Hi Benn, love this. While it has a few pessimistic undertones, I appreciate your realistic view on how the data space's evolved in the past few years. For future content, I'd love to hear your predictions on how the role of data analysts will be affected by the ongoing consolidation, obsoletion, and extinction events in the data industry.
Thanks! And yeah, I was just reading a couple things that made me wonder the same thing, actually. My current feeling (to stay on the pessimistic side for a bit) is that we might be better off if we stopped trying to be so creative and "strategic," and actually thought of ourselves more as accountants who are trying to apply standards to business problems. That sounds boring, but boring might be better than what we're doing.
This article is my startup experiences summarized, to my luck it even aligns on the data platform and one of our competitor we often lose business to is Alteryx. The part about the PDF download is so accurate, Around Q4-2022, it took me by surprise with all the configurable embeddable real time dashboards, it was excel/pdf that made the sale, which dissolved my conviction in business case on a data platform like the one I built. Its wild how times are progressing.
Sep 10, 2023·edited Sep 10, 2023Liked by Benn Stancil
Really great and thought inspiring post - thanks for writing this. My gut is that data just means so many different things to different companies (and within companies) that it does make sense that the tools themselves are highly fragmented. As there's more consolidation in best practices, standards, etc you'll see a consolidation in tools. What is surprising is that there are so many differences across the industry.
Yeah, I think it makes sense why there's demand for different types of tools, given all the different preferences and idiosyncrasies that people have in how they use these tools (e.g., this post: https://benn.substack.com/i/119475953/universal-need-individual-preference). But I think the hard part is the supply side of that. It's expensive to build these tools, so they usually raise venture money, so they want to get really big, and so on. And that's the part that probably doesn't work. It'd be like if everyone really wanted a huge variety of car brands. Even if the preferences for that were there, there will never be as many carmakers as, say, people who make t-shirts.
Ya... I often wonder what some of these tools would look like without the constraints of VC money. I used to think they would be better - more time to get it right - ability to make more long term bets, etc. but honestly nowadays I’m pretty convinced they would mostly be worse and/or out of business - with probably a few exceptions. However raising a little bit of money and going slower could benefit some I think.
I'm in the same camp. The kind of popular narrative seems to be that companies or products are made worse by VC money, which I don't think is usually the case. I think the real impact is on the people who work there, and their freedom to build what fulfills them.
Would X startup have a better product if they didn't have $50m to invest in building it? Seems very unlikely. Would the founders of X startup be happier being able to build what they want, at the pace they want it, for the people that want it? Probably.
(Also, the sorta caveat to that to me is that taking lots of VC money makes people assume you're the enemy. That very much seems the case with dbt, where if it's bootstrapped or doesn't take that much money, people give the team a lot of grace. Take money, and people will be much faster to turn on you.)
Ya. To your point I think the VC money focuses companies, helps retain top talent, and pushes for real revenue not theoretical revenue. I think lack of flexibility with speed is the biggest negative in my book.
Sep 11, 2023·edited Sep 11, 2023Liked by Benn Stancil
Unfortunately you're not operating in a vacuum and you have competition so oftentimes it might simply be you're raising money since your competitors are and you do not want to lose out. Especially if the product has a heavier sales motion. A little bit of VC money is good, too much is dangerous since that can lead to a decline of the product if you have to justify your valuation (magnified these days with non zero interest rates). dbt is a great example here - they need to justify the valuation and now rolled out the pricing change that in an ideal world they wouldn't have had to or wanted to.
As a sidenote I am just starting my own data company and bootstrapping it until I validate the idea and pitch. After that who knows but there's something to be said about having the luxury to even make that call.
So I think that's the question I have though (this feels like a whole post on its own, honestly): "Too much is dangerous since that can lead to a decline of the product."
That seems very counterintuitive to me. Why would dbt having $400 million dollars to spend, a large portion of which will go to investing in the product, make it *worse?* Especially if the alternative is a small team mostly bootstrapping it, while having to work part-time on things like consulting to pay the bills? This isn't some sort of gotcha; it's more that I'm genuinely curious why that's the reaction that lots of people have (me included).
If I had to guess, I'd say it's because of the thing I said in the earlier comment, where people's expectations change when you raise money. We start to see things that the company does as being economically driven, as selling out, as monetizing us, or something. It's not that the product is worse, per se, it's that it loses its purity as a thing that's just supposed to make us happy and help us or whatever. It's now a think that's supposed to make money - and make money for external interests and financiers - and we all get put off by that.
(I guess an alternative theory is that the product gets bloated, but that seems weird too, because companies are mostly building things that people are asking for. Bloat mostly happens because people - us, the people who like the product and say it's gotten worse - demand that it does more things.)
Yea - well some possible theories for the worse product:
1. It focuses on monetization which hurts the user experience. Some of this can be around features that used to be free now become paid or just antipatterns.
2. Related to bloat but overall fragmentation. The entire bundling argument of how you get a higher price if you bundle your product with others but if most people only care about one or two then they incur the cost of others. The favorite example is cable TV and how you'll pay for channels you may not watch and give them lower value. In this case the difference is that these additional "channels" lead to a worse experience.
3. Maybe it's simply to your point around expectations or even saying "with this much $ I expected them to do this and this and this"
I actually think it's closer to 2 and 1. I suspect most people don't actually know or care how much money a company has raised but they do see the experience they have using the product.
Short answer, absolutely. The BI market is really big, and there’s more than enough money in that market to support several public companies. A few years ago, Tableau, Qlik, and Microstrategy were all public, and mostly pure BI companies. And that market has only gotten bigger. To me, it’s more that BI tools are attractive additions to other suites (eg, Looker at Google, PowerBI for Office/Azure), not that BI isn’t big enough to stand alone.
The company is currently around $150m in revenue (https://www.thoughtspot.com/press-releases/thoughtspot-experiences-historic-year-of-growth-as-customers-around-the-world), so there aren’t many companies that 1) would buy a BI tool, and 2) can afford that. So it’s the usual suspects for any acquisition of that scale: AWS, Google, MSFT, SFDC, Oracle, SAP, maybe Snowflake or Databricks, maybe a few others? For a $10m business, you can get creative. For a $150m business, the buyers are basically always the same.
I have never quite understood the Alteryx (and related tools phenomenon.) I understand high level what the tool can do and why it’s valuable. I just don’t understand 1) the all your eggs in 1 basket approach from a company risk / investment standpoint or 2) all your eggs in 1 basket from a career standpoint - ie I’m a data person and I use Alteryx. Alteryx has done well and is big enough now where many companies and Individuals will be just fine with their bet - but what about all the people who bet on the various competitors who are now gone? I guess they are using Alteryx now and starting again...
My guess is that people just don't think about it that much? Someone recently shared a story about a data person at an insurance company that bounced around a few tools, and most of the consideration was cost, was how much of a headache it would cause them to use, and whatever preferences their execs had. And they actually didn't like getting rid of old tools because they knew how to use them, which both made them important (it wasn't job security, but job impact) and made them effective, because they knew the ins and outs of it. Like, I don't think about most of the tools as use as any sort of career development thing (I'd rather Gmail over Outlook, but if you make me use Outlook (or superhuman, or whatever), it's not that consequential to me); I could see other people seeing Alteryx in the same way.
Plus, if that's your mindset, Alteryx probably offers a lot. They'll train you; you get certifications; they're public so they seem like they'll be around a while; in some sense, relative to IBM or Oracle or whatever, the are"modern." So, why not?
Hi Benn, love this. While it has a few pessimistic undertones, I appreciate your realistic view on how the data space's evolved in the past few years. For future content, I'd love to hear your predictions on how the role of data analysts will be affected by the ongoing consolidation, obsoletion, and extinction events in the data industry.
Thanks! And yeah, I was just reading a couple things that made me wonder the same thing, actually. My current feeling (to stay on the pessimistic side for a bit) is that we might be better off if we stopped trying to be so creative and "strategic," and actually thought of ourselves more as accountants who are trying to apply standards to business problems. That sounds boring, but boring might be better than what we're doing.
This article is my startup experiences summarized, to my luck it even aligns on the data platform and one of our competitor we often lose business to is Alteryx. The part about the PDF download is so accurate, Around Q4-2022, it took me by surprise with all the configurable embeddable real time dashboards, it was excel/pdf that made the sale, which dissolved my conviction in business case on a data platform like the one I built. Its wild how times are progressing.
It's wild how in every BI tool, the most used feature is almost always "export to Excel."
Really great and thought inspiring post - thanks for writing this. My gut is that data just means so many different things to different companies (and within companies) that it does make sense that the tools themselves are highly fragmented. As there's more consolidation in best practices, standards, etc you'll see a consolidation in tools. What is surprising is that there are so many differences across the industry.
Yeah, I think it makes sense why there's demand for different types of tools, given all the different preferences and idiosyncrasies that people have in how they use these tools (e.g., this post: https://benn.substack.com/i/119475953/universal-need-individual-preference). But I think the hard part is the supply side of that. It's expensive to build these tools, so they usually raise venture money, so they want to get really big, and so on. And that's the part that probably doesn't work. It'd be like if everyone really wanted a huge variety of car brands. Even if the preferences for that were there, there will never be as many carmakers as, say, people who make t-shirts.
Ya... I often wonder what some of these tools would look like without the constraints of VC money. I used to think they would be better - more time to get it right - ability to make more long term bets, etc. but honestly nowadays I’m pretty convinced they would mostly be worse and/or out of business - with probably a few exceptions. However raising a little bit of money and going slower could benefit some I think.
I'm in the same camp. The kind of popular narrative seems to be that companies or products are made worse by VC money, which I don't think is usually the case. I think the real impact is on the people who work there, and their freedom to build what fulfills them.
Would X startup have a better product if they didn't have $50m to invest in building it? Seems very unlikely. Would the founders of X startup be happier being able to build what they want, at the pace they want it, for the people that want it? Probably.
(Also, the sorta caveat to that to me is that taking lots of VC money makes people assume you're the enemy. That very much seems the case with dbt, where if it's bootstrapped or doesn't take that much money, people give the team a lot of grace. Take money, and people will be much faster to turn on you.)
Ya. To your point I think the VC money focuses companies, helps retain top talent, and pushes for real revenue not theoretical revenue. I think lack of flexibility with speed is the biggest negative in my book.
Unfortunately you're not operating in a vacuum and you have competition so oftentimes it might simply be you're raising money since your competitors are and you do not want to lose out. Especially if the product has a heavier sales motion. A little bit of VC money is good, too much is dangerous since that can lead to a decline of the product if you have to justify your valuation (magnified these days with non zero interest rates). dbt is a great example here - they need to justify the valuation and now rolled out the pricing change that in an ideal world they wouldn't have had to or wanted to.
As a sidenote I am just starting my own data company and bootstrapping it until I validate the idea and pitch. After that who knows but there's something to be said about having the luxury to even make that call.
So I think that's the question I have though (this feels like a whole post on its own, honestly): "Too much is dangerous since that can lead to a decline of the product."
That seems very counterintuitive to me. Why would dbt having $400 million dollars to spend, a large portion of which will go to investing in the product, make it *worse?* Especially if the alternative is a small team mostly bootstrapping it, while having to work part-time on things like consulting to pay the bills? This isn't some sort of gotcha; it's more that I'm genuinely curious why that's the reaction that lots of people have (me included).
If I had to guess, I'd say it's because of the thing I said in the earlier comment, where people's expectations change when you raise money. We start to see things that the company does as being economically driven, as selling out, as monetizing us, or something. It's not that the product is worse, per se, it's that it loses its purity as a thing that's just supposed to make us happy and help us or whatever. It's now a think that's supposed to make money - and make money for external interests and financiers - and we all get put off by that.
(I guess an alternative theory is that the product gets bloated, but that seems weird too, because companies are mostly building things that people are asking for. Bloat mostly happens because people - us, the people who like the product and say it's gotten worse - demand that it does more things.)
Yea - well some possible theories for the worse product:
1. It focuses on monetization which hurts the user experience. Some of this can be around features that used to be free now become paid or just antipatterns.
2. Related to bloat but overall fragmentation. The entire bundling argument of how you get a higher price if you bundle your product with others but if most people only care about one or two then they incur the cost of others. The favorite example is cable TV and how you'll pay for channels you may not watch and give them lower value. In this case the difference is that these additional "channels" lead to a worse experience.
3. Maybe it's simply to your point around expectations or even saying "with this much $ I expected them to do this and this and this"
I actually think it's closer to 2 and 1. I suspect most people don't actually know or care how much money a company has raised but they do see the experience they have using the product.
Dan, re: the notion “surprising: there are way too many differences in the industry”: it’s because understanding is weak isn’t it?
And understanding is weak because epistemology and ontology via (compressed) speech acts* is weak.
Weak because legalese, the vetoer of daringness, has normalised/weaponised conduct via emphasis on the pedantic.
Give me examples (that concrete your contention) and I’ll clarify by parsing upon such examples.
*https://www.fastcompany.com/36313/power-words
There aren’t any public pure-play BI tools. Do you think ThoughtSpot has the potential to go public or the most probable exit scenario is M&A?
Short answer, absolutely. The BI market is really big, and there’s more than enough money in that market to support several public companies. A few years ago, Tableau, Qlik, and Microstrategy were all public, and mostly pure BI companies. And that market has only gotten bigger. To me, it’s more that BI tools are attractive additions to other suites (eg, Looker at Google, PowerBI for Office/Azure), not that BI isn’t big enough to stand alone.
Thank you, Benn,
In your opinion, which companies could be ThoughtSpot’s “natural buyers”?
The company is currently around $150m in revenue (https://www.thoughtspot.com/press-releases/thoughtspot-experiences-historic-year-of-growth-as-customers-around-the-world), so there aren’t many companies that 1) would buy a BI tool, and 2) can afford that. So it’s the usual suspects for any acquisition of that scale: AWS, Google, MSFT, SFDC, Oracle, SAP, maybe Snowflake or Databricks, maybe a few others? For a $10m business, you can get creative. For a $150m business, the buyers are basically always the same.
That’s not specific to ThoughtSpot; the same is true for Sisense, or dbt, or Fivetran, or whatever.
I have never quite understood the Alteryx (and related tools phenomenon.) I understand high level what the tool can do and why it’s valuable. I just don’t understand 1) the all your eggs in 1 basket approach from a company risk / investment standpoint or 2) all your eggs in 1 basket from a career standpoint - ie I’m a data person and I use Alteryx. Alteryx has done well and is big enough now where many companies and Individuals will be just fine with their bet - but what about all the people who bet on the various competitors who are now gone? I guess they are using Alteryx now and starting again...
My guess is that people just don't think about it that much? Someone recently shared a story about a data person at an insurance company that bounced around a few tools, and most of the consideration was cost, was how much of a headache it would cause them to use, and whatever preferences their execs had. And they actually didn't like getting rid of old tools because they knew how to use them, which both made them important (it wasn't job security, but job impact) and made them effective, because they knew the ins and outs of it. Like, I don't think about most of the tools as use as any sort of career development thing (I'd rather Gmail over Outlook, but if you make me use Outlook (or superhuman, or whatever), it's not that consequential to me); I could see other people seeing Alteryx in the same way.
Plus, if that's your mindset, Alteryx probably offers a lot. They'll train you; you get certifications; they're public so they seem like they'll be around a while; in some sense, relative to IBM or Oracle or whatever, the are"modern." So, why not?
👍🔥🔥🔥
There aren’t any public pure-play BI tools. Do you think ThoughtSpot has the potential to go public or the most probable exit scenario is M&A?