Snowflake IPO: The Team That Dreams Big
By Carl Eschenbach & Pat Grady on behalf of Sequoia
In 2017, Snowflake’s high-growth, high-burn plan seemed audacious. While AWS, Google and Microsoft Azure were offering customers a place to store big data, Snowflake was giving them a way to actually use it — and the company’s cloud-based data warehouse was growing fast. But the challenges were daunting. Storage and compute were expensive, and we worried the major players would eventually crowd Snowflake out of the space. Snowflake clearly had a great product, but we weren’t sure whether it would be a great business.
So we passed, and then immediately wondered: “What if they do exactly what they say they’re going to do?” And sure enough, they did. Snowflake consistently beat its top‐line plan with no deterioration in unit economics. Even more impressive was the maniacal customer love they enjoyed in an otherwise unexciting market — sales reps were flocking to the product, and we kept hearing from customers who knew firsthand exactly how special Snowflake was. So for the next round, just a few months later, we reached out to ask for another chance and were fortunate to partner in January 2018.
Since that day, it’s been our privilege at Sequoia to support Snowflake’s leadership team, many of whom have been with the company since the beginning. In 2012, Mike Speiser, the founding investor and first CEO, partnered with a special trio who dreamed up an even better solution, and together they built it. In addition to sharing a vision for a future in which companies could use data to drive better outcomes, co-founders Benoit Dageville, Thierry Cruanes and Marcin Zukowski combined user-centric design with true technical excellence. They created a product with superior performance that was not only incredibly well-thought, but incredibly difficult to build.
Over the years that followed, Snowflake’s product kept evolving — and so did its team. In 2014, the company recruited Bob Muglia to be the next CEO — and he, along with the rest of Snowflake, dreamed big. In a short period of time, Bob led the team from zero revenue to more than $100 million per year, as Snowflake continued to outpace even the lofty goals they had set. And once again, their aggressive expansion didn’t come with the typical deterioration in customer satisfaction or unit economics. Instead, in a testament to both Bob’s leadership and the quality of the product, Snowflake got stronger as they scaled. It was that impressive performance that gave us the conviction to lead one of the largest enterprise rounds in Sequoia’s history less than a year after our first investment.
Then in 2019, Snowflake convinced Frank Slootman, one of the most-respected CEOs in Silicon Valley — and, as of this week, a three-time IPO leader — to come out of retirement and lead the team as they prepared for a debut in the public market. Frank had nothing left to prove after his success at Data Domain and ServiceNow, and had rejected countless requests to lure him back to work. But he believed so strongly in Snowflake, and knew it was such a good fit, that he agreed to join in less than two weeks.
Having worked with Frank on the boards of ServiceNow and Medallia, we knew Snowflake was getting an insightful leader with an extraordinary command of details. Indeed, over the past 18 months, Frank’s operational rigor, relentless focus on serving customers and deep understanding of the business itself has prepared the company well for this week’s milestone. Together with a remarkable leadership team — including CFO Mike Scarpelli, Frank’s longtime business partner and himself now a three-time IPO leader; Chief Revenue Officer Chris Degnan, who has grown with Snowflake since joining as its first sales rep in 2013; and, of course, Mike Speiser, Benoit, Thierry and Marcin — Frank has driven Snowflake to dream bigger than ever before.
That disciplined execution has also enabled the team to capture data from some of the world’s biggest companies. In fact, as Snowflake has transformed from a cloud data warehouse to what they now call the Data Cloud — a repository that allows a whole world of data to be not only stored and queried, but shared — even the competitors have joined in. AWS, Google and Azure, the very companies we’d once worried would crush Snowflake, have all become partners instead.
By freeing that world of data once hidden behind firewalls and making it more useful not only within but between businesses, Snowflake is solving a messy problem no one else dared to tackle. In the process, they’re building not just an ecosystem, but an entire economy, which creates more value for its users with each new company that joins the platform. This is an exceptional product, and it sits on the shoulders of a remarkable team that continues to display an unparalleled ability to execute, even in the face of intense competition — and to push the limits of what it means to dream big.
To the entire team at Snowflake, from all of us at Sequoia: Congratulations, and we look forward to what you dream up next.
