How Databricks Went $1M to $7B+ ARR in 10 Years | Ron Gabrisko, CRO

16:39Ron Gabrisko:It's real time because, you know, that is what everybody has. They have an analyst like, oh, can you go get me this, you know, this answer, etc. And then, you know, it takes a day and they're like, no, no, change this, add this, you know, then it's a little bit stale. Oh, can you get this week's data versus last week's data? You know, it's all real time. So it's right at your fingertips. You know, I see like a couple other like, you know, you think about it, we want every business user like I have, you know, we have huge like retailers, like the store managers are like, how do I maximize revenue like on this particular shelf or with this product or which promotion should I run, which is going to be dependent on where your store's, you know, located.

17:22Ron Gabrisko:you know you're gonna have different dynamics based on you know kind of your clientele things of that nature um rental car agencies like how do i maximize sales it'll give you feedback oh your c-sats low on this you should probably clean your cars better you know what have you right like uh you know it's uh again it's putting uh i had a gas station uh uh one of the big gas station retailers was like i want to maximize sales of pizza and they would have like a camera feed and it would actually measure like pizza and pizza pricing. So it's, yeah, like I said, put the power at the fingertips of every single business owner out there in your business.

18:04Ron Gabrisko:And like I said, that's the future.

18:09Turner Novak:That's pretty interesting. So you could, so in this pizza pricing example, the camera, I'm assuming it's like a security camera that they just already had in the store. is it like what kind of data does it take in and then like how does the pricing of the pizza is it like real-time pricing or there's just like hey it looks like we can charge extra 30 cents based

18:29Ron Gabrisko:on something like no i think more of it's like you know if they run out of pizza they want to make sure they have pizza there you know like uh so it's monitoring that stuff like i said it could take video images it'll also be like you know how many pizzas you know should you have that day like this managing inventory based on seasonality or maybe other promotions they're running. But again, that's a small example. I mean, the idea is like, how do I maximize my entire business? You know, a lot of these gas stations, it's about petroleum sales, but a big part of it's like the retail business, right?

19:03Ron Gabrisko:It's like all the things you're selling inside the store, how can you maximize the sales of all those things? And that's, again, going to be independent based on location, promotions, you know, other independent factors and data that you'll have access to. So, yeah. So in terms of like Databricks versus the market, because I see all the time every day,

19:26Turner Novak:maybe it's actually tailed off a bit, but there was a time where like every day there was just like a new AI product that solved all your business problems or whatever, right? Like there's, there's a lot of them that are out there at this point. So like, what do you think Databricks kind of differentiates on. I'm assuming this is a pretty standard question you actually probably get in when you're talking to customers.

19:44Ron Gabrisko:And there's all kinds of new models out there, right? Like, I mean, obviously OpenAI and Anthropic had their models, but now there's lots of open source models. I'm sure you've read about them, you know, Kimi and GLM and what have you. It's not really about the strength of the model. The key for Databricks and even the key for a lot of these companies to be successful at AI is all about the context of your data. like the models are already smart enough. Like, you know, I ask these models all kinds of questions. They're as smart as I am, if not smarter, right? And, you know, it's all about like the context that you provided.

20:21Ron Gabrisko:And so your ability to connect those models with your proprietary data and your context or business is really what unlocks the, you know, insights and the outcomes for these companies. And so that's been the key for Databricks is just, you know, how we built out our data platform. Again, we were AI first from the beginning. You know, 10 years ago, you know, we were thinking about AI and machine learning before anyone else. And so we approach the market from that perspective and how we govern data, you know, like our Unity Catalog, Unity AI Gateway. We serve any model, any catalog. You know, it doesn't just categorize your data, but all your models, all your, you know, notebooks, everything else you're doing with your business so that we can automatically understand where's your data, you know, which what is relevant to answer these questions or build models around it.

21:16Ron Gabrisko:That's the key to Databricks. no other company has that kind of, you know, breadth and expertise.

21:22Turner Novak:And so back when you made this bet, this big bet on AI, like it was probably not quite as obvious back then. Like, what was the thinking? Was there like a, oh, artificial intelligence is going to do what it did? Like what, what element of this was like, you kind of got lucky at how AI has evolved and like how much of it was like, you kind of saw where it was going? Like, how would you kind of talk through what happened there?

21:48Ron Gabrisko:Well, yeah, I think, I mean, part of that was just insightfulness from the founders, I think, in the first kind of products and use cases they built. Like, Spark was just a massive, like, data processing engine, right? Which meant, like, the more data we could process, you know, the better, you know, we could perform versus other products that were out there, right? And so if you think about it, we went after the data science market first. So people who are doing, and a lot of these data science projects, if you think about it, if they're doing a huge genome study, they're trying to find a new cancer treatment.

22:25Ron Gabrisko:So they're taking a bunch of compounds and mapping them against different genomes, mapping them against electronic medical records, and trying to find trends, like which compounds should we test to try to accelerate R &D. Well, these genome files are huge. right and so like you know traditionally they'd be like okay let's run one model to try to predict something that might take 24 hours well databricks comes along and now i can run that in a minute so think about how fast i can accelerate my virtual r &d to try to find yeah and so and so that's now reality right for every single business is like how do i take billions if not trillions of data points, analyze them, get insights, and then make decisions based upon that data for my business, right?

23:15Ron Gabrisko:So that's been the key versus being unable to do that in the past. So I think it was insightful and certainly fortuitous to kind of start in that part of the market, developing machine learning, data science, all those kind of things. and that's how we kind of came at the market and entered AI early days. And LLMs were not, I mean, I don't know if we had them or how good they were. No, they weren't at the same back then. No.

23:48Turner Novak:So what was the initial kind of like products like? What was it powered by?

23:55Ron Gabrisko:Yeah, again, like we had notebooks. We still have notebooks, like data scientists. They're building machine learning models. It's just, it's all code. It's not, Hey, I can just use plain English to build these things. So, you know, you had kind of the chat GPT moment when chat GPT finally got good enough and consumers started using it. Um, we actually developed our own model, uh, back then early days of that. It was actually pretty good. Um, and then we ended up buying a company called Mosaic. Um, I don't know, it was probably three years ago to kind of start doing training for custom models, things of that nature.

24:33Ron Gabrisko:And so, you know, our AI R &D teams as good as any on the planet. But again, we're really focused on how do we solve these enterprise AI problems and outcomes for specific verticals and businesses versus like I would say the rest of the market is more general intelligence, you know, and for consumers. Right. And so that's been a big difference at Databricks. And again, that's our secret sauce. How do you connect the AI to the data in the best way, in the most secure and governed way possible to unlock these insights, as well as build agents, automate processes, things of that nature.

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26:23Turner Novak:Visit merge.dev slash Turner to start building for free. That's merge.dev slash Turner to try Merge for free. Yeah, it's been pretty interesting how back when ChatGPT launched, I feel like there's a lot of excitement around kind of consumer AI. And, you know, rightfully so, right, ChatGPT grew super fast. But then when you kind of like really got deep in like what it was, it was just like a lot of people basically using it as Google, banging it, using it as a therapist, just tons of questions, and you pay like 30 bucks a month or whatever. And you might actually lose money on a lot of those customers at the end of the day.

27:00Turner Novak:Versus on the enterprise side, a lot of times, it's like, hey, I'm doing this to complete work. And I think on the extreme end now, we have Uber paid a billion dollars in a couple months for their enterprise AI usage. So on the flip side, But it's like the opportunity in enterprise is just over the past couple of years kind of like insane how useful it's been, like how much work you can get done with it.

27:24Ron Gabrisko:Yeah, I know it's massive. I mean, like I said, I think we're still early days. Like, you know, everybody thinks like, hey, we're automating everything. You know, right now we've solved one use case front to end, which is like, how do you better automate coding? like cloud code, codex, cursor, all those guys are going after how do you automate coding, accelerate software development. And I think the tools are really good for that. I mean, obviously we serve all those through our Unity AI gateway, but how do you automate all these other processes? How do you automate finance? How do you automate things in sales, like a lot of the admin work and sales.

28:05Ron Gabrisko:We do a lot of that automation with Genie and our Genie code and Genie agents inside our business and inside of our customers. And I think that's still pretty early days because you have to kind of understand the process, re-engineer the process. You're just not lifting and shifting the same kind of process. But there's tons of upside. Like I said, we're at very early days on how we do that. and that's massive upside for this market.

28:35Turner Novak:Do you think it, is it starting to tip in some of these other categories? Like, are you seeing, you know, practical usage? It's like actually, you're actually able to use it in the same way engineers are using some of the coding agents?

28:47Ron Gabrisko:Yeah, I mean, listen, I think it's, like I said, you have to get in there and we're like customer zero for this, right? So we're like, we're an AI company. We're going to automate and use AI in our entire business. And so we bring a lot of those learnings then to our customers. But a lot of this is like, how do you get in there and the expertise? Because again, you have to redesign the process. You can't just, you know, automate the same process. And so, you know, that level of expertise, I mean, that's how we use our FTE motion. That's how we're, you know, it's like you look at healthcare, like how do you automate claims authorization and claims payment and claims, you know, you know, find claims fraud, all that kind of stuff.

29:35Ron Gabrisko:Like you need to understand the process, teach the agents what to look for, make sure the agents are high quality. And then, you know, you continually have to make sure that they're doing a good job. Right. And so I think we're still at early days on how we automate all those processes. But I'm starting to see the early, you know, wins at a bunch of these customers, a bunch of Databricks customers. And so that's super exciting for sure.

30:00Turner Novak:So internally at Databricks, I guess you've, I mean, you probably added billions in revenue since kind of the chat GPT moment. How has it changed? How's using AI kind of changed how you operate the team? Any like day to day or any like tactical things? Somebody listening to this can be like, oh, I'm going to do that too.

30:18Ron Gabrisko:Yeah, totally. I mean, listen, I run our entire business on Databricks. Like I said, I can get, you know, super deep on any one customer. Jeannie will prep me for all my customer meetings. You know, we're starting to automate a lot of the sales sequences. So anything I can do to automate like admin work, like forecasting, how do people enter things in Salesforce? You know, we're a consumption business, so we call them use cases. But anything I can automate to kind of increase productivity and increase sales time, I'm going to automate. And so, and a hundred percent of my sellers have Genie on their phones.

30:59Ron Gabrisko:So like they can run their accounts, their business, they can do demos for their customers. Like, you know, I'll go to customer dinners and I can pick up the phone and just show them. Like show them. I'm like, Hey, here's a, let me run Genie. I ran Genie. I had them upload, you know, some, you know, dummy data sets for your business. Like here's how I, you know, here's how I can find particular opportunities and how you guys are handling claims or loan origination or what have you. So, you know, we're going to put AI in everything we do. You know, we use it to, it'll diagnose your account and be like, hey, here's the next best action.

31:39Ron Gabrisko:Like it'll know, oh, you have a retailer, you've sold them this use case, you should go sell them XYZ use case. You know, you should go talk to this person and sell them this type of So it also makes recommendations for all our salespeople. They can do their own demos. Like I said, Genie's super easy to use. So it's like great to demo for pretty much any user of data or AI. So we're putting it in our entire business. I'd recommend that for everybody, just cause that's where the market's going. And it's been great for us. Yeah.

32:16Turner Novak:And I think probably one of the most interesting things about kind of like your story with Databricks is you originally joined after a conversation with an investor in the company. So how was that conversation? How did it go and what happened?

32:29Ron Gabrisko:Yeah, no, I met Ben Horwitz from A16Z. I mean, guy's a legend, right? And he's like, hey, I have this little company. It's probably smaller than any company you're looking at. It's called Databricks, but it's got the most upside of any company in my whole portfolio. Maybe you can meet these guys, recommend somebody. You know, and I met the founders and just, you know, hit it off. I mean, these guys, like I said, are, you know, smarter than anybody on the planet. Their brains work in a different way. And they just understood the space. And, you know, I thought data and AI was the future and, you know, decided to take a big swing at it.

33:18Ron Gabrisko:But, yeah, Ben was, he was super funny. He's like, these guys are like, you know, Berkeley, you know, vented this great piece of software, greatest piece of software on the planet, gave it away for free. I need somebody to come in and help them build a business out of it. And yeah, it's a fun story. I've developed a great relationship, friendship with Ben as well over the years. And he's just, you know, legendary investor and it's been awesome for our company.

33:47Turner Novak:So I have a question from one of my friends, Paul Klein. He's the founder of a company called BrowserBase. He's a solo founder. And his question, he's like, you got to ask him, how do you put up with seven co-founders? Just like, how do you do that?

34:02Ron Gabrisko:So I get that question a bunch, right? Especially from CROs, they're like, I can only handle one founder. How do you handle seven co-founders? I think it's a massive advantage, actually. You know what I mean? Because you have seven true owners of the business. like and you know lots of uh you know companies are too like hey can i get a founder to speak at my event or can i get a can i meet with a founder and they're all super technical right so it's like you know if you're talking to a technical audience uh you know i have seven times as many people to do exec alignment with ctos and cdo's and things of that nature so i mean obviously i spent a lot of time early days i think you know generally like engineers are skeptical of sales people so you know i spent a lot of time early days getting to know them you know understanding you know their strategy you know how how they want to develop the company and the culture and all those kind of things so um that would be my recommendation you know is like uh you know and And I think Ali, when Ali took over as CEO, you know, first thing he did is he sat down, he said, teach me sales.

35:15Ron Gabrisko:I want to learn sales. And we formed a great partnership together, building the company, like I said, from early days. So, you know, that's my recommendation is like dig in. You know, the founders are, you know, the company, especially early days. They're going to set the tone, the culture, everything. So it's been a huge advantage with seven of these guys. Love them to death.

35:41Turner Novak:I think, doesn't Anthropic have seven co-founders too? Maybe that's the lucky number.

35:46Ron Gabrisko:I have no idea. Maybe. There's a lot. It's either seven or eight. I can't remember. Yeah. No, that's a good idea.

35:53Turner Novak:And so you said something interesting.

35:55Ron Gabrisko:So Ali sat you down and he's like, teach me sales.

35:57Turner Novak:So how does that conversation go typically when a founder asks you that? What do you walk them through? What do they usually struggle with? How does that journey usually go? How should I approach that if I'm trying to... Assuming I'm super smart, how do I learn more about selling things to people?

36:18Ron Gabrisko:Yeah. First off, I would say most early-stage engineers are like, hey, if I just develop the best product and I have the best pricing, everybody's going to buy it. well, it doesn't really work that way, right? Like the power of sales, especially for enterprises, like salespeople are going to teach my customers how to use the product, how to get value out of my product, make them aware of my product, those kinds of things. So, I mean, I started on a whiteboard talking about organizations. So like, you know, listen, when you're selling to startups, there might be one person you need to sell to, the CTO or the founder.

36:58Ron Gabrisko:But when you sell to enterprises, they make decisions as an organization. right so you need to understand like the org chart who are the players who are the decision makers who owns the budget how's that how are the decisions made how are the approvals done so just talking through you know and so now i'd be like okay like who's you know who's the decision maker who's our exec champion all those kind of things on how you develop relationships like do

37:26Turner Novak:you typically just ask people that when you're first meeting them and talking to them or is that like too tacky like you have to like smooth yeah like how do you how do you figure that stuff out if you're just meeting someone for the first time like that no no no i wouldn't do that the first

37:41Ron Gabrisko:time no i mean part of part of what you're trying to do i mean a lot of these sales cycles like they'll take six 12 months or more right so you know initially you want to get to know a person and you want to be able to understand it's asking a lot of questions like sales to me is more about asking smart questions and listening versus, you know, hey, I have the great glitzy pitch. Like it was funny, like when I was interviewing for the company, they were like, hey, do the pitch. I was like, okay, send me the pitch. And I looked at it and it was super technical, right? I was like, yeah, like people probably just like zone out.

38:21Turner Novak:Like, I don't feel like looking at this, like flow chart with like all these diagrams.

38:25Ron Gabrisko:I had a lot of acronyms in there, a lot of speeds and feeds. And listen, like, you know, so I had some advice on here's how I would pitch Databricks. But I also started with either like, okay, pitch us. And I was like, okay, what kind of company are you? You know, I'm like, how do you use data? How do you use AI? What other systems do you use? What are some of your objectives that you want to get out of using AI with data? And they're like, are you going to pitch us? And I'm like, I am. Right. Because it's like, you know, the more information I can gather on what are your challenges, how can I help, how can my product help, the more credible I'm going to be as a salesperson.

39:06Ron Gabrisko:It's kind of like you go to a doctor if they're just like, yeah, you just need surgery. Don't you want to know what's wrong with me first? You know what I mean? So sales is a lot about come in prepared, know about the customer, try to do as much research as you can on their challenges and issues and objectives and strategic your objectives, go in high in the org if you can, and ask a lot of questions. Get to know them, get to know how you can help, and then be very credible and diligent and responsible and trustworthy on how you follow up. Don't bug them, but if there's specific areas you can help, that's what a good salesperson does.

39:47Turner Novak:You kind of have to assume if the bigger the company, the longer it's going to take to build that trust and get them to get under, you know, in some cases they're like moving their company over onto your product. Like it's a long process.

40:02Ron Gabrisko:Yeah. Yeah. And like I said, I mean, there's a lot of technical validation in there doing POCs and things of that nature, but, you know, start with understanding the problem. What is the, you know, what is the business problem they're trying to solve? How can you help them get there faster, cheaper, less risk. And then I talked with Ali a lot about MedPic and now he's an expert on all this stuff.

40:26Turner Novak:I've never heard of MedPic before.

40:29Ron Gabrisko:Yeah, MedPic is just a process on how you govern sales. Oh, really? What is it? Well, each thing stands for a difference. It's like metrics. So what metrics are you using to kind of justify like, you know, how do they measure their business? What metrics are you actually changing, you know, with whatever solution he is exact sponsor D is like decision process. Like each one, each letter means something in a process to kind of develop. It's a pretty well-known kind of enterprise sales motion. And then there's a thing called command of the message, which is similar for every company. I mean, those are two frameworks I would recommend for anybody that's trying to learn enterprise sales or build enterprise sales.

41:14Ron Gabrisko:Those are probably the two most common that I use and that we use. So and then obviously branch off of that. It's got to be custom for your company and your product.

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42:01Turner Novak:Start growing your revenue faster with Monaco. Try it now at monaco.com. Are there any mistakes you see people make usually when they're kind of first getting into this? Like, do they just try to ramp up too quick or what's usually the biggest mistake?

42:16Ron Gabrisko:Companies or salespeople or both?

42:19Turner Novak:I mean, maybe it's both. I don't know. Maybe it's the same thing. I don't know.

42:24Ron Gabrisko:What's usually the biggest mistake people make? I mean, I would tell you like the biggest mistake I see in salespeople is they start pitching before they understand, like I said, like, you know, hey, I'm going to pitch you my product, but I don't really understand anything about you or your challenges. So first thing, get to know somebody established rapport and ask some questions so you know, you know, what might be important to them. From a company perspective, listen, like companies are growing faster now than ever like ai is a huge unlock uh for growing companies um you know i'm a big advocate of you know you need sales people to grow your company but the plg motion has been great for you know companies like anthropic and stuff like that like they're doing great with plg um i always say like you know there's kind of four stages of a company there's kind of zero to 10 or 20 million, we're just finding product market fit.

43:22Ron Gabrisko:From 20 to 100, you're kind of building a playbook. It's got to be, you know, repeatable system, repeatable trends. From 100 to a billion, you're starting to expand internationally into partners. And then multiple billions, it's a lot about having the right leaders and culture and systems and processes and continuing that kind of fast innovation and how do you continue to run fast. And so each one of those stages requires kind of different, I would say, things to grow. And so like based on each company, you know, again, when I try to advise companies, you know, based on where they're at inside of their market, you know, again, you need, you know, usually you need salespeople to push your product because people don't know either know about your product or know how to use your product.

44:15Ron Gabrisko:Um, and even in the case where PLG takes off, you want salespeople then to be able to go talk to your enterprise customers. Again, enterprise customers, usually it's people that are buying stuff. If people are buying stuff, you want people to sell stuff um if it's intuitive of how to uh use something yeah i mean let it rip like developers know how to use these coding tools like awesome they pick out their best one and they go right um you need sales people to get through security reviews and contracts and things of that nature but you know the actual selling part of it might be like here are the advantages of my product versus another.

44:55Ron Gabrisko:But, you know, most products, they need salespeople to teach customers what their product does and how to get value out of their product. And so, you know, I think there's, you know, ways to ramp that up in a thoughtful way, depending on which market you're going after.

45:13Turner Novak:And I know you guys made a pretty strong bet on we're going to hire technical people to sell the product. I mean, is that generally that seems like The more technical the product, the more technical the salespeople have to be because you probably have to help the customers understand it. And you need to know the language to help understand the problems, I'm assuming.

45:32Ron Gabrisko:Yeah, a thousand percent. Like, you know, my salespeople can demo our product themselves. Like we have an amazing pre-sales field engineering team. But, you know, everyone in my organization should be able to demo. They should know the product. Because honestly, if you have technical buyers, you need technical sellers if you have technical buyers. Technical buyers don't like non-technical sellers. That's the difference, right?

46:00Turner Novak:Is it because they feel like they don't understand what they're even talking about? Like, I can't stand this person?

46:06Ron Gabrisko:If you don't understand it, that's even worse. But if you don't bring anything to the table, my time's precious. I'm only going to spend time with you if I'm going to learn something or you're going to help me solve a problem. And so if I'm a technical buyer, you need to bring something to the table that helps me solve my problem or get better or learn something. If you don't, I'm not going to waste my time with you. So for us, we have a very technical product. Obviously with Genie, it's a lot simpler now. We're starting to sell to business users. But early days, pretty technical product. We have technical buyers, data engineers, data scientists, data people.

46:47Ron Gabrisko:um you know they're technical highly technical i need technical sellers to be able to have credibility with them so that's that's what that's how i would decide kind of the profile and then you know a big thing like as you're starting to scale organization you definitely need what's the profile of the seller that's going to make this company really successful you need to know that like obviously it's not the same every time because you know what you look for but you need to build that profile and that pattern for your company so you can scale it.

47:21Turner Novak:When you say profile, so how do I understand what kind of profile I'd want?

47:26Ron Gabrisko:Yeah, like I said, what are the main criteria I'm looking for in a seller for them to be successful here? Like you mentioned one of them, they need to be technical. So I look for people that are technical. I look for people that have experience in the data and AI market for certain companies. I also test for like grit and perseverance and hard work. Like I always say, like hard work overcomes talent every single day. Right. You know, we're looking for folks that understand how to sell consumption versus committed contracts. You know, that's just usually, you know, having some cloud. I like having people that have some startup experience, Like, can they build?

48:10Ron Gabrisko:Like, do they know how to do things without having a big machine behind them? I also look for, you know, I avoid people that have a bunch of short stints. Like somebody that's had two, three companies less than two years, like they don't know what tough looks like yet. Every company comes across tough times at some point. So you want people that have seen that before and that are going to dig in and push through that. So, you know, I avoid people with lots of short stints. So, and again, I back channel pretty much. I look at every profile we hire here and, you know, I'm probably one degree of separation from everybody in Silicon Valley.

48:50Ron Gabrisko:So I can back channel just about anybody. But, you know, I'm looking for the best of the best on the planet because I think this is a once in a generation type company. Yeah.

49:00Turner Novak:When you talk about like grit, determination, hardworking, how do you gauge that before someone's actually done the job?

49:07Ron Gabrisko:Because they could be like, oh, I work so hard.

49:09Turner Novak:They could probably set their emails up so it sends at 1 a.m. so it looks like they're working or something. How would you actually gauge if I'm actually a hard worker and if I'm actually going to fight through it?

49:20Ron Gabrisko:I mean, listen, it's a little bit subjective. I mean, obviously, I'm trying to look for folks that haven't had a bunch of short stints, but I also like to learn about the person, the character, like how they grew up, you know, like what kind of challenges have they had to work through in their life, those kinds of things. Right. Like, you know, my dad was a construction worker. My mom was a teacher. Like I grew up from nothing. Right. And so like, you know, I want to hear somebody's background and understand them as a person too. And then we also give them assignments, right? Like we make them build a business plan.

49:54Ron Gabrisko:We make them pitch to a, you know, CEO, give me your AI vision pitch for CEO. We'll give them the deck, but I want to see them pitch it. And then we also make them do a genie demo for their vertical. So, you know, we're making them do some work to show that they really want it. Because, you know, I think you get a job at Databricks, it's a lottery ticket. Like, you know, so anyway, that's some of the ways I do it. And then obviously I try to, you know, if I know people that have known them, I'll ask them, right? Like, is this person going to be that kind of, you know, caliber seller? Again, that's why I look at some of the startup experience too, because I think people in startups work crazy, crazy hard and have a lot of grit.

50:42Ron Gabrisko:I mean, certainly we did early days creating this company.

50:45Turner Novak:How do you do that kind of reference check? Because like, I might be good friends with someone and you text me about him like, oh, he's awesome. Like, he's so great. You should hire him. Like, what do you, what do you usually look for when you're trying to like get through the BS and understanding if they actually, you know, what's actually going on?

51:03Ron Gabrisko:Well, usually I'm, um, checking with somebody I know and I have a relationship with, so they're not gonna, you know, BS me because they value.

51:12Turner Novak:If you try to like have your, your relationship is like above who the reference is.

51:16Ron Gabrisko:Well, at least it's like, Hey, if I tell Ron, this person's amazing and then they're not amazing, like, like that's, that's not good. Right. Like, again, I've lots and lots of, you know, again, one degree of separation from most sales leaders. And so, you know, they'll get pretty honest because there are a lot of times asking me to like, what do you think of this person? They're going to want an honest answer from me too. Right. And again, I'm not looking for like, oh, this person like has nothing wrong with them. I'm just trying to understand, like, you know, what are their strengths? What are the areas they need to work on?

51:55Ron Gabrisko:You know, obviously I'm looking for the best of the best. And then too, I'll ask the question, like, is this the top 1%, 5%, 10 % of the people you've worked with? Like, I'm trying to calibrate, like, where are they on the bar? I mean, some people would be like, you know, I text some people are like no pass so then you know you know what i mean so i think people you know i don't just check one i check at least you know two three depending on the position but uh they're pretty honest because it's a small circle yeah i feel like you kind of have to know who you're getting

52:30Turner Novak:a reference from like there was um what some of the founders i backed they they sold their company made like a decent amount of money you know they did really well and the the references it was like some coworkers and they're like, I, I hate that guy. He's so mean. Like, he's just always, he's always bossing us around. And like, cause he worked at like a big tech company and he was just trying to let, he sold his, his first company to the big tech company. And he's just, did not like the hierarchy and like the meetings about meetings to like do something. And he was just kind of shipping stuff and people in the company didn't like it because he was just trying to get stuff done.

53:07Turner Novak:And so some of the references were like, you know, this guy sucks. Like I don't like working with them. So it was kind of like, you're kind of calibrating the reference. They're like, okay, that's actually good in this case because he was the CTO of a new company. Yeah.

53:21Ron Gabrisko:You want to know what you're getting into is the thing, right? So I think all the feedback is good, but you got to kind of, yeah. I mean, you definitely need to know the source. Yeah.

53:32Turner Novak:And so one thing I think you did back when you guys were first kind of like building the sales team, it was pretty technical. You hired like a lot of sales reps. I think the number that I saw was you hired 40 reps in the first quarter. Is that true? I mean, that's kind of insane.

53:48Ron Gabrisko:Yeah, no, it was a funny story. I would like literally be like, okay, all day, Wednesday and Thursday, all I'm doing is interviews, right? And they got me, I was like, but you got to give me a break to go to the bathroom at least.

54:03Turner Novak:Okay, that's good. At least you get that.

54:06Ron Gabrisko:Yeah, exactly. But, you know, it was it was fun. I mean, a lot of those folks were from my network, too. Right. There are people I trusted. Like my early thesis was like Spark is everywhere. My first task is to understand, you know, what are they willing to pay for and who can I sell it to? Right. Like what's the profile, the ideal customer? and so you hire a bunch of people you trust to just go talk to all those open source users and get that information and find those trends and so like you know i think in today's environment too like i mean with you know a lot of funding getting thrown around like that's the first step like if you're trying to sell a product you need to hire you know a solid sales leader or at least some sales people that you trust and go you know especially an open source project like go talk to a bunch of customers that use the open source and understand what they'll pay for.

55:05Ron Gabrisko:And you know, am I still in enterprise, am I still in startups? That's job one. And so, you know, we had, you know, we just raised additional funding. I did a coverage model to just basically be able to cover all the different segments and find out, you know, which customers were more likely to buy and what they wanted to buy. And so we moved pretty fast that first year. I mean, I think we went from less than a million to, I don't know, I forget, 13, 15. But then we went to 50 to 100 to 50. You know, obviously now we're whatever, 6.9 billion plus and bigger. So, but yeah, early days, like, you know, those were known quantities for me.

55:49Ron Gabrisko:And that was my first task is go find out what people pay for and which segments we can sell to.

55:54Turner Novak:So it wasn't like you had no one using the product and you just hired a bunch of people to then go try to get customers. It was, you had, I think you said millions of people already using it. So it's like, okay, you're almost hiring like...

56:13Turner Novak:And then, how do we, how are we going to make a business around this in a way?

56:18Ron Gabrisko:Yeah. And initially we thought like, Hey, we tried PLG. We thought customers would just come to us and ask the questions. Like before I got here, that's what they were trying to do. And it wasn't working. It wasn't working.

56:33Turner Novak:No. Well, like what was the big block? block well customers in open source they don't really want to buy anything you have to ask them

56:45Ron Gabrisko:what they're willing to buy for it's a little bit different right um like if i'm you know i'll ask you know support questions once i get my question answered i'm good to go right so you know it's more about like sales people open doors they you know they get in front of people like that's part of the you know plg's more about like people come to you sales is more about i'm coming to you yeah it's the opposite right so so it definitely will help open doors and open markets faster um now that's being said like if you have a great plg motion like our plg motion was more around open source. It was like, we have tons of open source folks coming in the door.

57:32Ron Gabrisko:We need to go people sell them the thing that we actually monetize and make money with, right? So I would recommend that for any open source project that has traction for sure. Now, if you have a product and nobody's used it, I mean, yeah, you need a couple salespeople to start going to get your beta customers so that you can, you know, also, you know, develop the product. And, you know, again, that's the zero to 20 million product market fit. You know, you're going to need a sales team to do that as well.

58:05Turner Novak:So. And I know you leveraged, I think it was A16Z, kind of the, a big initial wave of customer introductions. Like how, how did you do that? Because a lot of people will say, oh, use your investors to get customers, right? Like sounds super easy. Like how do you actually do that successfully?

58:24Ron Gabrisko:Well, I mean, A16Z is a little special. Like I, I think it's the best VC on the planet, by the way, but you know, they build these like basically startup teams, which are like pieces of your company. Like, you know, they have, they have sales, they have marketing, they have, you know, like recruiting. Uh, but in this particular case, you know they have relationships with like the cios of some of the biggest enterprises on the planet like they built that for their portfolio and so they you know they would reach out to like apple or cap one and they would invite the cio and all their staff to come in for uh you know silicon valley day and they would show them 10 different portfolio companies so we would have like 30 minutes come in you know they wanted to do a demo like tell me about your your company and do a demo.

59:15Ron Gabrisko:And, you know, that way, like those CIOs and their staff would get to see 10 different amazing startups in one trip, right? And they would do it at like A16Z's office. So, you know, they'd roll out the red carpet and it's pretty cool because you get to meet, you know, Ben Horowitz and Mark Andreessen and stuff like that, right? So they had a pretty good job. I think that the mistake that startups make, because I think those programs existed, some of the investors and some of them run them better than others. But don't just send, you know, any old salesperson. Like I did most of those early days myself.

59:51Ron Gabrisko:Because one, like I get the opportunity to pitch my product to the CIO of a big company. Like, you know, that's a big opportunity. And most of the time, the CIOs are so thankful that you took the time to do it. They'll give you an opportunity. They'll give you a POC or they'll give you a small land. And now you're in the door. Now you have a big logo on your, you know, on a land, right? So, you know, I would say as a founder, go pitch those CEO, CRO, head of sales, like make sure you take full advantage of those. The, you know, hey, just make some intros to, you know, some of your, you know, can you intro me to X, Y, Z?

1:00:33Ron Gabrisko:Like, I think that's less valuable. I'd want to go spend, like, I'd rather be, you know, smaller number of companies targeted where I can actually get, you know, a chance to talk to somebody and, you know, potentially add some value. So A16Z, great, great program. We landed a bunch of our big customers that way.

1:00:54Turner Novak:Sounds like an in-person event where you get FaceTime. that seems to be like the most efficient or best way to do it versus just like a, you know, if you forward an email or whatever.

1:01:07Ron Gabrisko:Exactly. Like if you want to ask your investor, I'm sure money investors do these, like they have a, you know, a customer day or something like that, where, you know, they'll bring in 10 portfolio companies and pitch to either a panel of customers or maybe one customer. And this particular one was more of each customer. But that's what I would do. That way, get some face time, get to develop some relationships. Again, what you're trying to come out of there is with at least one follow-up, one relationship, one POC, something like that. So that's what I would ask for from an investor versus just, hey, can you introduce me over the phone or on email?

1:01:50Turner Novak:Do you get invited to a lot of those things now? Are you guys considered a big customer

1:01:55Ron Gabrisko:it out uh yeah no for i mean you know now i do a bunch of like kind of reverse like a lot of investors are like hey i have my portfolio coming in you know kind of hey can you do a fireside chat like you know talk about like because you know you think about a lot of these startups they're they're technical most of them are technical founders right it might be their first company it might not be but you know it's usually a technical led founding team and they're trying to say like how do i build that sales go-to-market engine it's the number one thing i hear and so you know most of the questions i get are you know some of the questions we're talking about here right it's like how do i build that go-to-market team how do i find that first sales leader how do i land those first customers how do i figure out pricing how do i build the first comp plan like all those kind of things so like a lot of my investors ask us to come in and just talk with their portfolios, their CEOs, about those kind of topics.

1:02:58Turner Novak:And when do you decide yes or no on those kind of things? If I'm trying to do stuff like that, do I need to have an enticing pitch of like, hey, it's a cool venue or it's a nice dinner? Or how do you usually decide what's worth your time? Is the guy on the other end now?

1:03:16Ron Gabrisko:I mean, me personally? Well, I guess I'm kind of trying to reverse this to where if I was trying to

1:03:22Turner Novak:like set some of this stuff up, what would I, what should I be offering to like the both sides of the marketplace in a way of like making it worth everyone's time?

1:03:32Ron Gabrisko:Yeah, fair enough. Um, I mean, certainly as a portfolio company, I want to have access to customer executives because I want to try to sell to them. Yeah.

1:03:44Turner Novak:And you don't want to feel like you're getting sold to as the customer executive, maybe.

1:03:49Ron Gabrisko:Yeah, correct. And like I said, on the customer side for these investors, it was like, hey, come see the best of Silicon Valley, right? So they would ask like, hey, what do you want to see? Do you want to talk about AI? Do you want to talk about security? They have a portfolio of different categories, right? And so they would kind of cater the agenda and the portfolio companies and they would let them pick like, oh, here are the companies I'm interested in um and so a lot of like uh i just hosted a couple big one big bank and one big healthcare company on the east coast like brought their whole team because they're you know they're going to come to to silicon valley and san francisco and they're going to want to see you know databricks and open ai and anthropic and you know nvidia if they're in town or the big hyperscalers and you know if your vc is a silicon valley vc like they should be able to help host them and get you a sit down there.

1:04:43Ron Gabrisko:So that's usually I would try to host them in San Francisco in that kind of way. But that's kind of what A16Z's model was. And it's pretty interesting. It worked really well. It helped seed a lot of these portfolio companies into these big customers, which is huge.

1:05:02Turner Novak:When you say that's what the model was, do they not do it anymore? Or is it

1:05:07Ron Gabrisko:different now or i'm just saying we're kind of beyond that like that size they're they've kind of moved on to the you know portfolio companies that are smaller i mean obviously we can get a lot of our own meetings now um with the ceos and the cios right i mean we're you know multiple billions but you know for like early mid-stage companies that's huge but i still you know i'll still reach out to investors once in a while and be like, hey, do you know so and so? Can we get a meeting with them? Right? If I'm having a tough time getting to somebody so it can be super helpful. It's definitely something you want to look at when you're raising money.

1:05:46Turner Novak:So when you talked about trying to figure out pricing and some of these like early customers, should I be willing to do like a pilot, give a discount, etc. to kind of land some of the initial customers just like get things going or how do you think about just navigating that because i i mean it always comes up is like you know what's how big is the contract what does it consist of the timelines like how long it is all that kind of stuff i mean most of our pocs and pilots are all especially early days we're all free oh really yeah we're not trying to make money off the pilots

1:06:23Ron Gabrisko:or the POCs, like we're trying to prove value for our team and our product. Now you probably want to like, I mean, a couple of things. One, you don't want that going on for a year. So, you know, you want to set some expectations around one, you know, what are we trying to prove? So what are your success criteria? And then two, what's the, you know, time period that you want to execute? Like we're going to do this over the next 30 days. And then the third piece is you want to make sure you have at least some kind of executive sponsorship that it's not just some, you know, rogue developer that's like, hey, help me do my project.

1:06:59Ron Gabrisko:And then you have no chance of selling this. But like, you know, those are the things you look at. I mean, again, like, I think you need to prove value before you have an opportunity to ask for money and ask for a purchase. And so that's what a POC or a pilot in my opinion is really all about. And listen, if you're a bigger company and you have references and you have a brand and you've succeeded in a bunch of projects and you have a track record, then you can use a lot of those things and you may not necessarily need to do a POC or a pilot. But even in those cases, like I would fund the POC or pilot if I have, if I know I'm going to get, you know, an opportunity and a bigger contract at the end.

1:07:48So, again, I think for those, you know, I wouldn't make pricing the POC or the pilot the gating factor.

1:07:58Ron Gabrisko:I would just make sure that once you're successful, you have a good chance of actually getting, you know, a contract after that. That's the more important point.

1:08:09Turner Novak:Yeah, because I guess that first whatever you kind of land first, it's probably not the final, right? Like if you're going to get more adoption, if you do a good job, they're going to spend more money whether the initial pilot is paid or not.

1:08:23Ron Gabrisko:Yeah, it's a small piece. It's like small set of users, small use case, one department. Again, you're trying to prove value, get your first land. And I mean, it's basically the land and expand model is land, prove value, build a champion, expand, get all the rest of those use cases in that department, start expanding other departments till you're across the entire enterprise.

1:08:50Turner Novak:Was there anything as you started to kind of like, you know, climb the ladder, people started to pay you, Databricks really started taking off, like anything that was kind of surprising or unintuitive that, I don't know, maybe you got it wrong initially, or you kind of like changed and just like things you wouldn't have expected as things really started to scale up?

1:09:12Ron Gabrisko:Yeah. I mean, that's a great question. There's like 10 answers to that.

1:09:17Turner Novak:I want all of them. That was actually a question from, actually one of my portfolio company founders asked me, she's like, I want to know this.

1:09:24Ron Gabrisko:So, you know, I think so. One thing that I noticed is like when we started selling Databricks, we were doing like 15K, 18K deals. Right.

1:09:35Turner Novak:This is annual. Yeah.

1:09:38Ron Gabrisko:Yeah. So I was like pretty small.

1:09:40Turner Novak:Let's use people say like, especially if you're doing enterprise sales, that's bad. Or no, exactly.

1:09:46Ron Gabrisko:New rule, no deals less than my monthly Uber bill. So, you know, I think, yeah, but when I would talk to the customers, we're adding tons of value. But just a lot of the use cases, because we're usage-based, weren't driving a lot of usage. So then we started to say, okay, how do we capture some of that value? You know, like there's companies out there like Palantir that'll do value-based pricing. We weren't doing that. We were doing straight cloud-based pricing. So, you know, we added like a platform fee. Then we added user fees. All these things to try to make our price points higher to match value.

1:10:22Ron Gabrisko:Because again, your proper pricing model, price equals value. If your price is over the value, then no one's going to buy it. If the price is under your value, then you're leaving money on the table. So basically, you know, in squint, that's what you're looking for.

1:10:38Turner Novak:Is there a number? Is there like a 10x? Is there like a, you need to add like 10x more value than you charge? or like how do you think about it?

1:10:45Ron Gabrisko:Yeah, certainly there's like a payback. Like if you're, you know, but some of this stuff might be loose. It's like, I'm gonna grow your revenue by billion dollars. Like I can't charge you a percentage of that, right? So a lot of it's like, you know, how do you compare with alternative, which is competition or build it yourself? How do you compare with, you know, the lowest cost alternative, you know, those kinds of things like that you have to kind of,

1:11:10Turner Novak:you know, once you get, you know, again,

1:11:12Ron Gabrisko:And pricing's complicated, but find out what's the base unit of value. For us, it was like the clouds were charging on compute and usage, and that was kind of the base value unit we were going to use. And then it was just relative to either a cloud service or build it yourself or what have you. But again, we put all these features to try to raise pricing early days. And one thing that wasn't intuitive was once we started charging for users, people would be like restricting people using the product.

1:11:49Turner Novak:Oh, interesting. Which then also drives down usage.

1:11:52Ron Gabrisko:Drives down usage. Exactly. So I was like, okay, let's get rid of user pricing. All the users are free. And all of a sudden usage took off, right? Because now everybody can use it. Everybody can get value out of it. And I don't know if that's intuitive. like a lot of people use users and usage. I would say, you know, again, one of the best things we did early days was tie ourselves to consumption and usage because data is growing, queries are growing. Number of people that want to ask queries of the data is growing. Number of agents that want to ask queries is growing. Like all those things are tied to usage.

1:12:27Ron Gabrisko:And I think, you know, restricting yourself on users, I think user-based pricing is a thing of the past, honestly.

1:12:34Turner Novak:Really? Is it just gone today? Like it just doesn't make sense to do that.

1:12:37Ron Gabrisko:I mean, the companies that are doing user based pricing are, you know, they're under siege because people aren't growing employees by, you know, they might be growing agents, so maybe you're charging agents. But again, I think everyone is or will move to usage based pricing, even the coding tools like early days, they were user based. I remember talking to some of the early folks at Cursor and I was like, you guys need to go usage based. and now that market is just blown up with usage-based pricing, right? So, yeah, so, I mean, you got to pick the base unit and then you need to test out that. One thing was like, you know, I don't think user-based pricing is a good idea.

1:13:22Ron Gabrisko:I think it limits the amount of value you can capture in most software. I mean, I can't say equivocally for everything, but I would say attach yourself to something that represents value and that's growing over time. So it's been a great business model for us, obviously, great business model for the clouds, for all the frontier labs, et cetera. I mean, they're selling tokens, but it's the same thing. It's usage. Yeah. Well, because essentially then the revenue upside is kind of uncapped.

1:13:58Turner Novak:Like if you just keep creating more value, you can keep adding more revenue.

1:14:03Ron Gabrisko:Every day, more data in my customer systems, there's more people asking queries and doing analysis and doing predictions. And then there's more agents that are doing the same thing. And so, you know, so then you're like, OK, what are the other pieces of TAM I can go after internationally, go after different markets, different verticals? like that's how you start to compound exponentially all those different markets together

1:14:32Turner Novak:so that was one of the 10 i mean is there is there nine other unintuitive things like anything else like really stands out as like man i wish i knew that

1:14:40Ron Gabrisko:i mean first of all like just going out to the market we talked a little bit about it already but just going out to the market and trying to understand like what will people pay for um what are the challenges like you'd be surprised at what customers will tell you when you just ask them like, hey, we're building this company. What are the things that add the most value? What would you pay for? A lot of people want to help. And then once you're going into enterprise, some of the things that you got to think about, because a lot of companies will be like, well, I'm just going to sell to the people that want to buy right now.

1:15:16Ron Gabrisko:And those people might be a lot of startups or AI companies or tech companies. They're going to be early adopters of technology. But if you want a super valuable company, trillions of dollars, you need to sell to enterprises. You need to sell to banks and healthcare companies and retailers and CPG companies. So one thing that early stage companies don't think about are like, what are those requirements? What are those requirements around security, compliance? So a good idea to understand those things up front because those will be big gating factors in how you grow your business. And if you don't understand how those affect your product or your service up front, it could slow you down quite a bit to try to add those things on later.

1:16:02Ron Gabrisko:So that wasn't something that, I mean, I said it out loud, so it's kind of obvious. But if you want to be an enterprise, which I think if you want to build a real business, you need to be. You need to understand how those things are going to affect your growth and how you support them. Like you want to sell the federal government, you need to get clearance personnel. You might need to, you know, quarantine those developers. Like there's all kinds of extra requirements on how you do that. You know, you should think about those things up front. So we missed some of that stuff. But I mean, obviously it -

1:16:39Turner Novak:Sounds like it worked out for you at the end of the day.

1:16:42Ron Gabrisko:It did. We made it. We made it so far.

1:16:45Turner Novak:And so how did, has anything changed about kind of the go-to-market? at philosophy, strategy, structure, how you sell as the products become more AI native, generative AI? I mean, you've always kind of been consumption-based because that's kind of one thing I hear a lot about with these AI native companies. You're selling essentially usage versus seeds. So when you think about the move from on-prem to cloud, there was just change in what got sold. So, the incumbents were kind of disrupted because they couldn't sell the seats and renewing the software with just the license. And then the shift from cloud into this usage-based AI stuff.

1:17:30Turner Novak:Again, they can't quite sell it because your usage is selling a seat that no one uses. And it's like, oh shit, you actually have to use the product now and we can't make as much revenue and it just kind of messes up the business. like how did that kind of go for you guys this whole transition or was it was it not even

1:17:47Ron Gabrisko:necessary we were always loud we were always consumption right so like you know some of the gating factors for us early days was like who's in the cloud like i would tell our sellers like if they're not in the cloud yet don't waste a bunch of time with them because aws or microsoft or gcp have to convince them to get in the cloud before we can sell them anything right so um you You know, but I think one of the, a couple of the things that, I mean, each stage, like I said, has been a development for the go-to-market team. Like again, early on, it's more around product market fit than how do you build a playbook?

1:18:25Ron Gabrisko:But, you know, how do you expand internationally? How do you expand with channels? Like we didn't have partners really days. So building out your partner channel, how do you build out EMEA? How do you build out APJ? you know those are all developments and then how do you go multi-product like most companies start with one product you know now we have a pretty massive portfolio of products right so like as you start expanding your portfolio of products and trying to expand into additional areas of opportunity you know that creates new muscles too right how do you build out specialist organizations for each one of those new products.

1:19:07Ron Gabrisko:You know, and again, like, you know, do that all in the world of, you know, how do I AI enable my entire sales team? So they're using that every day to just be smarter and more productive. So all those things I think are changing constantly. Like, you know, it used to be you do an annual planning cycle. We were doubling or tripling every year. So I do a six month planning cycle. We're still on that at this point right like it's like you know splitting territories every six months to make sure you have coverage on customers so every every little piece of the you know building and operating and running this business at this scale at this size is is new there's there wasn't a playbook for it

1:19:51Turner Novak:so it's been fun was there anything that um maybe like messed up initially or biggest unlock in terms of like how you expand internationally and or how you incorporate new products like anything that you guys wish you could have done differently and or you figured something you're like oh this is like this really unlocked it once we once we tweak this thing yeah i mean international is one

1:20:16Ron Gabrisko:area where i think you have to be a little bit careful on expanding too fast um yeah because i I think you can do a lot of your initial sales, you know, remotely. Not, you know, you're not going to build multi-billion dollar business internationally by selling from America. But you can get some of your first lands, all those kind of things. Because, you know, if you hire the wrong leader or, you know, the wrong strategy in a mere APJ, you're on a 10 or 20 hour plane flight and a lot of hours to try to fix that. So, you know, you need to find the right leader on each of those markets. And then obviously, you know, in EMEA, there's, you know, Germany is different than France, different than London, it's different than, you know, South Europe.

1:21:05Ron Gabrisko:I mean, each one of those different markets, same thing with, you know, Asia and Japan and, you know, India. Each one is a different market, different language, different culture. So you need new leaders for each one of those. So you need to have like your playbook pretty set in America's before you start going big internationally. Not saying you need to be at 100 million, but I would say somewhere between 20 and 100 million. You need to like have a pretty good idea what your sales playbook looks like, who you're selling to, what types of companies, what are the requirements, all those kind of things.

1:21:43Ron Gabrisko:and then uh because you're going to want to translate that into those other markets and i mean having the right leader is part of it but then you know early days i i actually took some of my key talent from america's and i said hey i'll pay for you to you know live in london for a year teach the new team try to do all this stuff with enablement but there's still always a lot of you know kind of tribal knowledge um same thing with apj like seed it with some of the people that have been successful and have been here a while so they can understand you can kind of it'll help accelerate that growth but i do think some companies make the mistake of going international too big too fast and then you spend a lot of money and uh you know sometimes it hurts your brand like if you have a bunch of people that don't know how to sell your stuff or aren't making customers successful, then it's harder to go address them later.

1:22:42Ron Gabrisko:So anyway, that would be my advice is just be, uh, be aggressive, but be thoughtful. And when you expand internationally.

1:22:50Turner Novak:So it sounds like bring some local, some of the local people who have been there, really know the product, know edge cases, pain points, et cetera, but then also hire somebody who knows Japan or knows India. Like this is the rule. This is how they do it here. Don't forget that you have to like do this one specific thing that is a custom here that no one else does or something like that.

1:23:12Ron Gabrisko:I mean, you're going to want the local leader because they know which great salespeople to hire, but they also know the customers. And then you want some, you know, kind of experienced knowledge. And again, the local leader will probably learn it. It'll just take them a year. When you put the other experience with them, they're just going to go that much faster in how you build international. So if you can do it, I'd recommend it.

1:23:38Turner Novak:So talking about, I guess, actual enterprise AI adoption, what are you kind of seeing today? Like what kind of challenges where people having the most success? It seems like you probably have like as close to a front row seat as you can get. Like what's kind of actually going on right now?

1:23:55Ron Gabrisko:Yeah. Well, I've literally talked to thousands of customers. You know, I think we did published numbers like 1.7 billion just in AI.

1:24:03Turner Novak:You know, it's revenue, 1.7 in AI revenue. Okay.

1:24:07Ron Gabrisko:It's been growing super fast for us. You know, it's every industry. Again, I think I call it the four C's of what's important for a lot of these companies. The first, we talked a little bit about context. Like, how do I attach AI to my data? It needs the context of my data to be able to be smart about the decisions and the predictions and things I want to make for my business. The second one is control, right? Like I also need a governed. I can't have everyone having access to all the data, especially in the world of models and agents. I need to know how these agents are going to use this data, make sure they're not disclosing the data.

1:24:51Ron Gabrisko:there's obviously a lot of compliance stuff too in regulated industries so control is incredibly important choice like right now we're seeing lots of you know things around model choice but cloud choice is also important i mean we're open source so you know you can kind of plug in anything into the databricks platform but we serve all the models you know we think frontier models would be really good for a lot of the really complex tasks. And we think open source models will be used for a lot of the other tasks and that market's going to grow super fast. So I think choice is really important because if you just get locked into one, you're going to end up spending a lot of money.

1:25:34Ron Gabrisko:And that's the last thing is kind of costs. Like costs have been kind of out the roof on a lot of this stuff. And so how do you govern those costs? We do all this stuff in a product We call Unity AI Gateway, just to give it a plug. But anyway, I think cost is the last thing that a lot of these CIOs and CEOs, I mean, they're blowing through their budgets super fast. So how do you put on the right cost controls, guardrails, things of that nature? So, I mean, that's what I'm seeing in the market. But again, the use cases are phenomenal. I'm seeing, you know, new drugs discovered and accelerated all kinds of financial services, use cases around automating, loan origination, fraud, things of that nature.

1:26:20retailers how do I maximize revenue with campaigns promotions how do I you know stack

1:26:27Ron Gabrisko:my shelves in the right way how do I do the right distribution how do I fulfill inventory faster I mean again it's every industry so markets growing super super fast again I think the biggest part is like you know the models are super smart how do you get the context your enterprise AI data and how do you connect those things in the best, most efficient, governed way?

1:26:54Turner Novak:What seems to be like the biggest challenge that some of these guys are facing when, is it, it's expensive? Is it that they don't know what to do?

1:27:03Ron Gabrisko:Well, it's a lot of the expertise. Yeah. Like, I mean, everybody's got an FDE model. We do too. I mean, I think ours are the best on the planet, but you know, they need some help.

1:27:17Ron Gabrisko:They either able to wire all this stuff together it's it's not simple right um i mean we're obviously trying to make it as simple as possible with a bunch of our new tech but still need still requires some expertise uh to be able to do that and i would say the biggest challenge in all of it is you know everybody recognizes like the data is key into how you're doing these enterprise use cases but But the data in a lot of cases is not in the right place yet, meaning it's all over the place. It's in legacy system or it's in old formats or it's in proprietary formats, all these kind of things. So getting your data in a good place to be able to attach AI is a tough and complicated problem.

1:28:03Ron Gabrisko:And I think Databricks is the best on the planet to do that.

1:28:07Turner Novak:Do you think, is there any irony to like AI is doing all this stuff and we can't just say, hey, AI, figure out how to do this for me. It's kind of funny that it does all this stuff, but then people were still struggling to use it correctly.

1:28:22Ron Gabrisko:It's getting there. Genie Code now can start building data engineering pipelines for you. I mean, it does all the ontology, so it'll go out and find the data sets and label them. And again, you want to do all those things in a governed fashion. We use Unity Catalog to do that. But, you know, AI is getting smarter about how it helps with, you know, data problems. I mean, that's the main use case for us for GenieCode, which is part of Genie. So it's getting there. We have like a data engineering, you know, GenieCode. We have data science, GenieCode. Like, you know, basically, we'll go develop that stuff and automate it.

1:29:06Ron Gabrisko:So it's pretty cool.

1:29:06Turner Novak:When you say your FDs, your forward deployed engineers, are some of the best on the planet, what makes them so good? Is there a way, do you structure them as part of the sales team? Are they using Databricks as the product which makes them better? What makes them so good?

1:29:26Ron Gabrisko:Yeah, I mean, listen, you got to start with trying to understand what the customer is trying to accomplish, right? was similar to any kind of call it PS or consulting project. But then being a leader and a thought leader in how to solve these problems, like which technologies, what's the best way and most efficient way to do it? What are the downstream effects of that? Because a lot of companies that are using FDEs, Palantir uses that model. Lots of people are using that model. One of the things you don't think through is like, what's the ongoing upgrading and maintenance of what I build? On Databricks, like we're a data platform, data and AI platform.

1:30:12Ron Gabrisko:So we're thinking through, like, we expect these solutions to develop and evolve over years and years and years. They can't have like huge army trying to upgrade them and maintain them. I know that's probably a great revenue model for some, but for us, we're thinking through like, how does this thing evolve and grow over time. And we allow the actual team there at the customer to be able to maintain. And that's why you need kind of a scalable, unified data platform underneath all of this. So I'm sure there's lots of talented technical FTEs that can solve these solutions, but how you solve them in the right way where it's scalable, cost-efficient, and again, evolves and grows over time without having to rewire everything, I think those are the keys and that's what makes our team the best on that.

1:31:04Turner Novak:So do they report to engineering typically or do they report to the sales? I've actually always kind of wondered what's the right way to structure that because they're kind of both.

1:31:14Ron Gabrisko:We have a group we call field engineering. So and that's all of our pre-sales. We call them solution architects that are doing kind of all our pre-sales architecture work. but our FDEs sit inside that organization. So they go deep like on the product. Like those folks are engineers. They can code, they can build products. They build out the pilots, they build out the environments. They're engineers. We call them field engineering. So that does report up into go-to-market but that's run by one of our co-founders, Arsalan. He's also a PhD guy. So like they're crazy smart. They're awesome.

1:31:55Turner Novak:I have to ask you this question because anyone who's like listening at this point, probably like, ah, you got to ask them about this. So Databricks is like$188 billion company. Like when do you guys go public? Like what's, how do you think about, you know, you just raised a couple billion more dollars. Like you could have done it. Like when does that actually happen? Because there's some companies that are like, they want to stay private forever. It seems like what's the view inside Databricks?

1:32:22Ron Gabrisko:It's not a matter of if it's a matter of when. we run this company like a public company. Like, you know, we, you know, report our financials and you know, every quarter we have board meeting where we, you know, go through our audit committee and we run this like a public company. So, you know, I expect, you know, we're not here to, we're here to build a trillion dollar company. So, you know, we're, I would say we're going public six months at a time, but, But, you know, like, again, you know, it's not a matter of if, it's just when. And we're not in a rush. Like I said, we're going to build this, make it a trillion-dollar company.

1:33:04Ron Gabrisko:So that's the journey.

1:33:08Turner Novak:I was going to say, man, that's like a big goal. But I guess you guys are getting closer and closer there to where it's like, eh, you're actually pretty close at this point.

1:33:14Ron Gabrisko:Yeah, I'm going to start saying we're going to be multi-trillions. So yeah, you're going to have to adjust.

1:33:19Turner Novak:You're like, oh, come on, only a 5X from there? You're not sure higher than that.

1:33:23Ron Gabrisko:Exactly. Exactly.

1:33:25Turner Novak:Do you have a favorite business CEO or founder? You can't say Databricks, can't say anyone at Databricks, or historical figure from history that you just get a lot of inspiration from?

1:33:36Ron Gabrisko:I love a lot of sports heroes, but I was going to say LL Cool J, actually. I started a business with LL Cool J way back when. Really?

1:33:51Turner Novak:Okay, I did not know that.

1:33:52Ron Gabrisko:interesting uh company like they did this virtual recording studio um where like a kid could record a song from like it was kind of you know pre-skype back then like a kid could record from la and new york together but uh you know guys reinvented himself many many times uh in many different industries you know kind of uh an icon over many decades so and he's good friend so thought i'd

1:34:20Turner Novak:throw him out there so interesting what is he up to today because i don't i don't really follow him

1:34:27Ron Gabrisko:that closely you know he he did his his show on ncis los angeles he did a bunch of that kind of

1:34:35Turner Novak:he was doing a bunch of tv stuff so huh yeah oh wow he did that for like 14 years yeah exactly oh wow okay yeah that's great do you have a favorite um do you have a favorite athlete then You said there were some athletes.

1:34:49Ron Gabrisko:Yeah, no, Michael Jordan for sure is my favorite. Like, you know, the goat of basketball in my opinion. And I don't know, you watch his story. Like there's a book called Relentless out there, the guy that kind of trained Michael Jordan and Kobe Bryant and a lot of those, you know, elite basketball players. It's a good book. So, but yeah, I don't know. Michael Jordan, maybe Walter Payton of Walter Payton. I'm a Bears fan. Grew up in Chicago.

1:35:21Turner Novak:I don't actually know the Walter Payton story that much. What's what's his kind of journey to the NFL and what made him so good?

1:35:29Ron Gabrisko:Yeah. I mean, Walter Payton was like, you know, he's he was on the Bears who were always like one of the worst teams. And they literally, you know, they never had a quarterback. So they would just hand on the ball every time and he would still break records running. he like would to train he would run up hills and stuff like that um and uh you know he ended up dying i think of cancer early but you know he always won kind of the there's there's an award now called i think the walter payton award for like the best kind of humanitarian in the nfl but he always gave back to right he always gave back to you know kids and and you know people who are struggling and things of that nature so it's kind of made made him uh a hero of mine for sure yeah

1:36:21Turner Novak:it's good good to remember where he came from good to remember to to help people along the way exactly um well ron thanks for coming on the show this is super fun thanks for uh thanks for having

1:36:33Ron Gabrisko:me it was uh great questions a lot of a bunch that i never got before so appreciate it oh really Okay.

1:36:40Turner Novak:Do you have any crazy stories? Anything just crazy that's happening in your life that no one would believe? I mean, the LL Cool J story is pretty...

1:36:49Ron Gabrisko:A lot of people don't know that, that I started a company with that dude. So that's pretty interesting.

1:36:56Turner Novak:What happened with it? Did you get people using it? Did you sell it?

1:37:02Ron Gabrisko:Yeah, we got hundreds of thousands of people using it. We licensed it to Sony and Microsoft and Dolby and a bunch of that stuff. I think it's still out there, but obviously I don't have time to... We never updated the technology. Obviously, the technology is way more advanced now than... We did that back in 2013 or something. It was a long time ago. Yeah, but it was super fun you know i've been on stage with them like singing yeah i've been to you know a couple grammys uh where he hosted the grammys and stuff it was pretty fun it's a good time different world

1:37:42Turner Novak:different world than tech software for sure yes on software yeah exactly i mean i talk a lot about

1:37:50Ron Gabrisko:like you know my upbringing as uh you know i said midwest kid out of chicago dad's construction worker mom's a teacher i think you know hard work and hustle you know again i always wanted to be a major league baseball player um you know i played in college i was the all-american big 10 mill honor but i never kind of made it but you know i've always kept that kind of hard work and grit and hustle i mean it's a big cultural thing for me with the sales team here actually um talk about it a lot um because i think like that's where i want the next generation of sellers and business people and people starting companies entrepreneurs like they got to realize like this stuff like nothing comes easy like even if it looks like it's easy nothing comes easy because you know uh it's always who out hustle i always say i never lost the game just the clock ran out If we kept going, I would have figured out a way to go further than the next person.

1:38:55Yeah.

1:38:56Turner Novak:What do you think the thing that separates the people that can do that and can't? Is there an internal drive or what is it that separates people who can and can't do that? I do.

1:39:11Ron Gabrisko:I think it's an internal drive. I don't think it's externally motivated. People ask me, hey, what? why don't you retire yet? And I'm like, because one, I'm having a ton of fun and passionate about what we're doing, but I'm not done. Like until we make this one of the, if not the greatest company on the planet, I'm going to keep going. You know what I mean? So I think it's, yeah, it's internally motivated. It's a drive. And, you know, I, again, from that relentless book, like it talks a lot about that, like talks about cleaners and closers and like what's the difference between the two so

1:39:51Turner Novak:what's what's the difference i'm looking up relentless right now i'll throw a link in the in the description for people to to check out the book did you ever watch the last dance with

1:40:01Ron Gabrisko:michael jordan it's about i didn't watch it bulls basically i've seen it yeah i've heard of it talk about like his will to win like you know i mean he almost didn't even need a coach because he he needed a coach to just make sure everybody else didn't quit okay he was that hard on his teammates he wanted to win that much there's one page on there in that book that kind of explains the whole book um it's a lot of those kind of things like when everybody's hitting a panic button, they all turn to you. It's about being the best of the best.

1:40:45Turner Novak:So it's about being that person when everyone hits the panic buttons. Who do they go to? You want to be that guy.

1:40:51Ron Gabrisko:Yeah. You want to be that guy. You want to take the last shot. Like all those things. You know what I mean? Which is me and Michael Jordan, right? So, well, cool.

1:41:02Turner Novak:This is, this has been a lot of fun. Thanks for coming on the show.

1:41:04Ron Gabrisko:Yeah. Thanks for, uh, it was fun. Spend great spending a couple hours with you. Appreciate it. Like, uh, it was fun. It was awesome. Can't wait to see it. Can't wait to hear it.

1:41:14Turner Novak:And I hope that you had fun. Thanks again. This episode sponsors Flex Numeral Amplitude, Merge and Monaco. If you enjoyed this conversation, please like comment, subscribe and share it with the one friend. We're trying to go from 1 million to 7 billion in ARR. Make sure to check out the back catalog of over 100 episodes with investors like Gary Tan from YC and early employees at high growth companies like Will Gabrick at Stripe. Tune in over the next few weeks for conversations with Jeff Morris at Chapter One Ventures, Tomer London, co-founder of Gusto, and Jamie Siminoff, who founded and sold Ring and has since scaled it to over 1 billion in ARR inside Amazon.

1:41:49Turner Novak:If you don't want to miss any of these, subscribe to my newsletter, The Split, linked in the description to get each episode plus a transcript emailed directly to your inbox every week. Thanks again for listening. See you next time.