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

1. 0:00 – 4:15

   Julia’s background

   1. JSJulia Schottenstein0:00

      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 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 gonna have their ears perk up and say, "Well, w- what's going on with this company?" The really important piece here is you wanna 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, 'cause you don't know if you can really go the distance and be an independent company, so you wanna have optionality.

   2. LRLenny Rachitsky1:01

      (Instrumental music) Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard won experiences building and growing today's most successful products. Today, my guest is Julia Schottenstein. 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 our conversation, we dig into the M&A process and get into a bunch of advice, try to improve your odds of having a good outcome, and just approaching M&A broadly. We also 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 talk about what they did right to get to where they are now. We also cover how to best think about competition, a bunch of frameworks for thinking about product, and advice on how to approach pricing and also open source. Enjoy this episode with Julia Schottenstein 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, Quora, and Modern Treasury trust Vanta to help build, scale, manage, and demonstrate their security and compliance programs and get ready for audits in weeks, not months. By offering the most in-demand security and privacy frameworks such as SOC2, ISO 27001, GDPR, HIPAA, and many more, Vanta helps companies obtain the reports they need to accelerate growth, build efficient compliance processes, mitigate risks to their businesses, and build trust with external stakeholders. Over 5,000 fast-growing companies use Vanta to automate up to 90% of the work involved with SOC2 and these other frameworks. For a limited time, Lenny's Podcast listeners get $1,000 off Vanta. Go to vanta.com/lenny. That's V-A-N-T-A.com/lenny to learn more and to claim your discounts. Get started today. This episode is brought to you by Superhuman. How much time do you spend in email each day? How about your team? You may not realize this, but your email tools are wasting your time. Superhuman is blazingly fast email for high-performing teams. Built 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 saved time per year. With Superhuman, you can split your inbox into streams for VIPs, team members, and emails from your favorite products to reduce context switching and make sure you never miss an important email. You can set 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/lenny. That's superhuman.com/lenny.

2. 4:15 – 8:24

   How Julia went from VC to working in product at dbt Labs

   1. LRLenny Rachitsky4:15

      Julia, welcome to the podcast.

   2. JSJulia Schottenstein4:18

      Super excited to be here.

   3. LRLenny Rachitsky4:19

      So, you have a really interesting career path in that you went from VC into product management. Usually it's the other way around. Usually PMs become VCs, and it's rare to see this kind of version of it. And so I wanted to start with just a question of just how did that, how did that come to be?

   4. JSJulia Schottenstein4:35

      I, I do have an unusual background. But, you know, it doesn't surprise me that people who are interested in product are also interested in investing and, and vice versa. You know, for me, I've always had three interests broadly, and that's an interest in business, an 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, and markets is, is less of a focus, but you still get to do all three. So I, I have a unusual background, and I used to be a professional investor at NEA. I did all of, um... Spent all my time investing in early stage startups that built for technical audiences, so think dev tools, infra 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 was much more of an identity for them than just a tool that they were 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, 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 four billion dollar company...... to a, a $12 billion company, and I thought to myself, if 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, I wanted to invest.

   5. LRLenny Rachitsky6:24

      Okay. So at this point, you're VC at NEA, you're trying to invest in DBT and... Okay, keep going.

   6. JSJulia Schottenstein6:29

      Yeah. So I, I w- 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 can invest in the company.

   7. LRLenny Rachitsky6:39

      (laughs)

   8. JSJulia Schottenstein6:39

      And then in 2020, I, you know, finally got the call that I was, you know, waiting for. Tristan said, "We're gonna raise some money." Uh, he had a term sheet from a firm that he liked. It was a good venture fund, but he also liked me and he wanted to give me a shot, and I was, like, super excited to get that message because like, "This is, this is my chance." And unfortunately, I ended up losing that deal to Sequoia. It's a, a formidable partner, but-

   9. LRLenny Rachitsky7:03

      Reasonable, reasonable loss.

   10. JSJulia Schottenstein7:05

       (laughs) I was, I was just so convicted that it was going to be a special company that I asked to even put my, my personal money in, and I asked to put, like, a very irresponsible, irrational amount, um, nearly, like, 20% of my liquid net worth into DBT because I was-

   11. LRLenny Rachitsky7:22

       Oh.

   12. JSJulia Schottenstein7:22

       ... 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, I dodged a bullet," or, you know, that, "Better off without them," or, you know, "Screw them." S- but, but for me, like, that was 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, I ended up calling Tristan and s- and asked him if I could be a part of the compy- company that built the product that I thought was so special. So that was my kind of unique path into product and, and to DBT.

   13. LRLenny Rachitsky8:02

       So you invested in DBT and then you ended up... There op- an opportunity opened up where you can end up working there?

   14. JSJulia Schottenstein8:08

       No. I think if I was, was able to invest, I w- I wouldn't be here, so... (laughs)

   15. LRLenny Rachitsky8:12

       Hm.

   16. JSJulia Schottenstein8:13

       I, I got a, a no. Um, the board ended up vetoing my personal investment, but it's okay because I ended up dedicating all of my personal time to building the company.

3. 8:24 – 11:10

   Four things Julia uses to evaluate a company’s potential

   1. JSJulia Schottenstein8:24

   2. LRLenny Rachitsky8:24

      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 is maybe a broader question of just in your time investing and finding a company like DBT early, what have you learned about just picking well, finding companies early especially? What are signs in your experience of just that this is gonna be something really interesting that you might wanna join? And this is more for people listening that are thinking about joining a company early on.

   3. JSJulia Schottenstein8:49

      Yeah.

   4. LRLenny Rachitsky8:49

      What, what do you think they should look for?

   5. JSJulia Schottenstein8:51

      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-

   6. LRLenny Rachitsky9:08

      Cool.

   7. JSJulia Schottenstein9:08

      ... specifically I'm looking at. So for 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 anal- analytics engineering work, and it was that range in scale that made me feel like this is a founder that's very rare and compelling. The next is markets. We, 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 en- entrant to make its 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. The, the next is product. Everyone who's listening hopefully either is interested in products or has a product background, so I, I won't say too much there, but it, but can you talk to users or customers, potential customers? Are they building something that's really special, unique? 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 gonna ultimately sell the product. You're not gonna get a 10 out of 10 on, 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 de-risk the success

4. 11:10 – 12:05

   How to identify whether or not you have product-market fit

   1. JSJulia Schottenstein11:10

      of the company?

   2. LRLenny Rachitsky11:11

      In terms of spark with a product, I'm doing a post right now on product-market fit. 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 and they're just 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 this, there's a spark that people are just, like, really enthused? You talked about people who made DBT kind of part of their identity. Is there anything else there?

   3. JSJulia Schottenstein11:36

      Yeah. It, it's can they not stop talking about it? And that's this, like, the chatter about a product, they wanna 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, that you're onto something and then that spark will help do a lot of the work on how do you get to market because, uh, your evangelists are really your, your users or people that love what you're building.

5. 12:05 – 13:11

   Distribution strategies

   1. JSJulia Schottenstein12:06

   2. LRLenny Rachitsky12:06

      What about in terms of the distribution 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 DBT, maybe other companies? Like, what are some examples of that?

   3. JSJulia Schottenstein12:20

      So DBT had an ecosystem advantage, and they were open source, and this helped really dramatically for lots of people to have low barrier of friction to just try it out and spread kind of organically. They first got started with very horizontal. People could just get started without ever even talking to sales, and I think that was a competitive advantage. But, you know, not all companies need to be product 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 wanna see someone who's... O- or a company that's really strong at enterprise or, or really strong at the bottom-up.

6. 13:11 – 15:54

   M&A strategies

   1. JSJulia Schottenstein13:11

   2. LRLenny Rachitsky13:11

      Okay, cool. So I wanna 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 in a lot of companies and maybe, I don't know, once a month I'm getting an email from a startup I'm an investor in. They're just like, "Mm, 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 led the acquisition of a company I was an investor in that DBT acquired that I think is a public company called Transform. And so my question is just, for founders who are currently thinking about M&A, M&A meaning acquisition essentially, (laughs) what's your best advice for them for how to be most successful in, in M&A kind of outcome for themselves?

   3. JSJulia Schottenstein13:57

      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 s- start it to be an enduring, independent, standalone company. And if you have that path, then you'll have the upper hand in 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 Bs. And the, 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, uh, in, 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 gonna have their ears perk up and say, "Well, what- what's going on with this company?" You know, we just bought this company, Transform. They were doing a r- they were playing a really good playbook here. And, uh, the really important piece here is you wanna 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, 'cause you don't know if you can really go the distance and be an independent company. So you wanna have optionality.

7. 15:54 – 18:01

   Lessons from the Transform acquisition

   1. JSJulia Schottenstein15:54

   2. LRLenny Rachitsky15:55

      I love this term, inflict pain on your potential acquirers. Uh, what are some, what are some examples of that? Like, how, who's done that well or what does... What's an example of that in action?

   3. JSJulia Schottenstein16:03

      Yeah. I mean, I can share the, the Transform story.

   4. LRLenny Rachitsky16:05

      Yeah.

   5. JSJulia Schottenstein16:05

      It's of a company we, we just acquired. Uh, 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 layer. 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, uh, 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, uh, and Airbnb in the data world is, is famous for having a really successful, like, semantic layer, metrics layer called Minerva. And what we had at DBT Labs is really good distribution and ecosystem, but we were kind of s- 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, 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... Lure them over to use their product. And so because they had positioned themselves as a friendly partner when, when really we, we weren't, we were trying to compete for this similar use case, when it came time to do an acquisition, uh, we were really excited because we knew their product was good and they'd already done a lot of the work to make integrating with DBT possible, and, uh, that helps us post-acquisition do the integration much more easily.

8. 18:01 – 20:25

   Competitive values at dbt

   1. JSJulia Schottenstein18:01

   2. LRLenny Rachitsky18:01

      How do you just think about... As a... Either as, as a startup or even an- 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?

   3. JSJulia Schottenstein18:15

      So we, we recently codified our philosophy when it comes to competition and I'll give Nick Kandel, the, the founder of Transform, who kind of led this exercise at At dbt Labs.

   4. LRLenny Rachitsky18:25

      Mm-hmm.

   5. JSJulia Schottenstein18:26

      But we really have like three pillars when it comes to competition. So the- the- the first is hold true to our vision. We're really excited about the path and the journey that we're going on at dbt Labs and we don't want the distraction. So occasionally you'll have competitors maybe throw shade or throw stones but most of that is just noise. If you have a lot of conviction that you're going in the right journey, you wanna just keep your eyes straight ahead and run your best race and not be too distracted by w- what maybe some critics are saying. Th- the second philosophy we have is really a grow the pie philosophy. So we wanna 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, um, BI use cases. We're s- we're seeing lots of companies start to operationalize their data now with this big wave of- 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 wanna 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 wanna leave space for our ecosystem to offer solutions to our users that, that help them out and, uh, we really wanna 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 a few areas that we do wanna 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 users' sake. But for everything else, we really feel like we can work with our ecosystem and accomplish what we wanna accomplish and also help them accomplish

9. 20:25 – 26:35

   Keys to dbt’s success

   1. JSJulia Schottenstein20:25

      their goals too.

   2. LRLenny Rachitsky20:27

      This may be a good time to just chat about dbt and the success the company has had. Like so many startups have tried to become a standard default layer of what's now called the moder- 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, similar to Snowflake where it's just like, it's just the default for building large data startups, and s- in most startups these days that work with a lot of data.

   3. JSJulia Schottenstein20:55

      Mm-hmm.

   4. LRLenny Rachitsky20:55

      So my question is just like what do you think dbt did most right to win in this and continue to win?

   5. JSJulia Schottenstein21:01

      So I think dbt did a lot of things right but I'll point out two that, that really stick out to me. And the first is just power in simplicity and the second is a commitment to being open and I'll touch on what I mean by, 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- what's so special about dbt? We have a SQL 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, Tristan, Drew and, 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 SQL we wanna invite you to do these workflows 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. They were, they 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 w- 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-

   6. LRLenny Rachitsky22:49

      Mm-hmm.

   7. JSJulia Schottenstein22:49

      ... dbt is really easy to get started with at your company with reduced friction. You know, we, we're building a product that people like so they talk about it, they wanna share it both at their organization and with other companies. Other companies get started with dbt, 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, uh, company. As our company grows, we get to invest back into our community and our product and the flywheel begins to spin 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 wanna build for dbt. And so they share best practices, build workflows, and now if you're a company and you've standardized on dbt, you've 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 d- decides to be on the standard. And so it's those two really important trends that made dbt so powerful today.

   8. LRLenny Rachitsky24:02

      So what I'm hearing there is essentially the, the product was right for what people need it to solve. There's also like a product-led component, open source, free, self-serve kind of piece that people adopted, used, oh, and started working and then kind of scaled and started 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? 'Cause 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, isn't necessarily what people are looking for, maybe they're, 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, was it timing that was really great? Was it like, specific influencers early on?

   9. JSJulia Schottenstein24:48

      Yeah. I think timing was-

   10. LRLenny Rachitsky24:49

       Mm-hmm.

   11. JSJulia Schottenstein24:50

       ... really important with the success of dbt, that they were there when the cloud data warehouses were really exploding and growing in a, in an enormous way. And you know, dbt Labs started as Fishtown Analytics, a consulting firm, so they worked really, really closely and hands-on with all of their consulting partners to get the pain point and really solve firsthand challenges that they saw. I think that combination of being at the right place at the right time, and also getting to work really closely with people's day-to-day problems, uh, created a, a really special experience.

   12. LRLenny Rachitsky25:29

       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 analyti- uh, Fishtown Analytics consultancy work?

   13. JSJulia Schottenstein25:38

       Uh, consulting part of the business was almost two years.

   14. LRLenny Rachitsky25:42

       Okay, so they basically-

   15. JSJulia Schottenstein25:43

       Yeah.

   16. LRLenny Rachitsky25:43

       ... spent two years solving this problem, like basically manually for people to... And that's such a, that's such a great way to understand real pain and figure out how to solve it.

   17. JSJulia Schottenstein25:53

       Totally.

   18. LRLenny Rachitsky25:54

       Awesome. Okay, so that's a really interesting insight, just like spend a few years just like manual, like it sounds like it was almost manual, right? Like manually helping people transform their data using whatever tools already existed.

   19. JSJulia Schottenstein26:06

       Yeah. Well, they were building dbt and-

   20. LRLenny Rachitsky26:08

       Mm-hmm.

   21. JSJulia Schottenstein26:08

       ... 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 the people who were building it, the founders were also day-to-day working with these customer clients that had

10. 26:35 – 29:32

    An offsite exercise Julia used to help her team internalize upcoming changes

    1. JSJulia Schottenstein26:35

       pain points.

    2. LRLenny Rachitsky26:36

       That reminds me of a story you told me about how you made your eng team do some manual work of-

    3. JSJulia Schottenstein26:42

       Yes (laughs) .

    4. LRLenny Rachitsky26:43

       ... an algorithm involved in transformation.

    5. JSJulia Schottenstein26:45

       Yeah.

    6. LRLenny Rachitsky26:45

       Can, can you share that?

    7. JSJulia Schottenstein26:47

       Okay. So I'm gonna preface this story by sharing that I'm a huge math nerd, and one of my favorite books on logic is called Godel, Escher, Bach. 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 gates. 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 gonna 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, and 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, uh, 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 node of the graph was an engineer and I, uh, 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 kooky way to, uh, spend the day, but it was, was really successful.

    8. LRLenny Rachitsky28:49

       What was the actual algorithm you were trying to implement?

    9. JSJulia Schottenstein28:51

       (laughs) . Um, we, we were trying to figure out how to make, uh, kind of a... 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 reverse, like what would need to happen to make, uh, your data SLAs de-materialized in time.

    10. LRLenny Rachitsky29:16

        Awesome, and uh, (clears throat) sounds like the team, uh, found that valuable.

    11. JSJulia Schottenstein29:20

        Yeah.

    12. LRLenny Rachitsky29:20

        Okay (laughs) . Uh, reminds me of a clip from the s- last season of Ted Lasso where they have these red strings and they... I won't get into it, but it's, uh... If you've seen it, you will know what I'm talking

11. 29:32 – 31:56

    Determining what features are included in open source

    1. LRLenny Rachitsky29:32

       about. I want to come back to, you were chatting about open source versus not open source. So some part of dbt was, is open source and some isn't.

    2. JSJulia Schottenstein29:43

       Mm-hmm.

    3. LRLenny Rachitsky29:43

       I'm curious how the team decides what is open source and what should be open source, what isn't open source and h- and what to charge for.

    4. JSJulia Schottenstein29:50

       We think about dbt open source, it's really the guts of the data transformation, it's where you describe your business logic. And then on the cloud side, we build proprietary software that supercharges the development life cycle and the productionization of dbt at scale. So what we think about as leaving for more cloud offering is we deal with state, so stateful 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, you know, 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 wanna supercharge that en- experience with kind of an open core model and build proprietary software that, that makes people much more successful at using dbt.

    5. LRLenny Rachitsky30:48

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12. 31:56 – 33:34

    Pricing and willingness to pay

    1. LRLenny Rachitsky31:56

       I know you also spend a lot of time thinking about pricing and willingness to pay and things along those lines. Is there anything you could share about which is- what you've learned about how to think about pricing for e- a tool like this, or even in general?

    2. JSJulia Schottenstein32:09

       Pricing and willingness to pay is such a hard conversation, and lots of startups don't do this early enough in their, their company journey. Uh, likely a, uh, side effect of zero- zero interest rates, where investors were happy funding, um, GitHub Stars and, and usage, and companies never thought about, "How are- how am I gonna make revenue, or, or make money?" Which is, it's important. So, you know, for, for us at, at, at dbt Labs, I don't claim to b- be perfect at it, but we're trying to get a better muscle around it, and I always think about Madhavan, who wrote this book, Pricing Innovation, I know you've had him on the show before.

    3. LRLenny Rachitsky32:45

       Mm-hmm.

    4. JSJulia Schottenstein32:45

       But he- 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 team's trying to sell something and, and people aren't excited about what you've built, aren't willing to pay for it. And at dbt Labs, we have this value, it's one of our core values, that says, "We are more concerned with value creation than value capture." And we really mean this. When we talk about, what is the value of dbt Labs to our customers, they often talk about how it's either 20 to 35% as valuable as what they spend on their cloud data warehouse. But what we charge our customers is a s- very small fraction of that 20 to 35%, and that's, that's by design.

13. 33:34 – 36:33

    Lessons from dbt Labs’s first pricing change

    1. JSJulia Schottenstein33:34

       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 by- of your customers. And it's so important to learn that lesson while the company's still smaller or the stakes are lower, because pricing just 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, uh, 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- we're happy to lose to ourselves, uh, but we have to really think very deeply about what are people willing to pay for and what moves the needle for them, and, and focus on that.

    2. LRLenny Rachitsky34:26

       I'm so curious what that pricing process was like to figure out what to change. Is there anything you could share about just, like, what that was for you? Or what are some just surprises that came out of that process where you're just like, "Oh, wow, we didn't expect that in these conversations"?

    3. JSJulia Schottenstein34:42

       It was really, like, an all-hands-on-deck conversation. S- pricing is so cross-cutting, because it's in a finance discussion as well. You're kind of modeling out things in spreadsheets and, and 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, uh, understand where people's appetites are, and sussing 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, 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, uh, one of the big s- things that we were trying to solve for was Have our pricing catch up to how people valued the tool.

    4. LRLenny Rachitsky35:41

       How many people did you end up talking to? Who was doing these conversations? And is there anything really important you learned about h- how to ask these questions in these sorts of willingness-to-pay conversations?

    5. JSJulia Schottenstein35:50

       So we, we talked to dozens. It was combination of product and product marketing-

    6. LRLenny Rachitsky35:54

       Mm-hmm.

    7. JSJulia Schottenstein35:54

       ... having the conversations. Uh, and, you know, people aren't very willing to share explicitly, like, what they will pay, but there's some tools that we used on relative value. People most think about, what is the relative value of dbt in their cloud warehouse? And we also tried to employ some of the tactics that we... Tried to suss out, what do, what do people view as very inexpensive? What's a price point that's very cheap or a no-brainer? What price point is, uh, m- maybe f- fair or comfortable for them, and what would be kind of too expensive? And then we had all the data back to figure out

14. 36:33 – 40:08

    Whether or not to be public about selling your startup

    1. JSJulia Schottenstein36:33

       where we landed.

    2. LRLenny Rachitsky36:34

       I wanna come back to M&A for a bit. I had a few more questions there, and I kinda moved on from that. And so again, you've done a lot of work within the MNA realm. Something that I saw recently, and this connects to the fact that a lot of startups now are looking to get sold, this, uh, VC Hunter Walk, he's a founder of Homebrew 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, 'cause in the past, y- you never wanted to come across as too sell-y. Like I, no- I don't want people to think I'm, 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, it creates more of a bidding situation, where many people know versus keeping it secret and kind of in, in closed rooms. So my question is just, what do you think of that? Do you think that's an effective strategy? Is it not?

    3. JSJulia Schottenstein37:28

       I think it's good advice. If you're in a Hail Mary situation where you're, you're looking for a home or you need an exit for your business, it's better to be transparent and cast a wider net. And you're right, in, like previous times, founders tried to be a little bit cute or obfuscate that they were evasive of the situation that they were in because they wanted to drum up some competitive interest when there, there really wasn't any. But, you know, unfortunately in, in today's, uh, 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 it, there's absolutely no shame in sending a note that says something like, "Hey, we're looking for an exit for our company. X, Y and Z didn't pan out as we expected. We've built a really interesting product and we wanna keep the team together. We're running a process. Are you interested?" Really just as simple as that.

    4. LRLenny Rachitsky38:24

       I've seen a lot of companies put together these really detailed decks or even websites of just like, "Here's the team, here's what we've built," to be very, kind of promotional about it. Is that something you've seen? Is that something you'd recommend?

    5. JSJulia Schottenstein38:35

       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 gonna come along with the acquisition is the biggest motivator for why a buyer would get excited.

    6. LRLenny Rachitsky38:52

       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 a startup, Localmind, that we sold to Airbnb. And I met Airbnb initially at, uh, a year before we actually s- started exploring the process at a random party at South by Southwest where I was... I actually have no memory of this party, but the head of product at Airbnb, Joe Bott, remembered it (laughs) and came back to us a year later and just like, "Hey, what are you guys up to? Maybe we could collaborate on some stuff." And that led to an acquisition. So I think that's just, just wanted to touch again on that point of just the power of... The way I thought about it is let a 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, they're like, "Oh, that company, maybe we should talk to them."

    7. JSJulia Schottenstein39:37

       Yeah. You wanna make sure that the buyer knows who 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 you've inflicted some pain (laughs) on them.

    8. LRLenny Rachitsky39:51

       (laughs)

    9. JSJulia Schottenstein39:51

       But yeah, certainly creating those connections while ahead of an, an exit event is important.

    10. LRLenny Rachitsky39:58

        And specifically there it's like, meet people at your competitors potentially. For us, like Airbnb was never even a potential company we would sell to 'cause it had nothing to do with it, but ended up making sense down

15. 40:08 – 44:57

    How to utilize connections during acquisitions

    1. LRLenny Rachitsky40:08

       the road.

    2. JSJulia Schottenstein40:08

       Mm-hmm.

    3. LRLenny Rachitsky40:08

       What's like the realm of the companies and people that you think people should think about meeting?

    4. JSJulia Schottenstein40:13

       If, 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 the, 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, to work for you.

    5. LRLenny Rachitsky40:50

       What if you're at the other end of the spectrum and you're in kind of dire straits right now and you're just like, "Oh man, what do we do to potentially sell this company?" I know odds are not gonna be great, but just what do you suggest folks do in terms of, I guess, finding connections to potential companies that might be acquirers?

    6. JSJulia Schottenstein41:07

       Yeah. I mean, use your, use your 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, uh, a duty to return the money to the investors and, and maybe this is, uh, (laughs) unpopular thing to say on a podcast, but like your investors understand that they're not making their money back and what they wanna do instead is have you end up at a really great company like an Airbnb because, uh, that will help them down the road. So it's all about the long game. But use your investors to help you find connections at different, uh, companies that could be buying and, and don't worry so much about disappointing them or being really realistic about where you are in your company journey.

    7. LRLenny Rachitsky41:53

       Yeah. To build on that, like I'm just an angel investor. I'm not like the lead fund and I don't... They feel differently, I imagine. But the last thing I want for a founder is to get stuck at a company they hate and-

    8. JSJulia Schottenstein42:03

       Mm-hmm.

    9. LRLenny Rachitsky42:03

       ... 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.

    10. JSJulia Schottenstein42:11

        Yeah. I think founders forget 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.

    11. LRLenny Rachitsky42:36

        Which is tough a l- a lot of times for founders that are told like, "It's all about grit and not giving up and don't quit," sometimes, sometimes you should quit.

    12. JSJulia Schottenstein42:43

        Oh gosh, yeah.

    13. LRLenny Rachitsky42:44

        (laughs)

    14. JSJulia Schottenstein42:44

        I, I don't wanna be the, I don't wanna-... say that. I, I love that, you know, peop- I think, uh, b- being founders it's, it's an 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, s- sometimes you really are out of cash and you do have to find a home, but, you know, I hope, I hope that you can continue to fight and, and find a way forward.

    15. LRLenny Rachitsky43:08

        Agreed. Specifically for people thinking about selling their company, are there any companies you think are good companies for people to look at right now that are actively acquiring or open to M&A?

    16. JSJulia Schottenstein43:20

        This is a tough one. I think a lot of companies are on the sidelines for a number of reasons, and they 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 headcount as much, uh, and M&A is often an org chart, uh, gymnastics of folding the target company's headcount into your budget and plan and maybe just don't have a lot of space. Or, uh, probably more common right now is there's just a general uncertainty about the future, and in highly volatile markets, people wanna take care of their own and even the best M&A deals add a level of complexity that a lot of buyers are just not looking to, uh, 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 is I would come up with a buyer set of maybe a dozen, and really there aren't more than a dozen companies that will find what you're doing to be a very good fit. Start with your buyer set and then start culling 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 or buyers and, and really play the d- a different playbook, which is inflict pain, make it really hard for them to not notice you, but, but do it with a smile and be friendly, uh, while you, while you do that.

16. 44:57 – 46:33

    How to communicate selling your company

    1. LRLenny Rachitsky44:57

       Sometimes with M&A discussions, there's a lot of, like, uh, 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 in how to approach it? Or do you think it's just, "It's fine, just tell us. We're looking to sell our company. Are you interested in being a buyer?"

    2. JSJulia Schottenstein45:15

       Yeah. I just wouldn't be too clever here. Like, everyone understands, like, oh, I'm evaluating strategic alternatives.

    3. LRLenny Rachitsky45:23

       Mm-hmm.

    4. JSJulia Schottenstein45:23

       It means you're, 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 (laughs) a good outcome, but depends where you are in your, your company journey. If you have t- time, then don't talk about M&A at all. Like, that's the last thing that you wanna speak about. Instead, you're talking about maybe collaborating or partnerships, how do we work together, knowledge sharing. And M&A is a dirty word if you have, like, a lot of runway and you're, and 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.

    5. LRLenny Rachitsky46:08

       That's such good advice. I remember (laughs) the term we used was, uh, "We're l- we wanna explore a strategic partnership." And everyone's just like, and knows what you mean by that, but you just kinda don't wanna say it too explicitly.

    6. JSJulia Schottenstein46:18

       Yeah, it's like everyone's, everyone in the room is kinda looking like, "Oh, yeah, yeah. Okay." (laughs)

    7. LRLenny Rachitsky46:23

       Yeah.

    8. JSJulia Schottenstein46:23

       Strategic partnership or-

    9. LRLenny Rachitsky46:24

       Yeah. (laughs)

    10. JSJulia Schottenstein46:25

        ... a strategic alternative. It's like, we all know these code words and we understand the situation you're in.

    11. LRLenny Rachitsky46:31

        Yeah. When do you think

17. 46:33 – 47:28

    M&A market forecast

    1. LRLenny Rachitsky46:33

       the M&A market might pick up again? I know it's impossible to predict. Do you have any sense?

    2. JSJulia Schottenstein46:37

       Yeah. I wish I had a magic ball. That'd be pretty sweet. Uh, 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? Uh, two things. One, founders are coming to terms with evaluations that they maybe received at the highs of the market are no longer gonna hold in this market, and companies are out of cash or maybe out of options. There'll be better assets entering the market soon, and at, uh, a certain point, the opportunities will just be too great, that that will incentivize a lot of the buyers that have been, uh, on the bench to start participating again in the M&A market. And I don't know exactly when that will be, but I think we're, we're pretty close. I think we're pretty close.

18. 47:28 – 50:14

    Values at dbt Labs

    1. JSJulia Schottenstein47:28

    2. LRLenny Rachitsky47:28

       And you mentioned a value that you have at, 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? I'm always curious what principles and values companies come down to to help drive the way they think.

    3. JSJulia Schottenstein47:42

       The value that I shared is we are more concerned with value creation than 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, it pays back, um, kind of slowly. The whole mission of dbt Labs is help analytics engineers disseminate organizational knowledge through data, and so we really believe in also being participants of sharing that information and getting more people knowledgeable about, about, about all sorts of things. Transparency wins. We're a really transparent company. Like, we, uh, share our board decks, we have lots of communication and participation in all of our Slacks. We're a writing culture. We have hard conversations in the open. So that's another, a big one. Transparency always wins. We are humble. Like, we, we don't ever feel like we're successful (laughs) . Like, we, we kind of, uh, come at this from a very humble space where we, we feel like we have to serve our community and our users, uh, and that really motivates us.... and then, uh, another one is just work done well is its own end, and it's really focusing on the journey and, and not the end destination.

    4. LRLenny Rachitsky48:56

       Awesome. I wanna do a post someday of 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 on Snowflake and on Figma, and what you touched on, there's such a connection and a thread of obsessing with your users and making sure they're happy. At 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 will get a sense of when we recorded this, where they think of their company as software as a service, where service is their number goal, like actually-

    5. JSJulia Schottenstein49:30

       Mm-hmm.

    6. LRLenny Rachitsky49:30

       ... provide service, and software's just a way to do that. And then at Snowflake their number one core value is put customers first.

    7. JSJulia Schottenstein49:37

       Mm-hmm.

    8. LRLenny Rachitsky49:37

       And they talk a lot about how that just actually informs their prioritization and all that thing, and 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.

    9. JSJulia Schottenstein49:52

       It's really interesting too, because a lot of the people who work at dbt 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 experience is really, really strong.

19. 50:14 – 52:02

    Lessons from working with strongly opinionated users

    1. LRLenny Rachitsky50:14

       This is, uh, another thread maybe we'll go down real quick. I'm working on a different post around Reddit, and how to work with really opinionated users that have strong opinions about changes to the product.

    2. JSJulia Schottenstein50:24

       Mm-hmm.

    3. LRLenny Rachitsky50:24

       And the way they described it, these guys were there for five years working with the community on the product, is that, like to your users, the product is their baby basically. It's like, they think it's theirs, versus the company's.

    4. JSJulia Schottenstein50:36

       Mm-hmm.

    5. LRLenny Rachitsky50:36

       And I'm curious, having a really strong opinionated community, which is what it sounds like you also have, what have you learned about just working with them to build product that makes them happy, and avoid, you know, revolts, and, and really upset-ness?

    6. JSJulia Schottenstein50:51

       It's hard as, as you grow. I think it's just a challenge 'cause 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 stats is at, at dbt Labs we have over 30% of our employee head count has contributed to our data transformation workflow.

    7. LRLenny Rachitsky51:15

       Mm-hmm.

    8. JSJulia Schottenstein51:15

       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, uh, channel regularly, and can feel when we like mess up or we don't quite deliver an experience that we're, we're proud of. Like, you will just see like dozens of people trying to jump on board and, and try to make it

20. 52:02 – 54:08

    The importance of shipping, learning, and iterating

    1. JSJulia Schottenstein52:02

       better.

    2. LRLenny Rachitsky52:02

       Is there any other frameworks or just general processes that you found to be really useful in building awesome product, running teams?

    3. JSJulia Schottenstein52:10

       I'm 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, uh, um, "Worse is better," (laughs) and, uh, "Tech debt is a champagne problem." And what do I mean by that? It's really to help me combat this perfectionism, 'cause perfect doesn't exist, and you should instead 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't anticipate it. You try very hard to understand exactly how people will use the product and get all the edge- edges, uh, ironed out, but you, you can't until you ship. And I'll, I'll share an example. So m- my team helps support the dbt Cloud Scheduler, and the initial version of the dbt Cloud Scheduler was pretty naive. Like, 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 this job to run? Okay, yes. Run this job. Okay, it's not time for this job to run. Next." C- 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 tech, tech debt, because that means people are using the product." And, you know, now we've had to rebuild our, our scheduler several times over, 'cause 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 GoWorkers and RabbitMQ. We just didn't need it, because we had no users. And so these two sayings, that, "Worse is better," and, and, "Tech debt is a champagne problem," just really reminds people, like, "Let's ship. Let's get it out into the users' hands, and then we'll learn and iterate, and it'll be a better experience for

21. 54:08 – 57:03

    How VC skills translate into product

    1. JSJulia Schottenstein54:08

       them."

    2. LRLenny Rachitsky54:08

       That's a good segue to my last question. So you weren't a PM before this role. You have strong 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 to, to become stronger product leaders, based on the experience you've had moving into product.

    3. JSJulia Schottenstein54:30

       So I pull a lot on my experience, or some of the things that I did when I was an investor in my current role in product. And maybe I'll touch on like what is the skill of a venture capitalist, it might be a little bit (laughs) foreign for people. But venture capitalists, they spend all their day meeting lots of different companies, contact 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 taste or refine 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 way smarter than they are. And so you do that all the time in venture, and I've brought a lot of those, you know, 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 at other companies that are like dbt Labs that are growing nicely, maybe a little bit ahead of where we are, and I ask them questions like, "How did you navigate open source?" "How did you navigate pricing?" "How did you navigate ac- acquisitions?" And I take kind of the best ideas, figure out which ones I can apply, and bring it back to dbt Labs. The second thing is I really think my special T or my superpower is that I'm a T-shaped generalist, and so I know a lot about... I 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 'cause I have just more credible experiences that I can pull from. And then the last thing that I think maybe doesn't show up day to day in my product work, uh, but in investing, you're constantly thinking about risk and the power laws. And w- we touched on this before, but, like, most investments don't work out. You lose the dollars that you put in, but all the returns come from these rare events that make up for all the losses. It's, you have to think about what are the uncapped upside opportunities in investing? And I think in product, you still have to do the same thing. Like, you can't, uh... I- if 50% of the things I worked on went to zero, like, we'd have a problem. (laughs) But it encourages me to continue to make bets for the company that has the chance of bending the trajectory of our business.

22. 57:03 – 1:00:50

    Lightning round

    1. JSJulia Schottenstein57:03

    2. LRLenny Rachitsky57:03

       We've reached our very exciting lightning round. I've got six questions for you. Are you ready?

    3. JSJulia Schottenstein57:07

       Yeah, let's do it.

    4. LRLenny Rachitsky57:09

       What are two or three books that you've recommended most to other people?

    5. JSJulia Schottenstein57:12

       Okay, so two books that helped me learn a lot about myself are Range, it's a book about generalists, and also Quiet, it's a book about introverts. Uh, and then I like a lot of biographies, so a few of my favorites are, uh, Snowball about Warren Buffett, Made in America about Sam Walton, uh, and Leonardo da Vinci.

    6. LRLenny Rachitsky57:31

       What is a favorite recent movie or TV show?

    7. JSJulia Schottenstein57:34

       Okay, so I almost watched a movie (laughs) 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.

    8. LRLenny Rachitsky57:46

       Wow. You've, you're in store for a treat.

    9. JSJulia Schottenstein57:49

       (laughs)

    10. LRLenny Rachitsky57:50

        Favorite interview question you like to ask?

    11. JSJulia Schottenstein57:53

        When's the last time you had to teach yourself something new, and how'd you do it? And so I like to test for growth mindset and a thirst for learning. And then also, why dbt Labs? I think a lot of people who come to dbt Labs have very authentic reasons why they're drawn to the company, and in moments when things are tough, it's the answer to that question of, "Why, why are you here?" that's gonna make all the difference.

    12. LRLenny Rachitsky58:17

        And sounds like what you look for is just, like, an, like, genuine enthusiasm.

    13. JSJulia Schottenstein58:21

        Yeah.

    14. LRLenny Rachitsky58:22

        Awesome. What are some favorite products you recently discovered that you really like?

    15. JSJulia Schottenstein58:27

        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.

    16. LRLenny Rachitsky58:37

        Hm. I've not 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?

    17. JSJulia Schottenstein58:45

        Do fewer things and try to single thread the team as much as possible.

    18. LRLenny Rachitsky58:50

        And single thread meaning, like, one main priority, one goal?

    19. JSJulia Schottenstein58:53

        One mission. Yeah, we're all working, rowing in the same direction.

    20. LRLenny Rachitsky58:57

        Final question. You have a podcast. First of all, tell us what it's called, but, second of all, what's a favorite podcast of yours other than this podcast and your podcast?

    21. JSJulia Schottenstein59:05

        Yeah. It's called the Analytics Engineering Podcast, so if you wanna learn more about the data industry, I host it 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 Round's podcast by Brett Baran. He, uh, interviews a lot of operators about how they do their b- very best work. And another podcast that I really like is the Logan Bartlett Show, which touches on, uh, timely, uh, trends in, in tech.

    22. LRLenny Rachitsky59:34

        And In Depth, I think Todd Jackson actually hosts a lot of the episodes too. Also, huge fan of the podcast. Definitely check it out. And then name... Say your podcast again, and how can folks find it?

    23. JSJulia Schottenstein59:43

        Uh, it's called the Analytics Engineering Podcast.

    24. LRLenny Rachitsky59:47

        And it's just in podcasting apps?

    25. JSJulia Schottenstein59:48

        Yes.

    26. LRLenny Rachitsky59:49

        Amazing.

    27. JSJulia Schottenstein59:50

        Check it out.

    28. LRLenny Rachitsky59:50

        Julia, we've talked about inflicting pain and, uh, strategic partnerships and why worse is better. Thank you so much for being here. Two final questions. Where can folks find you online if they wanna reach out, and how can listeners be useful to you?

    29. JSJulia Schottenstein1:00:03

        You can find me on Twitter, J_Ashotenstein, and you can also find me in the dbt community Slack, also Julia Ashotenstein. Uh, send me a note, reach me there, and, uh, I'd love to hear from you if you're, have data problems, or we can help serve your needs better. Uh, would love to chat.

    30. LRLenny Rachitsky1:00:22

        Thank you so much for being here, Julia.

Episode duration: 1:00:50