In a candid discussion on 20 VC, host Harry Stebbings interviews Tristan Handy, the founder and CEO of DBT Labs. Handy shares his journey from a "lost soul" in consulting to a successful startup founder, emphasizing the importance of seizing opportunities and leveraging skills—in his case, data expertise—to find one's niche. He discusses DBT Labs' growth, community-driven product development, and strategic fundraising decisions that traded off modest success for potential unicorn status while expanding their community reach. Handy also touches on the challenges of remote work, advocating for a distributed, asynchronous model that fosters community and combats isolation. Throughout the conversation, he underscores the significance of transparency, team performance over individual achievements, and the delicate balance of stakeholder interests as key to building a high-performance business.
"I'm thrilled to welcome Tristan Han Andy, founder and CEO at DBT Labs, a data transformation tool that enables data analysts and engineers to transform, test and document data in the cloud data warehouse."
The quote introduces Tristan Handy and his company, DBT Labs, highlighting its significance in the data analytics industry and Tristan's previous experience.
"One of my good friends from high school and college is Anthony Castellina, and Anthony had founded Squarespace five or so years before. [...] It was an environment that I had never seen before, just the whole concept that I could wear jeans and a t shirt to work."
Tristan Handy discusses his transition into the startup world through a connection with Anthony Castellina and how the culture at Squarespace influenced his career decisions.
"I think that you need some amount of luck to be in the game. You need some minimum bar of luck. Then above that, it's probably skill."
The quote addresses the balance of luck and skill in achieving success, emphasizing that while luck is necessary to start, skill is what propels individuals further.
"That is the feeling that I get when I get really excited about somebody. [...] But the talent search algorithm is fundamentally not that hard. People just get focused on the wrong stuff."
This quote reflects Tristan Handy's philosophy on talent detection, emphasizing the importance of communication and potential over specific experience.
"One of the strategic levers that I've tried to use throughout is to use time as a weapon."
Tristan Handy explains his strategy of using time to build a strong foundation and defensible position in the market.
"We took a long time to monetize our software. DBT core is open source. [...] But really DBT is as close as you can get to a standard in the modern data stack."
The quote describes DBT Labs' strategic decision to delay monetization in favor of perfecting their product and user experience, leading to a strong market position.
"I really believe in that? I still try to get us to. And certainly in the early days we released software that was not always perfect. That is fine,"
This quote encapsulates Tristan Handy's endorsement of the "move fast and break things" philosophy, encouraging startups to iterate quickly and learn from the market.## Early Stage Monetization and Growth
"What we found out is that the minute that you have a million dollars in software ARR, you're on a clock."
This quote emphasizes the urgency and expectations for rapid growth that come with reaching a significant revenue milestone.
"And it's actually almost harder to raise once you have revenue."
This quote highlights the counterintuitive nature of fundraising where having revenue can complicate the process due to investor expectations.
"I have a principles based answer, and the principles based answer is that we navigate as much of our strategy as we can by asking what the community needs from us at any given point in time."
This quote explains the principle-based approach to decision-making, focusing on community needs to guide strategic moves.
"We built role based access control. If you have an extremely mature, multitenant environment, then you can answer all the security questionnaires in a certain way."
This quote describes one of the key features required to transition to enterprise adoption, highlighting the importance of role-based access control.
"Oftentimes our ability to work together, to communicate, to have a consistent approach and consistent set of values that really determines the performance of the team."
This quote emphasizes the importance of teamwork and shared values over individual performance in determining team success.
"The goal that I always set for these meetings is that we don't leave the room without somebody saying something that feels uncomfortable."
This quote underscores the importance of candid discussions in performance reviews to address any underlying issues.
"Because it's lonely and dehumanizing. Because we're built to interact with other humans."
This quote reflects the challenges of remote work and the importance of human interaction, which distributed companies try to accommodate.
"So everybody gets, I think it's $250 a month for an out of home stipend."
This quote details the financial support given to employees to facilitate a healthy and productive distributed work environment.## Many Satellites Strategy
"In places where we have high concentration of employees, open up satellite offices. We're calling this our many satellites strategy."
This quote explains the company's approach to establishing smaller, local offices to support employees who are based in areas with a high employee density.
"The most important job of the CEO is to keep all of the different stakeholders in mind at all times and try to balance their long term interests against one another."
The CEO must consider and balance the interests of all stakeholders, which includes navigating the different definitions of success for founders and investors.
"I think you sold freedom for scale of money, and I think when you're small, you have freedom, you have flexibility."
This quote reflects the perceived trade-off that companies make when they decide to scale up with the help of institutional funding, often at the cost of operational freedom.
"We raised four rounds of funding all during COVID the valuations during that period started off attractive and only got more attractive."
This quote highlights how the company took advantage of the market environment during COVID to secure funding with attractive valuations.
"I think that there's a lot of companies, including public software companies, that are doing a lot of living into a lot of things."
The speaker acknowledges that many companies are challenged by the need to grow into their valuations, implying that it is a widespread issue in the industry.
"We're very focused on a metric called cost of book, which is not that different from customer acquisition cost, but it's like the math worked just slightly differently."
The speaker explains the importance of the cost of book metric and how it provides a more accurate picture of the company's efficiency in acquiring customers.
"I think that we found that the best leaders communicate very clearly. They bring their entire organizations along for the ride, whether it's the good parts or the bad parts."
This quote emphasizes that clear communication and transparency are essential qualities of high-performance leaders, which contribute to the success of the business.
"The main limit to transparency is when it conflicts with an individual's privacy."
The speaker notes that while transparency is important, it should not infringe on personal privacy, illustrating the need to find a balance in what is shared within a company.
"The companies that I had always worked at, the expectation was that you as an employee were going to learn about a fundraise once everything had been signed and the money was in the bank."
This quote reveals the traditional approach to transparency in fundraising and the speaker's realization that a different approach could benefit employees by providing them with timely information to make important decisions.## Employee Communication and Fundraising Transparency
"We said there's interest in the market we're probably going to raise in some reasonably near term time frame. We don't have any details, but we wanted to let you know that the wheels were happening and we're not going to sign any term sheets for the next 30 days."
This quote emphasizes the company's approach to keeping employees informed about potential fundraising activities, highlighting the value placed on transparency and giving employees time to understand the situation before any formal agreements are made.
"We have general way that we think about how to allocate those employees of a certain tenure, always get to participate at a certain level, and we try to do it in a way that all the rules are consistent between everybody at the company."
This quote outlines the company's policy for its secondary program, which is designed to be fair and equitable across the organization, allowing employees who have invested time and effort into the company to participate in financial opportunities.
"Fairness in doing this stuff is unbelievably important."
This quote highlights the importance the company places on fairness when it comes to financial opportunities, suggesting that they aim to create an equitable environment for all employees regardless of position.
"It's meant that we can renovate our home to actually have bedrooms for our kids. It's meant that we can have childcare support, that we need to actually be able to do our jobs and focus on them."
This quote illustrates the tangible benefits that financial security from secondary sales can bring to an individual's personal life, such as housing and childcare, which contribute to overall well-being and the ability to focus on work.
"Being a parent during COVID was tremendously challenging... solving them with money, because otherwise we would actually suffer meltdowns."
The quote reflects on the struggles of parenting during the pandemic and how having financial resources helped alleviate some of the stress by addressing childcare challenges.
"The problem with async and the time when it's really hard to adopt well is when it's adopted inconsistently."
This quote captures the importance of consistency in asynchronous work practices to prevent a reliance on meetings and to ensure efficient communication and productivity within the company.
"I try to make as few decisions as possible."
The CEO expresses a desire to delegate decision-making, suggesting a leadership style that empowers other team members and reduces the decision-making burden on the CEO.
"In five years, there will be more people participating in creating data, analyzing data. There will be more quality around the data that is produced and consumed, more consistency."
This quote offers a vision for the future of DBT and the broader data ecosystem, forecasting growth in participation and improvements in data quality and consistency.
"I have a grass is greener problem. I want to live every life."
The CEO reflects on their personal aspirations to experience various lifestyles and cultures, indicating a curiosity and eagerness for life experiences beyond the startup world.