How Snowflake Grew Into a $70 Billion Dollar Company & Had the Largest Software IPO in History

ROI Overload Sales & Marketing Newsletter

Welcome to another edition of… my newsletter!

I hope you’re all having an amazing week & everyone’s enjoying the summer weather.

Who’s getting excited for travel and vacations again??

When I jump on calls I’m getting into conversations with people planning trips for the first time in two years!

Thank goodness life is getting back to normal.

This week, I have a special newsletter - I’m breaking down Snowflake’s strategy that they used to grow from “just another tech startup” to the largest IPO in software history.

There’s some sales and marketing lessons in the case study, so I hope you can get something useful from it.

Outside of the case study, I write about a privacy email provider you should check out, an interview that discusses all manner of scaling and growth strategy for early stage startups and a book that dissects the strategy that IKEA, Salesforce, Amazon and Uber used to become absolute titans in their industry.

I hope you all enjoy.

Here’s what’s coming up this week.

  • 📈 Sales & Marketing: How Snowflake Became a $70 Billion Company with the Largest Software IPO in History

  • 💻 SaaS Of The Week: ProtonMail

  • 🎧 Things You Should Listen To: Growing & Scaling a Business w/ Ben Schneider

  • 📚 Things You Should Read: Play Bigger

  • 🧠 Scott’s Thoughts: Life’s Too Short To Work With Shitty People


Sponsors:

Gusto

Promo Details: gusto.com/scott (3 months free payroll / platform services)

Gusto's people platform helps businesses like yours onboard, pay, insure, and support your hardworking team. Payroll, benefits, and more.


📈 Sales & Marketing: How Snowflake Became a $70 Billion Company with the Largest Software IPO in History

Today we’re going to talk about Snowflake, and how they became the largest IPO in software history.

To give you an idea of the magnitude of this IPO, Berkshire Hathaway — led by Warren Buffett, hasn’t participated in an IPO in over 50 years.. but they threw their hat into the ring and purchased 250 million worth of stock in a private placement as part of the IPO.

That’s how exciting this IPO was.

But let’s bring it back to the beginning.

How did Snowflake achieve such incredible growth, attracting some of the largest investors in the world?

There were 4 very prominent things that Snowflake did to achieve this incredible milestone.

  1. Perfected the cloud-based data platform.

  2. Changed the traditional SaaS pricing model from a per-seat based pricing to a utilization model.

  3. Perfected their account based marketing strategy.

  4. Made strategic management changes pre-IPO.

Now for the purposes of this article, we’re going to focus on #3, and break down their ABM (account based marketing strategy).

Why am I not talking about 1, 2 or 4?

Well.

1. You are most likely not building a new cloud-based data platform that will compete with the largest IPO in software history to date (forgive me if you are).

2. You may not be selling SaaS, and although you may be - I don’t want angry CEO’s coming after me saying Scott influenced their VP Sales/Marketing to suggest they redo their pricing strategy and uproot their entire pricing model.

4. You don’t know Frank Slootman.

So let’s get into the ABM part of it.

In 2018, Snowflake grew its customer base by 300%.

How did it do this?

Sales and marketing alignment.

It may seem like a simple concept, but many organizations have disjointed sales and marketing conversations.

An ABM approach creates alignment between the sales and marketing teams.

As opposed to having marketing messaging going out to customers, and sales teams dialing for dollars across a wide variety of accounts, a true ABM approach identified an ideal customer profile and then marketing and sales will work together to ensure that every conversation a potential prospect has with a sales rep, aligns with the marketing messaging that the prospect has seen on your website, or on your social.

So how did Snowflake execute this strategy so successfully?

They threw out the rule book.

“Instead of using our preconceived ideas around industry categories, we let the data speak for itself.” – Daniel Day, former Director of ABM, Snowflake

Create An Ideal Customer Profile

The strategy was to capture market share, but also retain customers. They wanted to make sure that churn was at an all-time low and that the customers they captured were actually retained.

To do this, they needed to have a strong ‘Ideal Customer Profile’ that would help drive sales and marketing efforts, but they understood that their Ideal Customer Profile, may not be static, so they needed to constantly test the model to make sure that every customer they brought on, was a customer, that would last.

Snowflake leveraged machine learning (using the business analytics platform Everstring) to analyze its 50 fastest deals and its 50 biggest deals to find like accounts that would make up their customer profile.

They repeated this regularly to make sure that the model was 100% accurate.

Personalize The Outreach

In the early days, Snowflake only had 30 sales reps, so they needed to prioritize and optimize on the sales/outreach they did.

They gave each sales rep 100 accounts, with automated outreach going to 90 and 10 receiving custom, personalized messaging.

They broke their outreach into a 1:many, 1:few, strategy, leveraging automation to reach people at scale, while hyper focusing on a select subset of customers.

Now of course, this may not seem like 10 accounts is a lot of work to personalize an ABM & sales strategy, but these are enterprise accounts, so the reps were reaching out to several individuals (multi-threading) at each organization with messaging that fell in line with the marketing strategy.

After they closed these accounts, they added these accounts into their model and continued to improve and optimize their ideal customer profile.

Rinse and repeat.

Tech Stack

After a bit of research, I found the exact process and tech stack that Snowflake uses, courtesy of Douglas Karr.

This breaks it down quite simply.

The ABM Process that Snowflake deploys:

  1. Target – utilizing Everstring and Bombora, Snowflake isn't hand-selecting target companies… it's discovering businesses that match their best clients and have displayed an intent to purchase.

  2. Reach – utilizing TerminusSigstr, and LinkedIn, Snowflake is assembling personalized content experiences that touch prospective buyers before they may even be aware of their solution. In fact, one customer that had 450 touches before the client ever submitted a request!

  3. Engage – utilizing Uberflip, Snowflake has content experiences that are owned by the sales account manager, but produced by the ABM team to provide highly targeted content to drive the buyer into the customer journey.

  4. Measure – utilizing EngagioTableau, and Looker. Snowflake developed a proprietary means of scoring the leads and providing the sales intelligence needed to the sales account managers to assist them in closing the deal.

Results?

  1. Click-through rates increased 149x on 1:1 ABM ads.

  2. Half of ALL of the content that Snowflake produces is being consumed by ABM targeted organizations.

Throwing out any preconceived notions or category standards of who they were “supposed” to target, ensuring alignment across sales and marketing, trusting data, and leveraging tools and tech, all merged in a beautifully executed ABM (sales & marketing) campaign which not only won a massive amount of customers, but won a massive amount of the right customers, many of which are still loyal to Snowflake, to this day.

When you really look into how meticulously and strategically Snowflake chose to operate their sales and marketing strategy, it’s not hard to see why they achieved such significant growth.


💻 SaaS Of The Week: ProtonMail

With privacy being a bigger concern than ever before, more apps are coming out to support safe and secure data.

ProtonMail technically isn’t new, but it is revamped. I was browsing ProductHunt and saw it listed, had my curiosity piqued and took a look.

Wow.

Completely revamped UI + a major focus on usability. It’s made secure, encrypted email, user-friendly.

Based in Switzerland, with end-to-end encryption and built-in VPN, calendar and apps across all platforms, it really makes a compelling argument for secure, alternative email providers.

Check it out, even if you’ve used it before - I think you’ll like it.


🎧 Things You Should Listen To: Growing & Scaling a Business w/ Ben Schneider

I normally try and highlight other people’s stories but this week I’m going to be a little selfish and plug a podcast that I was asked to be on, Business & Lifestyle Leadership with Ben Schneider.

The only reason I’m subjecting you to this show is because I REALLY enjoyed the conversation.

I was not expecting to go so deep on sales, marketing and growth strategy and I really enjoyed the conversation, and we went quite tactical as well. It was an amazing 60 min, and I really hope you get something useful out of this.

I’ll get back to my own guests, next week, regardless.


📚 Things You Should Read: Play Bigger

This book is written by 4 founders of a respected Silicon Valley advisory firm. They study legendary category-creating companies and reveal a groundbreaking discipline called category design.

You’re going to learn how giants like Amazon, Salesforce, Uber, and IKEA didn’t only compete - but created their own category.

Get it on Amazon

It’s a concept that definitely has appeared in other works, but I do like how the authors break down the strategy and apply it to tech startups.

The book really challenges how you think about marketing, take to market strategy and product market fit, in a good way. It will force you to think outside the box in how you sell, or market - anything.


🧠 Scott’s Thoughts: Life’s Too Short To Work With Shitty People

It's not just about the work.

It's also about the people you work with.⁣⁣
⁣⁣
It’s a cliché, but life is too short to work with bad people. ⁣⁣
⁣⁣
If the person at your job doesn't make you laugh, gives you negative feedback when you need it most, or never listens to your suggestions, they're bad for your mental health - and clearly not good for business.⁣⁣
⁣⁣
People don’t leave the job.⁣⁣
⁣⁣
They leave their boss and their peers.⁣⁣
⁣⁣
Set boundaries and stick to them.⁣⁣
⁣⁣
Set expectations and stick to them.⁣⁣
⁣⁣
And please, for the love of god, interview the company you’re about to join into JUST as much as they interview you.

Have an awesome week, y’all.

— Scott ✌️


Sponsors:

Gusto

Promo Details: gusto.com/scott (3 months free payroll / platform services)

Gusto's people platform helps businesses like yours onboard, pay, insure, and support your hardworking team. Payroll, benefits, and more.


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