements of making the transition to VC? What advice did David get from the biggest names on entering venture? How long did it take David to do his first deal? What advice does he give other operators entering? How does doing deals in 2024 compare to when David started doing deals in 2021? 3. VC Value: Do 90% of VCs Really Damage Companies: Does David agree that 90% of VCs actually detract value? What does David mean when he says that the worst VCs are “seagull VCs”? What are David’s biggest tips to founders on how to get the most out of their board? What is enough ownership for David to really give the time needed to a company? 4. Lessons from the Greats: Doug Leone, Bill McDermott, Frank Slootman: Doug Leone: What has David learned from Doug on what it takes to be a great investor and board member? Frank Slootman: What has David learned from Bill on how to be the best leader of a mega company? Bill McDermott: What has David learned from Frank about decision making and execution? ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow David Schneider on Twitter: https://twitter.com/1daveschneider Follow 20VC on Instagram: https://www.instagram.com/20vchq Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ----------------------------------------------- #20vc #harrystebbings #davidschneider #venturecapital #coatue #generalpartner # #leadership #servicenow #hiring #dougleone #frankslootman #billmcdermott

David SchneiderguestHarry Stebbingshost
Sep 10, 20241h 11mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

From Seagull VCs to ServiceNow: David Schneider Redefines Value-Add

  1. David Schneider, ex–Data Domain and ServiceNow revenue leader and now growth investor at Coatue, discusses how real operating experience translates into meaningful VC value-add versus performative, low-value board behavior he calls “seagull VCs.”
  2. He walks through building Data Domain and ServiceNow from tens of millions to billions in revenue, highlighting lessons on urgency, ICP focus, sales playbooks, multi-product scaling, and avoiding ill-advised downmarket moves.
  3. Schneider explains his investment approach: how he evaluates markets, timing, renewals, customer quality and pricing risk, why some 2020–2021 vintages will struggle, and where his sales background gives him an edge in diligence and post-investment support.
  4. Throughout, he stresses people and culture—hiring scrappy talent with something to prove, giving direct feedback, empowering those closest to the customer, and choosing board members with real operating scars rather than pure “board CV” credentials.

IDEAS WORTH REMEMBERING

5 ideas

Anchor products in concrete business value: make money, save money, or avoid disaster.

Schneider insists every enterprise product must clearly show how it increases revenue, reduces cost, or prevents catastrophic risk (e.g., security breaches); if founders can’t answer this crisply, sales cycles drag and deals slip.

Build urgency and predictability with joint value cases, not end-of-quarter heroics.

At ServiceNow he used structured value discussions (“value prompters”) so executives understood the business case long before approvals, enabling him to reliably call quarters 90–180 days out and avoid chronic slip-driven mistrust.

Focus ICP and playbooks before blaming your sales team.

Winning GTM came from tightly defining the ideal customer profile, teaching reps specific stories, objections, and plays, and then hiring hungry, chip-on-shoulder sellers—“land of the misfit toys”—rather than just demanding more activity.

Don’t chase downmarket if you’re an enterprise company.

ServiceNow’s failed Express product showed that dumbing down an enterprise platform to fight low-end “ankle biters” created support headaches, unhappy customers, and distraction; it was better to own the high-value segment and let SMB competitors fight each other.

Expansion should follow customer pull, not board PowerPoints.

New billion‑dollar products at ServiceNow (HR, customer service, security) came from observing how customers were already repurposing the platform, then productizing those use cases—only after the core ITSM wedge was deeply penetrated.

WORDS WORTH SAVING

5 quotes

People buy product for three reasons: to make money, to save money, or to stay off the front page of a newspaper.

— David Schneider

There are VCs that are seagulls — they fly into a meeting, take a shit, and fly away.

— David Schneider

I realized these people were in the foxhole with me… and I should approach it from a human perspective: ‘I need help. Can you help me?’

— David Schneider

We were an enterprise company trying to act like something else.

— David Schneider

There is a difference between founder friendly and founder helpful.

— David Schneider

Lessons from scaling Data Domain and ServiceNow to multi‑billion revenuesEnterprise sales fundamentals: value, urgency, ICP, and sales playbooksMulti-product and market expansion strategy (when and how to do it)Customer success, renewals, and his contrarian view on CS organizationsVC value-add vs. “seagull VCs” and how founders should manage boardsGrowth-stage investing: pricing, market timing, plateau risks, and reservesLeadership philosophy: hiring, feedback, culture, and personal evolution

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