Sridhar Ramaswamy, CEO @Snowflake: Deepseek is Not a Threat to OpenAI & OpenAI Beats Anthropic|E1258

1. 0:00 – 1:23

   Intro

   1. SRSridhar Ramaswamy0:00

      I think it is terrifying to be a startup building on top of OpenAI. The line between an infrastructure provider and an application provider today is super blurry. There's basically no guarantee that OpenAI or Anthropic or Microsoft or Google are not going to go creative. You're not going to switch from ChatGPT to DeepSeek. It's a product, it's not a model. There's a big difference, Harry. There's a reason why Anthropic hasn't done as well, because it operates sort of at the model level. It's all of the additional things that go into ChatGPT that I think has staying power.

   2. HSHarry Stebbings0:35

      Ready to go? Sridhar, I'm so excited to have you on the show, man. It has been so long since we saw each other last as well, so thank you for doing this with me.

   3. SRSridhar Ramaswamy0:55

      (laughs) Thank you, Harry. Amazing to be here, um, and, uh, 20VC is absolutely one of the iconic names, uh, in investing. Excited for this.

   4. HSHarry Stebbings1:06

      Dude, you're very, very kind. Listen, I spoke to Margot before the show, and she said, like, "You'd be really missing a trick with Sridhar if you went straight to AI and straight to actually, like, CEO-ship." And so she was like, "You gotta just get a little bit more personal." And so I was like, "Okay, Margot, tell me more." And she said, "Start

2. 1:23 – 2:25

   Personal Journey to CEO

   1. HSHarry Stebbings1:23

      with, as your younger self in college or in your first job, did you ever imagine yourself becoming a CEO, and why?"

   2. SRSridhar Ramaswamy1:33

      (laughs) No, I did not. Certainly not when I was getting a bachelor's, certainly not when I was getting a PhD. In fact, I think when I was getting a PhD, becoming a professor, um, sounded more like the ideal. But at some point, I, you know, was not that excited about doing research, um, and, uh, that's when I switched over to software engineering. Uh, and even in software engineering, it's very much of aspire big, uh, but take little steps. Um, and yo- when you're at the right place at the right time, great things, uh, happen.

   3. HSHarry Stebbings2:09

      I totally agree with you in terms of being right place, right time, uh, says the man with a fondness on a podcast. Um, my, my question to you is, when you look at, bluntly, graduates coming out today and entering the workforce... I know you also have two boys-

   4. SRSridhar Ramaswamy2:24

      That's right.

   5. HSHarry Stebbings2:24

      ... who Margot

3. 2:25 – 8:28

   Advice for Young Graduates in a Changing Workforce

   1. HSHarry Stebbings2:25

      told me about. What would you advise 20, 21-year-olds coming into today's workforce-

   2. SRSridhar Ramaswamy2:31

      (laughs)

   3. HSHarry Stebbings2:31

      ... who are bluntly scared in some ways, looking at AI, going, "Where is there gonna be long-term jobs? Where is there not?" What would you advise a 20, 21-year-old entering the workforce?

   4. SRSridhar Ramaswamy2:42

      My kids and I used to talk a lot, they're 25 and 23, um, about what they should work on. Roughly, my advice to them was, "Find something that you're passionate about that society values." Um, I was like, "Yeah, don't pick these noble professions that we all pretend we value, but in fact we don't." I was like, "Being a teacher is really hard." Like, God bless them, but you know, um... And so hopefully by the time you have graduated, you have skills and passion in something that society values. Obviously everything is undergoing a lot of change. The best advice I have for navigating the, um, environment, um, is be open, be nimble about where change is coming, embrace change. Don't be one of those people that's like, "Yeah, the internet is never gonna be a thing." It is. AI is. And so embracing the change, seeing what is, uh, seeing what is possible, and you know, putting in the time, putting in the dedication, uh, to both excel at the job but be thinking about where things can go. Um, I think that core formula, um, of drive and malleability is the advice that I give to a 21-year-old. Honestly, it's the thing that I look for when I am trying to hire, uh, you know, take your pick, a senior exec into Snowflake.

   5. HSHarry Stebbings4:07

      I see so much of the debate going around about, hey, like, software engineering and my engineering, it's like the first place that AI is gonna really dominate. And you're starting to see that with Copilot and a lot of the tools that we see around that. Do you disagree and say, "No, there is immense value in software engineering moving forwards. Do do it, students, keep going." Or do you go, "No, that is actually the first to be impacted"?

   6. SRSridhar Ramaswamy4:32

      I think all kinds of knowledge professions are going to be impacted in a pretty big, big, big, big way. You know, my sort of the, the simplistic but, um, fairly accurate description of what AI can do is, like, it is this incredible translation layer between all kinds of knowledge. Unstructured, structured, um, it can make sense of it all in a way that only humans were able to. So I would say any knowledge worker, absolutely, including software engineers, should embrace and see where this technology is going to go. Um, I think it is too early, uh, to kind of jump to conclusions on, does this mean then that even software engineering becomes an apex profession or becomes like a thinned-out profession? What I mean by that is, uh, you know, look, after the internet, there was not a particularly good reason for every city in every country, um, to have, like, foreign bureaus sitting in Washington. It's like, why? Because the big ones, The New York Times can reach every part of the world. You get pretty good coverage. Maybe you don't like them, maybe you want some other viewpoint, but it became a handful. And so, you know, so things like journalism went from being a broad-based profession to one that was narrow. Same thing happened to music. Same thing happened... you know, so these ch- it is, I would say, a little hard to predict how much impact it is, it is going to have. Um, but to the extent that software will continue to be a huge part of everything that we do, I still see tons of opportunity in applying, you know, software and AI to more and more areas. So I'm kinda not down on software engineering as a profession any more than, say, I am down on analysts or CEOs as a profession. I joke to people, "I'm an email machine. That's all I do. Um, I talk and I write, um, and I read." And, uh, and so...... I think, again, like, embracing the future, seeing where it can go, being nimble is what it's going to take. I don't think software engineering is going to disappear anytime soon.

   7. HSHarry Stebbings6:46

      (laughs) I love the simplicity, "I am an email machine." Yeah, w- wonderfully done. Uh, uh, people always think that you just get better over time in CEO-ship, and you're just ba- phenomenal with the years that go by, and you present this wonderful facade. Can I ask a weird one? What have you got worse at over time?

   8. SRSridhar Ramaswamy7:02

      Uh, it's a good question. I think, um, you know, like, look, physical skills are harder as you grow. It's just, uh, just how, how it rolls. Yes, once upon a time, I would not think twice about a 20-mile run, no prep. It was like, "Eh, okay, let's go, you know, run for a bit." Um, not going to (laughs) happen today. But I think the mental thing is very much that is under your control, and that's the part that I'm happy about. Um, I'm relentless in terms of pushing myself, both to learn, to measure, to adapt. When it comes to physical stuff, it is harder. The other thing that we have to be realistic about as you grow older, um, is your ability to just sink a huge amount of time into a brand-new area is kinda limited.

   9. HSHarry Stebbings7:50

      Mm-hmm.

   10. SRSridhar Ramaswamy7:51

       And you have to have the humility about stuff like that. I joked... You know, my sons, uh, one of them is, like, 23 years old. I'm kinda like, "Yeah, you're not really going to be a concert pianist in your life." Like, that part is done. And so we have to accept what is changeable and what is not changeable. Um, but especially when it comes to mental things, I would say for the agile, driven person, the world's your oyster. I mean, and now we have all of these, like, language models that can, you know, create custom programs for you and do just amazing things that you'd never be able to do before. So, in that sense, I think there is even more opportunity than before when it comes to

4. 8:28 – 13:00

   Balancing Intensity & Team Sustainability

   1. SRSridhar Ramaswamy8:28

      the mental stuff.

   2. HSHarry Stebbings8:29

      You said about 20-mile runs, you said about relentlessness... Uh, by the way, I think you're still an Adonis, so I don't know what you're talking about. But I spoke to many of your friends, and they said you op- operate with an intensity that is incredible. And I'm like, "Gosh, it's another just, you know, praise of Sridhar."

   3. SRSridhar Ramaswamy8:46

      (laughs)

   4. HSHarry Stebbings8:46

      And they said, "But no, because people around you struggle to keep up." And I'm by no means running 20 miles and, you know, as athletic as you, but I am intense, and people struggle to keep up with me too, and I struggle with that. What advice would you have for me and other high-intent CEOs who need to bring people with them, but it's difficult?

   5. SRSridhar Ramaswamy9:10

      I think making sure that people understand the big picture, uh, the fleeting nature of opportunity, um, and how quickly it can, uh, disappear. You know, I run a company that is making, call it three and a half billion dollars, roughly, a year. If you think about things like the world GDP, um, inflation adjusted, it grows by, what, 1, 2, 3% a year? You know, it's, uh, it is, uh, 100 years, uh, if something is growing at a percent (laughs) for it to kind of double, or a little bit less than that, give or take. You're talking about doing that in two years. Um, I think the first thing that I tell people is, um, we are extraordinarily lucky to be in environments that can generate this much value and this much growth, and to sustain it and accelerate takes extraordinary people. It's not for everyone, and I'm okay with that. But let me tell you what it takes to succeed at Snowflake. The expectations are high because the returns are high, the opportunity is big, and the opportunity cost is even bigger. And so I think it's a question of what do people want to be a part of? Um, at Snowflake, we absolutely want to be that data engine for every single enterprise on the planet. I think that's a pretty amazing mission. Plus, we get to build an iconic company along the way. It takes special people. I don't have to make excuses for them.

   6. HSHarry Stebbings10:50

      When you hire someone thinking that they are able to scale through different stages of company development and you are wrong, why have you been wrong?

   7. SRSridhar Ramaswamy11:00

      Look, these things are unpredictable. Life is very long, um, and people also change over time. Um, there is a certain something that, take your pick, 10, 15 million pounds is going to do to people. Um, part of the reason why... I joined Google in 2003, a year before the IPO. Honestly, part of the reason why I succeeded, because a bunch of people that joined in 2001 and '02 all of a sudden were worth $50, $100 million, and they said, "Life's great. I'm out."

   8. HSHarry Stebbings11:31

      (laughs)

   9. SRSridhar Ramaswamy11:32

      Uh, honestly. Yeah, I don't blame them. Um, and, but that's part of, uh, you know, what it takes to, um, have a driven team. Uh, not everybody can scale. I've had lots of conversations with people about, "What does it take to double your team?" And roughly, my advice has always been, "Listen, every time your team doubles in size, um, all of the things that used to make you wonderful for your previous team are typically massive inhibitors for you to succeed in your new job." I'm not sure you, like, you really internalize that. Um, and it requires a lot of reinvention for what people have to be and how they have to operate. Um, you know, there are quite a few people that can make these transitions, that will adapt and that will thrive. Um, I almost see it as my, my duty, my job, my responsibility to give people those kinds of opportunities. But look, I'm also kind of, um, relentless and cutthroat in that I give people time, I give people opportunity. I... One of the things I've learned as an adult is how not to shirk from unpleasant conversations. I talk to people about what is working and what is not working. I give them time.And if it doesn't work, it doesn't work. Um, I have-

   10. HSHarry Stebbings12:53

       (laughs)

   11. SRSridhar Ramaswamy12:53

       ... demoted people, given them half their job, and said, "This is better for you, one of the hardest things you have- you can do

5. 13:00 – 16:59

   Navigating Difficult Conversations

   1. SRSridhar Ramaswamy13:00

      in your life."

   2. HSHarry Stebbings13:00

      Do you have any tips on how to actually force the hard conversations? Don't laugh. Whenever I have an email that I don't want to send or don't know how to send it, I force myself to go in the lift (laughs) in my apartment building, and whatever I've written, by the time I get to the other end, gets sent, and that's the deal with myself. Do you have any tips on how to actually force that?

   3. SRSridhar Ramaswamy13:21

      Yeah. (sighs) I mean, the first thing to remember is that, you know, conflicts typically do not resolve themselves. And so, you kind of have to internalize that postponing things is going to make them worse, and the more you postpone, the worse it gets. Um, I think, like, just telling yourself that is, um, is important. Uh, and the other thing is, uh, avoiding the hard conversation is typically also doing the other person a disservice, um, because you're not helping them. Not all hard con- hard conversations need to be, like, you know, um, "You're out of your job." They can be much more of, "Here are areas where I think things need to go better, and let me tell you why. Let me tell you what my expectations are." And I think it's also important to be respectful, and I f- I find it important to be just painfully humble in these conversations, um, where I will typically go into- go into the conversation, and I'll go, "Listen. This is going to be a difficult, um, and unpleasant conversation for us. I'm just coming out and telling you, and I'm not pretending I know all the answers. This is super awkward for me to have this conversation, but I feel it's important that we have that- we have the conversation." Um, to me, that combination of, you know, respect, straightforwardness, and humility goes a long way.

   4. HSHarry Stebbings14:48

      Final one before we move to AI, you mentioned, like, the demotion element there. That's a really hard thing to do. If you're willing to demote someone, does that not just mean you should fire them? Someone once said to me, "If you're willing to take less, you should never do the deal." And I kind of apply that here. If you're willing to have them but give them less, should they not just go?

   5. SRSridhar Ramaswamy15:06

      Um, there are situa- remember, all of these are fast-moving environments, okay? An area that you thought could be done fine with 20 engineers blew up. All of a sudden, it needs 100 people. Um, and the person that did- did the job fine with 20 now is holding a portfolio of, like, 40 people needing to grow to 100, and they're struggling, and the business can't wait. It's not that they are bad people. It's not that they are, you know, incapable of doing a good job. But to me, finding the, uh, like, the right context, finding the right framework to help somebody succeed at a given point in time, you know, it's- it's okay to have those sorts of conversations. I had one director, um, who, uh, was in charge of, accidentally became in charge of two different areas. Um, and part of what I went and told him was, "I am taking one of these areas away. By the way, the thing that you have in your hands is going to grow to be..." And I think I promised him a $40 billion business, okay? But I was like, "In five, six years," that is, this was Google Shopping, "this is what we are, um, looking at, and- and it's a big opportunity, but you get to focus on a single job." You know, that person took that job, eventually became a- eventually became a VP, was enormously successful. Um, but it's a lot of selling, man, because people are like... You know, when- whenever you have a conversation like that, the first reaction people have is like, "I'm a failure." Like, "No, you're not. You- you've been given an impossible job. Let's shape it to make you succeed." Um, again, that is real leadership.

   6. HSHarry Stebbings16:50

      Righ-

   7. SRSridhar Ramaswamy16:50

      Going and selling something that people don't want, and painting a vision for the future, um, and getting them to stay, that's

6. 16:59 – 18:25

   The Role of Wealth in Leadership

   1. SRSridhar Ramaswamy16:59

      hard.

   2. HSHarry Stebbings16:59

      Do you think richer leaders make better leaders? Because you are more convicted, you're not so worried about downsides, you're not fearful about, bluntly, "What happens if I lose my job or if something happens?" Do richer leaders make better leaders?

   3. SRSridhar Ramaswamy17:16

      No.

   4. HSHarry Stebbings17:18

      Hmm.

   5. SRSridhar Ramaswamy17:19

      I mean, I think it can make them, uh, callous. It can make them a little too tolerant of massive amounts of risk. It's a- it's a balance. You always have different constituents, and it's important to remember that as a leader. Like, it's not just you. It's the employees in your company. It's your, uh, it's your shareholders. It's your customers. Um, we went through, uh, a pretty difficult, uh, time as a company last year, and that's when it bec- sort of clearly came into focus, this affects a lot of different people, um, and, uh, it isn't always about swinging for the fences. Yes, sometimes you have to make that dramatic 90-degree left turn, uh, to get to some- to get to someplace. Um, but, you know, I- I- I- I don't think that being in positions where you're personally unaffected by the outcome from a dollar perspective is necessarily a positive

7. 18:25 – 24:41

   Sustainable Value in the AI Market

   1. SRSridhar Ramaswamy18:25

      thing.

   2. HSHarry Stebbings18:25

      I- I want to move into the world of AI-

   3. SRSridhar Ramaswamy18:28

      Yeah.

   4. HSHarry Stebbings18:28

      ... as- as we would. I wanna, uh, first just ge- get your advice on a scene. We walked around Hyde Park together, and I'm looking at this market today as an investor going, "Where is that sustainable value going to be generated?" It seems like models get commoditized faster now, and I think DeepSeek has shown that in the last few wee- weeks. A lot of application layer, uh, material seems pretty light in terms of just building on top of commoditized models. How do you think about where sustainable value is in today's AI market?

   5. SRSridhar Ramaswamy18:59

      I think part of... You know, I had a conversation with some folks from OpenAI and an application company, one of these coding platforms, um, and what I was telling, uh, you know, what this conversation was about...... is, um, the, the line between an infrastructure provider and an application provider today is super blurry. In a weird way, um, if there is a, um, let's say, a brand new application to be created, um, there's basically no guarantee that OpenAI, or Anthropic, or Microsoft, or Google are not going to go create it. All of these, at this point, are driven, motivated companies, and they pretty much go like, "Ooh, coding assistant. That's taking off. Oh, that's fine, I'll do a coding assistant." Um, or something else, "Oh, I see. People are, uh, uh, generating much better legal documents. Ah, maybe we should release, like, a, a legal, uh, ChatGPT." Something. Um, to me, I think that is part of what makes value creation in today's environment, like, really tricky, um, to figure out. I would say that the place where, um, there absolutely is value, you know, creation is with companies, um, that have a set of customer relationship, deliver clear value, and are willing to embrace AI fast enough that a disruptor is not going to unseat them. This is why I feel good about Snowflake, because we are a data platform. We help people, you know, um, collect data, make sense of data, run analytics on the data, run, you know, predictive, uh, things like machine learning on top of the data. I see AI as a massive accelerant for the data life cycle, and also for data access. You know, it... Will somebody that starts with these foundational new capabilities as their starting point be better than Snowflake, um, but starting from zero, mind you? The bet is that they won't be. So, I see, like, AI clearly creating value. You see, uh, for example, Salesforce doing this, um, with some pretty cool work with Agentforce. They're very much going, "We have relationships. We are going to disrupt ourselves. We are going to be out there." Um, but all new value creation, I gotta tell you, is just... It's, it looks very, very murky in terms of long-term value. There's value in product. It's really important to understand that OpenAI, I think it will be successful not because they are always going to be the best and cheapest at creating foundation models, because they have a product experience that, by some accounts, has half a billion loyal users. Um, that is really hard to create. Um, I think there's value accruing on the product side.

   6. HSHarry Stebbings21:58

      Do you think they're loyal? I mean, DeepSeek gets to number one in the charts in a day. Uh-

   7. SRSridhar Ramaswamy22:03

      You're not going to switch from ChatGPT to DeepSeek, and OpenAI is not stupid. If they can host DeepSeek to power some of ChatGPT, they will shamelessly do it, as they should.

   8. HSHarry Stebbings22:12

      Why would you not switch to DeepSeek? It w- it's free.

   9. SRSridhar Ramaswamy22:16

      So is ChatGPT, and it comes with a bunch of additional features. It's a product, it's not a model. There's a big difference, Harry. There's a reason why, like, you know, like, Anthropic, um, hasn't done as well, because it operates sort of at the model level. It's all of the additional things that go into ChatGPT, that ability to create images, that ability to do that little upload, that ability to run that little bit of code. It's like, it is a put together product that I think has staying power.

   10. HSHarry Stebbings22:48

       I- I've had Sam on the show, and he was like, "You know, we will steamroll startups." Uh, he put on a 20 VC jumper, which made me very happy. I was thinking branding. And then he, first thing was like, "We're gonna steamroll startups." And I'm like, "Oh, God. Oh, no." (laughs)

   11. SRSridhar Ramaswamy23:02

       (laughs)

   12. HSHarry Stebbings23:02

       Um, that's not great for my venture fund (laughs) . Um, but my question to you is, if you were Sam then today, what would you do? We had the founder of Groq on the show last week, and he said he has to open source.

   13. SRSridhar Ramaswamy23:14

       W- well, I mean, Sam is, Sam is succeeding, um, as I s- as I said, in terms of having a consumer product that is approaching, like, let's face it, like Meta and Google scale. Yes, some of it is because of the incredible publicity machine that Sam and OpenAI are, but dude, which was the last company that you heard about, um, that got to 500 million, um, you know, users without really, like, paying for advertising in recent years? Like, that's not a social network. Like, none. What is happening is truly, um, remarkable. You know, there's al- always been a little bit of mystique around OpenAI and their closed-source models. Um, and it's also now becoming clearer that they are good at misdirection in terms of where (laughs) , you know, where they tell people hard problems are. Um, and it is good that people like DeepSeek, you know, went and busted some of those, uh, some of those myths. Um, but I would separate out the success of OpenAI the company, um, from what's going to happen to models. Obviously, there are other cons- you know, other things that they want to do, um, like bet so big on AGI. You know, there's the new company that's, um, you know, that's in the mix. But one point that Sam made too, I completely agree with, um, which is, I think it is terrifying to be a startup building on top of OpenAI.

8. 24:41 – 28:48

   Competing with Giants: Snowflake's Position

   1. SRSridhar Ramaswamy24:41

   2. HSHarry Stebbings24:41

      To me, there was, like, two points where I'd be like, "Hmm, what happens there?" Which is like, number one, when you look at NVIDIA beneath you in the stack, I'd be concerned that they start to build a Snowflake competitor. To what extent do you worry, consider Snowfl- uh, NVIDIA moving into your segment and being a competitor?

   3. SRSridhar Ramaswamy25:00

      I mean like, look, I have to have the same worry about the CSPs. Um, I always have to be watchful, um, about things like that. Uh, AWS has, uh, has Redshift. Microsoft has Fabric. Google has, uh, has BigQuery. Uh, Oracle has their data warehousing platform. Uh, you should always be worried about being a little mouse in the land of giants. If they sneeze, you might get blown off. I mean, I, I get it. Um, but on the other hand, I tell people, "Listen..."... um, it's OpenAI and Anthropic that have created the best models on the planet for the last three years. It's not Microsoft, it's not Amazon, it's not Google. With, like, you know, Gemini is good but, let's face it, it's at best a fast follow. The thing that I tell people, um, is... You know, and you know this better than anyone else, Harry, a startup is a- a th- with product market fit, is like a living, breathing thing. It's magic, man. It's not like you and I know how to just create it just with some words and with some ideas. Snowflake is a manifestation, is a realization of that magic. It is hard to create a data product by copying. Um, you have to keep innovating. Obviously, it's like, Databricks has come up in the last five years as a very credible player in the data space. More, you know, more kudos to them. But there are things that we at Snowflake are very proud of, and very different from how Databricks operates. We need to continue to innovate and be up there but, dude, money doesn't buy you amazing foundation models, doesn't buy you Snowflake.

   4. HSHarry Stebbings26:39

      My question on NVIDIA was one side of that. The other side, you mentioned, was Databricks and, you know, I- I spoke to friends, board members, investors, and they said that, potentially, Databricks might be ahead in AI workloads with Mosaic, with MLflow, direct model hosting. How do you think about that? Do you think Snowflake is behind in that respect?

   5. SRSridhar Ramaswamy26:59

      Uh, so we should separate out, um, machine learning from AI. Um, I joke to people that all of the machine learning people branded themselves as classic AI. Um, and, uh, uh, look, uh, they were first to market. That was their sweet spot, and they've been good at it for a, um, for- for a while. Um, we were very much in a, in catch-up mode. Um, but AI is a much younger field, uh, didn't really exist, let's call it pre-ChatGPT. Um, there, I feel incredibly confident, um, that we are not only cutting edge, um, but ahead of them on- on a number of fronts. Um, we have thought of, um, both methodically but very quickly, made AI into a reality at Snowflake, in everything from "How do you do data transformations, data engineering better?" to "How do you make sense of unstructured data?" Um, and "How do you," you know, "how do you get reliably, um, to structured data?" And then we are putting all of this into- into this agentic framework called Snowflake Intelligence that is coming out. Um, that's... When it comes to AI, I feel very good about where Snowflake is. Um, that isn't an issue. I have work to do in terms of, uh, getting the word out there, um, getting more and more customers. We have amazing marquee names, um, you know, like Siemens, like Elevance, like Bayer, a ton of them that are using Snowflake AI in, uh, um, in production. So, I feel good about where we are on a, um, where we are on that side, and it's a fast-moving space. And, uh, the thing that I pride myself on, and the AI team, many of whom I've worked with for a lot of time, is, uh, in fast-moving spaces, my attitude is, "I can run as fast as anyone else.

9. 28:48 – 33:11

   Innovation Under Constraints

   1. SRSridhar Ramaswamy28:48

      Bring it."

   2. HSHarry Stebbings28:49

      It... You kind of remind me of Nick from Revolut, which is like, when you're talking, you're like, "You know what? I don't wanna fight you. Y- you do you, I'm gonna support you." (laughs)

   3. SRSridhar Ramaswamy28:59

      (laughs)

   4. HSHarry Stebbings29:00

      "Uh, I'm a believer, dude. Keep going."

   5. SRSridhar Ramaswamy29:02

      (laughs)

   6. HSHarry Stebbings29:02

      Um, so, yes, I completely get you. Can I ask, which structure do you think aids innovation better and aids winning better, being a super late-stage private today, like Databricks, or being a public company like Snowflake?

   7. SRSridhar Ramaswamy29:20

      Innovation is not an option. It's just something that we have, uh, to do. Um, do I have con- more constraints, um, than, uh, uh, Databricks being private? Absolutely. I mean, it's very clear that they're buying a bunch of business, um, that they don't have to worry about things like, uh, you know, uh, free cashflow. Uh, they have double the number of salespeople that we have. Um, but as I also tell people, "You know, it's easy to lose a lot of money." It's very easy to be uncalibrated about spending money. Uh, you should be careful what you, um, wish for. Do we operate under constraints? Absolutely. But that's what innovation is about, is, how can you drive in the face of constraints? And you know this. In some ways, like, DeepSeek is yet another illustration, um, that, you know, uh, having rich uncles is not always a good thing.

   8. HSHarry Stebbings30:10

      Can I ask, where have the constraints helped you, and where have they hurt you?

   9. SRSridhar Ramaswamy30:15

      I mean, like, with AI, for example, we said, "We were not going to be unreasonable about how large that team is." I didn't ask for a blank check. We said, "We know what we need to do. We need to foc- we need to have clarity around the things that we need to build, and we need to be very good at, um, at- at doing it." And, uh, you know, also, um, with a modest investment, um, we were able to very quickly catch up in AI. Um, I think having those constraints drives clarity. You are not trying to do everything, and you're not also trying to chase every possible unscalable, you know, kind of, uh, kind of business. Um, constraints can be problematic, um, when, um, there are dramatic market reactions, for example, because people can over-interpret, um, you know, changes that happen, um, quarter to quarter in numbers. Uh, and, um, and I would say, in some ways, um, like, the Snowflake stock journey, the ups and the downs and then the ups, um, are a reflection of, like, the scrutiny, um, that a public company faces. In an ideal world, I am able to tell my team and investors, "We got this covered. Um, you know, just don't worry about it. Everything will be great."Um, absolutely you have to worry about it, because people are making mortgages based on what their stock is worth, and so you get into externalities, um, that are difficult to, uh, you know, difficult to manage. Um, it raises the bar on operating responsibly. That's sort of what we had to learn quickly last year. But that's an example of something where, being a public company, you don't have to worry about dramatic reactions because they can end up having a bunch of second order consequences.

   10. HSHarry Stebbings32:04

       If you could, would you rather take the company private and remove the constraints?

   11. SRSridhar Ramaswamy32:10

       No. I think the visibility is a good thing. You don't get to bullshit anyone. Um, I think, uh, it provides for, uh, uh, it provides for liquidity. Um, and, uh, being able to grade yourself, I think, is an important part. Um, it is very easy to fool yourself into thinking, um, that things are gonna be great and you don't get, actually get any, uh, any feedback. We are in the world of, like, almighty dollars. Um, they are well calibrated. I can't, like, you know... Either you make money or you don't. Either there's free cash flow or there's not. I think that dose of reality is actually helpful. I mean, even if you, even if you look at, you know, um, the competitor that we talked about, for a few months it was all about, like, "Amazing AI is going through the roof." I haven't heard much from them about AI recently. All of a sudden, "Amazing, it's equal going through the roof." Um, it feels like a bit of three card monte to me, and I think being a public company forces you to be open and, you know, and, and show your work

10. 33:11 – 35:11

    The Future of AI and Snowflake's Strategy

    1. SRSridhar Ramaswamy33:11

       all along the way.

    2. HSHarry Stebbings33:12

       I want to touch on two areas, which is kind of enterprise adoption of AI first. Um, uh, uh, you know, I was sitting with a bunch of CEOs at a summit the other day, uh, as painful as they can be, as we both know, and they were like, "Hey, you know, we're still waiting on you fuckers from technology land (laughs) to actually deliver much ROI." And my question to you is, do you think we've seen, like, excitement, and then we're gonna plateau like we did with self-driving? Or will we actually just see the exponential acceleration of adoption within enterprise, and it will bluntly be a very smooth hockey stick up into the right?

    3. SRSridhar Ramaswamy33:45

       I think it is going to be gentler in terms of, uh, just growth. On the other hand, um, I can very confidently tell you that AI is creating, um, value today, and it'll continue to create enduring value. Um, many, many things that used to be just crazy hard for you and me to deal with are easier. You know that, I know that. And if some CEO is telling you that they're seeing no value from AI, I'd be like, "I am not sure you know a whole lot." Um, so let's get into the examples, right? The obvious easy ones. Okay, I was at Davos. I did 30, uh, 30 meetings. Um, I absolutely used things like dictation and transcribing tools to write, uh, to write notes for myself. I also hand-wrote a whole lot of notes. And, uh, you know, somebody on my team is like, "Oh, dude, 25 pages? Really? I don't wanna read this. How about you give me a summary?" I just take it, I plunk all of my notes into Claude, and I go, like, "I want a one-line summary per meeting." Out comes the beautiful, concise summary. It's magical. Similarly, um, you know, we have, uh, uh, internal, uh, chatbots that have access to structured data. Um, and they can handle questions that you have to, like, click around in dashboards and, like, you need to provide a lot of context. Um, again, incredible

11. 35:11 – 36:46

    Insights from Davos: Utility and Innovation

    1. SRSridhar Ramaswamy35:11

       value.

    2. HSHarry Stebbings35:12

       Davos is an interesting collection of world's biggest CEOs.

    3. SRSridhar Ramaswamy35:16

       Yeah.

    4. HSHarry Stebbings35:16

       Was there any enduring takeaways for you from the sentiment that you saw at Davos?

    5. SRSridhar Ramaswamy35:21

       I mean, first of all, I took a very utilitarian view of Davos, and less into, you know, um, uh, the bigger thing. This was my first time, and I was terrified by the idea of spending five days, um, away from work, uh, especially with, like, board and earnings, uh, coming up. It was well worth it. Uh, amazing number of meetings, um, amazing number of key folks from, uh, uh, from companies. You know, the message that I heard, uh, from, um, uh, CEOs was much more that of, "Help us create utility. Tell us what is possible." And when I talked to them both about what we can do with unstructured data, um, in terms of being able to create a chatbot on a document corpus quickly or structured data, they got it. But then when I tell them, "Now you get to mix and match them and create, um, agentic platforms, um, by where you can access a whole lot of related information in one place," uh, people are excited. Um, then I talk to them about, "Here is how you can automate parts of underwriting by bringing together all of the structured and unstructured information that you need to have in order to underwrite and, you know, like, insurance for a building," people are like, "Oh my God. That is, that is amazing." You're correct. We need to continue to be focused on utility, but I didn't face a lot of, like, rampant skepticism about ʻhui because I would just whip out my phone and show them, "Here are the five stupid and fun things I did yesterday with AI."

12. 36:46 – 39:10

    Incumbents Innovating at Unprecedented Speeds

    1. SRSridhar Ramaswamy36:46

    2. HSHarry Stebbings36:46

       Can I ask, in terms of, like, innovation speeds, it feels like we've never seen incumbents innovate at the speed that they are. You know, I'm friends with Scott Belsky, for example, who, obviously former CPO to Adobe-

    3. SRSridhar Ramaswamy36:55

       Yeah.

    4. HSHarry Stebbings36:56

       ... just recently. Like, everyone's moved so much quicker. The whole point of tech ʻshredar was, like, incumbents are super slow and shit. They're not slow and shit anymore.

    5. SRSridhar Ramaswamy37:05

       Yes.

    6. HSHarry Stebbings37:06

       What's happened? Have you ever seen incumbents move this fast?

    7. SRSridhar Ramaswamy37:10

       I think it is three cycles of disruption. All of us remember our history. We all know no one wants to be the person that is going to be known for the IBM deal with Microsoft. Um, people understand how much of a dramatic shift that was, um, and how, you know, companies like DEC... Remember DEC? Disappeared, man. We took over SGI's buildings. They were the darlings. Um, the first buildings that Google took over in Mountain View, um, was the SGI Plex with that funky purple.Uh, and I used to tell all, uh, you know, everyone that joined my team for, like, five years after that, "You know, SGI built these buildings." Um, and then I would look at them to see if they got it. And so we learned from that. Um, but I would actually say that mobile was a big platform shift in which the incumbents did pretty well. Um, you know, remember, Mark went after mobile web for Facebook, and then said, "Forget it. I'm doing an app." Similarly, same with Google. They, they, they took search, um, moved it over. I led my team for five terrifying years when we took mobile monetization from being 10% of desktop to being 100%. And so I would actually say, even in the previous round, all of the tech players got pretty smart. Amazon didn't get disrupted because of mobile. Mobile did produce truly new things, like Uber and Lyft, but I would say that generation of companies had already smarted up to the world that platform disruptions were, um, were going to be a pretty big deal. And this is why you see these companies do, like, these crazy investments into the future, because they see something, and they have the money to be able to do it. This is why Facebook became Meta. And you know what? Mark doesn't care that, uh, augmented reality fell, uh, flat on its face. He's like, "Bring it. Okay, I'm onto AI now." I think that is companies truly learning from the past and innovating hard.

13. 39:10 – 41:12

    The AI Arms Race: Investment & Innovation

    1. SRSridhar Ramaswamy39:10

    2. HSHarry Stebbings39:10

       Shridhar, where, where does this go? You're, you're... I, I hope you're my friend. Please advise me. I'm seeing, you know, Mark invest $65 billion in data centers. You're seeing the $500 billion announcement of Stargate. I know there's equity in debt, and it's not such a straightforward (laughs) deal, but we've never seen money thrown at anything like this. This is the kind of arms race of AI. Where does it end?

    3. SRSridhar Ramaswamy39:35

       I mean, with a bubble bursting, as all bubbles do. Uh, there's, like, this super, um, funny conversation and, uh, insightful conversation that, uh, um, Ben Thompson from Stratechery had with, uh, uh, Nat Friedman, uh, where they talk about, you know, is this a good bubble, um, like the telecom bubble in the '90s that eventually laid, you know, fiber for the whole world that Google and Facebook and you and I took advantage of? Or is this the dumber webvan stuff that just, like, burnt money in the early 2000s, trying to get you groceries, and we had to wait 15 years for Instacart to then show up? Let's face it, you and I don't know. And if the bulk of those investments are going into things like power and buildings, you can say, like, "Okay, it's created surplus for the world. Something good is going to come out of it." If, on the other hand, it goes into crazily depreciating hardware, you know, that is value disappearing, uh, in a poof. I think it's early. But back to your point about, what do we do? There's still scope for innovation. I think, like, every... OpenAI pos- cannot possibly do every workflow that there is. And what you and I need to do is, what are the things that are, you know, still ripe for disruption? Where is value being created? I think Harvey's a great company. I don't think it's going to get disrupted by OpenAI. And so I think finding niches like that and investing in them is kind of our formula for success. Money doesn't always buy you stuff.

14. 41:12 – 43:18

    Growth Strategies: M&A & Product Innovation

    1. SRSridhar Ramaswamy41:12

    2. HSHarry Stebbings41:12

       It, it absolutely doesn't. S- speaking of money doesn't always buy you stuff, you know, you know, the street is saying like, "Oh, the thing with Snowflake is, where's growth?" To what extent can you buy growth? And how do you think about an M&A strategy going forward to add the extra 10 points of growth to get the street to where they want to be?

    3. SRSridhar Ramaswamy41:29

       (laughs) First of all, um, three and a half billion going on 30, um, sounds pretty cool to me. Um, obviously, we have to, we have to sustain it. It's not a bad place to start from. Um, but, uh, what we have done, and I said this in our last earnings, is we have significantly expanded the aperture of what Snowflake is taking on. Um, we played at the goal layer. We said, "You do analytics with Snowflake, and oh, by the way, we do a little bit of machine learning." We have gone from that to, "We will help you with data ingestion. We will help you with, like, we want to be a key part of how you set up data engineering." Absolutely, analytics and machine learning and, you know, end-user access with AI, um, both in terms of tools that we create, but platforms like Snowflake Intelligence. The aperture just got a whole lot wider, and we have a team that is not only driving things like, how do we get even more of the analytics market, which is our sweet spot, um, but going and disrupting others in each of the other very large segments that there are in the data space. Absolutely, we will continue to look at, uh, you know, companies, um, but, you know, an inorganic, kind of unrelated acquisition strategy, uh, is not something that I'm excited about. I think it'll be a disruption. Snowflake is a product-led innovation company. We're not a PE shop. Not that there's anything wrong with being a PE shop. It's just a different skill. Um, that's not, uh, that's not us. And so a lot of our growth has to be driven by product innovation. Um, will we do smart acquisitions here and there? You know, Snowfl- you know, Snowflake spent some $150 million for Iniva. I think it's more than paid for, uh, itself. Those are the kinds of things to be doing.

15. 43:18 – 44:36

    Future Revenue Streams for Snowflake

    1. SRSridhar Ramaswamy43:18

    2. HSHarry Stebbings43:18

       What line of revenue is small or insignificant today for Snowflake that in 7 to 10 years will be a dominant line of revenue that we should consider?

    3. SRSridhar Ramaswamy43:29

       Starting with AI, 100%. I think it's going to be a, um, I think it's going to be a big deal. I think it offers the opportunity for disrupting AI as we know it, uh, today, more off a direct to, direct to consumer. Um, I actually would say the thing that can turbocharge growth for Snowflake is people building on Snowflake.We have the likes of FactSet, of JPMC, of BlackRock, Fiserv, Siemens, they're all building data applications on top of Snowflake, and we let them do some pretty nifty things when it comes to how they can bring together both their own data and data from their customers in order to create these data applications. I would say that is small today, but I fully expect that that'll be a pretty massive, um, like, overall revenue opportunity for Snowflake. And the really cool thing about this is, we go from being an expense item to actually being part of the top line of these companies, much better partnership dynamics, as you can imagine. I want to be able to say, "We make money when you make

16. 44:36 – 48:23

    The Landscape of AI Models

    1. SRSridhar Ramaswamy44:36

       money."

    2. HSHarry Stebbings44:36

       Can I ask, if we expand that to kind of the model landscape, I look at it and I go, "I don't know where this is in five to seven years." Do we have a world of many models, specialized and verticalized? Or do we have a world of fewer models, generalized and very large? I'm just intrigued, especially with the Google experience that you have. It's such a unique perspective. I'm- I remember reading, or like, historically, where people thought search would actually be verticalized at a certain point, and they did not anticipate these huge, multi kind of behemoths really owning it all.

    3. SRSridhar Ramaswamy45:08

       I think this is a really good question, and, uh, you know, unfortunately, my answer is going to be predict early and predict often. Um, uh, so okay, if we were to, um, deconstruct, um, Google Search and why it came to dominate. First and foremost, uh, Google did a bunch of deals to basically become the default search engine, with a whole pile of players, Yahoo, AOL, um, and then soon, uh, people like Firefox, um, and then all the PC manufacturers. It was a very deliberate strategy to be the center of search. Microsoft was asleep at the wheel for a lot of those early years. That's kind of how Google got started. Organic marketing was a part of it, but honestly, it was a small part of it. It was the gravitational pull that enabled them to then go knock out every other vertical that there was. It will amuse you to know, um, that live.com, which is a predecessor to Bing, had the better image search. They had the best image search. Google did not. Um, but with this thing called universal search, um, basically Google said, "Oh, you're looking for images. We will put them right on the main search page. You don't need to go anywhere." Um, that basically was the vector, um, by which Google conquered pretty much every other vertical that there was, whether it is shopping or videos or maps. So, that is how, by that central sticky property, um, that is how Google conquered the consumer world. Now, if you look in the world of AI, it isn't obvious to me, especially in the enterprise, that there is a single entry point. Um, on the consumer side, I know you disagree, I think ChatGPT is getting to be that entry point. And so if I were a betting person on the consumer side, to the extent that there are variations in models and specializations, um, I think that'll accrue to the incumbent, and the incumbent, 100%, is ChatGPT and OpenAI. Um, I think entry points for other models are just fragmented. At some point I used to worry about, uh, you know, oh my God, is there going to be one single enterprise enter- uh, entry point that is going to conquer them all? I still worry about it. I think there is still that kind of, uh, opportunity. Um, but on the enterprise side, I absolutely see, um, there being all kinds of specializations, because so far, in whatever, the last 50 years, it's not the case that there's been an equivalent of Google Search.

    4. HSHarry Stebbings47:51

       And I also love the kind of historical analysis there on Google's distribution strategy with the partnerships. I didn't know that to such extent. Um...

    5. SRSridhar Ramaswamy47:59

       Oh, all of us think Google, immaculate conception, one fine day, all of us decide we should use Google.

    6. HSHarry Stebbings48:06

       Which was the most needle moving?

    7. SRSridhar Ramaswamy48:09

       In terms of what?

    8. HSHarry Stebbings48:10

       Distribution. Which partnership would you say had the largest impact on Google's distribution ability?

    9. SRSridhar Ramaswamy48:16

       Yahoo and AOL. Early on. Those were the entry points. AOL didn't know how to do search. Yahoo didn't think search was

17. 48:23 – 50:28

    Lessons from Google's Distribution Strategy

    1. SRSridhar Ramaswamy48:23

       important.

    2. HSHarry Stebbings48:23

       Does being first really matter?

    3. SRSridhar Ramaswamy48:26

       100%. If I remember correctly, the- we paid, um, AOL more money than we made. It was- it was like 100+ percent rev share. Why? Those were the most valuable users then.

    4. HSHarry Stebbings48:40

       (laughs) .

    5. SRSridhar Ramaswamy48:42

       Talk about ... You know, the Google founders were amazing. They made a bunch of just incredibly smart business decisions. Yes, it was a great product, but people underestimate the power of business.

    6. HSHarry Stebbings48:55

       When you go back to those days, and you reflect on them, is there anything now where you sit as CEO of an incredible three and a half billion dollar revenue generating public company, and you think back and go, "I can take that. I can learn my lesson here." What are those?

    7. SRSridhar Ramaswamy49:12

       Um, relentlessness. I still remember, like, every discussion with Larry and Sergey used to be exhausting. They never ended. They just argued with you. Like, every single topic. Um, and but you know, good stuff came out of that. You examined every possible thing, um, and you pushed yourself really hard. I also joke to people that, uh, by the time I became head of ads, um, things like working with the legal team was a whole lot easier, because they had been battered around by Larry and Sergey just pushing the envelope with things like Google Books or YouTube, uh, which was a legal nightmare, um, early on. Um, and so, you know, I- that is my sort of like-... my lifelong takeaway, um, which is pressing hard, being, you know, being very first principles. Remember the Dutch auction? What other company has done the Dutch auction, um, and, you know, for IPOs? They did it. Um, obviously, it's Google, but still, I think just the amount of energy that they brought into every discussion and the relentlessness of driving, um, to the truth, to the right business outcome is absolutely something that I carry forward

18. 50:28 – 55:37

    Quick-Fire Round

    1. SRSridhar Ramaswamy50:28

       to this day.

    2. HSHarry Stebbings50:28

       Listen, I could talk to you all day. I'd love to move into a quick-fire. So, I say a short statement, and you give me your immediate thoughts. Does that sound okay?

    3. SRSridhar Ramaswamy50:35

       Sounds (laughs) good.

    4. HSHarry Stebbings50:36

       How do you feel about founder mode? Eulogized in the Valley, you're CEO, you've also been founder of Neeva. How do you feel about founder mode?

    5. SRSridhar Ramaswamy50:44

       I think it's a sh- I, I think it's just a shortcut for describing effective people. I think anyone can be that.

    6. HSHarry Stebbings50:52

       You have a 23-year-old and a 25-year-old. You have great relationship with them. My brother's just had his first baby. I'm an uncle for the first time. What advice would you give my brother who's just had-

    7. SRSridhar Ramaswamy51:04

       Ah. (laughs)

    8. HSHarry Stebbings51:04

       ... his first baby?

    9. SRSridhar Ramaswamy51:05

       (laughs) Um, uh, in my humble opinion, um, parenting is 90% presence, uh, 10% luck. You're done.

    10. HSHarry Stebbings51:18

        (laughs) Sounds adventure-

    11. SRSridhar Ramaswamy51:21

        The schools that you worry about, the books that you want to buy, the cool software. I'm like, "Bullshit." Like, the best gift that you can give to your child is you yourself, just being there.

    12. HSHarry Stebbings51:31

        What do you believe that most around you disbelieve?

    13. SRSridhar Ramaswamy51:34

        The possibility of change.

    14. HSHarry Stebbings51:36

        What do you mean?

    15. SRSridhar Ramaswamy51:38

        I think people just assume that too many things cannot be changed, including in themselves. I think we straitjacket ourselves, in terms of what we can do and what the people around us can do.

    16. HSHarry Stebbings51:50

        I heard a great statement, which is, "The heaviest things in life are not iron or gold, but unmade decisions." What unmade decision do you think about most?

    17. SRSridhar Ramaswamy51:59

        You know, I've followed my instincts generally. It was crazy for me to come to the Valley, because I was a successful researcher in Jersey.It was crazy for me to quit my first company, when I was running a team of, like, 120 people. I went from that to, uh, being a software engineer. Um, so I don't have many, um, many regrets. I have a wonderful family and a spouse that let me make these crazy decisions. Um, we moved house. Uh, she was very against it. It was much closer, many more friends. Um, I just do stuff, man, and I fall flat on my face very often. I pick myself up, walk on.

    18. HSHarry Stebbings52:40

        You can be CEO of any other company for a day. Which would you be CEO of?

    19. SRSridhar Ramaswamy52:45

        Um, I love, I love my job at Snowflake. (laughs)

    20. HSHarry Stebbings52:50

        (laughs) Okay.

    21. SRSridhar Ramaswamy52:51

        I'm knocking your question. (laughs)

    22. HSHarry Stebbings52:53

        Knocking this back. Okay. What's your favorite brand and why them?

    23. SRSridhar Ramaswamy52:57

        I have to admire the aura that, uh, you know, Benioff brings with, uh, um, with Salesforce. It's not just brand, it's the brand and the marketing. Um, I think he's a, he's, he's a remarkable human being.

    24. HSHarry Stebbings53:09

        Do you think brand and marketing is important for S- Snowflake today?

    25. SRSridhar Ramaswamy53:13

        Absolutely., um, because, uh, too many of our own customers who love Snowflake think of us as like, "Ah, very good warehouse, I like that." Um, and absolutely. Um, I think we have our work cut out.

    26. HSHarry Stebbings53:24

        What's the hardest thing about being CEO of Snowflake?

    27. SRSridhar Ramaswamy53:27

        At the end of the day, um, you're dealing with people. Um, you want to be a good human being, but you also want, uh, your team to succeed. Um, making sure that you're driving while still being a good human being, it's a, it's- it's a hard thing.

    28. HSHarry Stebbings53:47

        Yeah, it is.

    29. SRSridhar Ramaswamy53:47

        And it should be a hard thing. It's not something you should ever take lightly.

    30. HSHarry Stebbings53:51

        Um, final one. You're interviewed by a lot of people, you're asked questions all day, team members, employees, kids, family, you name it.

Episode duration: 55:38