Frank Slootman (SnowFlake)

Videos · Analytics, Business, Technology

This summary was largely done for my own note-taking, sharing it just in case it adds more value to other people.

I have no affiliation whatsoever with anyone in this note. This is a summary largely taken for my own reference, and may contain errors that do not reflect what the people involved said :)

Context

Source URL: Zoom

Why is it important: Useful for anyone who wants to set up an analytics startup. Though Frank Slootman has won at most things he has tried — so this was worth it for anyone who wants to set up a company

Keywords

Data Startups, SaaS, Data Lakes, Data Warehousing

Summary

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Highlights

Background

Frank was the CEO and Chairman of Service Now. Before that, he was the CEO and President of DataDomain. Led both of these companies to an IPO
Now is the CEO and Chairman of Snowflake, which he also led to an IPO
Frank immigrated from Europe to the US early on, and had his job application rejected by IBM 10 times
Involved in a lot of crappy businesses at first, and learnt from them

Data Domain

Data Domain started off as a small company of 20 people by a founder from Princeton. Initially, Frank took a huge pay cut to work here. This happened after the dot com bubble
Realized that the Data Domain product was barely marketable and they were running out of money. The product was a data storage product
Realization: Successful startups are an S-curve. The early years are really slow. It's like crawling
- One of the test customers was Stanford University. They wanted to sign a small $5000/year contract to make sure they had a paying customer and after they had given away a $30-40k unit for nothing. But still found it hard to sell
- But eventually, it became a successful business. Loads of small wins led up to it. You can have humble beginnings and questionable prospects, but things can take up amazing proportions later on
S-curve = very slow beginnings, and then a very rapid ascent. But eventually, you can slow down again
Data Domain was a limited product that was great at what it did, but had few adjacent products to grow
Every company has these moments where you must realize your limitations. It's up to the leadership whether they can recognize their problems on time, and if they can execute well
Can you evolve? Can you face the transformation? If you don't growth can kill you
Only used $28M in net capital throughout their lifetime and eventually sold for $2.4B. But ran out of market eventually and could not execute well enough to grow in adjacent market
Be keenly aware of how big your market is and what your next move is going to be. Be aware of your growth motion — both in core product and sales/marketing. Execution and awareness is super important. Does the amount of capital you have access to support this?

ServiceNow

Took lessons from Data Domain to Service Now
This was a structured messaging platform that manages digital workflows for enterprise operations
The Founder found ServiceNow interesting, but Frank (because he had a very different context) found it extremely strategic
- Realized that he could help take it in a very strategic direction for the enterprise

Working principles

What's the core job of a CEO

The core job is to win. Not trying to be flippant — it's all about the outcomes. Great CEOs have great outcomes. It's not about being smart, charismatic, and likeable
Get clarity in your head about what is strategically important. Don't appease your board of directors
"When you win, they can't hurt you. When you lose, they can't help you" - John Madden
The organization must win, the CEO is the single-most important person to make that happen
Take ownership of outcomes
Good leadership is a function of experience. Scar tissue helps you make better decisions. Be focused. Don't react to every situation that comes across and don't be thrown around by the waves. Get clarity of purpose and clarity of mind. Have high conviction about what you're doing. Don't let other people distract you.
Your responsibility is to the organization – the employees, the customers, and the investors. Not anyone else

Make really great stuff while moving fast

"It is breathtaking how slow, substandard and unfocused many companies out there get through the day. And think nothing of it. The lack of energy is palatable. There is performance upside everywhere."

What is the tradeoff between pace of execution and quality

Are you sure you're at the tradeoff point? Most people are moving really slow. This is usually an excuse. Just push it to the edge
If you really get there, you'll know what to prioritize. There are no prefabricated answers
The quality of execution is not a resource problem. It's a mental problem. A little bit more mental focus and concentration can create a far better perspective and outcome. "Good enough and okay" are terrible words. Make stuff that's really great. When people feel that it's really great, they get energized and inspired — which allows them to create much faster
A lot of energy comes from building really really great products. As Steve Jobs said — it's either really great or it's total shit. There is no middle ground. That is clarity of mind

We are very quick to accept mediocrity. Look at HP and IBM. These are companies that have been killed by mediocrity. Don't let mediocrity fester anywhere

Be big on reanalyzing problems. People can have a knee-jerk approach to analyzing problems via pattern matching — this is very very dangerous. First principles are far more important compared to pattern matching. Everything is always different. Don't pattern match if you want exceptional outcomes. Look at each new problem on its own merits

Stop meetings if the discussions are surface levels. Go all the way back and dig really deep. Broaden as much as possible when you're starting to analyze the problem. Don't be a lazy thinker. Don't fall into the trap of pattern mapping

Jumping fast to diagnosing a problem is a bad sign. Be slow when analysing, be fast when executing. MBAs often make the mistake of thinking fast and executing slow

Differential diagnosis from medicine is a great way to think about problem

At this point, have been through iterations with data-companies so many times and have seen a lot of what works and what doesn't. If he thinks that he can do much better than the executives he has at his disposal, he wants to just execute fast

Prefers to go straight for the problems
You can turn organizations very very quickly if you can change the people. But trying to improve the people often doesn't work
- When he was younger, he thought he could turn around people. Experience has taught him better

Hires more for aptitude than for experience. Can give hires experience but cannot give them aptitude

Asks them "what are you really good at?" Experience is something that he can easily get people

What is Frank really good at?

Is a very focused, mission-driven, "can't fail" person
Not a functional person — not an engineer or a finance guy
Is a very horizontal/lateral-vision thinker

Don't do other people's jobs for them. Help them get better by showing them where they are missing outcomes. Let them figure out how exactly to do the job. Just show the goal and the constraints

How do you know things are going sideways?

When things become lethargic and slow, pull the pin out of the grenade. Unreasonably change your team-member's perspective on timing when they are being slow
Respond to "this will take a year to execute" with "can we do it in 3 months"
If someone is aiming for a $100M/year sales target, ask what it'll take to get to $150M/year. Then ask them to execute the things you suggested
Incrementalism is the kiss of death. Today + 20% = failure. Today * 200% = a good chance of success
Never be happy be yourself. Always try to grow faster. Always challenge yourself
How do you know that you have reached the limits of what you can grow at?
What's your growth model? How do you think about growth? How do you know your target is a good number? Be intellectually honest

Founder-investor relationships

Personally, has always had really good relationships with his board
Had VC partners who told him "I don't want you to spend any time on board bullshit". Wanted to roll off the VC board members with independents before the IPO, in order to increase the company's profile — good board members helped him with this
Board members should decide they either support or not support the CEO. Don't be in the middle ground. Either you support the CEO, or you take them out of the role. The middle ground kills everybody
Don't be afraid of gossiping. When there's doubt, there's no doubt. Don't go sideways. Make a decision. Boards need to be 100% behind their CEO or they need to make a change

Can you sell across geographies in a post-Covid world?

Snowflake didn't miss a beat during Covid. People were actually easier to get on meetings via Zoom during Covid. Can definitely sell
More importantly, the efficiency and volume of sales calls increases significantly. You don't have to travel to Idaho and then only have 1 sales meeting for a 2-3 day period
Staff meetings are also a lot more efficient. Used to take 1.5 hours, now only take 45 minutes. A social element is naturally introduced when people are in person
Have done $100M in deals during Covid without meeting people in person. Only worry is that, post-Covid, sales people may want to get in front of people and go back to their old ways of selling in person
Have multiple selling motions at Snowflake — have one division for the Forbes-250, another for typical enterprise sales, another for inside sales etc. Each of these has been effective as working remotely

How do you decide between two equally good choices?

Just take both decisions. Don’t do a pros and cons list – have a more visceral approach
Try out both approaches and then compare notes later. The right answers will eventually force themselves on you
When you eventually decide on something, you need to develop high conviction. You have to be certain and need to drive for high conviction in your thinking — specially as a leader. Don’t project conviction before you have tried different alternatives

What are the best questions to ask to your team members?

"How do you think about this?" This is the first conversation. How do you know it's the right way to thinking about this? Really opens up a first-principles approach way to thinking
Look for evidence of clear, deep thinking. Not shallow thinking built on buzzword salads. Don't have analysis paralysis. You won't get to a decision by buying more data or insights. What evidence do we have that X works?
NOT, let's think about what are we going to do. Don't be too sure that you understand the problem. Always ask, "why don't we try that a few times"