M&A, competition, pricing, and investing | Julia Schottenstein (dbt Labs)

**Julia Schottenstein** (0:00)
M&A is always about creating plan Bs. And the way I would think about it is for any one company, there's only ever two to three buyers that find what you're building to be extremely strategic.
And the strategy that I would do in how do you get noticed is I would figure out the area that you bring a competitive advantage, and I would inflict pain on that potential buyer.
Make it impossible for them to not notice you, because that's when they're going to have their ears perk up and say, well, what's going on with this company? The really important piece here is you want to do that in a way that's still friendly and open. I see a lot of founders get this wrong, and they prematurely will shut down a conversation or they won't talk to an incumbent or a potential future buyer because they take too competitive of a stance. But that's a mistake because M&A is all about creating plan Bs, and you don't want to shut that door down prematurely, because you don't know if you can really go the distance and be an independent company. So you want to have optionality.

**Lenny Rachitsky** (1:04)
Welcome to Lenny's podcast, where I interview world-class product leaders and growth experts to learn from their hard-won experiences building and growing today's most successful products. Today, my guest is Julia Schottenstein. Julia is a product leader at dbt Labs, where she leads the dbt cloud product. She's also the co-host of the dbt Labs podcast called Analytics Engineering Podcast, a show about data trends that impact analytics engineers' work. As you'll hear in this episode, Julia actually led the acquisition of a startup that I'm an investor in called Transform from the side of dbt Labs.
And in our conversation, we dig into the M&A process and get into a bunch of advice to improve your odds of having a good outcome and just approaching M&A broadly.
We also dig into the story of dbt, which is one of the most successful startups out there that you probably don't know about. And we talk about what they did right to get to where they are now. We also cover how to best think about competition, a bunch of frameworks for thinking about product and advice on how to approach pricing and also open source. Enjoy this episode with Julia Schottenstein after a short word from our sponsors.
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Julia, welcome to the podcast.

**Julia Schottenstein** (4:17)
Super excited to be here.

**Lenny Rachitsky** (4:19)
So you have a really interesting career path in that you went from VC into product management. Usually it's the other way around. Usually PMs become VCs and it's rare to see this kind of version of it.
And so I wanted to start with just a question of just how did that come to be?