In this episode of "20 VC," host Harry Stebbings interviews Frank Slootman, Chairman and CEO of Snowflake, who shares insights from his book "Amp It Up" and his extensive experience in the enterprise software industry. Slootman emphasizes the importance of focus, decisiveness, and urgency in business execution, advocating for narrowing priorities to amplify quality and impact. He discusses his unconventional approach to performance management, advocating for quarterly performance compensation over traditional methods like MBOs or annual reviews, to better recognize top performers and swiftly address underperformance. Slootman also highlights the significance of trust, empowerment, and having a malcontent drive for success, while maintaining empathy. He touches upon board management, advising CEOs to lead with confidence and clarity, and underscores the transformative effect that successful companies have on individuals' lives, far beyond financial gains.
This is 20 vc with me, Harry Stebings, and what a show we have for you today. An individual who's built three home run businesses consecutively, one of the great entrepreneurs and executives of our time and out with a book. Amp it up.
Harry Stebbings introduces Frank Slutman as a distinguished entrepreneur and executive with a new book that he highly recommends.
Harvard Management Company is constantly seeking out the next generation of great investors and entrepreneurs. HMC has managed Harvard University's endowment for nearly 50 years and was one of the first institutional investors in venture capital.
HMC is portrayed as a key player in the venture capital space, supporting new investors and entrepreneurs with their expertise and partnership.
Well, the issue of focus is that we have a tendency as human beings to operate a mile wide and an inch deep. And it gets worse and worse over time.
Frank Slutman explains that lack of focus leads to superficial engagement with tasks and that it is critical to narrow focus to increase quality and effectiveness.
No, actually, I think people have sort of an unnatural rush to judgment because if you're wrong, I mean, you're losing even more time and more resources and more confusion than opportunity costs and so on.
Frank Slutman advises against rushing decisions as it can lead to greater losses and emphasizes the need for careful consideration to ensure correct decisions are made.
Well, you do it in every single interaction, every single message, every single meeting, basically every waking moment. You have to have that filter out. Can this be faster?
Frank Slutman discusses his strategy for maintaining a sense of urgency and pace throughout a large organization, emphasizing the need for constant reinforcement of these values.## Amping It Up
e way these things happen. And there's so much room up. And that's the whole point of the book. It's called amp it up. Why? Because there's all this room in the margin to do things faster, to do things better, to do things more effectively, and just free money is what they call it.
This quote introduces the main concept of the book "Amp It Up," which is to enhance performance and seize opportunities that are often overlooked, equating to "free money."
Doubt tells you everything you need to know. Okay. Because that's what the saying is. It's a tiebreaker. When there is doubt, you have your answer. There should not be any doubt. That's the whole point, right?
Frank Slutman explains that doubt is an indicator that should not be ignored. It is a deciding factor in making choices, especially when there is uncertainty.
Yeah, I mean, we don't do mbos, for example. I've killed off mbos in every company I've ever been in. If they had them, that's an easy call. I don't want people running their own show.
Frank Slutman discusses his preference for a performance management system that does not include MBOs or traditional performance reviews, favoring a more dynamic and direct approach to compensation and feedback.
The way we do it is the company first needs to earn the bonus money. The company goals, they get communicated. Everybody knows what they are. And based on our performance there, we fund the bonus pool for the entire company.
This quote describes the process of funding the bonus pool based on company performance, which sets the stage for calibration sessions where managers allocate bonuses to their staff according to performance.
Well, we have a very empowering style. What that means is we really want to turn them loose.
Frank Slutman emphasizes his leadership style, which focuses on empowering employees to perform to their fullest potential by providing them with freedom and support.
By the way, Scott McNeely used to say, fail fast. In other words, you can do really well by being a very fast course corrector, meaning that you acknowledge your mistakes and you fix them and then you move on.
Frank Slutman references Scott McNeely's philosophy of failing fast as a way to emphasize the importance of quickly recognizing and rectifying mistakes, fostering a culture where employees are not afraid to take risks and learn from their experiences.## Acknowledging Mistakes and Course Correction
"If you acknowledge the fact, like, oh, I screwed this up. No, it's actually good when you actually know quickly that, no, this is wrong. And we have to correct of course correction if you can do it fast is man. I mean, that's the next best thing after making perfect decisions. Well, nobody makes perfect decisions."
The quote emphasizes the value of promptly recognizing and rectifying mistakes, suggesting it's the next best outcome to making perfect decisions, which is acknowledged as an unrealistic expectation.
"Funny. It's kind of a little bit Silicon Valley new age culture where it's like, we need to create these environments of safety and everyone so loved and cherished."
This quote reflects a concern that the culture in Silicon Valley may be focusing too much on creating comfortable environments at the expense of efficiency and a strong drive for results.
"We feel insecure and high anxiety all the time. I often tell ceos, if you're feeling anxious, congratulations because you passed the intelligent test, you should be anxious."
The quote suggests that feeling anxious or insecure is a sign of intelligence in business leaders because it reflects an understanding of the competitive and challenging nature of the industry.
"Well, it's really a modern form of warfare business."
This quote draws a parallel between business competition and warfare, highlighting that while it's intense and can result in company failures, it's a positive outlet for human aggression that drives societal prosperity.
"Sure. I mean, of course you change. I mean, everything changed."
The quote acknowledges that change is an inherent part of leadership, suggesting that leaders should expect to evolve in their roles over time.
"The reality is a board needs to be led."
This quote stresses the importance of CEO leadership in board meetings, rejecting the idea that boards should dictate the company's direction without strong input from the CEO.
"One of the things I do when I'm acting in an advisory capacity and that could be on the board or something else, I try never to prescribe to people like do this or do that."
The quote conveys the philosophy that an effective board member or advisor offers ways of thinking about a problem rather than dictating specific actions, enabling CEOs to retain ownership of their decisions.
"I just read, Ryan Holiday's courage is calling, which I highly recommend, especially to young people."
This quote suggests that "Courage Is Calling" by Ryan Holiday is a book that has had a significant impact, particularly recommended for its relevance to young people and its insights on courage.## Courage in Business
"You need courage in every walk of life. But not many people have thought about it, understood what that means. And a lot of people back away from mustering courage because that's just a natural reflex. Courage is rare."
The quote emphasizes the importance of courage across all aspects of life and notes that it is not commonly reflected upon or understood, leading many to avoid situations where courage is required.
"Trust is the core currency of any human endeavor, and it's one of those most underrated, underappreciated ideas, concepts and currencies."
This quote underlines the concept that trust is fundamental to any human activity and is often not given the recognition or appreciation it deserves.
"Courage would be number one, because it's very hard to live without it. And not many people have it, again, because they don't think about it, and they just sort of reflexively behave because we all do that as humans."
The quote places courage at the forefront of desirable traits for children, suggesting it is challenging to live without and not frequently possessed due to a lack of conscious consideration.
"The great thing is, because we've had these three great companies over the last 20 years, there's hundreds, thousands of people who have been profoundly moved by the experience."
This quote highlights the speaker's pride in having led companies that have significantly improved the lives of many people over the years.
"But once you sort of get a few degrees of separation from economic hardship, that relationship changes to the point where it's sort of a topic."
The quote reflects on the shift in the speaker's perception of money after moving away from economic hardship, suggesting a detachment from its day-to-day impact.
"I mean, I just love doing that. And what I love the most, it's no bullshit. What Frank thinks, Frank says in the most eloquent and brilliant way."
This quote conveys the speaker's admiration for the author's straightforward and articulate expression of ideas in the book.
"Harvard Management Company is constantly seeking out the next generation of great investors and entrepreneurs."
The quote indicates HMC's ongoing effort to find and support new talent in the investment and entrepreneurial space.
"Mercury is building full stack banking for startups."
This quote introduces Mercury's focus on providing comprehensive banking solutions specifically designed for startup companies.