Leadership Lessons from a $30B Startup IPO

In this interview, Mike Scarpelli explains how Mike Scarpelli connects hard work, a failed company, bold negotiation, trusted partnerships, and clear accountability to leading finance at Snowflake. Readers will learn how the discussion connects that problem to concrete decisions about customers, product, teams, and growth. The conversation offers practical guidance for founders and operators on testing assumptions, responding to evidence, and choosing the next step when the path remains uncertain.

Hi, my name is Mike Scarpelli. I'm the chief financial officer of Snowflake, Inc.. Snowflake is a software company and cloud data platform that went public in September of 2020. Today we have over 7000 employees. We just finished our fiscal 24 at the end of January, and we had just under $2.7 billion in revenue.

I grew up in a very middle class blue collar. My father was an immigrant from Italy. I had to pay my own way through college and my second year of college, I used to get up at 2:45 in the morning. I would go to the Ontario Food Terminal and I would buy produce for a produce company, get it loaded on the truck, and I'd have that done by 839 in the morning.

And then I would go to school all day long, come home at night, take care of paying all the vendors, and then I would get up and do it the next day. That type of work ethic, just putting your head down and that that taught me a lot. And then when I was graduating from college at that time, I decided to go work for Coopers and Lybrand.

I went to Italy to work Milan for Coopers and Lybrand. Literally my first week there, I got pulled aside and asked to go work on a special project there, and it was for Gucci. If you've seen the movie the House of Gucci, I lived through that. I know all about one Investcorp was buying out Gucci and I investcorp seconded me out.

And then I started working on restructuring Gucci to cut costs and reorganize the whole group. You know, I'm a big believer and you just put your head down and do your work and let your work speak for itself. I think I put the time in, I had to work long hours. I hear young people today when they ask me about, well, what's work life balance like for you?

And these are people who want to become a CFO. I always tell them, if you're concerned about work-life balance, you probably don't want to do this job. Because when I was in my 20s, I literally worked every weekend. I'm a big believer in put your head down, do your work, and you do whatever it takes to get it done. And that's paid off for me.

I was 35 at the time, and I didn't see myself being a partner at PwC for the rest of my life. And so I left to go join HPL in a corporate development role. It looked like it was a successful company, especially in a small company. It's you or maybe one other person.

When I joined, it was just me and I was having fun. I was negotiating deals to buy companies. I guess it was about 3 or 4 months into it when they were doing the audit. PwC, the audit partner, called me and he said, I'm not getting the answers on some of these things and I don't understand these things. Could you dig into this for me? I said, sure.

I started looking at all these things. It turned out the CEO was committing fraud. So it was interesting. The FBI got involved. They had to deal with an SEC, the SEC and a Nasdaq delisting. I had to terminate over 50% of the employees and figure out what was going on.

And so took about three and a half years to settle all the litigation from securities class action, derivative actions, dino carriers rescinding policies. Those were actually some really tough years for me. Because I thought I had completely messed up my career by leaving PwC to go into this business, I felt obligated to prove that I had nothing to do with this because I didn't want to be guilty by association.

It was also the time when I had my first child, who was literally born two weeks before all of this stuff happened. It was actually probably the best learning experience that I've ever had. It was probably the toughest, especially since I didn't make any money. But I would say what I learned a lot about negotiation because at the end of the day, settle everything. It was a negotiation.

I'm a big believer that when you're in a vendor relationship and negotiation, you want to make sure that you're not there to screw the other person or necessarily get the lowest price. You both want to feel good about the transaction you're entering into, and it's just one transaction for many that you're going to have over many years with that vendor.

So I'm really big about it has to be a win-win for both and any type of negotiation when you're in a normal business relationship, when it comes to a settlement on something, it's going to be a one time transaction. You want to do the you want to get the best you can, and you always need to be willing to walk away from a deal.

I'll give you a great example. Snowflake was going public; Berkshire Hathaway was going to invest in Snowflake as part of the IPO, and they were going to be the lead investor in that. They ended up putting 500 million into the company, 250 to the company. And I convinced one of the other shareholders to sell another 250,000.

But in exchange for that, we wanted Berkshire Hathaway to put their name on the front of the cover for the S-1. Berkshire Hathaway came back to us and said, we want to do the deal, but there's no requirement to have our name on the front of the S-1. And as a result, we're not going to put our name on the cover.

I literally told them, I say it may not be a requirement for the SEC to have your name there, but it's a requirement for us. Take it or leave it. The person said, well, Warren won't have his name on the cover. I said, well, you can go talk to Warren, but it's a requirement of us.

I hung up the phone with him, and I remember I called Frank Slootman and I said, Frank, I think I just cost us the Berkshire Hathaway investment. But the guy called me back two hours later and said Warren agreed to it. And that was the only time that Berkshire Hathaway ever put their name on the cover.

What I'm saying is, I was prepared to lose that, having their investment. I didn't need their money. I knew we'd have. We had all kinds of access to capital. But what was important to me was having the endorsement of Berkshire Hathaway on the front of the S-1. And so I wasn't willing to give up that. You have to be bold.

HPL technologies. I was cleaning up messes for three and a half years of people, and I was trying to figure out what was the next thing that I was going to do. I just decided I am sick and tired of cleaning up other people's messes. I don't mind cleaning up my own mess. If I make a mistake, I'm going to go to a startup. I want to build something.

I interviewed with a number of startups and I met Frank Slootman. I had dinner with him a number of times, and I really liked what he was doing, and I believed in the market opportunity at Data Domain, and I joined the company. There were 130 employees who got to build that. Ultimately, we decided to sell the company to EMC.

When that transaction closed, Frank left. I started looking at other companies to take another company public, and then Frank came across ServiceNow. He approached me to come and work with him again and get ServiceNow ready to go public and take it public. And then I joined them and did that for eight years. Frank left after six years, and Frank approached me again for Snowflake.

At first I really was not that interested. But then I thought it was an opportunity to work with Frank again. I really knew nothing about Snowflake. I spent two weeks doing due diligence on Snowflake, and then I decided to join Frank at Snowflake as well. And now he just retired a week and a half ago. I don't think Frank's going to do it again, though. Three times is enough.

The one thing I learned from Frank is: don't come to him to solve your problems. He never told me what to do, but I could bounce things off him. But it was so important that I had an opinion on things. And I instilled this in people too, that I like people to come and tell me this is the problem.

This is what we need to do. This is what I'm going to do, and it will be me to either say I agree with you or have you thought about it this way? I think that's really important is because once you see people that have an opinion and it's a thoughtful opinion, you can build that trust.

And so Frank and I had great trust in one another. He trusted my judgment, and I trusted his judgment. He never, ever really got into the finances and the company at all or questioned any of the accounting the way we were doing things. I don't micromanage people, and I never want to be micromanaged. I always tell people, if you ever see me micromanaging you, it probably means I'm going to fire you. Because if I have to do your job, why do I have you here?

And it depends upon the stage of the company. And the bigger you get, the more you're a coach rather than a doer. So, like, when I joined Data Domain, there were 130 employees. Put it into football terms. I was playing both sides of the field because I was doing quite a bit more in ServiceNow. It was more of the quarterback.

I think there were 350 people, and when I joined Snowflake, there were 1500 people. When I joined 1400 people. At Snowflake's IPO, I viewed myself more as the coach, where I didn't have to spend as much time, but I was there to answer questions and help people through the process. That's just an evolution in your career.

The more senior you get, the more you kind of want to bring the people up from beneath you. I'm a very impatient individual. I struggled when I saw someone doing something wrong. I just wanted to jump in and do it. And I remember when people would send me stuff, and it was wrong. I would just do it myself. I used to build spreadsheets and stuff when people couldn't do them or weren't doing them.

Now I try to point out to them more how it needs to change, and I try to give more feedback so they can learn how to do it. It's that old analogy: you've got to teach people to fish rather than fish for them. I think that's just a maturity on my part over the years. And not to mention, I don't want to work seven days a week anymore.

The best feedback to people tends to be financially motivated, and this is in the form of a quarterly bonus. This is one thing that Frank really taught me as well. So every quarter we sit down with people and give bonuses, and bonuses are based on performance.

And if you're paying people 80% of the target, you need to give them a clear message as to why they're only getting 80%, or if you're paying them 120% as a bonus. You have to give them a clear reason why you're doing that and differentiating people. These companies that do annual bonuses to people don't force a regular conversation with people- a hard conversation. So I love doing quarterly bonuses for people. That's the best feedback you could do.

The biggest mistakes I see most startups making tend to be around title inflation within the company. It's really important that you bring people in at the right level. And I always tell people two things: don't hire for the job today; hire for where the job is going in the future, because if you don't do that, you're going to end up having to replace those people.

So I couldn't care less when I'm hiring someone. If you came, you were a senior director at your other company. I would never put them as a VP at our company. And generally, I bumped them down a level and said to them, "If you're going to be successful, come in. Don't worry about pay. I can take care of the pay piece, but title is important with the people around you. Prove that you're a VP or senior director. Do your job, and then I'll promote you after six months or a year if you do that job."

Those people tend to be more successful because your peers around you see that you're operating at that level, versus when you bring someone in, you give them a title, and you have others in the company who don't have that title and think they should have it. It creates conflict sometimes in companies. And that's one of the biggest mistakes I see in companies; I call it title inflation.

If you're a founder, it's important that you're present. I personally think it's important if you're going to have a small group of people and you're doing a startup. I think that in-person, real-time collaboration is so critical.

When you graduate from school, you may have gone to the best university in the world or college, but you know nothing about the job you're going to do. You need to be able to learn from people, and the best way to learn is real-time collaboration, where you can ask questions as you're struggling with something, and you can't do that over Zoom the same way,

Since COVID has really changed things and people have gone to remote work, I'm not a fan of remote work. I think in the early stages of COVID it worked because everything was shut down and people had nothing to do but work or sit at home, and most people worked as soon as things started reopening and even though people were still hadn't returned to the office, we can see it actually in Snowflake that people don't work as hard on Fridays and Mondays anymore than what they used to.

I also think it's super important that you make yourself accessible to people. People want to go work for companies where they think they are going to learn, they're going to grow, and there's going to be opportunity for them. So I think it's really important that, as a founder or any leader in a company, you are accessible and you show people you care about their career and their development. So being that mental coach is really important.