Opinion
Schneider: Customer success departments are make-believe organizations that shouldn't exist
“So we got rid of customer success because quite honestly, it was a, just a make believe organization that didn't need to exist.”
Insight
Schneider: 'Seagull VCs' distract management without providing real assistance
“My terminology from experience is there are VCs that are seagulls, And here's my definition. They fly into a room, or fly into a meeting, fly into a location, they basically take a shit, and they fly away. They talk a lot, they give work to do for other people…”
Opinion
Schneider: BMC and HP Software were 'dead already' during ServiceNow's 2011 rise
“The two companies we were competing with were BMC and HP Software. Two companies that quite honestly were dead already in my book. All they were trying to do is take money out of the revenue stream and drop to the bottom line. They weren't focused on the custo…”
Assertion Partly supported
Schneider: Gartner claimed ITSM market was capped at $1B during ServiceNow's IPO
“During the IPO process, we had Gartner Show up at a lot of the investor pitches and say, the size of the ITSM market is gonna be capped out at a billion dollars. So, we don't see the growth potential for ServiceNow.”
Insight
Schneider: Enterprise software leaders should ignore low-end competitors and avoid moving down-market
“And what I realized is there's 10 competitors down market. Let them go beat the crap out of each other down there. They'll drive all the investor dollars into the toilet. And we'll just sit here and focus on what we do really, really well and own the market th…”
Insight
Schneider: Companies buy software to make money, save money, or avoid scandal
“People buy product for three reasons. They either buy it because it's gonna help them make money, they buy product because it's gonna save them money, or it's gonna keep them off the front page of a newspaper, which is usually what security products are being …”
Insight
David Schneider: Delayed 'perfect' decisions are wrong decisions because issues change
“I think people try to make a perfect decision. By the time you make a perfect decision, it's actually going to be the wrong decision, because the issue's already changed.”
Assertion Contradicted
Schneider: ServiceNow doubled street pricing and doubled revenue in his first quarter
“We basically doubled street price in that first quarter which helped us double the revenue for that first quarter.”
Assertion Partly supported
Schneider: ServiceNow funded quarterly bonus pools based entirely on net new ACV
“In fact, up until recently, they had a bonus profile that was every quarter we would fund a bonus pool based on the company's achievement of net new ACV, which was new business minus any churn.”
Assertion Supported
Schneider: ServiceNow required new internal products to hit $100M in three years
“And so we actually launched four products at the same time in 2015, or 2016, I thought we were going to kill two of them, because for me to be viable, it had to be a hundred million in three years.”
Insight
Schneider: VCs must be founder-helpful, coaching founders with hard truths
“There is a difference, by the way, between founder friendly and founder helpful. And I think I have to walk the line between what I call founder friendly. I'm in your camp, but I'm gonna also tell you the truth. And I'm gonna get you ready for what's coming. A…”
Opinion
Schneider: Many stagnant startups today are worth more as cash than companies
“I would honestly say they're probably worth more as cash than they are as independent companies, and some of them have made the choice to refund the cash back to the investors, sell off the assets.”
Insight
Schneider: Small allocation sizes prevent VCs from taking board seats
“If my position's too small, it's hard for me to dedicate the time, and so I have to try to tell these founders, hey, you know, this is going to be awkward. I know you want us, you want me on the board, but I can't use one of my spots to”
Insight
Schneider: Founders should select board members with operational experience over board volume
“I do think it's up to the management team to drive the clarity of thinking, and avoid when you're interviewing potential board members, look for relevant experience. Not the fact that they've been on eight other SaaS boards, but have they ever done anything th…”
Assertion Partly supported
Schneider: Data Domain reached $2B in revenue two years post-acquisition
“That company inside of EMC, we drove it to a billion that first year, and two billion dollars in the second.”
Insight
Schneider: Data storage buyers prioritize fast data recovery over backup
“It's not about the backup guys. It's about the recovery. It's about how fast can I recover this data so I can do my job and not get in trouble if something is corrupt.”
Insight
Schneider: CROs must forecast revenue 90 to 180 days out within 3%
“And so my job always was, be able to call the number, 90 to 180 days in advance, plus or minus three percent.”
Insight
Schneider: Most founders cannot articulate their core value proposition until prompted
“No. I think not until we start asking. Now the best founders, the ones that I really get excited to work with, are the ones that have clarity of thinking about that process.”
Insight
Schneider: Capturing legacy enterprise budgets is easier than creating new spend categories
“The secret for me was it was easier for me to unlock dollars from existing known spend areas than it was for me to create a new spend category. And create new budgets that didn't exist before.”
Insight
Schneider: Hire salespeople with a chip on their shoulder to prove something
“I look for people with a chip on their shoulder. I look for people that have something to prove, where the best days are in front of them.”
Assertion Supported
Schneider: ServiceNow's $1B HR product line originated from a sales engineer's idea
“That's probably a billion dollar product now, inside of ServiceNow, because we just listen to customers.”
Disclosure
Schneider: Key Coatue investment thesis targets repeat founders fixing past problems
“I love repeat founders on solving a similar problem, just with a better approach. You'll find that as a theme of mine when I make investments.”
Assertion Supported
Schneider hired 150 ServiceNow sales reps in 90 days to hit $100M
“I hired a 150 people in less than 90 days. And we did the hundred million dollars.”
Insight
Schneider: Real diligence truths are uncovered on second or third follow-up questions
“I think it's that art of the question, and not being satisfied with just the first answer, but digging deeper, because the truth is usually the second or third question you ask will get you closer to the truth.”
