Databricks, Snowflake, and the Virtues of Competition

I roll my eyes when some business guru says that you shouldn’t care too much about your competition. “Play your own game” sounds zen, but it is some of the worst advice floating around.

For years, I kept my skepticism to myself, looking at these “experts” and assuming they must know something I didn’t. After all, they’d achieved more and had been around longer. I might have had better hair, but they had the accolades.

But something about it never sat right. How can you not care who you’re up against? In professional sports, teams study their competitors intensely. Fighters pore over footage, dissecting every strength and flaw in their competitor’s game. Football teams build strategies around exploiting the other side’s gaps. So why would business be any different?

These “play your own game” mantras often come from people who had the luxury of growing without much competition and mistook that luck for wisdom. It’s a lesson that falls apart in today’s world, where the ecosystem is exponentially bigger and fiercer than it was just a few years ago. That’s the good reason.

The other reason? Some of these folks did obsess over their competitors but think it sounds cooler to say they didn’t. It’s ego masquerading as advice.

But the reason doesn’t matter. What matters is this: it’s bad advice. Today, studying your competition isn’t just important. It’s essential.

The Heart of Our Economic Policy
To understand why studying competition matters, let’s look at why competition itself is good for us and why the U.S. Supreme Court calls it the “heart of our national economic policy.”

In a free market, competition is the engine that drives lower costs, better quality, more choices, and, ultimately, innovation. Americans know this, so they lead the world in their love for competition.

Our system is built to encourage competition. It makes starting a business easy, with infrastructure, financing, and expertise all available to help founders build and scale. And nowhere is this more evident than in tech, where the number of companies is growing at a staggering 7% per quarter.

So, each new generation of founders faces fiercer competition than the last, making it crucial to question old advice. Not all lessons from the past hold up, especially the idea that you shouldn’t worry about competitors.

Of course, this can be frustrating because it makes doing business tougher. However, the alternative is a system built on cooperation, or as I like to call it, collusion, which doesn’t work for America. Why? Because it restricts upward mobility, and that’s un-American.

Should You Be So Lucky
Even if you don’t watch football (the real kind, the one played with feet), you’ve probably heard of Lionel Messi and Cristiano Ronaldo. Their rivalry is one of the fiercest in sports history, with both players rewriting the record books. And when Ronaldo eventually left the Spanish league, Messi said, “I miss Cristiano.”

Sport is full of rivals who ultimately appreciate how the competition made them better. That’s what true rivalry does: it pushes you to perform better, innovate faster, and reach new levels you wouldn’t hit alone.

Business competition is no different. Gates and Jobs had a famously contentious relationship, with Jobs saying Microsoft had “no taste” and Gates claiming Jobs “never knew much about technology.” But as the years passed, Gates called Jobs “an incredible genius,” and Jobs said he “admired” Gates for the company he’d built.

The defining companies in our ecosystem benefited from fierce competition, but to do that they first had to recognize that they had competition, and then like a prizefighter does, study the competition.

Today’s rivalry between Snowflake and Databricks will be considered legendary one day. Founded in the 2010s, these companies were on separate, cordial paths until their ambitions collided. Snowflake initially held the edge, leading by sheer size. But Databricks didn’t just chase from behind; they named their pursuit “SnowMelt” and aggressively set out to overtake Snowflake. This bold approach galvanized Databricks internally and, frankly, drove the Snowflake team “nuts.”

The result? Databricks is now in talks to raise funds at a $55B valuation, surpassing Snowflake for the first time.

Is this story over? Not a chance. Just look at Apple and Microsoft, fierce competitors for almost five decades, each claiming the crown for the world’s most valuable company. Could they have reached these heights without caring about the competition? I don’t think so.