Looker doing things that don't scale

In the competitive landscape of business intelligence and data analytics, Looker emerged as a transformative force, eventually leading to a $2.6 billion acquisition by Google Cloud in 2019. But long before this impressive exit, Looker’s founder Lloyd Tabb employed a strategy that many startups might consider inefficient or unscalable: he built his product while simultaneously providing consulting services to his early customers. This approach, which blended product development with hands-on service, proved to be the key to Looker’s success and offers valuable lessons for entrepreneurs looking to build products that truly solve customer problems.

The Genesis of Looker: A Problem Seen Three Times

Lloyd Tabb didn’t stumble upon the idea for Looker by chance. As a seasoned technology executive who had served as CTO at several companies, including LiveOps and ReadyForce, Tabb had repeatedly encountered the same challenge: businesses needed better tools to understand their data. At each company, he found himself building custom internal data tools to help colleagues make sense of what was happening in the business.

After building similar solutions three times, Tabb recognized a pattern and a potential business opportunity. As the saying goes in entrepreneurship, “Once is an incident, twice is a coincidence, three times is a pattern.” Tabb had identified a recurring problem that wasn’t being adequately addressed by existing solutions in the market.

In August 2011, Tabb began writing the first few lines of code for what would eventually become Looker. His co-founder, Ben Porterfield, joined a few months later to help build out the product. But rather than following the traditional startup playbook of building a product in isolation and then trying to find customers, Tabb took a different approach—one that prioritized deep customer engagement from the very beginning.

The Consulting Conundrum: Service or Product?

Many software startups face a fundamental dilemma: should they focus purely on building a scalable product, or should they incorporate services to ensure customer success? The conventional wisdom often leans toward the former, with services viewed as a necessary evil or a temporary bridge to product maturity.

Tabb, however, recognized that in the complex world of data analytics, simply delivering software wasn’t enough. Customers needed guidance, education, and customization to extract the full value from the product. Instead of seeing this as a limitation, he embraced it as an opportunity to deeply understand customer needs while generating revenue to bootstrap the company.

“For our first four customers, I had different ways of delivering what I was building, from pure consulting to a standalone product,” Tabb explained. “But the problem with just giving someone the software was that they didn’t get as much value out of it. I realized I needed to be teaching how to do data as well as delivering a product.”

This realization led to a hybrid approach that would define Looker’s early go-to-market strategy: part product, part service. Rather than viewing consulting as a distraction from building a scalable product, Tabb saw it as an essential component of delivering value and accelerating product-market fit.

The Demo as Proof of Concept: A Unique Approach to Sales

One of the most innovative aspects of Looker’s early approach was how they transformed the traditional software demo into a powerful proof of concept using real customer data. Unlike many software companies that rely on generic demonstrations with sample data, Looker took a more personalized approach.

“We used the demo as a chance to build a proof of concept,” Tabb explained. “We didn’t have a dummy sales pitch version—we always asked the prospect for an actual dataset to play with.”

This approach served multiple purposes. First, it provided immediate, tangible value to potential customers by showing them insights from their own data. Second, it allowed the Looker team to demonstrate the product’s capabilities in a real-world context rather than a contrived scenario. And third, it gave Tabb and his team invaluable feedback about how their product performed with different types of data and use cases.

The strategy required significant upfront investment of time and resources, as each demo needed to be customized for the specific prospect. But the results spoke for themselves: “We had a better than 75% close rate on trials,” Tabb noted. This remarkably high conversion rate justified the additional effort and helped Looker bootstrap until they raised their seed round in the summer of 2012.

The Forward-Deploy Model: Teaching as a Core Competency

After the initial proof of concept, Looker didn’t simply hand over the software and move on to the next prospect. Instead, they implemented what they called a “forward-deploy” model, where they would set up the software for customers and teach them how to use it effectively.

“We would come in and do a free trial where we would set up the software and teach them how to use it,” Tabb explained. “And then we’d watch for engagement. Only when there was engagement would we close the deal.”

This approach had several advantages. By actively teaching customers how to use the product, Looker ensured they derived maximum value from it. By monitoring engagement before finalizing the sale, they could focus their efforts on customers who were most likely to succeed with the product. And by combining these strategies, they minimized early churn—a critical metric for any SaaS business.

“We had almost no early churn because we only sold customers who got the value out of it,” Tabb noted. This focus on customer success rather than simply closing deals helped Looker build a solid foundation of satisfied customers who would become advocates for the product.

Education as a Business: The Realization That Changed Everything

As Looker continued to evolve its approach, Tabb had a profound realization that would shape the company’s strategy and culture: “The thing that I realized very early was that Looker was an education company.”

This insight—that Looker was not just in the software business but also in the education business—led to a fundamental shift in how they thought about customer success. Rather than viewing support and education as cost centers, they recognized them as essential components of their value proposition.

“We knew that the value was getting the customer to understand how to build tooling so that they could understand their data,” Tabb explained. This perspective influenced product decisions, such as building chat functionality directly into the product so that users could get immediate assistance when they had questions.

“In SaaS, focusing on making your customer successful is a retention strategy, not a cost center,” Tabb emphasized. “Complicated products require education. If you’re selling a complicated product, you are in the education business—so the support you provide is everything.”

This philosophy extended beyond just helping customers use the product; it was about empowering them to become data experts within their organizations. By teaching customers not just how to use Looker but how to think about data more effectively, Looker created deeper, more lasting relationships that transcended the typical vendor-client dynamic.

Maximizing Learning from Every Interaction

Another key aspect of Looker’s consulting-while-building approach was their relentless focus on learning from every customer interaction. Tabb used a baseball analogy to describe this mindset: “One of the things about early product-market fit that’s really important is to look at your at-bats. When somebody shows up and expresses an interest in the product that you’re offering, make sure that you do everything that you can to maintain close contact so that you can learn from them.”

Each customer engagement was treated as a precious opportunity to gather insights that could improve the product and refine the company’s approach. “If you’re not driving yourself crazy thinking about how to capture it, you’re wasting opportunity,” Tabb advised.

This learning-oriented mindset meant that Looker’s consulting activities weren’t just about generating revenue or ensuring customer success—they were a crucial feedback loop that informed product development. By working closely with customers, the Looker team could identify pain points, discover new use cases, and prioritize features based on real-world needs rather than assumptions.

Bootstrapping with Services: Financial Independence

The consulting component of Looker’s early business model also served a practical purpose: it generated revenue that allowed the company to bootstrap before raising venture capital. By charging for their services and expertise, Looker could fund development and grow at a sustainable pace without immediately diluting ownership through outside investment.

This financial independence gave Tabb and his team the freedom to experiment and refine their approach without the pressure of meeting investor expectations or artificial growth targets. They could focus on building a product that truly solved customer problems rather than rushing to scale prematurely.

When Looker did eventually raise their seed round in the summer of 2012, co-led by First Round’s Bill Trenchard, they did so from a position of strength. They had already validated their concept, built a small but loyal customer base, and developed a clear understanding of their value proposition. This made them a more attractive investment opportunity and likely resulted in better terms than if they had sought funding earlier in their journey.

The Transition to Scale: From Consulting to Product

As Looker grew, they faced the challenge that all service-oriented startups eventually encounter: how to scale beyond the limitations of a consulting model. While the high-touch approach had been invaluable for early customers, it wasn’t feasible to maintain the same level of personalization as the customer base expanded.

The solution came in the form of systematizing the knowledge and expertise that had previously been delivered through consulting. Looker developed training programs, documentation, and community resources that could provide guidance to customers without requiring direct involvement from the core team. They built features into the product that embodied the best practices they had been teaching manually.

Several months after emerging from stealth in March 2013, Frank Bien joined as president and, after going shoulder-to-shoulder with Tabb on the fundraising frontlines in their Series A round, took over as CEO to firm up the sales motion and scale the business. This leadership transition allowed Tabb to focus on product and technology while Bien built the organizational structure needed to support growth.

The consulting DNA remained a part of Looker’s approach, but it evolved from direct service delivery to a more scalable model of customer success. The company maintained its commitment to education and support, but found ways to deliver these values more efficiently as they expanded to serve thousands of customers.

Lessons for Entrepreneurs: When Unscalable Makes Sense

Looker’s journey offers several valuable lessons for entrepreneurs, particularly those building complex products in emerging categories:

1. Don’t shy away from services: While the conventional startup wisdom often emphasizes building a pure product with minimal services, Looker’s experience shows that a hybrid approach can be powerful, especially in the early stages. Services can generate revenue, provide deep customer insights, and ensure successful implementations.
2. Transform demos into value-delivery opportunities: Rather than treating demos as sales pitches, use them as opportunities to deliver real value and learn from potential customers. Working with actual customer data creates a more compelling demonstration and builds trust.
3. Recognize when you’re in the education business: Many complex products require education to deliver their full value. Embracing this reality and building education into your core offering can be a competitive advantage rather than a burden.
4. Treat every customer interaction as a learning opportunity: Early customer engagements are precious sources of feedback and insights. Maximize what you learn from each one to continuously refine your product and approach.
5. Bootstrap with services before scaling with product: Using services revenue to fund product development can provide financial independence and allow for more experimentation before seeking outside investment.
6. Systematize knowledge as you scale: As you grow, find ways to package the expertise and best practices from your consulting work into scalable resources and product features.

The Legacy of Looker’s Approach

Looker’s consulting-while-building approach ultimately paid off in a big way. The company went from a single customer to more than 1,700, from a small, scrappy team in Santa Cruz to a 700-person company spanning eight offices around the globe. In June 2019, Google Cloud announced its intent to acquire Looker, inking a $2.6 billion deal that was one for the history books.

The success of this approach challenges the notion that startups must choose between being a product company or a services company. Looker demonstrated that, at least in the early stages, embracing both can create a powerful foundation for growth. By using consulting as a means to deeply understand customer needs, generate revenue, and refine their product, Looker built something that delivered genuine value—value that was ultimately recognized in their multi-billion-dollar acquisition.

For founders facing the product-versus-services dilemma, Looker’s story offers an inspiring alternative: sometimes, the most unscalable approaches are exactly what you need to build something truly valuable. By getting their hands dirty with consulting work, Looker gained insights that would have been impossible to obtain from a distance. Those insights, more than any particular feature or technology, were what enabled them to build a product that resonated deeply with customers and changed how businesses interact with their data.

In the end, Looker’s willingness to do things that didn’t scale—to provide high-touch consulting alongside their product—was precisely what allowed them to eventually scale to extraordinary heights.