Scaling Global Organizations in the Age of AI with ServiceNow Chairman and CEO Bill McDermott

**Bill McDermott** (0:00)
The cost to replace an enterprise platform in this SaaS apocalypse that people talk about is an extraordinary expense. Let's take that cost, and then let's take the cost associated with the human capital, doing that instead of something else, because the platform was doing the work for you. And then let's add up the cost of the GPU factory and the tokens that will materially affect their business model. And so for a simple application, on our platform, it would be ten times greater in cost to try to replicate it with a language model. People that run businesses understand that people make mistakes. They never will forgive software for making a mistake.

**Sarah Guo** (0:51)
Hi, listeners. Welcome back to No Priors. Today, I'm here with Bill McDermott, CEO of ServiceNow, and the closest thing we have to a rock star in enterprise technology. We talk about leadership in the age of AI, what enterprise customers actually want, the difference between SaaS platforms and the SaaS apocalypse theory, and the next 10 years of ServiceNow. Welcome. Thank you so much for being here.

**Bill McDermott** (1:12)
Thank you for having me, Sarah. Thank you.

**Sarah Guo** (1:14)
So I want to talk about your career and leadership and what's going on with ServiceNow, but I want to start at the beginning. I read Winner's Dream last week, and it's an amazing book. You talk about the deli you bought when you were 16
First of all, that's a very strange thing to do. But it's such an amazing story. Can you tell me a little bit first about your thought process and then we can talk about how you managed it?

**Bill McDermott** (1:39)
Yeah.
I don't deserve too much credit for doing a strange thing buying the deli because I was really trading in multiple part-time jobs.
At the time, I was stocking shelves, pumping gas and bussing tables.
So I had a chance to consolidate all of that into the delicatessen and have one job where I could spend all of my hours. For a kid going to high school, that made a little bit more sense. I got lucky. I bought the business for 5,500 notes, 7,000 with interest. If I make the payments, I keep it. If I miss a payment, they take everything away from me. So it was a pretty cut and dry moment. And I think the biggest thing that I've learned in my life, and especially there, is it's all about the customer. In the end, the customer and the customer alone determines whether you want to lose. And it's a very simple equation. If you keep them coming back, you got a good chance. And if you don't, you lose. And, you know, back then, one of the most interesting parts about that store was knowing your customer and knowing your base. And I really had, you know, three main customers. You know, one was the blue collar worker, like my dad, as I said in the book, was rich on Friday and dead broke by Sunday morning. There were the senior citizens and this was the early days of DoorDash, I guess, because they never wanted to leave their house and we delivered and no one else did.
And the hard part was getting the kids to walk a block and a half past 7-Eleven to come to my store. And these were the early days of video games and Asteroids and Pac-Man. And, you know, you tell that to people today, most of them never even heard of these games. But kids would stand there for hours, plucking their parents quarters into those games. And that's how I got them to walk a block and a half past 7-Eleven and come to my store. At the end of a long day, one of the young people said to me, you know, when we want to have good food, be treated with dignity and respect and play video games, we come to your store. And when we want to steal stuff, we go to 7-Eleven.
So, if you take care of your customer, you know who your customer is, and you give them what they want just the way they want it, no matter what business you're in, you've got a really good chance. And that's all I did. And it put me through school, including college, and it got me my start. And I have to tell you, the EQ that comes with dealing with 500 customers a day is worth a lot. And I have a feeling the world could use a little more EQ right now.

**Sarah Guo** (4:38)
I learned a great deal not managing a deli, but at least being a hostess and an outback steakhouse. See?