Lenny's Podcast: Product | Growth | Career cover image

Lenny's Podcast: Product | Growth | Career

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

Jul 13, 2023

Julia Schottenstein, Product lead at dbt Labs and an angel investor, shares her journey from venture capital to product management. She provides invaluable advice for founders on improving M&A outcomes and assessing competition. Julia dives into the significance of aligning product features with customer needs and discusses the challenges of open source versus proprietary elements. With insights on effective pricing strategies and the importance of networking, she emphasizes that building strong relationships can lead to better acquisition deals.

01:00:50

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Episode guests

Julia Schottenstein

Highlights

AI Chapters

Episode notes

Evaluating Early Stage Companies: People, Market, Product, and Distribution

Challenges of growth and community involvement at DBT Labs

Transparent Approach: Seeking an Exit for Your Business

Acquiring Companies for Transformations: The Story of DBT Labs

1.

Intro

4min

2.

From Venture Capital to Product Management: A Unique Career Path

2min

3.

Navigating Investment and Competition

14min

4.

Empowering Data Transformation with DBT

9min

5.

Navigating Open Source and Pricing Strategies

5min

6.

Navigating the Complexities of Pricing Strategy

2min

7.

Navigating M&A: Strategies for Startups

18min

8.

From Investment to Product Management

7min

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Julia Schottenstein is a product lead at dbt Labs, a data transformation company, and an active angel investor in data and infrastructure startups. She first got excited about dbt in 2019 when she was a VC at NEA and decided to make the leap from investor to operator by joining dbt Labs. She also co-hosts the dbt Labs Analytics Engineering Podcast, a show about data trends that impact analytics engineers’ work. In today’s episode, we discuss:

• Advice for founders hoping to improve their M&A outcome

• How to strategically think about competition

• How to determine your paid features and have willingness-to-pay conversations

• Why Julia lives by “worse is better” and “tech debt is a champagne problem”

• Lessons from dbt Labs

• What PMs can learn from investors

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Find the full transcript at: https://www.lennysnewsletter.com/p/m-and-a-competition-pricing-and-investing

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Where to find Julia Schottenstein:

• Twitter: https://twitter.com/j_schottenstein

• LinkedIn: https://www.linkedin.com/in/julia-schottenstein-25424318/

• Podcast: https://open.spotify.com/show/4BKMMeVXk4jJnAQSqGSJvE

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Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• Twitter: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

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In this episode, we cover:

(00:00) Julia’s background

(04:15) How Julia went from VC to working in product at dbt Labs

(08:24) Four things Julia uses to evaluate a company’s potential

(11:10) How to identify whether or not you have product-market fit

(12:05) Distribution strategies

(13:11) M&A strategies

(15:54) Lessons from the Transform acquisition

(18:01) Competitive values at dbt

(20:25) Keys to dbt’s success

(26:35) An offsite exercise Julia used to help her team internalize upcoming changes

(29:32) Determining what features are included in open source

(31:56) Pricing and willingness to pay

(33:34) Lessons from dbt Labs’s first pricing change

(36:33) Whether or not to be public about selling your startup

(40:08) How to utilize connections during acquisitions

(44:57) How to communicate selling your company

(46:33) M&A market forecast

(47:28) Values at dbt Labs

(50:14) Lessons from working with strongly opinionated users

(52:02) The importance of shipping, learning, and iterating

(54:08) How VC skills translate into product

(57:03) Lightning round

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Referenced:

• dbt Labs: https://www.getdbt.com/

• Tristan Handy on LinkedIn: https://www.linkedin.com/in/tristanhandy/

• dbt Labs acquires Transform to enhance Semantic Layer tool: https://www.techtarget.com/searchbusinessanalytics/news/365530993/DBT-Labs-acquires-Transform-to-enhance-Semantic-Layer-tool

• Snowflake: https://www.snowflake.com/en/

• Gödel, Escher, Bach: An Eternal Golden Braid: https://www.amazon.com/G%C3%B6del-Escher-Bach-Eternal-Golden/dp/0465026567

• Red strings training clip from Ted Lasso: https://www.youtube.com/watch?v=aVe3Iwy10MA

• Monetizing Innovation: https://www.amazon.com/Monetizing-Innovation-Companies-Design-Product/dp/1119240867

• Madhavan Ramanujam on Lenny’s Podcast: https://www.lennysnewsletter.com/p/the-art-and-science-of-pricing-madhavan#details

• Pricing survey: https://www.qualtrics.com/marketplace/vanwesterndorp-pricing-sensitivity-study/

• Hunter Walk’s blog post about publicly selling your startup: https://hunterwalk.com/2023/05/13/the-acquihire-market-for-early-stage-startups-is-ice-cold-one-better-strategy-announce-youre-for-sale/

• Range: Why Generalists Triumph in a Specialized World: https://www.amazon.com/Range-Generalists-Triumph-Specialized-World/dp/0735214506/

• The Snowball: Warren Buffett and the Business of Life: https://www.amazon.com/Snowball-Warren-Buffett-Business-Life/dp/0553384619/r

• Sam Walton: Made in America: https://www.amazon.com/Sam-Walton-Made-America/dp/0553562835

• Succession on HBO: https://www.hbo.com/succession

• In Depth podcast: https://review.firstround.com/podcast

• dbt community Slack: https://www.getdbt.com/community/join-the-community/

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Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

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Lenny may be an investor in the companies discussed.

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