Keith Rabois argues that companies should own their entire product stack rather than outsource critical functions like sales. When you outsource, you hand your future to people with different incentives. ThoughtSpot rebuilt its database from scratch to deliver a better analytics experience, the kind of integrated thinking that separates iconic companies from the rest.
Chapters
I tend to like and prefer both leading and investing in vertically integrated companies. For a long time, people were opposed to vertically integrated companies. Think Apple was critiqued all the time for not being open and not being modular. But fundamentally, if you have an asymmetric ability, you want to ensure that that asymmetric ability in life has the maximum possibility of success. And that's typically by not outsourcing your destiny to somebody else or some other organization who has different prioritization, different incentives. And so you have to take on this whole stack sort of yourself. The benefit of doing that is also you can customize the entire experience because there are tradeoffs usually in the stack and the company that is doing the vertical integration can maximize the product experience or the value proposition to the end user because they're making tradeoffs between let's say battery life and some screen design and some UI decision. And so I invested in basically a modern analytics company, enterprise analytics company called ThoughtSpot very early. And they're basically had a rebuild a database underneath the analytics engine because the only way to deliver the value proposition in a compelling way was to actually be able to affect the database. And that may have seemed crazy for a very small company to reinvent a database to build a front-end user interface on top of. But that's the way you build heroic and iconic companies. Paul Graham had a tweet recently over the last six months that really reflected this, which is when you depend upon other people to sell your product, you're basically, again, deferring and delegating your future to somebody else, which is a really bad idea. If you have an asymmetric ability to compete, then you should actually maybe even be competing with the people you might sell through. And if you don't compete successfully, maybe you're not creating enough value.
