The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: Scaling ServiceNow to $5BN in ARR | Leadership Lessons from Doug Leone, Frank Slootman and Bill McDermott | VC Value Add: Is it Real and Why the Worst VCs are "Seagull VCs"

Sep 11, 2024

David Schneider, a General Partner at Coatue and a key figure in scaling ServiceNow, shares invaluable insights from his journey. He discusses the secrets behind growing ServiceNow to $5 billion in ARR and the common reasons companies plateau. The conversation also covers the transition from operator to VC, the challenges faced, and advice for founders on navigating board dynamics. The discussion critiques 'seagull VCs' and emphasizes the need for constructive feedback in leadership, making it a treasure trove of wisdom for entrepreneurs and investors alike.

01:06:23

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Quick takeaways

Understanding customer motivations for purchasing products is crucial for tailoring offerings effectively, focusing on income generation, cost savings, or risk mitigation.

Selecting board members based on relevant operational experience rather than mere previous positions significantly enhances strategic guidance and board dynamics.

In competitive markets, successfully positioning against incumbents requires leveraging existing spending patterns while maintaining a clear focus on customer needs.

Deep dives

Reasons for Product Purchase

Products are primarily purchased for three key reasons: they help generate income, they result in cost savings, or they mitigate risks that could lead to negative publicity. Understanding these motivations is crucial for businesses to tailor their offerings effectively to meet customer needs. For instance, industries heavily reliant on security solutions focus on the last aspect, prioritizing products that keep them compliant and out of the headlines. Consequently, companies must clearly articulate how their product aligns with these goals to drive sales.

Instilling Urgency in Sales and Project Management

01:31

Navigating Founder Support and Personal Growth in Venture Capital

01:50

Mastering Board Dynamics: Effective Strategies for Founders

02:48

The Power of Constructive Feedback and Trust in Leadership

03:05

Intro

4min

Navigating Tech Growth and Sales Strategy

5min

Navigating Competition and Growth in Investment

16min

Navigating Market Dynamics and Investment Strategies

17min

Navigating Billion-Dollar Investments

15min

The Power of Constructive Feedback and Trust in Leadership

3min

Insights on Leadership and Personal Drive from a Transformational CEO

3min

Embracing the Future: Learning from the Past

4min

David Schneider is a General Partner @ Coatue and one of the great operators of the last 20 years. Prior to Coatue, David was instrumental in ServiceNow’s growth to over $100B+ public market value. David led the growth of the company from $100M to $5BN in revenue. Before joining ServiceNow, David held senior positions at Data Domain, the company he joined at $0 in revenue and scaled to $1BN in revenue and an IPO and acquisition.

In Today's Episode with David Schneider We Discuss:

ServiceNow: Secrets to Scaling to $5BN in ARR:

What are David's biggest lessons from scaling ServiceNow to $5BN ARR?
What worked? What did not work?
What are the most common reasons companies plateau?
How did ServiceNow roll out so many different products so effectively?
How did David hire and ramp 180 people in 90 days?

2. From OG Operator to Newbie Investor:

What have been the single most challenging elements of making the transition to VC?
What advice did David get from the biggest names on entering venture?
How long did it take David to do his first deal? What advice does he give other operators entering?
How does doing deals in 2024 compare to when David started doing deals in 2021?

3. VC Value: Do 90% of VCs Really Damage Companies:

Does David agree that 90% of VCs actually detract value?
What does David mean when he says that the worst VCs are "seagull VCs"?
What are David's biggest tips to founders on how to get the most out of their board?
What is enough ownership for David to really give the time needed to a company?

4. Lessons from the Greats: Doug Leone, Bill McDermott, Frank Slootman:

Doug Leone: What has David learned from Doug on what it takes to be a great investor and board member?
Frank Slootman: What has David learned from Bill on how to be the best leader of a mega company?
Bill McDermott: What has David learned from Frank about decision-making and execution.

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