Salesforce vs. Snowflake

Hi everyone 👋

Systems of record like Salesforce ($250B) and HubSpot ($32B) built giant moats by becoming the single source of truth for their customers’ data. 

But today, the center of gravity in the organization is shifting. Instead of building around their CRM, product-led growth (“PLG”) companies like Figma are using reverse ETL tools like Census and Hightouch to pull engagement and customer data from their data warehouses ($AMZN, $SNOW) into all the apps they use.

By making critical product metrics portable into a company's day-to-day tools, this modern data stack poses a potentially existential risk to Salesforce’s moat—and those of other B2B SaaS systems of record. 

We talked to Census co-founder Sean Lynch to learn more about reverse ETL’s place in the modern data stack—here are three of our key takeaways:

[The original data warehouse is] the Indiana Jones dusty old warehouse where artifacts go to die. Today, the warehouse has evolved into the Tesla manufacturing plant version, where it's shiny and new, things are moving through it at incredible speed…  [reverse ETL] comes along in the last step to provide that return path back to all those apps, to help companies actually do things with those data. (link)

From my perspective, Salesforce has the most to lose from this shift for the reasons that you mentioned. This idea of having a source of truth for customers is something that most companies want and have been trying to figure out, and if anybody has gotten close to it, it's Salesforce… [but] a modern data stack -- this sort of hub around the warehouse -- really has the most potential to affect them. (link)

I continue to be humbled by how much SaaS exists in the world and how much demand there is for SaaS for various workflows. It doesn't seem like we are at all moving towards a consolidation at this point. It seems like the path forward is for companies to have their various point solutions work better and better together. (link)

For more on the modern data stack and reverse ETL, check out our full interview with Sean here.

Product-led growth companies have been an important source of early product-market fit for reverse ETL products—Figma, for example, was Census's first customer.

That's because PLG only works when sales and customer success teams have all the metrics they need to understand who is engaging with their product, who is championing it internally, and who can be upsold.

Check out our interview with early Airtable employee and current VC David Peterson for more on the kinds of data that PLG companies like Figma, Airtable and Retool need—and how they structure their sales, marketing, and success operations to take advantage of it.