Notes - SNOW New CEO & Strategy Review
Summary
- Frank Slootman's leadership has long been viewed as critical to SNOW's success, driving unparalleled execution and positioning the company alongside tech leaders like Apple and Microsoft.
- The transition to CEO Sridhar Ramaswamy presents both the potential for great GenAI innovation and execution, but also raises questions about future strategic direction and operational efficiency.
- We will be publishing a follow-up Update report on SNOW in a few days, including a tech review and valuation.
Why Frank Slootman was critical for SNOW
Frank Slootman is no doubt one of the best tech, non-founder, CEOs of all time.
His execution on tech, product, and business leadership is top notch. Other comparable CEOs are Tim Cook of AAPL, Satya Nadella of MSFT, Shantanu Narayen of ADBE, Nikesh Arora of PANW, Lisa Su of AMD, Hock Tan of AVGO, and others.
It is very rare for us to have wow moments when listening to the executive team's presentation, the insights, and the strategy and execution. It went as far as some observers on Twitter believing we were promoting SNOW. But this anecdote also shows that these companies are high quality and close to perfection in every aspect. As such, the market typically prices this in very aggressively, especially during the up cycles as the market never stays at the happy medium, but instead reaches the extreme sides of the pendulum.
The most impressive part about Frank Slootman is simply doing the right thing and executing it relentlessly. Many founders can lead the company to a $100m to $1bn mark but finding it increasingly challenging as the company scales further towards $2bn and then $10bn. For most of the time, it is because scaling a startup is already tough enough, and the daily work of keeping the existing product running and evolving has consumed too much time for these founders, such that there is no time for them to think about issues like the S curve, that won't appear in the near term but becomes critical in 3-5 years when the company hits the rock.
Frank is very good at TAM expansion, which is critical for a company's compounded growth. It is very hard to successfully land one S curve, and it is even hard to envision future S curves and ensure each one can layer on top of each one to deliver compounded growth. This is presumably the most important factor in the DCF valuation for a tech company. Frank's ability to continuously expand the TAM, and establish the company as the leading player in the field is a great long tail growth visibility booster. This has been testified by his tenure at EMC, NOW, and SNOW. Similarly, the leadership at AVGO and PANW have executed this very well.
