Inside Hootsuite’s Product-led Growth Journey

April 28, 2023

You don’t hear much about the successful transitions from a sales-led focused business to a product-led business.

Many folks have tried, only to run into insurmountable challenges along the way. Potential stumbling blocks include:

  • Lack of internal DNA and skills. The team that built your existing business might not be the team that can transform it.
  • Lack of internal buy-in. Expect to see tensions between the PLG team and the rest of the org over engineering resources, website real estate, which leads can go to sales, and much more.
  • Lack of immediate pay-off. It can take 12 to 18 months before the PLG motion generates meaningful revenue. If you’re looking for quick growth, look elsewhere.

But when it works, the transition to product-led can reignite growth and be well worth the wait.

One example I’ve been following is Hootsuite, the OG social media management platform. Founded in 2008, Hootsuite provides an all-in-one platform for social media managers to plan, collaborate, and analyze their social media strategy. The Vancouver-based software company is trusted by more than 20 million users in 175+ countries.

Head of Product Growth Partho Ghosh opened up about the five key learnings from Hootsuite’s transition from sales-led to product-led. Keep reading to find out why Partho was wrong about Hootsuite’s credit-card gated free trial, how Hootsuite pairs self-service and product-led sales, and what apps they use to keep getting better at PLG.

This is a guest post in collaboration with Partho Ghosh, Head of Product Growth at Hootsuite.

1. Focus on improving your PLG motion in the same sequence as your customer’s journey.

When I first joined Hootsuite, the company was focused on improving the product’s “habit” moment, i.e., getting a customer to continuously use the product to solve a pain point. While this made a lot of sense, it had skipped focusing on the “setup and aha” moment first and jumped right to the “habit” moment because the data showed a massive correlation to long-term retention. Many will recognize these terms from Reforge’s Setup-Aha-Habit framework:

  • Setup moment: The user has performed necessary actions to set up for the core value proposition.
  • Aha moment: The user has experienced the core value proposition for the first time.
  • Habit moment: The user has established habits around the core value proposition.

We found that there was so much room and potential to improve the Setup & Aha moment first, and by doing so, we would dramatically increase the funnel for those to reach the Habit moment. As I spoke to other PLG leaders, it turned out this wasn’t an uncommon scenario across other companies either. Upon learning this, we made the decision to pivot away from focusing on the habit moment to looking at the setup and aha moment, which really was our activation funnel.

Activation is challenging for all PLG companies, and it felt especially difficult for us. We found that our customers needed to integrate at least two to four social media accounts before they truly see value in the product. They also needed to post across their multiple accounts quickly if they were going to stick around long-term. Improving this is tough and requires a lot of agility and a whole lot of experimentation.

What we hadn’t realized was that the true lightbulb moment that differentiated Hootsuite wasn’t a certain feature or two, but came down to what our brand represents, the industry’s leading and OG social media management platform. Hootsuite was created in 2008 before the term “social media manager” was even a title. Today, there are over 100,000 social media managers by title and many more who play the role without the title.

In fact, the Hootsuite blog is visited by over 4 million people every month, and our company is where many go to become social media experts. And in the end, that’s the ultimate goal of our product as well.

To drive our PLG strategy, we realized we needed to do two things:

  1. Activate customers as fast as possible (ideally in 24 hours!) to solve the immediate pain point they had.
  2. Bring in the collective knowledge of the Hootsuite brand into our product and help guide users from low to high social media maturity using the power Hootsuite. We love saying, “Hootsuite is your guild to the wild.”

The faster they can set up their integrations, the faster they can get the main “job to be done” out of the way and improve the time-to-value. These accounts retained and converted much higher.

Then came the second problem, which was much more fun to dive into but much harder to solve, making our customers look like rock stars with our product and build that aforementioned “Habit moment.” We did this in numerous ways, including using “Owly” (our super-powered mascot) to help customers automate and bring insights into what our customers do every day.

Through our activation funnel, we looked to use Owly as much as possible to help showcase to users the value of Hootsuite fast. The collective of these two problem spaces was the culmination of over two-dozen experiments, and the work isn’t done; it’s just getting started.

The takeaway: To drive PLG improvements, focus on improving your own customer’s journey (in that sequence) and then lean into your product’s superpower. Surround your activation funnel around those superpowers to get your customers to feel value from them as much as possible.

2. Conversion: We tested everything, and yes, a credit card-gated trial was a winner at Hootsuite.

This is a humbling story, but many individuals with previous experience in PLG organizations can come with preconceived notions that simply may not make sense for your business. I’m definitely no exception to this!

For Hootsuite, we tested many options to simplify our acquisition and activation funnels, from different packages to our freemium model to the value metrics on our pricing page and, a controversial one, whether or not to include a credit card gate made sense for all trials. I was nearly 100% positive that keeping a credit card gate on our paid trials was incorrect and hurt the value we could’ve been getting through our trial motion (separate from our freemium motion). Well, I was wrong.

When we experimented against our conversion funnel, we looked at multiple key metrics but primarily most would boil down to one of the following three:

  • F:P (Free to Paid);
  • T:P (Trial to Paid); and
  • Paywall Conversion (in-app expansion).

We are lucky at Hootsuite that we get enough web visitors and trials in our pipeline that allows us to experiment pretty rapidly, typically getting results in two weeks.

With a product like Hootsuite and competitors that price themselves anywhere from $19/month to $50,000/month, we found better overall results by keeping a mandatory credit card on our trial motion—even though in every other previous experience of mine (from SMB to enterprise), this was never true.

I believe that the combination of our freemium model, the type of product we sell and the number of customers that were going through our paid trials made for a messy acquisition funnel and GTM motion, especially when we wanted to bring in the appropriate sales-assist motions. Thankfully, I’ve had some amazing partners that I work with day to day in our marketing team that help validate these kinds of decisions.

There were other instances where this was true in our actual product. Still, it gave me pause to realize that, as always, proper product discovery, experimentation, and testing are always required in a product-led organization.

The takeaway: To succeed with PLG, you have to experiment to find success, even if you think you know the answer from previous positive experiences. Every company, customer segment, and product are unique.

3. Understand how you’ll bring in product-led sales after you’ve understood how far your self-serve motion can go.

When I first joined Hootsuite, I led our product growth department, a small department focused on improving the adoption and activation across our entire product line. As most PLG experts will tell you, the first order is to focus on your activation funnel, which is exactly what we did. We focused on the onboarding funnel, in-product messaging, and many other common things you’ll read about when researching PLG.

However, we quickly learned how much we could extract from those improvements from an overall growth POV. Of course, improving early activation does wonders for your gross revenue retention (GRR), but for pure growth metrics, we didn’t invest enough time into our monetization efforts.

To remedy this, we created monetization teams to focus on improving the paywalls within our product and how our pricing and packaging would help set up cross-selling and upstream movement. Where we could have done better was the late decision to add sales assist to our self-serve motion.

It took me over a year to get sales involved in this funnel because Hootsuite was quite sales-led when I got there, and the number of stakeholders needed to be brought into the fold when driving sales-assists. However, it’s one thing I would do differently in the future because the dividends are immense. While my first thought process was to bring in tooling to help us, we had enough data, enough tooling, and amazing analysts to help us derive four different motions:

  1. Self-serve-always customers. These customers bought through self-serve and wanted to continue using self-serve. Their accounts could range from our lowest-priced plan up to “enterprise” ACVs, all because they just want to buy through a self-serve motion and not deal with sales. Fair.
  2. Product-qualified leads (PQLs). Anyone who was in our freemium motion that hit a certain set of product usage metrics and would be a great fit for either a self-serve paid trial or a sales-assist motion (two separate sets of criteria).
  3. Product-qualified accounts (PQAs). Self-serve customers that meet certain product usage and firmographic criteria to be reached out by sales and helped through a sales-assist motion. These customers typically fit our ICP (ideal customer profile) and are some of the best-fit customers for our sales team.
  4. Demos. Pretty simply, prospects that asked for a demo first on our website, get directly routed to sales.

The hardest part of these motions was typically determining how we would handle scaling from the self-serve buyer, also being our user persona vs within the sales-assist motion, where the buyer and user personas are separate individuals.

The realization was that standing up our PLS motion would not be as easy as “handing” over folks that are using Hootsuite day-to-day to see if they’d like to try more value out on a higher-end plan. Instead, we’d need to prospect further within a company using the product and find the right person who’d see value in consolidating, having more of the company use the product, or standardize the use of the product (such as SSO, 2FA and other “enterprise” features).

In previous companies I’ve worked for we would call this “population expansion” and it’s a common tactic that companies like Slack, Miro, and Airtable all use.

The takeaway: When scaling PLG in your organization, don’t shy from bringing your sales team in as quickly as possible. PLG used to be seen as “anti-sales,” but that has largely been debunked in the industry and can bring massive dividends to your organization.

4. Build the right organizational structure to support PLG.

In my experience, the road to drive PLG or simply to be more product-led starts either in growth marketing or product management. Wherever it begins, it’s important to build your “PLG army” quickly. This means finding the individuals in your company that will act as change agents and have the grit to transform an organization from one form (typically sales-led or founder-led) to product-led. This almost always requires the buy-in from your execs and, at the very least, your CEO.

At Hootsuite, PLG was really driven originally through the “product growth” department, which technically reported under product but for a while had two bosses: the head of growth marketing and the head of product management. Eventually, our organization shifted quite a bit that PLG itself was driven from the top and really executed by both marketing and product management departments. As they say, it takes a village.

However, there are tricks to garnering buy-in to drive PLG. In my past experiences, it’s been easiest to showcase the opportunity by standing up a PLS motion or by showcasing the savings or improvements the company could make to its LTV:CAC ratio and gross margin. On the product side, by showing the changes to virality and activation. Getting data analysts to help you find the right data mix to add to your story is critical, and really, in my opinion, this is no different than getting buy-in to go and build any new product overall.

When it comes to working with sales and customer success, showcase the immense value that having highly qualified leads can bring and how much time having more self-serve administration can have to your CS team. We found we saved a significant amount of time by improving our CS back-office and allowing our customers to administer their own accounts for many menial tasks. For the most part, our customers wanted to do this stuff on their own anyways and not have to contact their CS. All of this is quantifiable and makes a difference in an organization!

The takeaway: One of the first things to do when moving to PLG is to build a “PLG army” in your organization and find the right change agents to transition your company.

5. Bring in the right PLG tooling.

“There’s an app for that” they say and usually, they’re right. One of the ways we did well with PLG and simply being more product-led was by investing in it. We brought in the right tools to help us activate, monetize, and drive a proper PLS motion. Still, before spending a dime, we tested most of what the tooling can bring us on our own accord, whether it was through hack-a-thons or by using our own data analysts to determine our setup, aha, habit moment. Once we found some “gold” in the mine, we doubled down.

Today our product tech stack includes apps in experimentation, feature flagging, product analytics, digital adoption, competitive intelligence, release notes, UX research, session recording and product-led sales. This may seem like overkill (and maybe it is), but all of these tools integrate with each other seamlessly, allowing us to message our customers easily, test paywalls and other features, and understand our users and market in a very meaningful way within hours instead of sprints.

This really allowed our analysts, developers, and product designers to focus on meaty problems, while allowing product managers and designers to self-serve adoption data, messages, and paywalls.

The takeaway: Investing in your product tech stack can improve the agility of your team, and allow them to improve your PLG motion without much risk.

The TL;DR: How Hootsuite went from sales-led to product-led

  1. Improved our PLG motion in the same sequence as our customer’s journey and leaned into our product’s superpower, even though that wasn’t a specific feature.
  2. Made sure to test changes to acquisition, activation, and core product funnels even if other companies are succeeding with a different way of doing things!
  3. Brought in our sales team and drove product-led sales early once we built up ourself-serve motion appropriately
  4. Built a PLG army within the organization made up of allies and change agents across departments.
  5. Invested in the right tooling to grow our business and our product tech stack.
Kyle Poyar

Partner at OpenView

Kyle helps OpenView’s portfolio companies accelerate top-line growth through segmentation, value proposition, packaging & pricing, customer insights, channel partner programs, new market entry and go-to-market strategy.