Executives Will Never Buy Your Product, But Here’s Who Will—According to Lucidchart’s COO
May 20, 2020
In 2010, Dave Grow joined Lucidchart in a cold Salt Lake City basement—an upgrade from the company’s original office, the living room of co-founder Ben Dilts’ student apartment. Lucidchart had 20,000 users, four employees, and $0 ARR.
Today they’re on top of the world. With over 600 employees, Lucidchart is a household name in productivity software, enabling over 20 million users to think, work and communicate visually. And as President and COO, Dave has been instrumental in leading the company to over $100 million in ARR and a $1 billion valuation.
To help us kick off season 9 of the BUILD podcast, Dave called in to discuss all things growth—including the self-service model, a hot topic right now with so many big companies adding it for the first time.
“As much as I love the self-service model, it’s important to recognize it’s not necessarily the right model for every product at every stage,” Dave explained. “Self-service—or, more broadly, your go-to-market motion—isn’t just a tactic. It’s a fundamental part of your strategy, so it has to tie in tightly to your product positioning, your target market, your buyer persona and so on.”
Dave added that changing a company’s go-to-market motion is really tough. “If you come from a traditional enterprise sales background, introducing a self-service model will bring up some real challenges. If the company grew up with a pure self-service motion as we did at Lucidchart, layering on enterprise sales requires a big learning curve. Self-service can be a compelling model, but it has to fit and be accepted as a fundamental part of the company and product strategy.”
There’s a misconception about how easy it is to become self-service if you didn’t start out that way. It goes something like this: “I’ll just put a self-service signup form on the front end of my product and offer a free tier, and then boom! Now I’m product led.”
“Self-service isn’t just a tactic. It’s a fundamental part of your strategy.”
There’s a lot more complexity to it than just the external appearance of what product led growth companies have—you have to be wired for it and there are so many things it changes, like the buyer persona.
So what does that mean in terms of who you should build for and who you should get your product in front of? Is it the same as old school software, or is it different now?
“There’s an evolution happening. Generally in the buying market, while there are of course exceptions, most executives aren’t necessarily focused on the next great software or piece of their technology stack,” said Dave. “As an executive, I’m largely going to be focused on whether I have the right strategy to win, and whether I have the right people to be successful. After I work that out, I’m going to turn my focus to the execution and the operational side. But even then, in my experience, most executives rely on the next level of leadership, who are largely the functional experts in their organizations, to recommend changes in technology or process.”
That means just because someone has the title of chief operating officer, it doesn’t mean they’re the right person to start with. So who is?
“Even in today’s buying environment for B2B software, that next layer of directors and managers already have a lot of influence—probably more influence than we may give them credit for,” said Dave. “What I think self-service does now is just deepen that influence and purchasing power. Because now if I’m that manager or director or even an individual contributor, I can potentially self-service into a product, start using it, share it with my peers and demonstrate real results for the business—all without the approval of the executive.”
Essentially, in a self-service world, focusing on the leader of an organization just doesn’t work because they have too many priorities and are too focused on strategy to care about products. Say you were trying to get to a company’s finance department, for example. Think about the next layer down—the director level or even the individual contributor level, like a staff accountant with lots of pain points. Figure out those pain points and think about creating a self-service product that addresses them, and that grows up through the organization through them. You’d want to do this rather than just put a self-service signup form on the front of a CFO-oriented product.
“When you’re buying software—or really anything—the farther away you are from the pain, the less you care,” Dave said. “So a self-service model gives us an opportunity to go directly to those users who are feeling the pain and where the value proposition will be held much more tightly.”
Does this shift in the buyer persona affect how SaaS businesses should think about marketing? Listen to the full episode of BUILD, hosted by OpenView’s Blake Bartlett, to hear all of Dave’s insights and more.