How to Join Early,
Sell Smart, & Build Products

Julia Schottenstein

Head of Product, dbt Cloud (dbt Labs)

FORMERLY VC INVESTOR

Early Stage Founder Eval

The 4 Pillars of Great Early Companies

People: Founders with range, vision + day-to-day execution
Market: Is it growing? Space for new entrants?
Product: Can you hear the spark? User enthusiasm?
Distribution: What's the unfair advantage to reach customers?

The joining calculusYou won't get 10/10 on all four. Pick where you can add the most value to de-risk the bet.

Finding Product Spark

Signs You've Found Something Special

Users evangelize unprompted to colleagues
Product becomes part of how they self-identify
They describe emotional attachment, not just utility
Organic word-of-mouth is the distribution engine

dbt's special qualityJulia discovered dbt users described it unlike any tool, it was their identity. That emotional resonance was the predictor of something truly special.

M&A Playbook

How to Get Acquired on Your Terms

Timing: Plan M&A when you don't need it, strength is your leverage
Pain strategy: Identify 2–3 strategic buyers; inflict competitive pressure on them in your strength area
Tone: Stay friendly and open, you need to keep the door open as Plan B
Position: Be a partner solving their problems, not a desperate competitor

The Transform case study

Transform built semantic layers & threatened dbt's roadmap. They were vocal about their tech while positioning as a partner. When dbt acquired them, the integration was smooth because they'd already built bridges.

Plan B thinking

M&A is about having optionality. If you're strong enough to go independent, you're strong enough to negotiate a good deal. Never shut doors prematurely.

Value Alignment

Pricing Philosophy

Know your value before building; don't defer pricing conversations
At dbt, they capture only a small fraction of the value they create (by design)
Test price elasticity while stakes are low, not when you're desperate
Use relative value questions: what's cheap? fair? too expensive?

The pricers paradox"You don't get to decide if you'll have a pricing conversation. You only get to decide when."

Product Truths

Julia's Counterintuitive Beliefs

✗You should maximize ecosystem competitionINSTEAD →✓ Grow the pie, not slice it thinner. Partner with ecosystem companies to expand the TAM for everyone.

✗Keep your product roadmap secret from competitorsINSTEAD →✓ The best competitors are the ones you can eventually acquire or partner with, position yourself as open & collaborative.

✗Your team should understand the algorithm theoreticallyINSTEAD →✓ Make engineers *be* the algorithm (literal rope + sticky notes). Physical, memorable learning creates ownership.

✗Open source cannibalizes paid productsINSTEAD →✓ dbt's open core: open source is the distribution moat; cloud product adds state, collaboration, scale.

Based on Julia Schottenstein's episode on Lenny's Podcast. All ideas on this page are from the episode.Watch on YouTube Follow @j_schottenstein on X

GO DEEPER IN THE EPISODE

04:15 How Julia went from VC to working in product at dbt Labs 08:24 Four things Julia uses to evaluate a company’s potential 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’s 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’s 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 50:14 Lessons from working with strongly opinionated users 52:02 The importance of shipping, learning, and iterating 54:08 How VC skills translate into product 57:03 Lightning round

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