Transforming Data at Coalesce – Armon Petrossian – Ep.213

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(00:00:00) – Intro

(00:03:54) – Experiences living in China

(00:09:59) – Founding Coalesce

(0012:14) – How does Data Transformation work?

(00:13:46) – Choosing to build around SnowFlake

(00:20:01) – What other opportunities arise as data becomes more abundant?

(00:22:41) – Where are you investing capital right now?

(00:23:49) – What evolution does your sales team need to make right now?

(00:27:39) – What’s a typical sales cycle for you?

(00:29:54) – What have you learned about selling to enterprises that people often struggle with?

(00:31:36) – Navigating political dynamics or relationships

(00:33:02) – What do you look for in new sales hires?

(00:35:11) – What have you become passionate about within building the company?

(00:38:32) – How do you handle disagreements with your co-founder?

(00:42:00) – What works for retaining engineers?

(0044:54) – What companies do you admire?

(00:45:30)- Advice to other data founders

Alex Bridgeman: What made you- I saw you studied Mandarin too. Where did that come from?

Armon Petrossian: That’s a ridiculous story. I had no clue what I was getting myself into, but when I was in college, I thought it would be a good idea to learn a different language. And seeing as China was an emerging world power and I was super interested in business, I thought, yeah, I should just go learn the language. It can’t be that hard. And I signed up for a year abroad in Shanghai, China. And the people at the counselor’s office, when I went to sign up, were like, hey, you haven’t taken any Mandarin classes at all at school here. Are you sure you want to go there for a year? And have you done your research? And I was like, yeah, yeah, I’ve done my research. And they’re like, okay, I think you should think about this and come back another day before you sign up. So me being like a 20 year old college kid, go back to my place, Google search Shanghai, go to the Google images, I see this beautiful modern city with amazing, like just an amazing skyline. And I’m like, all right, great, research done. Shut my laptop, head back to the counselor’s office the next day, sign up for a year in China. And I land, and I get there, and nobody speaks English. It is not what it looked like on Google images. And I remember thinking to myself, okay, well, here we go. And I spent a year there, and it was a super challenging year. It definitely was a really important time in my life where I grew a lot as a person. But complete, complete polar opposite from where I’d grown up in Portland, Oregon, my entire life. I’d never left Oregon or lived anywhere else in my entire life. So, it was an eye-opening experience.

Alex Bridgeman: What were some of the most eye opening moments there?

Armon Petrossian: I think living there for about a year was, it instilled a pretty massive amount of gratitude into my life. Like I realized how lucky and fortunate we are growing up in America and going through that experience and dealing with things like the air quality, I mean, just the sheer amount of people, so many cultural differences, I felt so grateful and felt almost like I had taken a lot for granted growing up where I had and just for being able to grow up in this country. And so, there was that element. But it also instilled a ton of other great aspects too, like being there from a work ethic standpoint, the people there work so damn hard. And that was infectious. And so, yeah, it was a great growth experience. And then also just at 20 years old, I’d never gone through the process of really having to meet people for the first time and have nobody who knew me or knew of me. Like, it was a bit of an identity crisis going through that and really learned who or it at least felt like I found myself to a degree and who I was as a person. So, it was an incredible experience. Just not what I was expecting. That’s all I should say. It was not what I was expecting.

Alex Bridgeman: I have two China-related stories. One is I went and studied abroad – well, not studied abroad – we did a short entrepreneurial trip to China. So we went to Shanghai and Hong Kong. We were only there for a total of a week. So I had nowhere near the level of exposure that you did, but also felt the same. I’d been to Japan before for something that was closer to study abroad, and I thought there’d be some similarities, but it did not feel like there were any similarities.

Armon Petrossian: That’s what I was about to say. Japan and mainland China are so different, and even Hong Kong. Hong Kong is so different as well.

Alex Bridgeman: Yeah, Hong Kong felt much more westernized. It felt like you could be somewhere in New York, potentially. Definitely a little bit more, still a little bit more crowded, but it had much more of a Western feel or at least more of a Japanese feel in terms of just the way the city felt. And then I had a roommate in college who was from Shanghai, and he somehow knew this local Chinese restaurant and was speaking Mandarin with the waitstaff and the owner there. And I don’t even remember what we ate, but it was such a wildly different menu than what I was used to.

Armon Petrossian: Yeah, yeah, than like Chinese-American food. It’s way different.

Alex Bridgeman: Yeah, even like Panda Express is not even close.

Armon Petrossian: No, no, not even close. I agree. I was like thinking that’s how it would be there as well. I’m glad I wasn’t the only one that thought that way. Sounds like you were in the same camp. And it was, yeah, like I said, it was eye opening. You’re like, okay, this is a bit different than I anticipated. But all in all, that year was an incredible time in my life. I look back on it fondly.

Alex Bridgeman: Do you have any Chinese clients today at Coalesce?

Armon Petrossian: That’s the funny thing. So, I was so bullish on learning a new language. I had been told by so many people that I admired that were mentors of mine or successful, much further down their careers that I had talked to about doing this and learning Mandarin, and I never use it. I never use it day to day. Like I still say, if you drop me anywhere in that country, I’d be able to find my way home and survive. But at the end of the day, we have no customers in China. I never use the language anymore. It’s mostly a party trick at this point.

Alex Bridgeman: Are there any like opportunities to use it in SF anywhere?

Armon Petrossian: Like I said, just very, very minimal party trick scenarios or things will come up. I’m in North Beach, which is on the cusp of Chinatown. And so, at times there’s opportunities to use it, but it’s not frequent.

Alex Bridgeman: So how do you go from U of O to founding Coalesce? What was the bridge there?

Armon Petrossian: Yeah, so speaking of people that I admired a lot in my career, when I came out of college or at least when I was in college and starting to figure out what I wanted to do after I graduated, I knew I was always interested in a couple things. There’s two core areas that I was interested in. One was real estate and another was technology. And I was fortunate enough to know a specific person that I really admired and had the skill set that I felt if I could adopt half of their skill set, I’d be really successful in my career regardless of what I did. And so, as I was gearing up to graduate and I was looking for an internship, I basically approached this guy who didn’t know me that well. I had known him through one of my friends, it was one of my friends’ dads, and I basically said to him, hey, look, I don’t really know what your company does, I don’t know what you do, but I know who you are and the characteristics that you have and the skill set that you have, and I would love to work with you and work for you, and I’ll do whatever you need me to do. I’m happy to scrub the floors. I’m happy to put in sales calls. I’m happy to do whatever you need me to do. And so, he brought me on as an intern, and it just so happened to be in the data analytics landscape. And as I worked there and worked for him and started to model myself after his skillset, I fell in love with the space. And as I got deeper and deeper into this industry and that company continued to grow, it ultimately ended up getting acquired. And at that point, it presented the opportunity for my co-founder and I to pursue what became Coalesce today. But similarly to my experience going to China, if you were to have told me that 10 years from now or 15 years from now, or 15 years ago, I should say, that I would be CEO of a company in the data transformation space, I would have been like, what’s data transformation? And here we are. That’s kind of how the story unfolds.

Alex Bridgeman: So how does data transformation work? What does that look like?

Armon Petrossian: Yeah, so at a high level, when you think about any analytics project, the goal is to take various different types of data from different sources and consolidate it and prepare it in a way that you can then make decisions off of it and derive some type of intelligence or perform analytics on it. And the biggest bottleneck in doing that is actually taking that raw data, getting it to the point that it’s consumable. And typically, companies have to spend and hire, tons of money looking for data engineers, paying consultancies to try to accelerate these projects, try to support the business requirements and demands, and they’re almost always behind schedule. And so really where we focus is by providing a force multiplier for a data engineer or a data architect or any data practitioner on Snowflake to be exponentially more productive in their day job and allow them to actually meet the requirements from the business at a time that the business is anticipating it or sooner versus always being behind schedule, always being stressed out, never being able to meet the qualifications, never being able to meet their timelines. And so that’s the reason people buy our product and love the solution.

Alex Bridgeman: I was listening to the Frank Slootman episode from Invest Like the Best this morning, just thinking about our chat today. What made you choose Snowflake as the platform to build around?

Armon Petrossian: Yeah, so I’ve been working with Snowflake for a very long time, I would say before they were even 100 employees, and watched their growth go through pre and post IPO. And one of the reasons why that ecosystem is so special is because Snowflake has been focused on providing a best of breed platform, purely and specifically a best of breed platform from a database perspective. And when customers are on their major cloud providers, whether it’s GCP, AWS, Microsoft Azure, and they decide they’re going with Snowflake, they’re, whether conscious about this or subconscious about this, making a decision that they’re foregoing their major cloud providers analytics platform and going to Snowflake because they want a best of breed database to do analytics on. As a result, typically that will also follow with everything else that they choose when it comes to technologies that support it peripherally. And so you’ve seen technologies like Fivetran emerge and they all have a similar theme around them. There’s some level of automation and ease of use when you think of a best of breed technology. And so you’ve seen technologies like Fivetran emerge, Tableau certainly on the DI space, and the customer base wants something that delivers a lower TCO, makes things easier to do, makes data projects more broadly applicable for a larger audience, and that’s exactly how Coalesce approaches the data transformation component. And so, there’s a philosophical aspect to it from a core value proposition along with some of these more subconscious things that the customers go through when they make a decision to move forward with Snowflake. And lastly, they’ve been the best partner to work with and we had a ton of relationships within their ecosystem.

Alex Bridgeman: You said TCO, what’s that mean?

Armon Petrossian: The total cost of ownership for a project. So, meaning, you could go use a different platform when it comes to analytics and you can still get from point A to point B, similar to how Snowflake allows you to. The only difference is you’re probably going to need more people in order to support that, and it might take you longer to get to that same destination. Whereas Snowflake is so focused on ease of use, so focused on automation, that you can do a lot more so much more efficiently, even if there is a premium to use that platform in the case of Snowflake. So you’ll pay a small premium, for example, when it comes to the technology side of the house or the software side of the house, but it’s greatly offset by the actual operational costs that you accrue versus you having to be more labor intensive or people intensive or some of these other areas that are more frustrating when it comes to an analytics project.

Alex Bridgeman: I’ve heard folks talk about stuff like, and you of course did here as well, talk about Snowflake being a best-in-class database. What goes into that? What does that mean? On the data side, for my side, if we’re talking about housing data at Altos, which is a product we sell and focus a lot on, every so often, a prospect or client will ask if we host our data on Snowflake because they want to pull from a Snowflake cloud versus kind of the web portal like just flat file. Can you talk about what that looks like? Why is Snowflake so much better at what they do?

Armon Petrossian: Yeah. So similar to how I was describing best of breed motion when it comes to people foregoing their major cloud provider’s platform to go with Snowflake, the core aspects as to- What I should say, there’s a unifying theme around the companies that have been most successful in the analytics industry. And when you think about what’s considered best in class, that usually is an automated product or platform that’s easy to use, that’s broadly applicable, and typically some types of architectural advantages. So, when Snowflake came out of stealth, their big focus was being able to decouple storage and compute. That was a big architectural advantage that they designed the platform for from the ground up. But at the same time, there’s so many other elements to why that platform has been so successful. And it’s all largely associated with the ability for them to automate some of the things that used to require expensive DBAs or the ability to use the platform and make it so broadly applicable so that it’s not just core IT teams that are accessing the database. You also have people in marketing or finance that also can. And so those same themes around automation, ease of use, architectural advantages are what then create a best-in-class product for any other part of the analytics stack. Whether that’s the ingestion component, whether that’s transformations, whether that’s business intelligence, whether that’s data science technologies, generally speaking, there’s that unifying core theme. And as long as you have a focus on automation, ease of use, and architectural advantages, you’re generally going to be considered a best-in-class product, and people will be happy to pay a premium for that technology because at the end of the day, it’s going to bring down the total cost of ownership for your component of the analytics workflow or the entire analytics workflow in general.

Alex Bridgeman: Yeah, it seems like you chose an industry where the volume of data in the world is growing really rapidly, it has a very high CAGR, plus pairing with a best-in-class company within this space. It seems like there’s quite a bit of tailwind for Coalesce.

Armon Petrossian: Exactly. Yeah, there was a statistic around 90% of the world’s data was created in the last two years. It’s growing at an insanely, insane exponential rate. Data volumes are growing like crazy. And so, as the volumes and complexities increase, the transformations of that data are going to become more and more important and doing so in a way that’s governed, has lineage, is documented, is efficient. And so those tailwinds along with working in an ecosystem like Snowflake have been awesome for us as a startup.

Alex Bridgeman: What other opportunities do you think that rapid increase in the amount of data out there presents? Like what else becomes interesting over the next few years on the data side?

Armon Petrossian: Yeah, I mean, the hot topic right now is all AI. It’s LLMs, generative AI, machine learning. And so, the way I view it, and you mentioned Frank Slootman earlier, he has this quote around, there is no AI strategy without a data strategy. And I couldn’t agree more. In fact, I was talking to one of our content directors today about this with one of our customers. So, she had caught up with one of our customers and asked them what they were doing in AI. And he said, we’re not doing anything in AI right now. We’re setting the foundation so we can perform AI in the future. And what he meant by that was that all the underlying data and all the foundation that you build when it comes to your data projects, your data estate, that’s the most critical component to being successful on an AI journey. And so, the AI, like whatever LLM you’re training, whatever generative AI is pulling from has to be from a data set that’s accurate, that’s been persistent, that’s been built properly. Otherwise, it’s a classic garbage in, garbage out situation. And so, what I’m seeing right now that’s exciting me is that there’s some of our customers, I would say about 20% of our customers that are on the cutting edge of what’s going on in the analytics industry today. And because they not only use Coalesce but other products like Snowflake and Fivetran were able to build a very efficient automated analytics workflow, they’re able to then perform AI and ML models and extend into some of these cutting edge modern approaches and stay ahead of all their competitors. And so, as we see the hype for AI continue and the progress of it, we recognize that as long as we’re able to unlock our customers to get the data that they need prepared and take it from that raw point to the point that it’s consumable in a way that’s efficient, sustainable, resilient, that’s going to be the big unlock for some of these other more modern use cases that are coming up in so many of the executives’ conversations at literally every business today. And so I’m excited to see how that unfolds, personally.

Alex Bridgeman: Yeah, you had a good recent fund raise. Where’s the additional investment for you at this point? Is it in sales, product, both, something else? What does that look like for you?

Armon Petrossian: It’s been a pretty healthy split. So, I would say it’s almost completely right down the middle between go-to-market and R&D. And we’ve been fortunate, we’ve had a crystal clear vision of what we wanted to build right as we started the company and even before we started the company here at Coalesce. And so, it’s just been a matter of prioritizing what’s most important to our customers, talking to our customers and making those priorities align with what they need in the near future. And so, when it comes to how we use that capital, a big portion of it goes to R&D and product, and another big component of it goes to go-to-market, marketing, field events, and sales.

Alex Bridgeman: So, I’m particularly curious about the sales side, and I’ve been having a couple more sales-oriented guests on this podcast. On the data side, we had the former CRO of ZoomInfo on, Tim. He’s also in San Francisco. I don’t know if you’ve met him before. He’s awesome. But for that sales side, what’s the next evolution your go-to-market and sales team needs to make or is it making?

Armon Petrossian: So, we have a bit of an inverse situation compared to typical startups. So historically, startups, particularly in the data space, would raise money from VCs and they would go and sell to other startups, and they would then start to move up market into the enterprise segment, Fortune 1000, Fortune 2000. That was the most common strategy. And there’s tons of reasons why. I think selling to startups historically was way easier. There’s less red tape. There’s less bureaucracy. You also don’t need as mature of a product. Whereas for us, both my co-founders, Satish and myself, we only knew the enterprise space. In our past life, we were only able to work with as high up market as it possibly goes. And so, we saw and had a vantage point of the problems that plagued analytics operations at scale and knew, just based on our relationships and based on our history, that we were going to have to deliver a highly mature product when we came out of stealth ourselves. And so, coming out of stealth just over two years ago from today, within the matter of a few months, we were in production in three Fortune 500 customers for their most sophisticated use cases on Snowflake, which was completely different than how every other data analytics startup had worked in the past five or six years. And so that was an awesome thing as the markets shifted. So obviously as tech stocks tanked and venture capital became harder and harder to come across, startups selling to startups is a bit of an antiquated model now. So we were fortunate from a timing standpoint that we were always focused on the enterprise up market. What’s funny about that now and the reason why I say we have an inverse is we’re now moving down market. So, we’re moving from the enterprise and the Fortune 1000, Fortune 2000 companies and moving down market into mid-market segments, growth segments, startups, digital natives. Those were never companies that we had focused on. We’ll still continue to focus on enterprise, but there is so much opportunity as we move down market into the growth segments that’s been really exciting. And so, to answer your question, aligning our sales org around that focus is going to be a big part of this upcoming year.

Alex Bridgeman: Is that the chasm that Sluvin was talking about where you get used to selling to startups and then suddenly you go talk to a Fortune 100 and it’s slower, it’s much harder, totally different experience and it’s hard to bridge that gap all the way?

Armon Petrossian: Totally is; it’s a completely different ball game. I was at a dinner last night with one of our investors that hosted a CEO meetup, and we were just talking about what it’s like selling to an enterprise. And for somebody who’s founding a company or is a startup or if you’re just selling to other startups in the growth segment, you would be shocked at how slow and how painful things can be, even after a company’s made a decision to buy your product. I mean, just the procurement process can take months. And that’s assuming there isn’t anybody leaving within the department, or there’s no reorg that shuffles things around, but just the procurement process can take a full quarter, let alone all the InfoSec questionnaires that you’ve got to fill out, all the legal reviews and MSA docs that you need to go through. It can be a long, drawn out process and really slow things down. So, it makes sense why companies historically didn’t want to go through that, along with just the requirement of having a much more mature product to sell into a business like that. But for us, I’m hopeful that given we’re moving down market, that it’s going to be less relevant, since we’ll probably be pleasantly surprised at the velocity that things can move these days.

Alex Bridgeman: What’s a typical sales cycle for a larger enterprise deal?

Armon Petrossian: Yeah, so our sales cycles are pretty typical regardless of who we’re working with. And I think one of the reasons we’ve been able to have the success that we’ve had over the course of the past couple of years is because we’ve got a pretty simple approach to how we sell and position our product. And what we’ll do is we’ll basically go into an account, and we’ll do a demo of the product over the course of an hour. And following that demo, we’ll set up a call and we’ll tell the prospect that the way we do POCs is we’d love to take a project that they have that’s coming up that they would forecast would take them two or three weeks, and we’re going to build that project for them in the span of three or four two-hour sessions. So ultimately, six to eight hours of the user using Coalesce compared to two or three weeks with whatever their next best alternative is. And generally speaking, by the end of that proof of concept, the person’s sold, and they’re like, okay, great. So, in six to eight hours, I just did what normally takes us two or three weeks. Not to mention, there’s a bunch of other benefits around the lineage that we provide, the documentation that we auto-generate. And so we just extrapolate the value associated with that proof of concept and the time savings cost savings, and back into the price point that we come and sell our product with. And so that’s been a huge advantage as well, as a lot of finance departments are starting to slash software spend or they’re making a mandate that no new software can be purchased. And we’ve gone through that numerous times, especially in these larger companies where, because we’ve been able to demonstrate such a great ROI, the person on the other end within the company is like, hey, if we don’t buy this product, we’re going to be paying for it because all of our timelines are going to be slipping, all of our projects are going to take longer. This is a no-brainer. And so that’s generally how we position, that’s generally the process and journey that our customers go through.

Alex Bridgeman: I like that approach of solving a problem first as part of the sales process to demonstrate the value. That makes a lot of sense. What else have you learned about selling to enterprises that others often struggle with?

Armon Petrossian: Most of my career has been in go to market. It’s what I’m most passionate about. I love sales, marketing, business development, everything. And when it comes to selling to an enterprise, I think some of the things that I have to learn the hard way, especially early in my career, is how much politics play a role in a sale as well. And you like to think that people operate logically, but there’s actually so much emotion that goes behind a decision to purchase a technology. And as a salesperson, as a go-to-market person, as a sales engineer, as you’re interacting with a company, so much of what you’re doing is monitoring and observing the political dynamics or the interpersonal dynamics within the company and trying to understand how to position what you’re doing, what you’re offering in a way that’s going to be received best. And I feel like there’s all types of quirks and behavioral things that come up through that process. And as long as you know what you’re delivering is going to bring value to the customer, and as long as you know that you’re going to make their lives easier, regardless of certain resistance, whether that’s people just being resistant to new technology or being threatened about their jobs or their livelihoods, it’s so critical that you’re able to manage these types of fears or doubts or concerns in a way that allows you to continue to move forward and give them something that’s really going to change their life for the better.

Alex Bridgeman: What are a couple scenarios where you’d have to navigate through a couple different political arrangements or relationship dynamics? Any good examples or a couple of different maybe templates that you see often?

Armon Petrossian: Yeah, yeah, so a funny one is, it’s not uncommon for technical people to resist technologies, new technologies in the first place. You start to build familiarity with technology. And when you do that, you have some type of connection, whether it’s like some type of spiritual connection to a product. And so if you really believe in something, you have a lot of conviction in something as the status quo, and then a new product or some new team comes into your office and presents something that completely flips that paradigm on its head, you’re naturally going to feel a lot of resistance because people don’t want to feel like they were wrong about how they’ve been doing things for a while. And so how you actually address that is pretty critical because you don’t want to come off too strong, you don’t want to come off too soft, but it is critical that you allow them to think differently and you challenge them to think in a new way. And at times, that can be difficult. So, it’s more around monitoring and observing how you actually are able to challenge the way that somebody’s thinking, challenge the way that somebody’s been doing things in a way that’s going to be received positively.

Alex Bridgeman: What do you like to look for in new sales hires who are capable of navigating, among other dynamics in sales, but that one especially?

Armon Petrossian: Sales is an art, in my opinion, and everybody’s got different styles. To me, I look for similar core themes, regardless of what the role is. But when it comes to sales particularly, I’m super passionate about continuous learning. And I want somebody who is going to continue to progress themselves, not just in their career, isn’t just passionate about the actual art of selling, but also just general continuous learning in life as a person and learning new skills, having new hobbies. And so, I usually like to dive into that to a large degree. There’s also a bit around the technical aspects, being able to comprehend and position technical aspects and not being afraid to challenge somebody that’s on the other end within a company, not being afraid to challenge somebody or a prospect to think differently. And so, there’s a level of assertiveness that you have to have along with general persistence and being able to feel comfortable in uncomfortable conversations and uncomfortable situations. And so, I think there’s a few ways that I try to bring that out through an interview process to understand what their level of assertiveness is, how persistent are they going to be, while also being down to earth. I want somebody that I can hang out with and feel comfortable with and that I can either grab a coffee or grab a beer with and still feel connected to them quickly and build rapport with quickly. And so, a combination of things at the end of the day, but the most critical ones being, are you going to- are you ambitious? Are you going to put in the work? Are you going to put in the hundred cold calls or 200 cold calls as you start to build out your pipeline? And then are you going to be able to, once you’re in the situation, are you going to be able to challenge how people think and challenge the status quo and provide them a new way of doing things that’s going to be a lot more efficient?

Alex Bridgeman: What else about building Coalesce have you become really passionate about?

Armon Petrossian: I’m passionate about everything that we do here day to day. I can’t believe I get paid to do this job still. I fell in love with, similar to how I fell in love with the data analytics industry, I fell in love with even the engineering process and the product process. It’s been so illuminating for me to have exposure at such a high level to so many different aspects of a company going through this. And so, I spend a bunch of time with our engineers understanding what certain roadblocks are there, what objectives are we trying to achieve, what parts of the product do we want to focus on moving forward in the roadmap. And not to mention, so much time with our customers, trying to understand is our roadmap aligned with what the customers want? And I think it’s really easy, it’s so, so easy to say that you’re obsessed with your customers, that you put the customers first. But the reality is most companies say that, but they’re actually just obsessed with the competitors. And they’re monitoring what the competitors are doing and what features the competitors are shipping and what’s rolling out from all the competitors within their landscape. I say this all the time, I could care less about who’s in our competitive landscape. I would rather focus on what our customers are saying they want versus what our competitors are releasing. And fortunately, we’ve been able to prevent a lot of the distractions and noise throughout our competitive landscape and prioritize the right functionality compared to doing what the competitors are doing and following suit. And so, I would say besides the go-to-market front, I’ve become very passionate about the product and engineering side of things as well.

Alex Bridgeman: How do you refine that roadmap and choose what you’re going to focus on? Because I know for the stuff I’m doing day to day, there’s tons of little things that you can improve on or small feature additions or a different data set that two prospects asked in the last six months. They’re like, oh, that seems easy enough. Why can’t we do that? But obviously you still need to focus on something. So how do you get there?

Armon Petrossian: Yeah, I’m lucky. I’ve got a co-founder that’s way smarter than me and has built tons of massive scale data warehouses, like literally some of the world’s largest, most complex data warehouses. And so, because we’ve worked together for a long time, it’s been about a decade partnering together, both at our past company and here, I lean on him a ton to know, hey, here’s the things that our customers are saying they need at face value right now in the near term. What are the other things that we can be doing that they’re not thinking about? Or what are the other things that are going to come up as we mature down this journey that are going to be critical for us to be able to add more value to our customers day to day. And so, it’s a nice blend between the two. And generally speaking, there hasn’t been anything that our customers or partners have told us that we need to deliver from a product standpoint that we didn’t already know. It’s just a matter of knowing when to do it and a matter of when to prioritize it. And so that’s always the- that’s a constantly changing, constantly dynamic situation and assessment. And based on all that information, based on all those conversations, based on the data behind it and our customers, that’s how we determine what should be prioritized higher or lower within the roadmap.

Alex Bridgeman: How do you handle disagreements with your co-founder?

Armon Petrossian: Yeah, it’s a good question. So again, we’ve been very fortunate to have had a pre-existing relationship prior to starting our company. And I’ll often say, one of the reasons he’s been such a great partner and such a great co-founder for this company was because it’s rare for us to actually have a full-on disagreement about something. Generally, we’re aligned on what to do, but I’m going to be a bit more aggressive and he’s going to be a bit more conservative. And usually, where it ends is somewhere in the middle. And so, there’ll be some level of compromise where we’re aligned behind, hey, we need to do this. And I may want to do it sooner. He may want to do it later. And we settle somewhere between in the middle. And that’s been pretty much the story since day one. I’m not always the most aggressive one. Like, there are certain things that he may be more aggressive on, and I’m less aggressive on, or I’m more conservative on. But generally speaking, we go through a discussion, we talk through it, and find some middle ground as to how we approach things.

Alex Bridgeman: What issues are you less aggressive on?

Armon Petrossian: Yeah, it’s a good question. I would say it’s more contextual. It really just depends. Like there isn’t a general theme of what I’m more or less aggressive on regardless of how the business is operating. It really just depends on the situation or the context behind it. And so, I would say generally speaking, I’m more aggressive on go-to-market, more aggressive on marketing, more aggressive on field events. At the same time, I want to be as aggressive as possible when it comes to delivering functionality and in our roadmap, but at the same time, I don’t want to put so much strain on the company that it causes people to burn out. And so, I think if there’s an area that I’m a bit less or an area that I’m more conservative on, it’s generally with having more leeway, being more lenient when it comes to product.

Alex Bridgeman: I’ve been reading a little bit of the Will Larson systems and product book. One thing that was kind of interesting to hear him talk about was that hiring more engineers isn’t generally the answer to go faster. Because your veteran engineers need to train the new ones and it takes time to ramp up, and then you can go on. But then if you’re always hiring, you’re always training somebody, and it’s often hard to make the engine to go faster. So, if you want to go faster on something, where does that come from?

Armon Petrossian: There’s a complete dis-economies of scale with hiring more engineers and thinking your roadmap is going to move faster. There’s a massive rate of diminishing returns. And in certain scenarios, you’ve seen companies who have had less engineers be able to do more versus hiring a ton of engineers and expecting it to work out more quickly. And so, I’m a believer of that personally. I think you grow that part of the business in a very measured approach, and there’s certain times where it makes sense to add more headcount into that part of the org, and there’s certain times where it makes sense to just keep things as is and keep things in that flow state.

Alex Bridgeman: What works for retaining engineers? I imagine if you have a small engineering team and you want to be very measured about growth, tenure is probably extremely helpful. So like what-?

Armon Petrossian: Yeah, it’s true. Pretty much our entire company has been retained. Like we’ve been running this business for almost four years and there’s been almost nobody who’s ever left the business. And so when it comes to retention, one of the things that has come up in numerous interviews with some of our best engineers that I’ve been most excited about is that there was this sentiment at their previous company where they were doing things in engineering that wasn’t actually getting delivered to the customer or working on projects that may or may not ever actually get released. Or things were just easy. They were easy for them. There weren’t challenging problems that they were dealing with. The company had kind of matured. And so, it wasn’t as exciting for them. And so, in the interview process, they would say things like, I just can’t wait to be at a company where I can solve hard problems again. And my response has typically been, great, because there’s so many for us to solve. Like this is a never ending journey here. The data analytics space has so many problems that we can solve. Transformation is just one lucrative category. There’re tons of peripheral categories we can focus on. If you join us, if that’s your attitude, we will keep you very busy. I promise. And so, it’s on our end, I would say the right types of engineers first and foremost is what you want to hire, people who are excited and passionate about solving difficult things and difficult problems. And one of the things our VP of engineering said at a very early stage to some of our junior engineers is you don’t know how lucky you are that every single thing we build here at Coalesce gets used by the customer. Like nothing that we’ve ever built within our company has been because of an ideation phase or trying to find product market fit. We knew exactly what we wanted to build. We knew what we would build would get used by the customers. And so that invigorates engineers, in my opinion. Knowing that what you’re building is actually being delivered to an end user that’s going to be excited and bring them joy is something that helps retain engineers in general. It also helps attract engineers in the first place, along with the company culture. I think generally speaking, at a high level, the company culture is critical for retaining all employees, not just engineers. And so, between solving hard problems and being in an industry that’s exciting, that you know you’re delivering value to people on the end user standpoint, along with your company culture, all those things combined is what help you retain your staff.

Alex Bridgeman: What other data companies or software companies do you admire?

Armon Petrossian: Our two closest technology partners are Snowflake and Fivetran. I admire both of them greatly. I think they’ve done an amazing job at encapsulating the core philosophies to what is most successful in the analytics industry, and that ties back to earlier in this conversation around automation and ease of use. And so, you’ve seen both those companies grow and be so successful. I’m close with a lot of people at both those companies. And so I admire them a lot. I admire the founders. I admire the way that they’ve executed. And those two come to mind immediately for me.

Alex Bridgeman: What advice do you offer to other data founders?

Armon Petrossian: If we’re thinking strictly data founders, I would say that the world’s changed a lot in the recent years here. In the past 18 months, things have shifted. Going into the data space, it has been pumped with capital that has become highly competitive in categories, in my opinion, that I don’t think should have been nearly as competitive or had nearly as many players in them. So, you should be very mindful, you should be very thoughtful about what problem you’re solving and making sure it’s a real problem before you embark on this journey. And knowing that there are tons of opportunity in the analytics space, I would not settle to solve a small problem. I would be focused on solving as complex and big of a problem that you can possibly focus on, and don’t fall victim to that same historical approach of trying to be a startup that sells to other early startups. Focus on selling to a mature company, that’s big, that’s difficult to get into, and build something that if your product doesn’t work, that they’re screaming at you and they’re in your face, because that’s how you know you found product market fit, not selling some add-on solution that’s a nice to have.

Alex Bridgeman: Yeah, back to your enterprise experience and deciding to focus there for early customers versus startups.

Armon Petrossian: Exactly.

Alex Bridgeman: Armon, thank you for coming on the podcast. It’s been really good to chat with you and hear all about Coalesce and learn about data businesses too. I always enjoy studying them. So, thank you for indulging me for a little bit.

Armon Petrossian: Yeah. Thanks, Alex. Go Ducks.

Alex Bridgeman: Go Ducks indeed.