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Julia Schottenstein is a product lead at dbt Labs, a data transformation company, and an active angel investor in data and infrastructure startups. She first got excited about dbt in 2019 when she was a VC at NEA and decided to make the leap from investor to operator by joining dbt Labs. She also co-hosts the dbt Labs Analytics Engineering Podcast, a show about data trends that impact analytics engineers\u2019 work. In today\u2019s episode, we discuss:

\u2022 Advice for founders hoping to improve their M&A outcome

\u2022 How to strategically think about competition

\u2022 How to determine your paid features and have willingness-to-pay conversations

\u2022 Why Julia lives by \u201cworse is better\u201d and \u201ctech debt is a champagne problem\u201d

\u2022 Lessons from dbt Labs

\u2022 What PMs can learn from investors

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Find the full transcript at: https://www.lennysnewsletter.com/p/m-and-a-competition-pricing-and-investing

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Where to find Julia Schottenstein:

\u2022 Twitter: https://twitter.com/j_schottenstein

\u2022 LinkedIn: https://www.linkedin.com/in/julia-schottenstein-25424318/

\u2022 Podcast: https://open.spotify.com/show/4BKMMeVXk4jJnAQSqGSJvE

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Where to find Lenny:

\u2022 Newsletter: https://www.lennysnewsletter.com

\u2022 Twitter: https://twitter.com/lennysan

\u2022 LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

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In this episode, we cover:

(00:00) Julia\u2019s background

(04:15) How Julia went from VC to working in product at dbt Labs

(08:24) Four things Julia uses to evaluate a company\u2019s potential\xa0

(11:10) How to identify whether or not you have product-market fit

(12:05) Distribution strategies

(13:11) M&A strategies

(15:54) Lessons from the Transform acquisition

(18:01) Competitive values at dbt

(20:25) Keys to dbt\u2019s success

(26:35) An offsite exercise Julia used to help her team internalize upcoming changes

(29:32) Determining what features are included in open source

(31:56) Pricing and willingness to pay

(33:34) Lessons from dbt Labs\u2019s first pricing change

(36:33) Whether or not to be public about selling your startup

(40:08) How to utilize connections during acquisitions

(44:57) How to communicate selling your company

(46:33) M&A market forecast

(47:28) Values at dbt Labs\xa0

(50:14) Lessons from working with strongly opinionated users

(52:02) The importance of shipping, learning, and iterating\xa0

(54:08) How VC skills translate into product

(57:03) Lightning round

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Referenced:

\u2022 dbt Labs: https://www.getdbt.com/

\u2022 Tristan Handy on LinkedIn: https://www.linkedin.com/in/tristanhandy/

\u2022 dbt Labs acquires Transform to enhance Semantic Layer tool: https://www.techtarget.com/searchbusinessanalytics/news/365530993/DBT-Labs-acquires-Transform-to-enhance-Semantic-Layer-tool

\u2022 Snowflake: https://www.snowflake.com/en/

\u2022 G\xf6del, Escher, Bach: An Eternal Golden Braid: https://www.amazon.com/G%C3%B6del-Escher-Bach-Eternal-Golden/dp/0465026567

\u2022 Red strings training clip from Ted Lasso: https://www.youtube.com/watch?v=aVe3Iwy10MA

\u2022 Monetizing Innovation: https://www.amazon.com/Monetizing-Innovation-Companies-Design-Product/dp/1119240867

\u2022 Madhavan Ramanujam on Lenny\u2019s Podcast: https://www.lennysnewsletter.com/p/the-art-and-science-of-pricing-madhavan#details

\u2022 Pricing survey: https://www.qualtrics.com/marketplace/vanwesterndorp-pricing-sensitivity-study/

\u2022 Hunter Walk\u2019s blog post about publicly selling your startup: https://hunterwalk.com/2023/05/13/the-acquihire-market-for-early-stage-startups-is-ice-cold-one-better-strategy-announce-youre-for-sale/

\u2022 Range: Why Generalists Triumph in a Specialized World: https://www.amazon.com/Range-Generalists-Triumph-Specialized-World/dp/0735214506/

\u2022 The Snowball: Warren Buffett and the Business of Life: https://www.amazon.com/Snowball-Warren-Buffett-Business-Life/dp/0553384619/r

\u2022 Sam Walton: Made in America: https://www.amazon.com/Sam-Walton-Made-America/dp/0553562835

\u2022 Succession on HBO: https://www.hbo.com/succession

\u2022 In Depth podcast: https://review.firstround.com/podcast

\u2022 dbt community Slack: https://www.getdbt.com/community/join-the-community/

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Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

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Lenny may be an investor in the companies discussed.