EPISODE 280

Snowflake CEO Frank Slootman Wrote the Playbook on How to Amp It Up

55 minutes · January 19, 2022

Frank Slootman, Chairman and CEO of Snowflake (NYSE: SNOW), presided over the largest software IPO in the NYSE’s history, but it wasn’t his first rodeo. Snowflake is the third company Frank has taken public, and the lessons that shaped his career are part of his new book Amp It Up: Leading for Hypergrowth by Raising Expectations, Increasing Urgency, and Elevating Intensity. Frank shares the secrets of his success, the leadership principles that guide him, and what he’s learned along the way.

Speaker 1:

From the library of the New York Stock Exchange, at the corner of Wall and Broad Streets in New York City, you're inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision in global business. The dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism, right here, right now at the NYSE and at ICE's exchanges and clearing houses around the world. And now, welcome inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.

Josh King:

The New York stock exchange sits at the Southern tip of Manhattan on the corner of Wall and Broad Streets. These days, a lot of folks take it for granted, but Wall Street has a fascinating history. The eight blocks of the street run from Broadway in the west to the East River in the east. It was originally known in Dutch as de Waalstraat when it was part of new Amsterdam in the 17th Century, an actual wall existed on the street from 1685 to 1699, protecting the early entrepreneurs and fur traders of Fort Amsterdam from encroachment from the north. The Dutch have all always been enterprising.

Josh King:

Now, as the story goes, England followed the Netherlands in control of Manhattan. And then George Washington was sworn in as the first President of the United States, just a few feet from the front door of the NYSE on April 30th 1789. But 233 years later, American, Dutch and British interests are inexorably intertwined. Take our own company, Intercontinental Exchange, for example. I'm in New York. Our headquarters is in Atlanta, Georgia. Our European futures operation is based in London, England, and a big part of that operation is futures trading for Dutch Natural Gas at the Title Transfer Facility or TTF, virtual trading point in Amsterdam.

Josh King:

What goes around, comes around and the Dutch get around the world. In a few weeks, when the 2022 winter Olympics get underway in Beijing, I'll have my eyes peeled for 22-year-old, Jutta Leerdam, the reigning world speeds skating champion with over 800,000 followers on Instagram, who's proven herself a trend setter on and off the ice. Another Dutch trend setter with the Winfrey title is Frank Slootman, the chairman and CEO of Snowflake. That's NYSE ticker symbol S-N-O-W or snow who, like the immigrant inhabitants of New Amsterdam more than two centuries ago, has proven himself a master entrepreneur and visionary leader, able to take a great idea and scale it massively, and then apply the same playbook again and again.

Josh King:

Let me bring you back 10 years to 2012, Benoit Dageville, Thierry Cruanes, and Marcin Żukowski started Snowflake as the secret name of the startup they were working on during that particularly hot summer. The name was also fitting because a few years later, Snowflake burst onto the tech scene with a one of a time groundbreaking Cloud data warehouse product that revolutionized how companies could manage their data. As Snowflake got bigger in 2019, the company knew it was time for leadership to take it to the next level and brought in today's guest, Frank Slootman, as CEO.

Josh King:

Over his distinguished career, Frank has mastered the process of fundraising scaling and building young companies into unicorns with the run ending eventually way back here at the corner of Wall and Broad Streets with an initial public offering. As I said, what comes around, goes around. And our conversation with Frank Slootman on how he amped up his career scaled three companies and the lessons he wants to now share with the world is coming up right after this.

Speaker 3:

As the gold auction and also, the LBMA gold price is the world's price for gold, particularly gold, which is delivered in London. Four banks would travel to a room next to the Bank of England twice a day in order to run an auction verbally. And it worked like that for about a hundred years. When some of these firms moved out to Canary Wharf, they decided that actually, it was too much to be sending people to the room, so they moved it to a phone call to buy and sell and establishing a price.

Speaker 3:

IBA took over the auction in 2015 and we moved it to an electronic auction and on the web ICE platform, so it's fully audited to proper electronic liquidity window of market. Buyers and sellers can come together. It still runs as an auction in rounds of 30 seconds and final price were used as the benchmark for the entire gold market. It's been extremely successful since we took over. Volumes have increased and they've pretty much more than doubled, and we've actually nearly tripled the number of participants that we have as well.

Speaker 3:

And we publish the data transparently on our site, so anyone can come and see what actually happened in the auction. And we introduced a centrally cleared model with ICE as the central counterparty, because that makes it much easier for new firms to join. It's up to 79% of the volume has gone cleared. This is kind of the pattern that ICE has seen through how different markets have developed, but normally that takes 10 years, whereas actually, it's taken 10 weeks in the auction.

Josh King:

Our guest today, Frank Slootman is chairman and CEO of Snowflake. His company's listing here at the NYC in September 2020 was the largest software IPO in the history of the US capital markets. Prior to joining Snowflake, Frank served as the CEO of ServiceNow and that's NYSE ticker symbol, NOW and Data Domain, leading both of those firms successfully through their IPOs. Frank's new book, Amp It Up: Leading For Hyper Growth By Raising Expectations, Increasing Urgency and Elevating Intensity, still is the leadership principles he's developed over his long career. Welcome, Frank, inside the Ice House.

Frank Slootman:

Yeah. Good to be with you, Josh.

Josh King:

Amp It Up, published a scant of 13 months after the Rise of the Data Cloud, which you wrote with Steve Hamm. Where does a CEO Frank find time to write two books back-to-back and what was the inspiration for Amp It Up?

Frank Slootman:

Right, you got a good point. I really had to be shamed into writing this book, considering the amount of work that it is, but got a lot of help from the company. It's really a company production, by the way. And that really allowed me to do this at 6:00 AM on weekdays and weekends and the holidays. Make it as easy as I could make it.

Frank Slootman:

But yeah, where the inspiration comes from, we've had three very successful companies in a row, so you get barraged by requests for, "Hey, can you explain to us what the secret sauce is? What's the silver bullet? What's the playbook?" And Americans always think that there's an easy answer to these questions. And after a while it's like, "Look, I can't do one-on-one meetings with a million people. I can't do every speaking engagement," et cetera.

Frank Slootman:

So, a book becomes highly scalable way of really creating some well-curated observations around "Look, here's what we believe to be true about the trajectory that we've been on. And you can take it or leave it and try it on for size and see if you like it." And there is a following for this and the reason that we know that is because we wrote a book back in 2009, 2010, that sort of became a combat manual for entrepreneurs over the years where, because this is really for people that have nowhere else to turn.

Frank Slootman:

They're very lonely in their jobs. They're high anxiety, they're entrepreneurs, they're CEO, and sort of getting a very unvarnished view, inside view from a fellow traveler. In other words, somebody who has lived their lives over and over. It became very meaningful to them. So, I got pestered by VCs over the years, like "When are you going to do an update to your book because you now have two more companies to talk about." So, I finally caved, okay.

Josh King:

You have served, as I intimated in the introduction, as the CEO of companies in Silicon Valley and now, Montana, but your story really begins 5,500 miles away from the West Coast. You've said that you were really born in the wrong country. But you think that your upbringing in the Netherlands gave you a unique perspective on business and success, that's helped you throughout your career?

Frank Slootman:

Yeah, there's no doubt. I mean, you can take somebody out of their country, but you can't take the country out of the person, as the old saying goes. There's no doubt, I'm a total hybrid here. I'm a proud US citizen, but at the same time, there's no negating my Dutch roots. And people that know the Dutch, and you seem to know to Dutch people, it's, fairly recognizable what the Dutch attributes are that are at play here. I mean, Dutch people are incredibly hard driving, no nonsense, can't suffer bullshit type of people.

Frank Slootman:

Sometimes that is hard for American audiences. They also appreciate it. And, likewise, when I go to Holland and I meet Dutch customers there, they kind of look at me with a smirk, like, "Yeah, I can tell you're Dutch. You speak the language, like we do, but there is something different about you." And that's the American flavor and flare that has built up over three, almost four decades.

Josh King:

Quick digression. I don't know if you've watched any of the first couple seasons of Ted Lasso, but on a team of great characters, the Dutchman is the one guy, straight faced, no bullshit throughout the whole game.

Frank Slootman:

It's a small country, obviously, which is why they sort of veer far and wide. You can't help but run into Dutch people everywhere because they have such a small country. It's just, it's hard not to be acquainted at some level with that culture. But it's a very, it's a country that has really no natural resources other than the natural gas that you mentioned, which they're pretty much run out of by now, so they've really leveraged their geographic location over the years. That's why they're big in banking and insurance and distribution and logistics. Those are all disciplines that leverage where they are, right at the headwaters off the entire European continent.

Josh King:

And Frank, while you were getting your degree from the Netherland School of Economics, you came to the US for an internship with UN Royal and returned after graduating to get a job at Burroughs, which is now Unysis and ticker symbol, UIS. Did you always have your eyes set on a career in the US?

Frank Slootman:

No. the internship sort of came about because I was about a year ahead of schedule at the university. And I'm like, "You know what? I can just blow a year on doing some other stuff that's interesting." And we were babes in the wood back then. We had no experience. Never seen the inside of an office or anything. So, getting an internship in the US in those days was a really big deal and it really didn't matter to me, where it was, what company it was, I just wanted to have the exposure to what is that like.

Frank Slootman:

And obviously, I got that in spades at UN Royal in Indiana. It was super interesting to me, sort of my first encounter with American management. And then, I had another internship after that. But eventually, I returned to Holland about a year later, resumed my education. But I was now really primed at that point, in terms of, I knew a lot more, about what it was like to be in the US. I was a huge fan coming here. The perception in Holland of United States is very, and I don't want to use the word biased, that might be too strong. But it's not what it really is, so it wasn't an enormous surprise to me to come here.

Frank Slootman:

This is a very buoyant country. This is a country that's very aspirational. This is very much a country that believes things that other countries don't believe. Where I come from, people are quite resigned to their fate. They're kind of like whine and bitch all day. Americans are, it doesn't matter what profession they're in, they always believe they can do better. They always have a twinkle in their eye and they're going to do this, they're going to do that. And it's just, it's intoxicating that energy. That's the reason why this country does so well. It's not just a scale. It's just that there is a spirit here that always believes that it can do things that other countries don't believe about themselves.

Josh King:

Frank, how did those early experiences rising through the ranks and being sent from problem to problem help you establish the principles for success that your career would see?

Frank Slootman:

It was very formative. In the early days, I want to say like the first eight to 10 years or so, were actually immensely frustrating to me because I was a strange animal, right? People were looking at my credentials. I speak with a fat accent and like, "What are we going to do with you, pal?" So, I ended up in odd places because they didn't know what to do with me.

Frank Slootman:

And for example, when I joined Unysis, I ended up in a corporate planning role. While that is probably not, my temperament is not terribly well-suited for those types of jobs. They're very far removed from the drive train. And then my career thrived as each sort of, it veered just taking on jobs that nobody else would take, in other words. Give me that train wreck. We'll do something good with it.

Josh King:

I mean, in the book, Frank, you used the analogy of getting in the right elevator. And today, there's an endless bank of software company elevators, but when you joined Comshare, it was in the nascent days of the tech world. What attracted you to the space? And did you have a sense that the sector was really about to explode?

Frank Slootman:

No, I didn't. Back then, there were hardly any software companies around. Software was barely an industry. It was sort of an adjunct to what they called the computer industry back then. And it wasn't until the consent degree with IBM that really unbundled the software from hardware because software industry couldn't even happen because software was bundled. And it wasn't charged for, so companies just couldn't build software because it was just given away.

Frank Slootman:

So, it just started to happen, but I wanted to desperately be in software at that time. As young as I was, I mean, I was determined that that's where I wanted to be and certainly, not hardware because I saw another way for commoditization happening over there. I just took a job with a software company just to be in software and that's sort of the extent of my thinking on that.

Frank Slootman:

Now, it was actually pretty interesting because this was sort of a forerunner of a data analytics, business intelligence type of company. And the term BI had not even been invented back then. Windows 3.1 didn't even exist. I mean, they had graphical user interfaces that were completely proprietary to that company. I mean, it's hard to believe at this day and age that things were that way back then, but they were,

Josh King:

I mean, without the foresight of having read Amp It Up, our listeners might assume that a jump from into software would take you really the rest of the way in your career from your start in Europe, to Indiana, the Midwest, all the way to California. But you mentioned this earlier, it isn't really what happened. What took you back to the Netherlands at one point?

Frank Slootman:

When I in Ohio, I joined copy ware in Farmington Hills, Michigan, and I had not even been there a few month and they acquired a sizable company in Holland, a company called Uniface. Company still around, by the way. It was an application development and runtime platform to run on both Unix and OSU and Windows all at the same time.

Frank Slootman:

But predictably, we already talked about Dutch culture, that relationship between the American parent and the Dutch subsidiary didn't go so well. So, they looked around and they found the guy with a passport to Dutch language proficiency like. And I had already made a little bit of a name for myself in the company. Like, "Yeah, why don't we just throw that guy into that fire and see what he can do with it."

Frank Slootman:

So, I ended up going back to, I really didn't want to. I was like, "Jesus, I spent my whole life trying to get here. And now, I feel like I'm being haunted, by this Dutch thing, this cloud that's hanging over me." And it was really my wife who said, "No, no, we'll go. It will be fine. Let's go." So, she talked me into it because I was on the verge of saying, "Look, I'm not going back there." I'm just, I'm fighting that tide. So, I did.

Frank Slootman:

Obviously, I was a young man and not even in my mid-30s and I'm taking over a whole business, a whole organization, global, all this kind of stuff, so, it was a hell of. And then obviously, a business that was at a sense of itself, of its product lifecycle, which has its own unique set of challenges. Get the world to sort of move onto a different technology platforms, et cetera. So, it was an incredible trial by fire. Learned an awful lot in that period of time. I really had to change from being an individual contributor or a small team leader to somebody who runs organizations. And that's a whole different deal.

Josh King:

Frank, you write about trying to convert your experience, taking on the hard problems of your employer, into making a path to the C-Suite. What's your advice about someone climbing the corporate ladder looking to make that leap?

Frank Slootman:

Well, the number one bit of advice I would have is make sure you're close to the drive train. I mean, there's many jobs in companies and some of them are quite far removed. They're very safe. I often refer to those people as passengers and then, they're the drivers. Those are the people that are right there, where the people that bring home the bacon, there when the shit hits the fan. People that the company really, really runs on.

Frank Slootman:

Not all people are created equal in terms of their roles and their contributions in companies. I hate to break it to the audience, but that is the way that it is. You want to be that person, okay? You want to be the playmaker and the people that they're going to pass the ball to when we have two seconds left in the quarter, that kind of thing. And a lot of people shy away from that because it's incredibly high anxiety to live in that world, but you want to suppress that reflex. In other words, swarm to it instead of distance yourself from it.

Josh King:

I'm curious, how that opportunity at Data Domain came to you? And for our audience who may not remember the days of tape backups, can you explain the underlying concept that you grew from two men and a dog into a multibillion dollar business?

Frank Slootman:

Data Domain was really an interesting company. I mean, to this day, with all the other things that we've done, I still treasured that experience greatly and it's still a very large business to this day. But the world of backup and recovery, was dominated, as you said, by tape automation technologies. Now, tape technologies go all the way back to the early days of computing, because that was the form of magnetic storage that we had.

Frank Slootman:

Obviously, that industry had moved on to all kinds of different disk space technologies. But backup recovery still largely dependent on tape and tape automation technology, so we created a tape. You could eject the tape from a tape drive and you could ship it off site. And you had literally physical media that could logistically manage. But the problem with tape was, I mean, tape got lost, tape became unreadable. It was the lowest ranking job in the entire world of IT, if you were involved with tape automation.

Frank Slootman:

That was career death for people, so it was just the least flattering place in the entire IT operation was backup and recovery based on tape, very logistically, intense. I mean, the problem with backup and recovery is, yeah, you can do backups, but the point of backup is recovery because if I can't find or read tapes, I'm still up the creek without a paddle. So, we came out there and we said, "Look, no, we're not just going to sell a product here. We're going to nuke an entire industry out of existence. We were going to do the world of favor."

Frank Slootman:

So, we came up with this war cry that said, "Tape sucks, move on." And of course, people chuckled because they recognized it. They knew exactly what we meant. I mean, we have bumper stickers and people would at trade shows would stick them on tape libraries. And it was one, and we were better known as the tape sucks company than we were by our own company name at one point. And I've never been able to equal that level of success with a marketing slogan. It was great and it lasted the entire duration. We just never backed off of it.

Josh King:

You arrived at something like tape sucks. It's hard to get off of that. Data Domain went public in 2007, but two years later acquired by EMC, in my home state of Massachusetts. What did that initial scaling up to that point and then the public exit experience teach you about why being acquired was the right choice for Data Domain?

Frank Slootman:

The interesting thing about data domain was it was very, very slow going. I mean, we were crawling the bottom in the early days, so we had a product that had marginal product market fit. It was small, it was slow. It could address very few use cases. No databases of scale and no file systems with scale. So, we were just picking over use cases here and there to sort of stay alive in the early days. So, I really lift that cross and the chasm dynamic.

Frank Slootman:

And over time, we overcame that because we were laser focused on making the product bigger and faster every year. We call it a turn on the crank and we came out with a product that was at least twice as big, twice as fast, so the market kind of opened up gradually for us. And eventually, we totally crushed that market because we could address any and all use cases that were out there. And the product was insanely fast, completely automated. Architecturally, just damn near perfect, so.

Frank Slootman:

And there were many, many players in that segment, by the way. I don't know what, if you go back to those days. I mean, it was a super crowded field, but we just crushed that entire field. I mean, we had like 15X, the X of the next nearest competitor. And I talk about that in the book, because again, there's observations, maybe even lessons that can be extracted from what happens when you're in a crowded field and you're trying to separate yourself from the pack.

Frank Slootman:

But the issue with the acquisition, by the way, I've never sold a company in my life other than that one, so I'm not prone to selling at all. I'm trying to get into markets, not get out of them, but strategically we had a dilemma and others that we were, what I would call landlocked, maybe another nautical Dutch type of term, because we couldn't get beyond our core business of backup and recovery. We added sort of network replication disaster recovery, a whole bunch of adjacencies to it.

Frank Slootman:

But in the end, it's like we have to get into backup software in which we tried. We wanted to buy technology from, what at that time was Veritas, Convo, companies that are still around, because then we could really address the, the functional scale and scope off our platform. But we didn't have the market capital resources to do that. We tried to, we wanted to get into primary storage. Obviously, that required even more resources, so we really had the strategic dilemma that we couldn't grow beyond our core market. At some point, we were going to get stunted in our growth.

Frank Slootman:

Now, you can be very obstinate about it and say, "Well, I'll eventually cross that bridge when I come to it," or you can try to anticipate it and say, "Okay, I'm going to find somebody who has the resources that I do not possess." And that's exactly what we did. We had this very high profile bidding war between the EMC and NetApp at that time. By the way, our two largest competitors were both bidding for the company at the same time.

Josh King:

It's good problem.

Frank Slootman:

Yeah, it was a good problem. We were entertainment for Wall Street for a six-week period. Every week there was a new bid. And everybody was like, "Who's Data Domain? Never heard of that company." Well, they knew now. But EMC prevailed. I think EMC was exactly the right acquirer because they just sort of had the orientation and the scale and the intensity culturally. They sold the living hell out of that product.

Frank Slootman:

I mean, I still remember that we were in countries like France, where we had like a $10-million business, which was very small. And the EMC came in and within a quarter, it was up to a $100 million because they had channels and customers and everything primed and ready, right? It was just a beautiful thing when a company has massive scale and distribution, what a good product that gets entered into that context can do in a short period of time was mesmerizing.

Josh King:

And then of course, Michael Dell found just as attractive to bring EMC into Dell. So, it's the story, what goes around, comes around, as I said at the beginning. But let's focus on another dilemma that brought up in the book, Frank. In 2011, you joined ServiceNow, a name that's really quite familiar to our listeners where you were confronted by that old conundrum of the CEO founder that we've discussed on this podcast before. The founder brings you in to scale up the company, but finds it difficult to step aside. In Amp It Up, you're pretty open about the struggles the company faced in its business and leadership. Can you explain how you overcame both to lead the company through its 2012 IPO?

Frank Slootman:

Yeah. One of the reasons I made it a very transparent discussion is that most people think that when you have these highly successful company, it just happens like poof, beautifully. And all of a sudden, everybody is just high-fiving and doing victory laps and everything is beautiful versus reality is completely different. I mean, we lived in absolute terror. When we first came in there, it was a very, very anxiety-ridden ride in the early days. In the book, I go on and on about what some of those issues are. But one of those issues was that taken over from a founder CEO was really, really hard.

Frank Slootman:

It's always hard when you come in as a CEO and you have to follow a founder because the founder almost has mythical status in the organization. And rightfully so, by the way, because they have created something, right?. And it's very rare to create that kind of value. Fred Luddy, the founder of ServiceNow, I mean, super talented guy, obviously. But he had also been the CEO of ServiceNow for seven years. Not exactly like a year and a half, he'd been there for seven years.

Frank Slootman:

And it was difficult for him to sort of hand over the reins, but the investors in the company convinced him that, "Look, we think that this is needed," because the company was growing well. It wasn't, and the company wasn't failing financially on its growth objectives. I mean, it was doing well. It was doubling. At the same time, that was enormous anxiety about how the company was unfolding. All these things eventually came together.

Frank Slootman:

Look, I'm not a certain type of CEO. I always become the CEO that the situation mandates and dictates. And I look at what the situation requires of me, not what I want to bring to it per se, based on my own background. That's actually another important bit of learning with a lot of people take on CEO roles and they keep doing their last job because that's familiar to them and they love it and they keep doing it. I'm the opposite.

Frank Slootman:

I look at the situation, "What does this require?" And then I change myself to become that flavor of CEO. So I've been very different from early days of Data Domain, later days of Data Domain, early days of ServiceNow. Early days of ServiceNow was just jungle fighting. I mean, it was just trying to stay alive. Basically, we had to solve our enormous problems that we have while the company was doubling in size, more than doubling its size every year. That takes very different approaches, orientation, skill sets, and so on what you do.

Frank Slootman:

And then Snowflake is again, a totally different. And the whole point of the book is I try to contrast these experiences, like look, they're not the same. Different technologies, different markets, different competitors, different eras, different cultural times that we live in, you need to become, what that situation requires off you. And that's, I had a question the other day from somebody that hit me on LinkedIn and he was putting all kinds of labels on himself. And I say, "Stop putting labels on yourself. That is the most, that is so unproductive. Don't typecast yourself." right? You really need to, look at yourself as an asset that can be applied in many, many different ways. And you need to have the flexibility of mind to really deploy yourself.

Frank Slootman:

I always tell my own people, "Look, I'm a piece on the chessboard, okay? Now, we're going to go move the pieces and I'm just a piece on the chessboard." Now, I might be a big piece on the chessboard as the CEO of the company, but that's really how you want to think about it. And you can't play chess pieces in a million different ways, right? That's the point of it.

Josh King:

So, after six years of success, by any metric, by playing the king on that ServiceNow chess board, why was it time to step down? I mean, what drove you to move on?

Frank Slootman:

I actually wanted to retire, truth be told. I mean, truly retire. I just have been in the line of fire too long. I was just shot. I mean, that's how I felt at that time, like I had no more to give. So in hindsight, I understood that I was just burned out, classic burned out. And when you're burned out, you don't regenerate anymore. You just get into this cycle where all you want to do is leave. When you get that sensation, you do need to leave because you're no longer the right person for that situation.

Frank Slootman:

But yeah, then I was off for two years and I did a lot of sailboat racing and I did talk about that in the book as well, because that was a passion and I'd never been able to do that without guilt. Because if I sailed before, I always felt guilty because I was doing something that wasn't the company and now, I was completely free of guilt because it was my own time, my own money, et cetera and it was great. But as I got into retirement, the whole experience of retirement changes in the beginning, it's very euphoric, right?

Frank Slootman:

Because you're like, "Oh, this is great. I don't have to go work on Monday. And my email just dribbled down to nothing and all this kind of thing." But then, you go like, "Oh, this is the rest of my life." Right? And fortunately, the temperament that is in you, it's going to re-manifest itself sooner or later. It's you're in this job for a reason. You ever noticed that NFL quarterbacks just can't leave the stage. They just have such a hard time doing it because that's who they are, that's what they live for. They're kind of like-

Josh King:

But if you're performing at Tom Brady's level, you have no reason to step aside.

Frank Slootman:

Brady is a great example, but Joe Montana was that way and they all craved that energy, that excitement, that intensity, they can't let it go. And Brett Favre was that way. I mean, all these greats, right? Not all CEOs have this, but a lot of CEOs do.

Josh King:

After the break Snowflake's CEO Frank Slootman and I are going to preview and review some of the other lessons in his new book, Amp It Up. And how that allowed him to grow Snowflake into the biggest software IPO ever, and how. And that's all coming up right after this.

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Josh King:

Welcome back. Before the break, Snowflake's CEO, Frank Slootman and I were discussing his career. We left off before the break with your decision to literally set sail after 33 years of a career that took you all over the globe, including bringing two companies public. Why did you give up the helm of the invisible hand for this new role with Snowflake?

Frank Slootman:

You can only sail so much, [crosstalk 00:31:19].

Josh King:

Tell me about sailing, first of all. What was that?

Frank Slootman:

Yacht Racing is incredibly exciting and then it has a lot of corollaries to business because it's this multidimensional game of weather and competition, and what happens on the race course and reacting to it. And it's very much a talent game just like business is. You're finding the best sailors in the world and all of that. But what is so great about it is, I mean, the starts are incredibly exciting and that takes enormous amount of drilling to become really good at starts because it's a tightly, tightly coordinated process and you have to become good at it.

Frank Slootman:

But the thing that I like so much about yacht racing that I like better than being in business is when you make a mistake on the race course, it's almost immediately obvious that you did. It's like it's full of feedback. The consequences of your action are like right there. Whereas in business, it often takes so much longer to be confronted with the consequences of your actions and some people don't-

Josh King:

You hit a mark, you have to do two 360s. Everyone's watching.

Frank Slootman:

Correct, correct. But it's also, you attack and you cross again. On stacking, all of a sudden, your boat left behind and you go like, "Oh, my God," so because it's very hard to get ahead on an upwind leg, right? So, we won a lot of outraces. We actually won everything that we wanted to win. So after a while, it's like, "Okay, we've done enough of this." I mean, it's a hell of a cash burner as well. It was just like Formula 1 of sailboat racing. So like, "Look, I'm not going to be doing the same races over and over again." So, we started to wind down a little bit.

Frank Slootman:

And also in sailing, you're always looking for new adventures, different platforms and things of that sort to sort of keep it interesting, continual learning experience and so on, rather than rinse and repeat. At the same time, I ended up in conversations with the lead director and investor at Snowflake. Somebody who I had known for many, many years, so at Sutter Hill Mike Speiser. And he and I were serving on another board together and every time we we'd go to our quarterly board meetings, we'd have lunch and discuss the state of a affairs in the world and blah, blah, blah, sort of thing people do in Silicon Valley.

Frank Slootman:

And he always talked about Snowflake because it was a very exciting company to him and I didn't know that much about it, but enough to have a conversation. And that went on literally for years, okay? So, I just had some peripheral view of the company, as well as its strategic challenges, by the way. But one day, and this was in March of 2019 and he said, "What would it take for you to take the helm?" He was pretty smart to use nautical expressions in that conversation, take the helm at Snowflake.

Frank Slootman:

And I was like completely taken aback because there not a single thread thinking about that, considering that, considering any role of any sorts. I mean, I was just in my way of life and I was going to stay there till the end of time. So, it sort of lit a fire under me, just the prospect of doing that, it just kind of brought me back from my burned out state in 2017 to two years, feeling incredibly challenged, energized, and sort of having a new leash on life, if you will take on something like that.

Frank Slootman:

And the reason that I found it so interesting is technology was mesmerizing. Everything in our world starts with technology, starts with architecture, okay? And that is a common thread through all our companies. You cannot sell your way through a crappy product, okay? A lot of people think that that's possible, but there's a real limit to what salespeople can and can't do. But then, there's new platforms in terms of the Public Clouds, right?

Frank Slootman:

There's new business models. We now use consumption models instead of subscription models. New competitors, new partner ecosystems, so it was like, "Wow, this is the future." And by the way, data is going to, some people have referred to it as a new currency to new oil, whatever you want to call it, but. And when the whole world goes direct to consumer and it becomes disintermediated and goes wholly digital, the role of data obviously becomes insanely important. It becomes the beating heart of a modern enterprise.

Frank Slootman:

I use that expression a lot to say, "Look, data operations is going to become your core." I remember having a conversation with the CEO of a very large healthcare company. He was saying during the pandemic, he's like demand was up 60% over here, down 100% over there. He's like, "How do we run a supply chain?" Right. I mean, anecdotal observation has pretty much run its course. We cannot just read our emails and have a few phone conversations and know what's going on. You have to have data to partial reality, right?

Frank Slootman:

Now, most organizations are incredibly in up still in terms of their data promise. Insurance companies historically have not been because they are data companies by their essence, right? You guys are a data company, you know as well, right? You relate well to that way of thinking. But for many, many other enterprises, including a lot of banks actually in the world of financial services, because they operate through branches and very conventional brick and mortar ways of interacting with customers, all of a sudden, it has to change rapidly. So, we're going to be in the middle of that.

Frank Slootman:

It's a transformation that is still going on. And people are, are mesmerized by Snowflake results because they don't quite understand, where is this coming from? I mean, if you look historically at what platforms like ours have done, there is no relationship to the past with what Snowflake is doing now. I mean, people go from spending $50,000 a year to a million dollars a year in one year and they're like, and the CFOs go, "What the hell is this all about?" Right?

Frank Slootman:

Because they can't understand how spending categories can just explode overnight like that. But they do because the world is changing to digital and this is the essence of digital transformation. A term that gets used a little bit too much in too many places. But that is what digital transformation is. You're no longer using data to basically please a bunch of eyeballs, like, "Hope you like it. See what you can do with it" to data driving operations directly, right?

Frank Slootman:

It's lights out, light speed and then fully disintermediated and it's fully programmatic. That's where we're at right now. And of course, the appetite is insatiable for both technology and people that know how to make this future happen. Because that's what it is. It is a future state that we're all working on right now.

Josh King:

People who have seen sort of the ticker symbol of Snowflake pass their eyes on CNBC and see how its companies perform and say like, "What is that company with the name after falling snow from the sky?" When a company is buying a million dollars from you in the course of a year, what are they getting?

Frank Slootman:

So, one of the things that, that our founders did really, really well and it's a very important lesson here for anybody that's watching Snowflake and trying to understand is that they took a clean sheet of paper. They did not try to carry technology or ways of thinking forward. They just said, "Look, let's re-envision, re-imagine based on the platform realities that we now have, which was the Public Cloud. And, how do you design single best data operations platform you possibly can?"

Frank Slootman:

So, this is not data warehousing, it's just one use case. This is really think about it as a database in the Cloud. It is data operations from the most transactional to the most analytical and everything in between, so. And by the way, data platforms have been extremely fragmented historically. They were all special purpose for this thing and that thing and that has really created a lot of problems for data center operations, because they just had a Frankenstein architecture out there and people are sick of that.

Frank Slootman:

At the same time, we've never had a data Cloud in the history of computing because data was just fragmented and proliferated into silos and what we call bunkers. Bunkers is basically a silo that's incredibly hard to access. And it's like, "Well, why does that matter?" Well, that's because historically all we did was we did analytics in silo. Meaning that we would run something like Tableau on top of Salesforce or whatever. And people would eyeball those reports in those dashboards, and that was sort of the extent of it.

Frank Slootman:

But now, and the influence of data science, we really have to interrogate data regardless of its silo boundaries. That is by then, we often refer to this as data enrichment because you can take incredibly mundane data and when you enrich it with data attributes from other sources, like for example, you guys did with ADP, all of a sudden data goes from mundane to high octane. And having incredible meaning and potency and yield value for applications you never imagined.

Frank Slootman:

So, you need to create a platform that allows data to be enriched and be joined and be blended and be overlaid in ways that data scientist only have insight into. Because the essence of data science is you are trying to discover through historical data what the relationships are in your business. Once you understand relationships, you can now predict them.

Frank Slootman:

I mean, for example, I remember when we first, got involved with Geico and Todd Combs, the CEO, said, "Look, I don't need any more lectures from you guys on architectural prowess and all this sort of thing." He says, "If I have a problem in a state like Florida, where bodily injury claims are disproportionate to surrounding states, what explains that? Because, if I can't explain it, then I can't predict it. And if I can't predict it, I can't change my policy, I can't change my pricing." Right? So now, we're having business conversations about data.

Frank Slootman:

And by the way, insurance companies are already pretty data savvy, but every single industry is experiencing these kinds of questions. And historically, people have tried to answer these questions anecdotally. And obviously that is not the best way to go about things because that's just one man's opinion against another, right? And opinions, everybody's got one, but data doesn't lie. Data has no opinion.

Josh King:

Amp It Up, Frank, you write a lot about building culture and I think you had some issues at Snowflake when you got there. Did you find it difficult to change Snowflake's established culture? And are there any particular secrets to building a consensus around the idea of change?

Frank Slootman:

Well, building culture is a very forceful thing. In other words, you got to really mean it, okay? In other words, as a leadership team, it's not just the CEO. It's really every leader in the organization needs to internalize and then, want to act on it. In other words, wants to call it out, wants to prosecute it because you can see good behavior, bad behavior around you all day long. The question is, what are you going to do? Are you just going to look the other way or are you going to call it out?

Frank Slootman:

And it's not just bad behavior, it's also good behavior. You got to catch people doing things the right way and then amplify that and praise it and reward it and so on because people are like pets and children. They only learn from consequences, so you got to create consequences, good and bad when things happen and things happen all day long. Most people just preside over culture. In other words, they kind of let it happen.

Frank Slootman:

And when you let it happen, you get feed-ups. Strong personalities will just dictate culture in certain business units, in certain geographies and so on. And when you buy companies, it gets worse, right? Because now you're buying somebody else's culture. Well, you think you're just going to turn it off? It's not that easy. And companies that have been around a long time, it's near to impossible to undo the culture. Anybody who's tried to run HP can talk about that because you have companies that have existed for whatever, 50, 100 years, you don't get rid of culture. I mean, it gets rid of you. So, the earlier you show up, the better off you are.

Frank Slootman:

When I was at Data Domain, hell, we were 15 people when I joined there. You could have a meeting in the hallway with the entire company. That's awesome. Because now, now you're going to look people in the eye, and say, "Look, this is the way we're going to be. All of us, no exceptions." Right? And people really want to be led in that manner. They want to know what good behavior is. They want to know what bad behavior is.

Frank Slootman:

I mean, one of my favorite, interview questions has always been, "What kind of people succeed here? What kind of people fail here and why?" Right? Those are really good conversation, good questions to have because each organization is different. But your culture is the only thing that's really unique to you and everything else is up for grab for anybody else.

Frank Slootman:

Everybody has ideas. Everybody has access to capital. Everybody has access to talent. Those are just markets, but culture is how you get up in the morning and how you prosecute your day, so it is a huge deal. In any successful company just ask them, they will attribute success to their culture. They all do and for a good reason.

Josh King:

In Amp It Up, Frank, you say that a company's mission really has to be weaponized. How does that work at Snowflake?

Frank Slootman:

I always talk about mission posture, which really means having a very, very intense visceral sense of what the company is trying to achieve. Nothing to do with financial targets or growth targets or market capitalization. None of that stuff is material to your mission. Your mission is you're pursuing an end state or at least the closest thing to what you can envision, to what you want to realize as a couple.

Frank Slootman:

Now, for us, it's a data Cloud. We want to bring about something in the world of computing that has never existed before and we are consumed by our mission. Now, what that does the weaponizing, what that does is we block everything else out. If it's not related to our core mission, we don't want to hear about it. People naturally become very unfocused, very, very easily. It takes nothing.

Frank Slootman:

It takes a ton of work to maintain intense focus on the mission, so that's the weaponizing. Because when all the energy and all the quality of resources is fully concentrated on the mission, that's pure magic, okay? Things will change in ways you cannot even imagine the ideas that happen. The ambitions that happen, the boldness that happens as a result of that, that becomes the magic. That is the X factor in companies, but it starts with weaponizing the mission.

Josh King:

As we're recording this in early 2022, the competition for talent has reached a boiling point. And you mentioned several times in the book that you look for aptitude over experience, does that focus help snowflake identify young talent and how do you measure aptitude?

Frank Slootman:

Yeah, in some areas it's easier than others, and in sales, we can just look at what people have done the past. Good sales people have a track record. Okay, it's real easy and in engineering, they put guys on the whiteboard and they give them problems. And like, "How fast does this guy type?" That's a running joke that we always have. In other words, "How fast does this might work?" Right?

Frank Slootman:

Engineers should have a very easy time discerning the talent, so. But yeah, aptitude is really about, what are you innately good at? What are your God-given talents? What is the core of your being, right? And by the way, for most people, that's a very difficult question. They've never really been asked that before. And then being able to talk about it in an intelligent, really rich-considered manner. So it's a very important question because if I hire you, I can get you experience every day at the week. I can't get you aptitude. You come with aptitude.

Frank Slootman:

I'm buying aptitude and then I'm going to develop that with experience, right? But the essence of what I'm getting when I hire you is what you're innately good at. I need to know what that is. And by the way, the inverse of that is what are you not good at? So, because we all have our... that's sell of awareness. So, what are things that we should absolutely not ask you to do ever?

Josh King:

I mean, you probably have even a sense of things that you know you're not good at.

Frank Slootman:

Yeah.

Josh King:

I mean, you brought in some reinforcements when you started at Snowflake, including Michael Scarpelli, who was your CFO at Data Domain and ServiceNow. How does having who's worked closely with you for years help you accomplish your goals of hyper growth without losing focus?

Frank Slootman:

Yeah, yeah. Mike is a really good example of that because what he's really good at, I'm not, and I always use the, the analogy of he plays defense, I play offense. We're two sides of a coin, which is a reason why we've shown up in so many companies together. When I was interviewing with ServiceNow, I said to the board, "I want to bring Mike along." And in other words, I was already negotiating Mike's package before I had joined ServiceNow. I mean, that's how aligned this is, okay?

Frank Slootman:

When I was considering Snowflake, I told Snowflake, "I will not do this if Mike doesn't come along." And Mike was still the CEO at ServiceNow at that time. We played a round of golf. He's a pretty good golfer. I'm a miserable golfer, but somewhere along, the 18 holes, he's like, "I'll do it, but don't leave me again." Because he was still smarting from the fact that I left ServiceNow and he felt I left him stranded. So in other words, I did not accept the Snowflake role until, Mike said, "I'm coming along."

Frank Slootman:

Because, and this is another important observation, I think. When you run companies, you need to narrow the plane of attack very, very quickly. You need to sort your issues into, "What am I going to focus on?" Okay. And in other words, what problems can I solve very quickly versus what is going to take longer to solve. Who can solve what set of issues, right? And Mike, he takes on the end entire spectrum of controls and administration. Obviously all the financial reporting, all the systems. And essentially, he defends. When I'm on offense out there, I don't worry about what's going on at home at the farm because that is in a very, very tight control mode.

Frank Slootman:

And he and I have very short conversations because by the time we start asking the question, we already know what the answer is type of thing. There's no doubt that the successes that we have had, our function of the combination of our respective orientations in how we come at the world. Investors know this about us. They're very well dialed into it.

Josh King:

Yeah. I mean, the results speak for themselves. I mean, 16 months after you and Mike came to Snowflake, you raised $3.4 billion as part of its IPO, instantly establishing Snowflake as one of the NYC's marquee companies. The question is though, for investors, for others, for employees, how do you keep momentum going now as a public company and how does the future look for Snowflake?

Frank Slootman:

Yeah, that goes back about mission posture. Okay? I mean, the only thing that energizes people and teams and organizations and companies as a whole is the mission. I mean, you're not going to get excited, "Well, we want to grow 100% this year." I mean, it's like when people start to roll their eyes. It's like, "That's not exciting." Right? And you got to go back to the early days of Steve Jobs, who always had this glimmer of, "I'm going to do something insanely great." By the way, everything he did had to be insanely great because he just couldn't get out of bed if it wasn't insanely great.

Frank Slootman:

That is how you energize companies. It doesn't matter how big we are, as long as we have a compelling mission that we want to get up for every day and swing for defenses and then, it's not hard. It is hard when you lose your sense of mission, when you lose your desire and your boldness and your aggression in the marketplace and want to go after competition. That's when you're at risk. And by the way, when you see the decline of very, very storage enterprises, you can pick MG and HP and and Intel and so on, what happened to these people along the way?

Frank Slootman:

So, understanding that is really important because obviously, you can't fight it off unless you understand where it's coming from. Scale is definitely a problem because you get layers and layers and you got the problem of having tons of passengers on the boat, all these types of issues. So as leaders, you very much, I try, no matter how big this company gets, I try to run it like a popsicle stand where we're driving a race boat around the race course, okay. And we feel the consequences of our actions every minute of the day.

Frank Slootman:

That's really what you want to preserve rather than layers and layers and layers and channels of communication. I don't care for any of that. I'm on the phone with customers every day. I talk to more people than most people in the company do, and that makes me dangerous because I hear directly what is going on - good, bad, and somewhere in between. And I have to, the moment I start sitting in my ivory tower and rely on reporting from people all over the place, we're in a world of hurt.

Frank Slootman:

And the other thing I'll say is we maintain a very, what we call a malcontent attitude. And a lot of our people have the same malcontent attitude that I do. And then by the way, I have to have that around me, because I don't like people that want to self-congratulate and do victory laps all day. I hate that. We are people that basically see everything that's wrong all day, and we always see a room up from where things are. It's very hard.

Frank Slootman:

When I was at ServiceNow, Fred Luddy, the founder, he said to me, at one point, "I really don't want to come to the staff meetings anymore." And I said, "Why not?" He said, "Because you guys are indicting everything I've done." I'm like, "We're not trying to indict what you've done. It's just our nature to talk about problems." We're not trying to find fault with people or who did what to whom. No, we're talking about stuff that's not working well. And that is our culture.

Frank Slootman:

We're always picking at things that could be better. That culture really keeps you safe from being indulgent or just, you're sort of presiding. Presiding is the worst word. One of the worst, worst in the English language for me. We don't preside, okay? We're driving change. Better, better all the time.

Josh King:

So, Frank, as we wrap up final question, and if it's a spoiler alert for Mike Scarpelli, if he's listening, Mike, you can turn off the podcast now. But with three IPOs in your rear view mirror and one attempt at retirement already failing to stick, what do you see as the next chapter in Frank Slootman's journey?

Frank Slootman:

Well, that's another thing I don't think about that. I always find the problem when I hire people that are already, they have just taken a job and they're already about their next job. That's not a healthy dynamic. I don't think about what's next. I only think about now and what I'm doing today. You need to be invested in the moment, in the present, rather than I'm thinking about my next move. Once you start doing that, you need to take yourself out of the game.

Josh King:

What you're doing now is doing pretty good, so keep yourself in the game, Frank. Thanks so much for joining us inside the Ice House.

Frank Slootman:

My pleasure, Josh.

Josh King:

And that's our conversation for this week. Our guest was Frank Slootman, the Chairman and CEO of Snowflake. That's NYSE ticker symbol, S-N-O-W. His book from John Wiley and Sons, Amp It Up: Leading For Hypergrowth By Raising Expectations, Increasing Urgency, and Elevating Intensity is in bookstores and online now.

Josh King:

If you like what you heard, please rate us on iTunes, so other folks know where to find us. And if you've got a comment or a question if you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us @icehousepodcast. Our show is produced by Pete Asch, with assistance from Stephan Capriles, Ian Wolf, and Ken Abel. I'm Josh King, your host, signing off from the library of the New York Stock Exchange. Thanks for listening. We will talk to you next week.

Speaker 1:

The information contained in this podcast was obtained in part from publicly available sources and not independently verified, neither ICE nor is affiliates, make any representations or warranties, express or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.

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Information contained in this podcast was obtained in part from publicly available sources, and not independently verified. Neither ICE nor its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the information and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice.