Tristan Handy on Building dbt Labs, Delegating Decisions and Choosing Scale

Harry Stebbings welcomes Tristan Handy, founder and CEO of dbt Labs. Handy describes moving from consulting and an MBA into startups through a friendship with Squarespace founder Anthony Casalena. At Squarespace he enjoyed a more direct working style, but had to find a way to make his existing skills useful in a product company.

He concentrated on data and learned performance marketing, spending his first several years in startups in marketing roles. He regards his introduction to Squarespace as an important piece of luck: growing up in a small town outside Baltimore, he had not seen an obvious route into the technology startup ecosystem.

Asked how he identifies talent without an established résumé, Handy describes noticing people who communicate clearly and cut through confusion. His first employee, Aaron, impressed him in a meeting at a previous company despite being relatively junior. She later led customer success at dbt Labs; his account reflects a particular relationship and outcome, not a general hiring test.

Handy argues that many jobs, including his own, do not require someone who has previously done the identical role at scale. He values clear thinking, hard work, communication and shared values. Stebbings challenges him that experience also carries useful knowledge, especially when a person has spent years learning a function.

Handy’s response is that time can be a strategic asset. Rather than maximizing growth at every moment, a company can take time to develop a product, shared understanding and trust. dbt Labs spent its first three and a half years bootstrapped, funding work through a revenue-generating services business while building the software.

The company took time before monetizing dbt Core, its open-source data transformation tool. Consulting revenue supported continued product development, which he says was difficult but allowed the team to refine the user experience and community. His claims about adoption and dbt’s position in the data stack are those of the founder and reflect his commercial interest.

Handy distinguishes moving quickly in product development from rushing to monetize. Early software releases were imperfect, he says, because fast iteration helped the team learn. He believes that once recurring software revenue reaches a visible milestone, investors often expect rapid growth, so founders should consider when they want to enter that fundraising cadence.

During the bootstrap period he asked investors what evidence would make the business ready for a Series A. The answers initially varied. He says the decision to raise became clearer when prospective investors understood the company as a potential category creator with open-source adoption, rather than assessing it only through early revenue.

Why monetize when they did? Handy says there was no perfectly mapped strategic path. In 2019, large-company data teams asked for a commercial relationship because their organizations could not adopt open-source software without one. The founders had hoped to remain internally funded, but concluded those customers’ needs required substantial investment.

Moving from community adoption to enterprise deployment was still in progress at the time of the interview. Handy lists single sign-on, role-based access controls, audit logs and security requirements among the work. His approach was to solve some needs manually first, then gradually make the delivery repeatable and scalable.

At the time Handy said dbt Labs had roughly 350 employees and unusually high retention, estimating that only around a dozen people had left. Stebbings asks whether that reflects excellent hiring or insufficient performance management. These are Handy’s historical estimates and the host’s challenge, not independently verified employee statistics.

Handy questions rigid labels such as A, B and C players. He believes team performance depends heavily on communication, shared values and the ability to work together, although individual contribution still matters. Some departures, he says, were related more to team dynamics than isolated performance.

The company had used formal quarterly reviews from its earliest days. Handy describes an hour-long conversation involving the employee, manager and often a third person. He aims to create space for an uncomfortable but constructive topic rather than allowing frustrations to accumulate; feedback can go from employee to manager as well as the reverse.

Handy calls dbt Labs a distributed, asynchronous company: people work across locations and time zones, often without being online together. He distinguishes that from requiring everyone to work alone at home. He says remote work can be isolating, while a distributed organization can offer local places to work and connect.

At the time the company had a Philadelphia headquarters and was opening a San Francisco office, where a notable share of staff lived. It planned offices around local employee communities rather than assigning entire functions to one location. These are the company’s historical arrangements and plans, not a statement of current policy.

Handy describes an approximately $250 monthly out-of-home workspace stipend and a separate home-office budget. The company was considering satellite offices in employee concentrations, with the stipend potentially changing for staff within commuting distance. He acknowledges the precise boundaries had not been finalized; the amount was his recollection from the interview.

He prefers a workspace designed for the company’s community and values, although he acknowledges coworking served a useful purpose for dbt Labs earlier. His criticism of remote work is about isolation and context, not a claim that every worker needs the same office arrangement.

For Handy, a CEO must balance the long-term interests of multiple stakeholders. Before raising institutional money, the founders could imagine a smaller, internally funded business and a modest exit. Taking venture capital changed the scale of outcome investors would seek and introduced a different risk profile.

Stebbings frames the choice as exchanging freedom for scale. Handy agrees freedom was a cost, but says his goal was expanding the community and serving larger customers rather than merely making more money. He believed enterprise requirements could not be met on the original trajectory within the time available in a fast-moving market.

Asked about founder dilution, Handy recalls that a $222 million round at a reported $4.2 billion valuation produced relatively modest dilution. He stresses that the company raised during a favorable valuation environment and says he does not know how he would have balanced the decision in a different market. Those are historical financing figures, not a current valuation.

Stebbings asks whether the company worries about living up to that valuation. Handy says many companies faced similar pressure after a growth-focused financing period. He reports that dbt Labs was growing quickly and had adjusted efficiency over the preceding months, while acknowledging a change in direction was needed.

He recalls that efficiency metrics rarely came up during fundraising despite their importance. Internally the team focused on cost to book, which he describes as an acquisition-efficiency measure calculated on a margin basis. His sneaker example illustrates why using revenue alone can overstate efficiency when the cost of the goods is substantial.

Handy attributes some of dbt Labs’ historical efficiency to organic community adoption of its open-source product. This is the founder’s characterization, and the interview does not provide a full audited set of unit economics. His company has a commercial interest in both the open-source community and the paid offering.

On high-performing leadership, he emphasizes clear communication and bringing teams along through good news and difficult changes. Transparency is a company value, but he says it requires practice. In one cost-to-book exercise, sales and finance collaborated and a sales leader shared a written proposal for the team to comment on.

The main limit the company draws around transparency is individual privacy. Handy says dbt Labs shares salary bands on job postings but not individual salaries, and does not publicly detail why an employee left. He presents this as a balance between informing colleagues and respecting personal information.

One painful lesson concerned fundraising transparency. Earlier rounds were announced to employees only after completion. During the Series B, employees said they would have liked earlier information to consider exercising options before a potential change in the 409A valuation; those decisions can have tax implications and vary by individual circumstances.

For later rounds, Handy says the company told staff that fundraising interest existed before terms were settled and committed not to sign a term sheet for 30 days. He acknowledges this was operationally difficult in a fast market. The description is of the policy at that time, not tax advice or a guarantee that a financing would close.

The company had also started a secondary-sale program, with the goal of offering opportunities approximately annually if markets allowed. Handy says eligibility and allocation followed consistent rules and that employees with sufficient tenure could participate. Secondary transactions depend on available buyers and terms; the program described was not a promise of future liquidity.

He believes people who help build a company should not necessarily have all their wealth tied up in illiquid shares until an eventual exit. Personally, he says he had exceeded his earlier financial aspirations. Partial liquidity reduced family stress and helped pay for home changes and childcare, especially during the pandemic.

In the quick-fire round, he says working for a time in Italy let him experience a different place and culture despite the demands of a startup and family life. Meeting executive Frank Slootman in a group of Sequoia CEOs reminded him that prominent business figures are still people navigating difficult journeys.

Handy calls public speaking one of the hardest parts of his role, despite improving with practice. Asked which other company he would lead, he chooses a ten-person self-funded software business for its freedom. He also wishes he had trusted himself more when early signs at dbt Labs began to work.

He says he tries to make as few decisions as possible as CEO, an intention he records in a document explaining how to work with him. The aim is to create room for others to decide, not to suggest leadership has no responsibility. He cannot immediately list his five most recent decisions.

Asynchronous work requires consistent cultural and technical guardrails, including substantial writing. If meetings fill everyone’s calendar, people lose the time needed to read, think and respond. He says it can be socially difficult to ask someone to replace a meeting with a document; Stebbings offers an example of politely proposing email first.

Looking ahead to 2027, Handy predicts more people will create and analyze data and that data quality and consistency will improve. He says practitioners still faced considerable messiness in 2022. The forecast reflects the founder’s view and commercial interest, not an established outcome. The two close by thanking each other.