There are hundreds of amazing companies that sell software and tools to data scientists and machine learning teams. In fact, many of the best companies in the last 15 years have been exactly that.
But outside of SafeGraph (where I work), there are almost no companies that specialize in selling data to data scientists.
Partially it is because it is MUCH easier to get to $10 million ARR by selling applications (traditional SaaS). Partially it is just tradition coupled with stagnation. Partially it is because venture capital firms have been wary of funding data companies. And, most convincingly, being a data-only business is less exciting to most entrepreneurs because data is a supporting role (see the last section on data and humility).
But selling data to data scientists is starting to be a big business.
Selling data (DaaS or Data-as-a-Service) historically has not been a great business. Outside of Zoominfo and a few others, there have been almost no pure-play data unicorns built in the last 20 years.
That’s because very few companies had the ability to make use of raw data in the past. 10 years ago, only the most advanced engineering teams were able to make use of external data. But that’s changing. An order of magnitude more companies buy data today than did five years ago. That’s because a good engineer with a tool like Snowflake can be as productive as a great engineer was 5-10 years ago.
This is happening across industries.
One example is hedge funds. Not that long ago, just ten funds were buying significant alternative data. Today it is still under 100. But there are 500-700 funds that are currently making the investment to ingest large amounts of data.
The #1 rated session was an interview with Todd McKinnon, CEO Okta — it was excellent and I highly recommend it.
My presentation was the #2 rated session. Here is the full video:
And here is the full learnings:
(1) Avoid good opportunities
the MOST IMPORTANT advice I can give you is to avoid good opportunities.
avoid good opportunities like you work to avoid the coronavirus.
Good opportunities must be avoided at ALL costs.
this is true if you want to build a great company … but this is JUST AS true in life.
the more successful you become, the more good opportunities are going to come at you. soon you will be swimming in good opportunities.
again, that’s true for companies and true for you individually.
let’s first dive into this advice individually and then show it applies to building a business.
let’s say you are 22 years old and don’t have any money. well then you are likely going to see very few opportunities to invest and most of them will be bad. but as you gain wealth, you will see more opportunities to invest — and many of them will be good. but even the good opportunities take time and effort to review — so it is in your best interest to do everything possible to wait only for the great opportunities.
this is even more true when running a company. the possibilities of the number of things you can do to grow your business are endless. you can launch new products, be better at recruiting, speak at SaaStr, and so much more. my advice, have some sort of rubric that allows you to ID good opportunities and avoid them.
but how do I know when an opportunity is just good and not great?
my simple heuristic: if the opportunity has few obvious downsides, it is almost certainly NOT a great opportunity. all great opportunities have very big and very obvious downsides.
of course, just because it has obvious downsides doesn’t mean it is a great opportunities — it still is more likely to be a bad or good opportunity … but if you see something with no obvious downsides, it almost certainly is not great.
this is also true with people you hire. if you want to hire a 10xer, that person will almost certainly have glaring faults. anyone that you can hire without glaring faults will, at best, be good — they will certainly not be great.
summary: avoid good opportunities like you avoid COVID-19
(2) Delegate things you are good at
most people advise us to delegate things you are not good at. they advise to surround yourself with people that have different strengths and different weaknesses.
this is the conventional advice.
maybe someone on your board already gave you this advice.
most of us have heard this advice many times over the years.
but this is terrible advice. don’t listen to it. ignore it. take it outside in the backyard and bury it. stab it and kill it.
do the opposite.
instead: Delegate the things that you are good at.
I know this sounds really strange … so let me explain.
the things that are the EASIEST to delegate are the things you are already good at. you know how do those things really well. you might already be an expert in them. you can break down these things well. you can also hire for these things.
so delegating these functions will, for sure, have the highest success rate.
if you are a great engineer, who do you think you will be better at hiring — other great engineers or great salespeople?
the answer is obvious — you will likely hire super engineers and very mediocre salespeople.
so the first thing you should always delegate are the things you are best at.
I cannot stress this enough.
you even see it in all great companies – they rarely get great in things that are not traits of their founders.
for instance, Marc Benioff is the world’s best software marketers. he was an amazing software marketer ever before he started Salesforce. he’s incredible. he’s hired great marketers and delegated to them. Salesforce continues to be great at marketing.
but Marc Benioff is not a great UI/UX person. while he’s been able to acquire great UI/UX people through acquisitions over the years (Stuart Butterfield, CEO of Slack, is one of the world’s greatest), the Salesforce product still suffers from having one of the worst UI experiences.
and guess what? it hasn’t mattered.
it is better that Benioff focused on his strengths.
you should focus on your strengths too — you cannot be all things to all people. focus on being great at just a few things.
let’s look at the napkin graph (above).
on the y-axis is things you are good and things you are bad at. the x-axis is things you love to do and things you really hate doing.
when you get a chance, try to fill out these quadrants for yourself.
the easy thing is to delegate as much as possible on the things you are already good at.
build systems to make delegation easier. hire super talented people and work on up-leveling them.
now you have two other buckets left.
for the things you like to do but are not yet good at … work on investing in yourself. get a coach. read. learn. try a few different things (and know that you will fail). while it is unlikely you will ever become great at these things … you can get yourself to good. once you are good, you can better effectively delegate (and hire).
now there are things that you are bad at and you also do not like doing. my advice in this quadrant is to do everything possible to get leverage through APIs or software … or maybe you do not need to do them at all. remember, you don’t have to do everything to have a super company. there can be many functions that you either outsource or just not do.
the great thing is that the number of vendors you can choose from is growing exponentially. you have amazing choices.
the number one skill to have in the next 20 years is the ability to select and manage vendors — almost every company now has more vendors than employees.
(3) Do the opposite of “smart” people
take a look at what the smart people around you are doing … and do the opposite.
Disney was a fascinating person who captured the imagination of the world.
Two random insights from the book that are a bit non-obvious:
Disney was ALWAYS out of money
Much of the book is about how Walt Disney (and his brother Roy) were constantly searching for money. Everything they did was in the lens of needing capital. 100 years ago (when Disney started), it was REALLY hard to get capital. And capital providers were extremely controlling. And capital was really expensive.
Today, Walt Disney would have been able to easily raise tons of money at good terms. People would be lining up to throw money at him. We entrepreneurs today have no idea how hard it was for many of the early pioneers. Many of them had to get personal bank loans to keep their companies afloat. We have it soooooo much easier today.
Roy Disney made Walt Disney possible
Walt Disney’s older brother Roy was the steady hand at the company. While Walt was the creative genius, Roy was the person who made sure the company was operating. The brothers had a tenuous relationship and Roy is not given enough credit.
Reading the book, I kept thinking about Steve Jobs’s partnership with Tim Cook. Steve Jobs no doubt revered Walt Disney (he even sold his other company, Pixar, to Disney Inc). But to really make Apple shine, Jobs needed to rely on people like Tim Cook.
But while Cook will forever have a special place in history (Cook has become a great CEO in his own right), Roy Disney has been seen as more of an asterix (possibly because there is a cult and mystique of the founder).
number of employees of a well-run 100-person start-up that care about the long-term company: 60
number employees of a 10,000-person company that care about the long-term company: 6
this is why start-ups can win.
This is why they do win.
The biggest predictor of whether a company will be an important company in the next ten years is the raw number of employees that really want that company to win. Not the percentage of employees, but the actual raw number.
This is why organizations with a large shared mission do so well. Some large organizations that will certainly still be important in the future include Apple, Esri, and the U.S. Military. These large organizations are the exceptions as they have a true share mission.
But most 10,000 person organizations have, at most, a handful of people who truly care about the long-term outlook of the organization.