The Three-Pillar Competition Philosophy
Hold true to your vision, grow the pie, lean into strengths — and name the two things you defend
- Difficulty
- Moderate
- Time to result
- ~ongoing to results
- Steps
- 4
- Confidence
- 94%
dbt Labs codified how it responds to competitors into three written pillars, plus a hard boundary. Most competitor noise is treated as noise; the ecosystem is treated as a partner in expanding the total opportunity rather than a set of rivals slicing a fixed one; and the company explicitly names the small number of standards it will defend, leaving everything else open for partners to build. The output is a decision rule for what to ignore, what to co-build, and what to fight for.
Origin
Codified at dbt Labs in an exercise led by Nick Handel, the founder of Transform, after dbt Labs acquired his company. Julia Schottenstein credits him explicitly for leading the exercise.
Core principles
- 01Most competitor shade is noise; conviction in your own journey is the filter
- 02Grow the pie rather than slicing a fixed one too thinly
- 03Leave space in your platform for the ecosystem to serve your users
- 04Take a long-term view on competition
- 05Defend only the standards that are genuinely better served together for the user
How to run it
- 1
Pillar one — hold true to your vision
Treat competitor attacks, shade and stones as noise. If you have conviction in the journey, keep your eyes straight ahead and run your best race. The cost of engaging is distraction, and distraction is the actual damage a competitor can do to you.
Pro tip Write this down as a stated philosophy so that individual employees do not have to relitigate 'should we respond' every time a competitor posts.
Watch out This only works if the conviction is real. Without it, ignoring critics is denial rather than discipline.
- 2
Pillar two — grow the pie
Work with ecosystem partners to make the total opportunity set larger rather than fighting over the current one. Point the company at the expanding frontier: dbt's core was reporting and BI, but the pie kept growing as companies began operationalising data and using clean, transformed data assets to train ML models.
Pro tip Find the adjacent wave that expands demand for your category, and make that the target rather than your competitor's market share.
- 3
Pillar three — lean into your strengths, leave space for others
Know what you are actually good at and go hard there, while deliberately leaving space for the ecosystem to offer solutions to your users. A platform ambition requires partners to have room to make money.
Pro tip Fostering an ecosystem attracts partners who build workflows and share best practices, which compounds into a network effect you did not have to fund.
Watch out A platform that absorbs every adjacent use case starves its own ecosystem and loses the partner network effect.
- 4
Name the ground you will hold
Explicitly enumerate the small number of standards you will defend, and the reason must be user benefit rather than revenue. dbt names exactly two: the transformation standard and the semantic standard, because those two are better served together for the user's sake. Everything outside those two is open for partners.
Pro tip A short, publicly-defensible list of defended standards is what makes 'grow the pie' credible to partners rather than a slogan.
Watch out If the defended list grows, partners will stop believing you and start hedging.
In the wild
dbt Labs has platform ambition but does not try to own the whole modern data stack. It takes a long-term view of competition and explicitly holds ground on only two things — its transformation standard and its semantic standard — on the grounds that those two are better served together for the user. Everything else in the modern data stack is left to partners, whom dbt actively fosters. With 20,000 companies using dbt every week, partners are motivated to build for dbt, share best practices and build workflows around it.
→ Standardising on dbt unlocks an integrated modern data ecosystem that was not previously available to a company, which is itself a flywheel: the ecosystem's investment makes dbt more valuable, which attracts more users, which attracts more partners.
Common mistakes
Reacting to every competitor jab
The real cost of a competitor is distraction, not their marketing. Responding converts noise into an internal roadmap tax.
Slicing the pie too thinly
Fighting partners for share of a fixed opportunity destroys the ecosystem that would have expanded the opportunity for everyone.
Never naming what you will defend
Without an explicit, short list of held ground, every roadmap decision becomes a fresh argument about whether you are competing with a partner.
Is it for you?
Best for
Platform or open-core companies with a real partner ecosystem, where every roadmap decision risks competing with someone who is also a distribution channel
Not ideal for
Zero-sum markets with no ecosystem, or early companies still searching for product-market fit where 'hold true to the vision' becomes an excuse to ignore signal
From the transcript
“we recently codified our philosophy when it comes to competition and I'll give Nick handle the the founder of transform who kind of LED this…”
“the first is hold true to our vision we're really excited about the path and the journey that we're going on at DBT labs and…”
“the second philosophy we have is really a grow the pie philosophy so we want to work with our partners in our ecosystem to make…”
“we want to lean into our strengths so so we have an ambition to be a platform company and we know what we're good at…”
“there are a few areas that we do want to hold our ground and that's in our transformation standard as well as our semantic standard…”
From the episode
M&A, competition, pricing, and investing
Julia Schottenstein (dbt Labs)