NPLG 7.6.23: Frank Slootman's Advice

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Frank Slootman’s Advice

Frank Slootman is a legendary CEO and builder. Frank is the CEO of Snowflake and took the company public in 2020 in the biggest software IPO ever. Before scaling Snowflake to its blockbuster IPO and beyond, Frank was the CEO from early to scale for landmark enterprise companies ServiceNow and Data Domain. Frank grew up in the Netherlands and is the author of three books: Amp It Up, Rise of the Data Cloud, and Tape Sucks. I highly recommend reading his books, especially Amp it Up.

In a recent podcast, Frank opines on a problem he frequently sees with young startup CEOs:

“They just think I hire a bunch of people and sit back and wait for greatness. They have no idea that they have to relentlessly drive every second of the day, every interaction, and seek the confrontation. We slow down to a glacial pace unless there are people who are going to drive tempo and pace and intensity and urgency. That’s what leaders need to do. CEOs must constantly push the urgency even though it’s really hard to bring that to every single instance of today.”

One of my favorite quotes from Frank in Amp It Up is:

“Raise your standards, pick up the pace, sharpen your focus, and align your people. You don't need to bring in reams of consultants to examine everything that is going on. What you need on day one is to ratchet up expectations, energy, urgency, and intensity.”

After reading and listening to Frank, I personally amp up my own urgency and drive. He is someone we should all learn from.

I would love feedback. Please hit me up on twitter @zacharydewitt or email me at zach@wing.vc. If you were forwarded this email and are interested in getting a weekly update on the best PLG companies, please join our growing community by subscribing.

PLG Benchmarking (Startups):

This is a new section! I will continue to update these metrics and add new metrics. I would love your feedback on what else I should track.

Conversion rate (website → free user):

• Best: 10%

• Good: 5%

Activation rate (free user → activated user):

• Best: 60%

• Good: 30%

Paid conversion rate (free user → paid user):

• Best: 8%

• Good: 4%

Enterprise conversion rate (free user → enterprise plan):

• Best: 4%

• Good: 2%

3-month user retention (% of all users still using product after 3 months):

• Best: 30%

• Good: 15%

Conversion from waitlist to free user:

• <1 month on waitlist: ~50%

• >3 months on waitlist: 20%

For more detail on acqusition rates by channel (Organic, SEM, Social etc), please refer to this prior NPLG.

PLG Financial Benchmarking (Public PLG Companies):

Financial data as of previous business day market close.

Best-in-Class PLG Benchmarking:

15 Highest PLG EV / NTM Multiples:

15 Biggest PLG Stock Gainers (1 month):

Complete Notorious PLG Dataset (click to zoom):

Note: TTM = Trailing Twelve Months; NTM = Next Twelve Months. Rule of 40 = TTM Revenue Growth % + FCF Margin %. GM-Adjusted CAC Payback = Change in Quarterly Revenue / (Gross Margin % * Prior Quarter Sales & Marketing Expense) * 12. Recent IPOs will have temporary “N/A”s as Wall Street Research has to wait to initiate converge.

Recent PLG Financings (Private Companies):

Seed:

• Dust, a French AI startup for improving team productivity, has raised $5.5M. The round was led by Sequoia, with XYZ, GG1, Seedcamp and Connect participating.

• Metal., a developer platform for building AI/LLM capabilities, has raised $2.5M. The round was funded by Swift Ventures, Chapter One and Y Combinator.

• Rubber Ducky Labs, a developer of an operational analytics platform designed to improve ML-powered product recommendations, has raised $1.5M. The round was led by Bain Capital Ventures, with participation from Cadenza Capital.

Series A:

• Datapeople, a developer of an augmented writing software designed for organizing and augmenting recruiting data, has raised $13M at a $48M valuation. The round was led by NextView Ventures, GreatPoint Ventures and New Markets Venture Partners, with participation from Uncork Capital, First Round Capital, Gaingels and Fog Ventures.

• ElevenLabs, a viral AI-powered platform for creating synthetic voices, has raised $19M at a $99M valuation. The round was co-led by Nat Friedman and Daniel Gross, with Andreessen Horowitz, Creator Ventures and SV Angel joining.

• Faros AI, a platform for software engineers designed to bring key operational data into one place, has raised $20M at a $100M valuation. The round was led by Lobby Capital, with participation from SignalFire, Salesforce Ventures and Operator Collective.

• Oso, a company that makes authorization tooling for developers, has raised $15M at a $80M valuation. The round was led by Felicis, with participation from Sequoia and Harpoon Ventures.

• Reka, a company that’s trying to simplify LLMs for businesses, has raised $58M at a $315M valuation. DST Global Partners and Radical Ventures led the round, with participation from strategic partner Snowflake Ventures.

Series B:

• Captions, a New York-based video editing app, has raised $25M at a $250M valuation. Kleiner Perkins led the round, and was joined by Sequoia Capital, Andreessen Horowitz and SV Angel.

• Parabola, a San Francisco-based startup that uses AI to help expedite back-office processes, has raised $24M. The round was led by OpenView, with participation from strategic investor Flexport alongside Matrix, Thrive, Good Friends, Webflow and Otherwise Fund.

• Render, a startup that has created a DevOps cloud platform, has raised $50M at a $230M valuation. The round was led by Bessemer Venture Partners, with General Catalyst, South Park Common Fund and Addition joining.

• Typeface, an operator of a generative AI platform designed to provide AI content for work, has raised $165M at a $1B valuation. The round was led by Salesforce Ventures, with participation from Lightspeed Venture Partners, GV, M12, Microsoft, Madrona Venture Group, Menlo Ventures and A&E Investments.

Series C:

• Fly.io, a tech company whose public cloud infrastructure enables developers to deploy applications, has raised $70M at a $467M valuation. The round was led by EQT Ventures, with participation from Andreessen Horowitz, Dell Technologies Capital and Intel Capital.

• Redpanda, a startup that helps companies capture data in real time in a modern context, providing a new way to stream data, has raised $100M at a $520M valuation. The round was co-led by Lightspeed Venture Partners, GV and HaystackVC.

• Runway AI, whose AI software can create a short video from just a few typed words, has raised $141M at a $1.5B valuation. Investors include Google, Nvidia, Salesforce and Felicis Ventures.