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Revenue Builders
From Zero to Scale: What It Really Takes to Build a Billion-Dollar Revenue Engine with Chris Degnan, Former CRO of Snowflake
01:01:58
In this replay of one of our favorite Revenue Builders Podcast conversations, Chris Degnan shares what it actually took to help build Snowflake from pre-product uncertainty into a billion-dollar revenue engine.
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- [00:05]
A
Welcome to the Revenue Builders Podcast, a weekly show featuring B2B sales leaders and executives. Hosted by five time CRO John McMahon and Force Management co founder John Kaplan, the show takes guests in the barrel behind the scenes with the people who've been there, done that, and seen the results. Revenue Builders covers best practices for scaling and growing your business while sharing the pitfalls to avoid. Enjoy today's episode. Today we revisit our conversation with Chris Degnan, former CRO of Snowflake. Degnan led that revenue engine through its incredible trajectory. John McMahon and John Kaplan talked with Chris when he was still CRO, and they explore the remarkable journey of building one of tech's most successful cloud data warehouses from the ground up. Chris takes listeners behind the scenes of his early days, ultimately helping transform Snowflake into a company that generated more than $1 billion. In Reven, he reveals the mindset, coachability, and relentless work ethic that separates founders who scale from those who plateau.
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B
Hello and welcome to the Revenue Builders podcast. I'm John McMahon and I'm here with the big man, Johnny Kaplan. Cap, say hello today. How are you?
- [01:21]
C
How you doing, brother? Good to see you.
- [01:24]
B
Good, good. Hey, Cap. Our special guest today grew up in the same town that I live in, Sudbury, Massachusetts, and Chris went to the University of Delaware, started his career in enterprise sales at Informatica, and then he moved on to Covalent Technologies, which was acquired by VMware. From there, Chris became the VP of the west at EMC, and then he moved on to be the VP of the west at Abexa before joining Snowflake. Get ready for this, Cap. Two years before they had a product. Two years. Chris is now the CRO at Snowflake and he's helped build the company from zero to well over $1 billion in consumption revenues. Cap, please help me welcome my friend and the extremely talented Chris Degnan.
- [02:18]
C
Hey, Chris, how are you? Thanks for joining us today. Congratulations on your outstanding success and we're really looking forward to talking today. Thanks for coming.
- [02:28]
D
Well, well, I'm, I'm honored to be here. And, and you know, part of the success I've had at, at Snowflake is due to Mr. McMahon, so I owe John. Anything he wants me to do, I'll. I'll do it. So I'm psyched, like, to be doing it.
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C
So.
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B
It's awful nice of you, Chris, awful nice of you, but I didn't do all the hard work that you did, so. Hey, Chris, let's jump into this, right? A lot of. And let's start with the fact that many people in our audience believe they want to be in a startup and some even think they want to be in a RAW startup. And then you join Snowflake two years before, you know, the first general availability release. Now that to me that's raw at that time, you know, joining, look, looking back, joining Snowflake with the grand slam home run, but at the time joining a company like Snowflake was a tremendous gamble. So let's tell us a little bit about what made you decide to take the leap.
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D
Yeah, so, so when I, you know, I think I got, you know, introduction to the quote unquote Blade Logic Mafia by working for Andy Byron at Avexa and I got an opportunity to meet you, John, through Avexa and it was actually a. I couldn't have been. My career at EMC was really helpful in what I did here at Snowflake, but my career at, even though it short tenure at Avexa, it was incredibly helpful because there were things that I would have to always ask permission to do at, at emc and Andy would always be like, just go do like, I don't, I don't need to micromanage you. And so I learned some of the. Both of those two things were really critical and I think, you know, when, when I, when I started to pick my head up is I was back at EMC because of, because Avexa got acquired by emc and that was the last place I wanted to be. I just was done with, with storage and I just didn't like it. So I was like, you know, and by the way, I had a great run there, but I just was done. And so I started to talk to a bunch of different people, some of which are, you know, part of the Blade Logic Mafia. And you know, candidly, they were trying to imitate you, John. And, and, and I don't think there's a way to imitate John McMahon. John McMahon is an original and you can't, you know, imitate John. And so I think from my standpoint I didn't want to go work for a pretend person or someone who thought they were better than everybody else. I really just was looking to work with good people and you know, I was, there's a, maybe a midlife crisis involved in there, you know, just turning 40. And I met Mike Spizer from, from Sutter Hill and Mike is, he's, I mean, you know him so well. He's an incredible recruiter and he's a great sales guy and, and I think he over promised a little bit of what, what, you know, Snowflake, where Snowflake was. And I remember walking in, you know, to my interview at.
- [05:26]
C
At.
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D
At Snowflake to meet the founders, and I was wearing a suit, and they were all wearing, you know, ripped jeans and T shirts and sandals, and I think they're all like, what the hell is this guy doing here? But, but I think it was just a combination of I didn't want to go work for some. Some people that were going to think they were the next John McMahon. And I also think I really liked the founders and I like Spicer, and I figured, you know, hey, I'll take this job. You know, John, one of the, One of the secrets that I'm not sure you, you know, is they, you know, when Spizer was. Was, you know, negotiating with me on the job, you know, I said, the one challenge I have with taking this job is that there's no one that cares about me that, you know, on the, you know, at the company that there wasn't a CEO at the time. Mike Spizer was the CEO. And, And I said, so I really would like, you know, an advisor on the board. And I said, if you can help me solve that. And I said, you know, I, you know, at Avexa, we had John McMahon, and John was really helpful there. And, and, and so Spider's like, well, I know John, and I think like, that day, the next day or the next couple days, you had a board meeting with him. And, and so he said, I have this company. I'd like you to. To. I mean, it was early for you, too, right? And, and he asked you to join the board. And he came back and said, I got. I got McMahon on the board. And, and so, so I think you were the kind of linchpin to make me finally take. Take the job, even though you may.
- [07:01]
B
Not know that I knew part of that, but I thought you might have already committed to it. And so Spicer, you know, we met in a cafe in Redwood City, and he said, hey, you know, I really like what you say when you're on the board, some of the comments that you make, and I really believe in, you know, the way in which you approach sales. And I'm starting this company called Snowflake, and I'd like you to, you know, help, you know, join the board. And I said, well, what does it do now? You got to remember. What was that? How many years ago is that?
- [07:32]
D
2,000. That was 2013. 2013.
- [07:35]
B
2013. And he said. I said, well, what is it? He said, it's a cloud data warehouse. And I remember I got little tingles in my forearms, and I. That never happens to me. And I. He said, let me tell you more about it. And I said, you can tell me more about it, but I'm in. It was that short of a conversation. Yeah.
- [07:54]
D
So it kind of. Both of us, you know, made it a little bit because Spicer was such a good. You know, we believed in Mike so much, and it's been. It's. For both of us, it's been a good ride.
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B
You join the company, you walk in, there's no product. I think, if I remember right, in that little room up in.
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D
In San Mateo.
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B
San Mateo, you walk in, there's like 10 developers in the background, and there's no sales guys, and it's you In. In those situations. For somebody that joins a raw startup, what is it that you actually have to do and what is your real job responsibility at that point?
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D
The first thing I did, like, the first couple days, I was like, you know, this is the biggest mistake of my life. As I. As I'm sitting there staring across from. Like, I actually, you know, sat across from the QA team, so the QA engineers, and they're. They're super nice people. But, yeah, I was. That was. That was what I was. Was going on, who I was. And every time I pick up the phone, they're like, will you shut up? Because they were, like, doing their work, right? So I'd have to step outside and walk around, and I. And I think I was. I was struggling on exactly what I was supposed to do. And, you know, Mike Spizer, really, all he cared about was making sure that we got customer feedback. So what I started to do was say, all right, you know, at Avexa, at emc, I would hold my sales team accountable to go on, you know, eight sales calls a week, three, two to three net new business meetings. And so that's what I said I'll do. And so I. I decided, all right, I'm just gonna go out. And even though I, you know, I couldn't put the name of the company on my LinkedIn, you know, we. I had nothing I could send people. I just started, you know, creating spam lists and marketing to a bunch of, you know, Chief Data Officers, CTOs, and saying, look, you know, we've. We've built a database from scratch, and I have. I had a whole spiel, and. And then I'd ask for 15 minutes and I would go on eight calls a week, and it was all new business. Meetings for a long time. And John, you were on some of the emails because every week, not only did I do the eight meetings a week, but I would actually have to send to the entire company, including the board, you know, the summary of my week's activity. And so I really was nervous that I wouldn't, I was so afraid of failure that I would make sure I would do that and I would send, you know, a weekly update to the entire team. And to this day, even though we have a retention policy of getting rid of emails, you know, that are older than a year, some of the founding engineers, they archive those emails and they kind of hold them as, you know, treasure troves because it's a neat thing to go back in time and, and look back at some of the first meetings I've had with some of our earliest customers and, and it's all there in, in, in the emails.
- [10:53]
B
So if we really set in that stage, what is your real job, your job responsibilities? You know, making those eight calls, getting exposure to potential customers. But you, in a, in a funny way, you're a product manager.
- [11:07]
D
The early engineers, they jokingly would call me the Shadow cto, even though they, they tried to get me to write SQL and I failed miserably. They were polite about it, but I, to this day I, you know, I can't write a single code and whatever. But what, what it was the foundation of, of our, of our kind of philosophy of put our customers first. And so instead of me, you know, making a decision, which I tried to, you know, force our founders to do many things like go on premise because I would get large enterprises interested and they say when you go to the private cloud, and, and our founders would say never. So I would have to change the, my, my strategy on who our ideal customer profile would be. But nonetheless, you know, we, I would bring them to meetings and they would make really very strategic product decisions on, on which way the engineering department was going to do. And they, all they really wanted to do was solve technical problems for the customers. And that's really how we started the company from a, from a customer interaction perspective. And candidly, to this day, that's still in our DNA and our culture right now.
- [12:24]
B
Chris, so you, you're essentially a product manager, or as they politely called you, you know, the Shadow CT cto. Then how did you know when it's okay to actually sell a product and actually bring in some sort of revenue?
- [12:41]
D
Well, I mean, so we found like the first two customers, turns out, and you know, this. Well, John is I think you were kind of still on the fence of whether or not we were going to work because the only people that I could get to use the product were like ad tech companies and online gaming companies, if you recall.
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B
Tech and ad tech. I remember that.
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D
Yep, yep. And, and so yeah, I, so, so we got what, what we started to see was we had two customers, Accordant Media and White Ops who, who were using the product on a daily basis and, and they were using it to the point where it was starting to cost us money. So prior to Bob Muglia, our first real CEO, I invented really awful pricing scheme that we end up having to unwind. But so I went and pitched both according and White Ops and I said, okay, great, will you sign this? And I don't even think they knew what they were signing, but they said yes. And so I think in Probably June of 2014, I think we got our first two contracts and I think Bob was starting right around there and he's like, I'm not going to disrupt that. We got them to agree to pay us money but then we couldn't bill them until probably the fall of 2014. So it took us another probably four or five months to figure out how to bill them. But that was another awesome experience. In fact, we have our 10 year anniversary. We've just had our 10 year anniversary and I'm interviewing Tamara Hassan who's now the CEO. He was the founder of White Ops and now it's called Human and you know, to have that still connection where there's still a customer and I'm talking to the guy who was, who bet on us early, early on is neat.
- [14:32]
B
So that's a great story. So if we walk through it, you basically, you're a product manager now. You're starting to get, you know, a couple deals. And then if I remember now, we said, okay, let's go hire, you know, one or two salespeople, which you did. What would you call that phase of the company? So first it's like product market fit. It's, you know, you're a product manager or shadow cto, then you're starting to sell a couple copies of the software and now you're hiring a couple salespeople to see if we can, you know, expand our reach a little bit. What would you call that phase of.
- [15:03]
D
The company I joined is probably in alpha and probably it was the, the beta phase of the, you know, saying, do we really have product market fit? I mean, John, you've been involved, I've been involved in other startups where they just, they can't find product fit for years. And it was, it was taken a little bit of understanding that. But I think what I started to see was demand like that. We, we actually knew what our ideal customer profile was and I think that was when I think you as the, as, as the board member, I think Bob as our CEO and Spizer were like, okay, we can, we now see that we're starting to understand who our ideal customer is and we can go target those people. And that was really helpful. And that's when we started to really, you know, go after, you know, targeting, you know, end user customers that fit in that profile. And so I'd still say that was, that was pre GA because we were about a year away from, from that, from GA at that point. But it was just getting more validation if you will, on our, on our products, on a product market fit. And do we actually have some, you know, is the dog hunting as Bob used to say, and the dog hunting. So that's really was, was helpful for us.
- [16:19]
B
Yeah. And what a lot of people don't know is when you started all of this you had some very formidable competitors. Amazon had a product called Redshift. They were probably the leading product in the cloud. And then you had, you know, multibillion dollar companies like Teradon, Teradata, which were on premise companies. But we're trying to make the move to the cloud. So here you are trying to gain product market fit, being basically an evangelist out there and everywhere you go people are trying to compare you to Teradata and what they probably do in the cloud and to Amazon, a multibillion dollar company with the leading product in the cloud. Can you talk to us a little bit about fighting some of those major competitors that way?
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D
It's daunting. And I think there's kind of two sides of this is number one is when you're selling a startup product, people aren't going to give you a ton of money to start. And I think, you know, there's a, there's a misperception if you're a salesperson that you can go into an early stage startup and make a ton of money. And, and I will tell you that my wife was pretty pissed at me for two years because I had no commissions coming in, right. And I, I took a pretty big pay cut for probably two and a half years, three years before I could actually make any money because we really weren't selling enough to warrant me taking a commission check. And I think so first of all that was kind of a hard grind, if you will, to start off doing that and then competing against the likes of Amazon and Teradata. And there was a series of things that happened that, you know, I always say I'm, you know, better lucky than good.
- [18:10]
C
I.
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D
There's a lot of luck that, that I, that I kind of ran into in my career at Snowflake. And the first set of things that that was, was helpful is that Amazon, while they were the first cloud data warehouse with Amazon Redshift, it was not a good product. And, and so we actually solved a lot of the problems. So what I would do is I would actually build lists and, and focus on the, you know, people that were using Amazon. That was, first of all, I wasn't, you know, at the time we, we would go after the large Teradata customers. But Teradata was the Ferrari of the data warehousing industry. And I just, it was going to be hard for me to really go and take off, you know, take a huge teradata at the time because we were so small. So I focused on Amazon customers and Amazon Redshift customers and we would spam them and I identified the pains they had. So I would go in and say, not just me, the entire sales team, we'd go in and say, okay, these are the five or ten things that you have pain around Redshift. And they'd say, yeah. And I'd say we solve all these. And I'm like, don't believe a thing. I say try it and we'll let you try it for free. So it was like just getting people to try and put data inside of Snowflake was, was incredibly hard. And but we would get there and they would try it and they're like, oh, wow, this does solve these problems. So really the first luck, if you will, that, that I ran into was that that Amazon Redshift was not a good product. And then secondarily, as we started to move, you know, into the more enterprise y sale, it was really. IBM had had this wonderful product called IBM Netezza that was a separate company. And IBM made the wonderful decision to End of Life Neteza which pissed off all of their customers. So we started targeting Netezza customers and it was really the Teradata was the last thing. And I think Teradata, and it's a good lesson for large companies is Teradata was almost arrogant. They're like, you know, Vertica has come along, ate this has come along. They've never, no one's been ever able to replace Teradata. And they were kind of like, we're good. And they ignored the cloud and they were really like, hey, the cloud's here, but it's way more expensive to store data in the cloud. And they ignored it. So they, they kind of let the cloud sideswipe them. And then we were, we were there for our customers to help them move to the cloud. And you know, that's really, that was, that's awesome. Because Teradata, you know, sat in their laurels and they didn't respect the competition and they got, they got crushed and they're, they're getting crushed still.
- [20:51]
B
Yeah. And then Chris, every company that's a raw startup has one customer that they can look back on that says, you know, I got this customer. They busted our ass product wise. But when we look back, that was the company that actually made us. And do you, you can name who that company is and maybe talk a little bit.
- [21:15]
D
I'll tell you exactly it is. So there's a company company in Boston called Locallytics and Locallytics, they had one of the largest, they had a 500 plus terabyte vertica cluster on Amazon and we started to work with them and they're, you know, their engineering team were really interested in us, but there was a technical issue where how we, what you call cluster data was not how they wanted us to cluster. So you'd have to recluster the data. That, that reclustering effort was probably a seven month pivot for the entire engineering team and it was probably one of the most expensive database migrations in history because we have God only knows how many PhDs we had working on that, that database migration. But what that did was that led to us, you know, getting there, getting them up and running. They actually forced us to institute a lot of feature sets. Then, then Nielsen, we were about to lose to a Hadoop vendor that's out of business actually. Yeah, we were about to lose to them. And Terry, our founder was like, oh, just turn on this recluster feature. And, and, and, and Nielsen, all of a sudden there was a bunch of Israeli engineers and they're like, you guys are cheating. What did you do? Because we, we, because the work that we did for Locallytics, all of a sudden it was like, oh yeah, we turned it on. And all of a sudden we were way faster than the open source tool sets and way cheaper. And I think those two things really were material because then when Nielsen signed up with us, then we got the Nike cold called Nielsen and then Capital One. We lost Capital One to Redshift only to get them back. And they. So those are our kind of our. Our first early customers that, that were in the enterprise space that really move the needle for us.
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C
I really am. I'm listening to these different stages. And before we get on to the, you know, sexy part of the scale and the execution that Chris is just dominant at, I want to talk about a little bit we've talked about thus far. Kind of a couple of stages, Chris, a startup phase where you were kind of shadow cto. And really what I think I heard you say was your responsibility was as much about gathering requirements and understanding what customers, what they're dealing with, what they're struggling with, and then bringing that back and being a great translator to your technical teams. And then you moved into this kind of, okay, we have an understanding of this where we now have some product fit and. Or some product viability. Now we're starting to identify, you know, ideal customer profiles. I don't want this to get lost in the conversation. Couple things that are amazing to me. Number one, that's typically different people like, and it's very rarely that you go get a former grinder. I don't think you're. I can't characterize you as former. You're a grinder today. Like, you were a grinder back in the. In the early days. But it's really rare that you get somebody that comes from like a background that's a scale at scale at EMC and then Vexa or wherever. And then to be able to come back. Can you give us a couple of lenses for. Let's say our audience were listening. What does it really take? A lot of people say, yeah, I can do that. I can go back. And Johnny and I laugh about it. We call it the laptop effect. When guys say they can go from scale and then they can go into these startup companies and then they call us and they complain about, man, I didn't. I didn't get my laptop. Or, you know, they didn't get my 401k set up right, or whatever Johnny and I are. We're not laughing at them, but we're like, look, you know, that was part of the discussion of what it really takes to go into these environments. So sorry I'm doing such a long setup on this, but I'd love our listeners to hear a couple things. Number one, what was it in you and what decisions would you make, being honest with yourself that says, I can do this and I'm going to do it for these reasons, it's not going backwards, but it's going into a different environment that I'm in. And then number two, if you're the hiring manager, if you're an executive, if you're a board member, if you're an investor, what would questions would you really ask somebody to say are they number one capable of doing that? And number two, is it going to give them energy? Does it make sense?
- [26:00]
D
It does, yeah. I mean, I think it, you know, And I think McMahon does an incredible job in interviewing people to find out their, their who they are as a human. And yeah, you know, I, you know, and just to share a personal bit of myself is that, you know, I, I, you know, grew up initially, you know, fairly well off going to sitting at the front row of the Celtics games and to, to having nothing. Like having my house almost taken by the irs, my parents going through this awful divorce, and you know, a lot of other stuff. And you know, people in general will say, you know, that they can blame other things in their life for their failures. And you know, when I was young, because this was when I was probably 13, 14 years old, I said I want, I'm like, dude, I'm not gonna let this define me. I'm not gonna let that. So, so I think from, from my upbringing, you know, I started riding my bike to Star Market in Sudbury, Massachusetts to get to bag groceries and then to go and get a better paying job. I became a cashier and then I said, oh, I can be a bank teller at baybank in Sudbury. So I just think I've had this mentality and I have the mentality to this day is you have to earn your keep every single day and nothing is handed to you. And I think the biggest issue, you know, cannily of, of people that, that have come from big companies is that they have administrat like I have now. I have everyone kind of doing everything for me. And, and I think, you know what I, what I have the biggest thing that, that kind of the, the, the, the thing that I worry about the most is fear of failure. And so, you know, when I came to, to Snowflake, I wasn't the VP of sales, I was the director of sales. And you know, Mike Spicer told me I'd never be the VP of sales, let alone the CRO. And you know, I, I've just, I've taken the mentality that I have a. I have to earn my job every day, every, you know, month, quarter. And I still keep that same philosophy there's different things that you have to do as you become a big, you know, as the company grew. And I think the other thing is, you know, I think being super open to feedback is like, you know, I don't know any everything and I'm gonna like, people are gonna punch me in the mouth and tell me I'm screwing something up and I'm gonna be like, okay, I'm gonna go fix that. And I think John would tell you like, he'd be like, hey buddy, you're gonna, you're gonna. If this, if you don't fix this, it's gonna get fixed another way. And then I think John certainly was part of the board discussions where, you know, Spicer was, was certainly part pushing to replace me and bring in a, you know, a more senior person, you know. And you know, I was fortunate to have Bob Muglia, you know, support me to be the chief revenue officer. And even to this day, Bob, Bob jokes and says as soon as Bob moved on from, from Snowflake, he thought for certain Frank Slippman would fire me. So, you know, look, I'm always afraid that I'm going to get, someone's going to take something from me and I'm, and I'm always going to try to, you know, do my best to, you know, grind and keep my job. And that's how I am as a human.
- [29:23]
C
I've heard you say very powerfully I've heard you say you believe that you have a 90 day employment contract is really how you view your job. And I want to hit you with something. I want you to contemplate it for a second. Most people that think that way, it's the good part of it is it's awesome that, you know, you've had unbelievable success. The largest IPO and history of technology is, I mean, it's just fantastic. But you now, with all the success, you still believe you have a 90 day employment contract with. There's a saying that says you have to work as much on the business as in the business. And what I find with the grinders as they grow is, and they identify with the grinding piece. Sometimes they really struggle with working on the business. And that's probably why Spizer and some of those people, it's very rare that somebody will stay as a CRO or stay as the leader of sales through these, through these different, through these different segments. How do you balance your comfort zone of the grinding in the business and the forecast and the number and the scale and the recruitment and all that stuff and how do you balance it with working on the business now that it's a huge company?
- [30:47]
D
Well, you know, I'll give credit, a ton of credit to Frank Slootman on helping me mentally get to this spot because in a lot of ways, Snowflake, you know, is my baby from the go to market standpoint. And I care very deeply about the company and I'm very passionate about it. And I think, you know, Frank noticed and, and I think part of what kept, made him keep me in the job was because I was so in the business. Like I knew the customers and the customers and I have to this day really good relationships. But I think. So he made this comment to me and he said, Chris, you're a deal hound. And he said, that's great. And that got us to where, you know, we need, we needed to be, but it's not going to get us to where we want to go. And so you've got to hire people and, and you've got to trust that they're going to do their job. And if you start doing their job for them, they're not, they don't belong here. And, and, and he always, he talks about passengers and drivers and he goes, you're a driver, but you need to hire other drivers and hold them accountable. And so I think, I think that's been the key. You know, you Never trust anyone 100. But I think if you find yourself, especially at the scale we're at now, if I find myself that I'm doing someone else's job that works for me, then that's, it's a problem for them, I'll do it. But, but they're, they don't, that's not going to end good for them. So.
- [32:27]
B
Right. Hey, I want to go back. Cap and Chris. So having watched Chris through all these different phases, you know, one, in the early days, he knew how to scrounge. You know, you call him a grinder, but he knew how to scrounge.
- [32:44]
C
Yeah.
- [32:45]
B
But if you really say what Chris could do, because there was many discussions, as Chris pointed out, on whether or not he would make it. Chris had, you know, one. He was very, very, very coachable. He really took to heart what he told him. But more importantly, he adapted, he changed, he morphed. He'd see him one quarter and he knew he needs to be in another place on the next quarter. And all of a sudden he was there. He morphed, he adapted. And not many people can continue to adapt and it's usually because they get to a point where they're either not driven anymore or they just stop being coachable. They think they know everything. And Chris has this wonderful ability to both be coachable and continue to adapt and morph. So I give him a lot of credit for that.
- [33:36]
C
I love that.
- [33:37]
D
I'll just say, John, like, you know, it also goes to surrounding yourself with amazing people. I mean, you know, having, having, you know, the, the. My, my MBA is, you know, getting, you know, sitting down with John McMahon and building up productivity models and, and talking about that stuff, sitting down with Bob Muglia, with Frank Suitman, with Mike Spicer. I've, I've been super fortunate to, to have people that, you know, if I'm not listening to them, I'm an idiot. Right. And, and you're, you guys are all legends in my eyes. And, and I think that's part of the, the, the, the wonderful part of Snowflake is, you know, taking advantage of these amazing, amazing leaders.
- [34:19]
C
So, Johnny, let me add another variation to that, too. And I think our listeners have heard this on this podcast today with you here, Chris. My experience is the most successful people on the planet are the ones that have made sense of their own stories. And we've had Doug Holiday on the podcast where he talks about, you know, he talks about this very thing and, and like being comfortable in their own skin. And, and you've made a number of references here in the last 30 minutes of just talking to us. You talked about learning, overcoming learning disabilities. You've talked about, you know, you and I share a. You and I share, you know, the family, home, getting taken away from us. And, and, you know, that's, there's people that stuff like that life happens to. To people, and they either can't make sense of the story or try to run away from the story or. And there's other people that, you know, have things that happen to them in their lives, in professional and personal, and it's a part of their story. And it doesn't surprise me that you've taken that, you know, assessing what you can learn and being comfortable in your own skin, no matter where you come from. I just don't see it a lot today, Johnny. I, I see people that get to a certain level and then when they're asked to do something that is perceived, maybe at a lower level, but there's a good reason to do it because there are tons of growth that people won't want to do it because how they would be perceived, it's like other people's eyes versus your own eyes. And that's how Johnny's always described me to you, Chris, is that you've been very, very comfortable in your own skin. When, When I read about Day Contract, I'm like, I get it, man. This dude is motivated by. He probably hates to lose more than he loves to win. And that is a, that is a really, really, really cool attribute. So I just want to. Hats off to you.
- [36:20]
D
Yeah. I mean.
- [36:21]
B
Hey, Chris. Yeah. Talk a little bit about when you knew. I mean, I think I know, but tell. Talk about when you knew. Oh, I think the Snowflake thing's really going to go. It's really going to be a, you know, sizable company.
- [36:35]
D
Because, John, I think you and I talked about this. It's like, you know, when we were just having these, you know, and they were wonderful customers, and they are wonderful customers to this day, but the, the online gaming and, and, you know, tech companies there, I can't just sell to them. And I think when, honestly when Capital One leaned into us, you know, and in a material way, I was like, okay, we got something. And, and it was a lot of work because they wanted us to do more engineering work than. And they changed. They actually forced us to change our philosophy as a company on how we were going to do things. And, but that was just a material moment in time. And then, you know what, what I think the, the, the, the, the, the headwind that we kind of, you know, or, sorry, the tailwind that we, we kind of took advantage of was the, the fact that everyone, we, I think we were surprised at how fast all these companies were going to move to the cloud. I think that was. That. That still shocks me to this day, but I think the Capital One thing. Okay, great. And then now, now it's that. That it's still going on.
- [37:44]
C
Right.
- [37:44]
D
The tailwind of the cloud migration.
- [37:47]
C
Yeah.
- [37:47]
B
What I want everyone to hear is there was a time when Chris and I actually talked about the fact, oh, my God, can we only sell to tech and ad tech? Is. This is like, this is all the company is going to be able to do. This is never going to be a big company. And then what Chris is talking about, the listeners, is then we had Capital One and then you had this realization, well, if we can get Capital One, we can get almost anybody on the earth. So here it goes.
- [38:13]
C
How would you guys describe that? As being a little bit more purposeful now to say, okay, we've identified an ideal customer profile. That doesn't mean that it's in a segment. That doesn't mean that it's in an industry. So Chris, how would you go if you're writing a book about that experience and you and Johnny talking about that, like, what were the mechanics behind it? Was it okay, we understand their problem, their problems attached to a big business issue. Therefore they're going to spend lots of money on it. Like could you get into that a little bit more? Like when you said Capital One and when it started to, when it started, the problem started to scale, what mechanically did you do and what advice could you give about people that are in this state, they have some good users, some good companies and they're trying to go after a larger addressable market. Does that make sense?
- [39:05]
B
Yeah, I mean, I think talking about scaling, John. Scaling scale.
- [39:08]
C
Yeah, but scaling around that fundamental question of holy smokes, is there anybody else that can use this? And like, what did you do about that? Like, okay, there was a fundamental question and then you went out and did something, found out. Yeah, there's a whole heck of a lot of people. So I'd like to know the mechanics of that a little bit more.
- [39:26]
D
So there's kind of two sides of that because you know, I had a leader on the east and a leader on the west that were running almost deep, very different businesses. And I'm a velocity guy, so I like velocity, I like transactions. Like that is at the heart of it. I want new customer logos. The guy on the east, he got starry eyed with large enterprise and he only wanted to sell a large enterprise. And I think you can't do one or the other, you have to do both. And I think that's, that's the lesson I learned. It's like, dude, the large enterprise is wonderful, but they'll, they'll, they'll surprise you on the upside one quarter and then they'll surprise you on the downside in a material way the next quarter. So if you build a business on just on the large enterprise, you're screwed. And to this day my largest market is in the west because we opened up the most amount of logos in the west so that just getting new logos matters. And anyone who tells me they're just going to sell the large enterprise, as a salesperson, I would have zero interest in selling to just the large enterprise. I think what Capital One, the pain associated with Capital one is they had publicly made an announcement that they were going to vacate their data centers by a certain period of time. They didn't want to have any data centers. And they're an innovative company. They don't want to just be A financial company. They, in fact they have a software product they built to, you know, to integrate with Snowflake. So they're creating software company now. You know, that's when we saw like, okay, like the, the competition can't help them vacate the data center, AKA Teradata. Snowflake can. And that's when we started to say, wow, okay, now we're, now we actually have the first customer that's moved off of Teradata. Now let's take, let's go after every Teradata customer. And that was kind of like go. And you felt that and you're like, okay. That's when you kind of pivot and you're saying, okay. We were just selling to people already in the cloud. Now we're saying, okay, now we have a referenceable customer who's moved off of Teradata. Let's go after that. And that was really it.
- [41:48]
C
Okay, so now the addressable marketplace just exploded, right? The size of the addressable marketplace. Now, Johnny, if you're comfortable taking the conversation into scale, some, and some people do this. They're, they're, you know, it's like at the buffet table, your eyes get a little bit bigger and you, it's really, the mechanics behind it is putting the right people in the right locations in the, you know, doing the right things and how do you balance it with not getting over your skis? So talk a little bit about that. Okay, Market, addressable market just all of a sudden massively opens up. And now I can imagine the board members and everybody involved is saying, let's go, Chris, let's go. Get like it should have been yesterday. How did you scale it?
- [42:33]
D
I mean, McMahon could, could tell you. So, I mean, I, I very much built a commercial sales organization. High velocity sales, that is what I built. And, and I, I loved that business. And I clearly remember, you know, at. I get it, I get it. We're remodeling our house and I'm just living at my in laws house and I get a text from, from John McMahon at three in the morning, my west coast time. He's, he's up at 6am and he says, hey, call me when you get up. And I'm like, of course. When I get that text message, you know, I'm thinking, oh, I'm getting fired. Like, I don't know what's going on. But I'm like, I'm in trouble. And so at 6am my time, I call, you know, John and, and he says, you got a new boss. You got A new boss, and it's Frank Suhman. And, and, and I'm like, oh, my God. And I, you know, so we go through all that transition, and the first thing that Frank said was, you know, dude, you can't sell to the large enterprise the same way you're selling to the, you know, the small, medium business. It's just not. That doesn't work. And so, you know, you know, within three to four months, we ripped the band aid off and I reorganized in the middle of a fiscal year, reorganized the sales team to be more deliberate about how we went after the large enterprise. And that, that took. We. We screwed it up the first time. And, you know, that's now matured into kind of what we call our vertical sales. But I think you kind of always have to evaluate what's working and what's not. And so, you know, I went from creating a majors organization to now having a vertical sales motion in the large enterprise. And that's, that's working really, really, really well. And so I think, you know, where, where again, Frank was really helpful, was helping me understand how to scale. And, and, you know, to McMahon's point, I wasn't married to any one thing. I was like, okay, if you say so, and you think this is the right thing, I'll do it. And that's kind of, you know, the growth that I had to go through was saying, because what worked before doesn't mean it's going to work forever. And there's still the velocity business that's super strategic and important because market share matters. But, but getting the large enterprise matters in a material way. And now we're rolling that out globally as well.
- [44:56]
C
So. So, Johnny, what an incredible inflection point. So you've got this relationship with Chris. He's got the right attitude, he's adaptable. He is all these things. That was your word. Now you're calling him and saying, hey, you got a new boss. Without giving away the, you know, secrets around the kitchen table. I imagine people want to come in and this is the, this is the. Sometimes the mistake people make. We got to go find somebody. Chris was great up to this point, but we got to go find somebody that really knows how to scale and do all the things that Chris just did. As you know, Chris just explained that he did, but he had the opportunity because he is adaptable. He's a great learner. He's a great execution. Can you talk a little bit about that? About how sometimes people make mistakes and just. They try. They'll throw away all this great experience that Chris has to go try to find somebody and then bring them into a culture and then talk a little bit about some of the thinking about that, because I hear that every single day.
- [45:59]
B
I think Chris said it. I mean, he, he wasn't married to any one idea. He was gonna listen to what people had to say. And if they thought that they knew better than he was, he was willing to go out and try it, see if it worked. And that's going back to his coachability and his adaptability. You got to give him a lot of credit for that.
- [46:17]
C
How do you balance it, Johnny? How do you balance it? I love that.
- [46:21]
B
I understand what you have to constantly be what I call a student of the game. You got to figure out is this game changer.
- [46:29]
C
You're sitting on the board. You're sitting on the board. We understand what Chris's attributes are of like, hey, I'm a great learner. I've proved that I'm adaptable. I got a 90 day mentality. And I've also proven that I can be strategic as well. Somebody comes in, they're like, yeah, I'm gonna bring in my own team. Like, you're a board member.
- [46:49]
B
That does happen. But so you got to give Frank a lot of credit for giving Chris an opportunity to prove himself.
- [46:56]
C
Yeah. So first figure out what you got, what's in the kitchen, before you just bring something new. Because you guys see people make these mistakes, man. They. And they don't understand the culture that you're going into. They don't understand what was built and how it was built. They're the pressure to. And just listen up as you're out there thinking about bringing people into your company. Like, I have seen people that have gone and even done the job somewhere else and they want to bring that mentality because they've done it somewhere else doesn't mean that you're going to be successful in the environment that you're going into. So hats off to you guys, Johnny and Chris and Slootman and everybody for figuring out what was in the kitchen first before you started to decided to remodel. That's pretty powerful.
- [47:41]
B
Let's talk about something else Chris had to adapt to. Yeah, let's talk about what everybody else is trying to move to. But Chris has already moved to it. It's a consumption model where he pays his salespeople based upon consumption. So, Chris, can you talk a little bit about the challenges of selling and then trying to generate consumption with your customer base?
- [48:09]
D
Yeah, look, first of all, Having a world class product, it makes life a lot easier. So first of all, you know, if you're selling something that don't work, it's not gonna, you know, the dog don't hunt. But I think with, well, that also.
- [48:26]
B
Goes back to what you were saying before. When Chris originally was telling people what his different feature capabilities were. They were capabilities that the earth had never heard of before. So what he was talking about for the audience needs to understand that his customer or potential customer base was listening to Chris talk about those differentiators and they were basically saying, yeah, okay, Chris and pigs fly also. Right. So that's why he had to, he had no choice but to prove it with the customers because they just absolutely wouldn't believe it at that time.
- [49:01]
D
Yeah, so, so that, that was like, that's like don't believe anything I tell you. That's what I would say is you don't, you, you might think I'm some salesperson selling, you know, selling you something that you don't need, but try it. And that, that we were fortunate enough to have, have a product that worked really well as we, as we scaled the company. I think, you know, going through that, that, that process of, of under of the consumption model of looking at how to sell, it's hard because you, especially if you say you're, you're selling, you know, a seat based license, you know, or, or you're selling a piece of hardware, you know, you, you basically say all right, great, you're committing to using, you know, 100,000 seats or you're committed to using, you know, $10 million of storage that I sell you and you can pay the sales rep immediately on, on that. Our model was very much a land and expand model. So the, the, the, the, you know, the, the salesperson that was used to making 5, 6, $700,000 a year, they were going to fail because they were going to expect to come in and be someone that could just do some big deal and high five everybody. But in the consumption model, you have to be a student of what you sell because not only do you have to have the customer commit which is, which is what we call a booking or goes to our remaining performance obligation RPO that we report to Wall street. But you have to get the customer to consume it. And so we, we hold the sales team accountable. Now there's, there's plus and minuses to that on the, so the sales team has a booking quota and they have a consumption quota. The consumption quota. It's, you know, there's Good and bad to that. But, but ultimately, you know, you can impact that by selling the customer education. You can impact them by introducing them to a partner. You can impact that by getting our professional services team engaged. But you own the customer contract. And to fully realize your, your, your commission on that deal, not only do you have to sell that customer on the booking, but you have to get the customer to use it. And, and I think the, the benefit is for the, in the customer because the customer is saying, okay, I have a business partner who actually is invested in making me successful, not just, you know, selling me a deal and leaving and, and, and the hit sales mentality won't work here. And there's pluses and minuses to that. I mean, there's definitely, you know, I've worked with some wonderful, incredible salespeople that, that, you know, probably wouldn't be successful in a consumption model because they don't want to, you know, be that invested in the customer. They want to get this strategic deal and then say, see you later and pay me.
- [51:45]
C
So even this last topic in this consumption model is, there's the whole podcast on that. And I, maybe I'd love to have Chris come back and talk to us about that because it's happy to.
- [51:56]
D
Happy to.
- [51:57]
C
It's, it's not if for SaaS companies if, you know, it's, it's when. And so anyways, let's talk a little bit about what we talked about it. You know, we began the conversation just talking about the early days of Snowflake and Chris, you know, basically having a position of. They called him the Shadow cto. And really that conversation summed up well for me is there's different stages that companies go through, whether it's startup, foundation, scale, whatever you call it. Chris called it like product build. He called it ga. He called it understanding the ideal customer profile. We talked about how difficult it is and at being honest with yourself and comfortable in your own skin to really understand that there are different sales attributes and characteristics, not only for leaders, but sellers and companies, of what needs to happen in those stages. And I think, you know, Chris did a great job of talking about how, you know, why he's so successful and it's because of his didn't really matter what stage he was in. He wasn't married to any one stage. He was open to learning. So people that are out there that are listening and you think that you, your place is here or your ideal space is there, if you believe you've got more to learn and you have an Adaptable and your coachable personality. There's a, there's great opportunity to be had. You were described as a deal hound, but, you know, because you loved the art of the deal and that was kind of your, you know, the 90 day employment contract. But what you did was you surrounded yourself with people that did all aspects of the business and you learned. And so I just, I love that part of your story. We then moved into scale and you talked about, you know, the addressable market and balancing new logos. And so you're, you're clearly rooted in the velocity business. Your, your every part of your being is, is rooted in the velocity business. And, and there's nothing wrong with that, like having that mentality of, I've seen people that, you know, don't really understand that and then they suck at getting new logos and you're going to die as a company if you don't have a focus on new logos. And you know, one of the most interesting part of your story, Chris, that I really love is that, you know, you made really, really smart, probably impatient people contemplate what they had in the refrigerator before they went out to dinner. And you know, that was you, you were in the kitchen and before they went out and remodeled the kitchen or before they went out and decided they're going to go get something, you know, inexpensive meal, you know, you were already in the refrigerator and my hat's off to, to Johnny and you and Sloopman and, and again you being adaptable again to learn and to grow and, and look at what Snowflake has turned into. The last thing we talked about, which we could have talked forever about it was the consumption model. And I love how you said it, you said it's not just getting a customer to commit. And so everybody listening here, you know, if you're not doing it today, McMahon used to tell me, if you want the next job or you want to understand the next thing, go start doing it. And so the customer commit part is now is if that's the table stakes, it's now about the customer consuming it, they got to use it. And the ultimate measure of value in the future is going to be the use of what you are providing. And so if you don't have a mentality of being intellectually curious about not only how somebody's going to procure something, but how they're going to use it and how it's going to impact, you know, business implications and that, and, and then your value is going to grow by the use of it. If you're not Thinking that way today, you really should start to be thinking that way. Johnny, what did I miss?
- [55:53]
B
I don't think you missed anything. What I want to emphasize is how early on in companies like when Chris thought, oh, we can only sell to tech and ad tech, or even the early days of PTC when we thought we can only sell to consumer electronics and medical device manufacturers. What happens today is so many companies want to go out there and think they can sell their product to everybody. And then what happens is they put a lot of salespeople on the street, they burn a lot of money while they're still trying to develop their product. And maybe someday the company will sell to all the different companies on the earth. But in the early stages, you got to figure out where your product fits, go down those bowling alleys and continue to make money in those bowling alleys while you're developing your products. So then you can take it into other, other aspects or other use cases and other bowling alleys. So I can't emphasize that more. I see it so many times where companies want to go so fast, especially these days where they're taking rounds of 2, 300, $400 million, and then they just throw salespeople at the problem and burn so much money when the product's not ready. Well, maybe it is ready. It's only ready for a couple bowling.
- [57:03]
C
When they're not honest with themselves about outliers. So once you establish that ideal customer profile, it doesn't mean it's ideal forever. It means it's ideal right now for the performance and the scale of the company for right now. And then, you know, somebody will argue with you, you know, in the major accounts group, Chris, or the. One of the verticals and say, well, see, we've got XYZ company and they're using our product. But, but if they're outside of your ideal customer profile, then you have to be honest with yourself and say that they're an outlier. It doesn't mean that there's not find them. But I've seen companies get killed by outliers, Johnny. It's a huge customer, and they start to try to pivot towards this huge customer away from their ideal customer profile, and they get in, they get into a problem again. That's probably a whole nother. A whole nother podcast. Johnny. Take us on some. Take us on some rapid fires.
- [57:55]
B
Leah Little rapid fire. Chris, you ready?
- [57:57]
D
Yeah.
- [57:58]
B
How about your ideal day off of work?
- [58:01]
D
Well, right now it's. It's where I'm at, you know, hanging with my family, getting on the boat in Lake Tahoe. I mean, it's. I love this place. So that's. That's it. Hanging with my family in Tahoe.
- [58:13]
B
You're gonna pull the kids around on the Jet Skis or on the wake bar.
- [58:18]
D
Now it's wake surfing. It's wake surfing now.
- [58:22]
B
Wake surfing. Love that. Can you do it? Are you good?
- [58:25]
D
Yeah. Yeah. And it's not hard on your body, so. So.
- [58:30]
B
Right.
- [58:30]
D
Yeah.
- [58:31]
B
What do you got? The Mastercraft.
- [58:34]
D
A Cobalt Surf.
- [58:35]
C
Yeah.
- [58:36]
B
Nice.
- [58:37]
C
Yeah.
- [58:38]
B
And he does it automatically. Fill up the ballast.
- [58:40]
D
Oh, yeah. Yes. It has these buttons that you press and.
- [58:44]
C
Yeah.
- [58:45]
D
This is my first boat I've ever owned.
- [58:46]
B
It's unbelievable because years ago, you had to basically fill them up. And once you do and everybody wakeboarded or surfed, then somebody would say, I want to ski. What do you mean you want to ski?
- [58:58]
D
Settle down.
- [59:01]
C
Dude. Is there any water left out there in Tahoe? Is there still water? All right. Okay.
- [59:07]
B
Chris, what about your favorite meal?
- [59:09]
D
My favorite meal is spaghetti and meatballs. That's what I grew up on. I love it. Pasta and meatballs.
- [59:16]
B
Not SpaghettiOs, not Kansas spaghetti, oats, not SpaghettiOs. Yeah, you graduated from the SpaghettiOs. All right, good. How about your favorite movie?
- [59:24]
D
You know, it's not movies nowadays. It's. It's shows and, you know. You know, and. And it's probably like one of the shows that I just loved is. Was Breaking Bad. I mean, just. It took me a while to get into it, and then I got so addicted to it. So.
- [59:40]
B
Yeah, some of those TV streaming shows are unbelievable. How about the best concert you ever been to?
- [59:46]
D
Well, this is gonna sound really funny, but, you know, when I was, you know, in high school, I went to a Vanilla Ice concert. And I remember drinking when I wasn't supposed to and walking with two beautiful women right under my arm. So I felt pretty big time at this.
- [60:03]
C
So it was the experience, not the. Not the concert so much. For sure.
- [60:08]
B
So, Chris, you know how much I, you know, appreciate you being on. I always have loved working with you and to continue working with you. And I want to thank you so much for spending time with Johnny, and I really appreciate it. And for our audience. They're going to get so many great lessons out of what you have to say. Thanks so much.
- [60:25]
D
Well, I. You know, John, as I said in the beginning there, you know, I wouldn't be in the position I am without you. And so I genuinely. And bottom of my heart, thank you for investing in me. So I.
- [60:37]
B
Look you're welcome.
- [60:38]
D
Thank you.
- [60:39]
B
You're welcome back.
- [60:40]
C
Hey, Chris, one of the things we. We forgot to ask you about, do you have a favorite charity before we say, before we wrap it up?
- [60:46]
D
Yes. The. The. The Multiple Myeloma Foundation. It's a. It's cancer research. And, you know, we have a family member that, you know, we. That's affected by it. And, you know, we. We contribute. We contribute to that cause.
- [61:00]
C
Awesome. So we'll get that in Multiple Myeloma. That mean you'll get us a. Get us a link to the website and we'll make sure that we get that posted and. And appreciate you for that, brother. Thank you so much for spending the time. There was so many golden nuggets. Much respect for your career and what you've accomplished and much more to come. So congratulations and thank you for being with us.
- [61:25]
D
Thank you both. Great.
- [61:26]
C
Great. Got it, brother. And thank you for being on Revenue Builders.
- [61:33]
A
Thanks for listening. Thanks for listening to today's episode. If you enjoy the content, please subscribe, rate and review the show to help us reach more people. This show is brought to you by Force Management, where we help companies improve sales performance, executing the growth strategy at the point of sale. Check out forcemanagement.com for more information.