By Labor day, it had become clear that Frank Slootman’s third initial public offering (IPO) would not be like the other two. After a slight summer lull, Covid-19 was resurgent, which meant that rather than a global tour of get-to-know-you lunches and PowerPoints in hotel meeting rooms, his roadshow for data warehousing company Snowflake was going virtual.
Slootman, 62, took over a nondescript conference room on the second floor of Snowflake’s Dublin, California, office, embarking on a series of meetings that now rank with Mark Zuckerberg’s Harvard dorm coding sessions in terms of value per hour. For seven days in mid-September, packing in everything from a series of one-on-one meetings to large presentations, the naturally gruffSlootman met over Zoom with more than 1,000 people, including fund managers and investment bankers, who were on hand to win a piece of his IPO.
Rather than the usual grilling, Slootman was toasted instead. “The issue was not ‘Do I like the company?’ The issue was ‘How many shares do I get?’” he recalls in his Dutch accent. Of the virtual IPO, he says, “I absolutely loved it.”
Slootman, who took over Snowflake in April 2019, had been as ruthlessly efficient as the rest of the process. Just six months in, he had lined up his anchor investors, including Dragoneer Investments and Marc Benioff’s Salesforce. Around the same time, he began meeting with research analysts who would wind up setting bullish prices for the IPO. And when Slootman and his team virtually rang the bell of the New York Stock Exchange, a process that looked as awkward as it sounds, raising some $3.4 billion in the process, Salesforce and others were there to support the floor. “These are people we knew from previous rodeos,” Slootman says with a shrug.
Snowflake, valued at $4 billion when Slootman took over, more than doubled that first day and is up significantly since. It currently boasts a market capitalization of $81 billion on trailing sales of roughly $580 million. His personal net worth, an estimated $2.2 billion, is an extraordinary figure for someone who has never been part of a company in its earliest days.
Slootman likes to say that he doesn’t have a formula, even after having pulled off similar magic at both Data Domain and ServiceNow. Talk to him at length, though, and watch the patterns, and you can see that’s not true. The former sailor runs pre-IPO companies like a tightly rigged high-performance watercraft, a captain with extreme confidence who will throw overboard anyone who shows the mildest mutinous inclination.
“When I was a younger man, I was more tolerant; I always thought I could coach people to a place where they would be great,” Slootman says. “And 99 times out of 100, you’re wrong on that, which is the reason I [now] pull triggers much faster. I still don’t think I’ve ever taken anybody out of a job too soon. It’s [always] been too late.
“I exercise executive prerogative,” he adds. “I don’t have to justify it, I don’t have to convince you. I just have to know that this is what I want to do. And the reason is, CEOs are only there for one reason, and that is they need to win. When you win, nobody can hurt you. And when you lose, nobody can help you.”
Frank Slootman’s path to the American Dream, via IPO billions, started with his making Naugahyde seats for the automotive and boating industries. Born in the Netherlands to a military veteran and a portrait artist, Slootman had a childhood regimented by high academic achievement and racing sailing dinghies. A standout economics student at Erasmus University Rotterdam, Slootman finished school a year early to pursue internships in the United States. His dream employer: IBM. In 1982, after a number of rejections from Big Blue, he “crawled ashore with $100 in my pocket” (a phrase he repeats so often his employees know it by heart) in South Bend, Indiana, with a job as an intern in the seemingly dead-end fake-leather industry.
“I learnt from that experience that I don’t want to be in an elevator that’s going down,” he says. “It doesn’t matter how good you are or how bad you are—in the wrong elevator, you’re going to get hosed.” Eventually, he was able to shift to the up elevator— computers—first in Detroit, then in Ann Arbor, Michigan, where he moved customers off mainframes to more modern server products. When executives at a later company, Compuware, realized in 1995 that acquisition in Amsterdam was going sideways, its young staffer, a native Dutch speaker, was given a chance to clean up the mess.
By 1998 Slootman was running Compuware’s California office amid the dotcom boom. The assignment itself was another challenge: Compuware was bleeding employees to Silicon Valley’s emerging powers. “My whole career was doing jobs that other people didn’t want to take,” he says. “So after a while, I’m like, ‘Instead of bitching about it, I’ll just stick to these train wrecks and show you what I can do with them’. ”
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