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

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.

(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. Julia, welcome to the podcast.