M&A, competition, pricing, and investing | Julia Schottenstein (dbt Labs)
Executive Summary
A Lenny's Podcast conversation with Julia Schottenstein, a product leader at dbt Labs, on how M&A works for startups, how dbt grew, how to think about competition, and the company's values. Sponsors named: Vanta and Superhuman. PARTIAL COVERAGE: the episode runs about 61 minutes and the available caption text is auto-generated, lightly punctuated and cut off near the values discussion, so the final minutes are not covered. Company figures are Schottenstein's own claims and are unverified. This is a summary of her views, not financial or legal advice.
Key Takeaways
Make potential buyers notice you
She says most companies have only two or three buyers who find them strategic, and you should make it impossible for them not to notice your competitive advantage.
Stay friendly and open
She says founders often shut down conversations with an incumbent by being too competitive, but M&A is all about creating plan B, so you keep optionality.
Her acquisition experience
The host says she led dbt's acquisition of Transform, a startup he invests in, from the dbt Labs side.
Why dbt took off
She says dbt solved a pain point at the right time, with a framework that keeps data quality high but is simple to learn.
Open source flywheel
She says open source lowers friction, lets dbt see many use cases and builds network effects, with about 20,000 companies using dbt each week.
Timing and community
She says timing mattered as cloud data warehouses exploded, and that dbt Labs began as the consulting firm Fishtown Analytics.
Company values
She says dbt cares more about value creation than value capture, and values transparency, humility, and work done well as its own end.
The Conversation Breakdown
Make potential buyers notice you
⏱ Untimed topicShe says most companies have only two or three buyers who find them strategic, and you should make it impossible for them not to notice your competitive advantage.
Stay friendly and open
⏱ Untimed topicShe says founders often shut down conversations with an incumbent by being too competitive, but M&A is all about creating plan B, so you keep optionality.
Her acquisition experience
⏱ Untimed topicThe host says she led dbt's acquisition of Transform, a startup he invests in, from the dbt Labs side.
Why dbt took off
⏱ Untimed topicShe says dbt solved a pain point at the right time, with a framework that keeps data quality high but is simple to learn.
Open source flywheel
⏱ Untimed topicShe says open source lowers friction, lets dbt see many use cases and builds network effects, with about 20,000 companies using dbt each week.
Timing and community
⏱ Untimed topicShe says timing mattered as cloud data warehouses exploded, and that dbt Labs began as the consulting firm Fishtown Analytics.
Company values
⏱ Untimed topicShe says dbt cares more about value creation than value capture, and values transparency, humility, and work done well as its own end.
Core Frameworks & Ideas
Plan B - Schottenstein's M&A view
Keep buyer conversations open to preserve optionality.
Open source flywheel - Schottenstein's account of dbt
Low friction brings users, use cases and partners, which feed the product.
Value creation over capture - dbt's value
Put good into the community first.
Actionable Next Steps
- ✓List the two or three companies most likely to find yours strategic.
- ✓Keep one friendly channel open with each of them.
- ✓Map where your product loses people to friction in getting started.
- ✓Check the user numbers quoted against dbt's public statements.
Notable Quotes
“m&a is all about creating plan BS”
“we are more concerned with value creation than value capture”
“transparency always wins”
The One Thing to Remember
Schottenstein says to stay friendly and open with potential buyers, because M&A is about keeping a plan B and optionality.