Lessons from OpenView’s 3rd Product Led Growth Summit
November 15, 2018
On November 7 (yes, the day after the midterm election), we hosted leaders from some of the fastest growing software companies for our 3rd Product Led Growth Summit. Each speaker had their own unique take on the topic. Some came from companies that had been product led from inception (e.g. Trello, Lucidchart) while others have more recently pivoted their businesses to embrace product led growth (e.g. HubSpot). Some speakers rose through the ranks from the product or technical organization while others started in marketing, design or even industries outside of SaaS.
Despite these differences in perspectives, one thing was clear. Companies of all types and sizes are becoming much more sophisticated in their adoption of product led growth. They’ve done so not just because it promises more efficient growth (which, by the way, it does), but rather as a matter of necessity. Customer expectations are simply changing. Buyers have more and more options, it’s easier than ever for them to learn about products online and they expect software they use at work to look and feel like software they use at home. Gone are the days of clunky interfaces, archaic sign-up processes and uninspiring websites.
Read on for highlights from the event and nine lessons to apply to your own business.
- Complacency will kill you
- Is your product bought or sold?
- Product is the new battleground for winning customers
- B2B SaaS has to learn from casual games
- Double down on what’s working and play to your strengths
- Everything in marketing can and should be measured
- Brand is at least as important as demand gen for appealing to modern buyers
- Your products are only as good as your team and processes
- Formalize your design principles to accelerate innovation
Complacency will kill you (Patrick Campbell, Co-Founder and CEO of ProfitWell)
ProfitWell’s subscription metrics product gives them a unique vantage point into the world of SaaS. One of their key findings, according to Patrick Campbell, is that the SaaS market is far more cut-throat than it was only five years ago.
The major technology barriers to building products don’t exist anymore, and as a result the average company now reports 12 competitors (up from 3 in 2013). Customer acquisition costs are now 70% higher, as more and more companies are chasing after the same buyer. Features that were once valued, like SSO and user permissions, have become commoditized. Despite advancements in product development and UX, buyers are ungrateful and blended NPS scores have dropped from 34 to 10.
The only way to win in today’s market is to become customer obsessed and move faster than ever before, Campbell urges. The top companies rely on deep customer insights to make sure they’re building the features that will drive true competitive advantage. They find value metrics for their products that resonate with their exact target customer and align the customer’s usage with how much the customer pays. They also invest in customer retention strategies, whether through introducing annual plans or fixing delinquent churn.
Is your product bought or sold?
(Christopher O’Donnell, SVP Product at HubSpot)
HubSpot began their journey towards the bottom of the Product Led Growth Market Map, yet they have scratched and clawed their way near the top. Along this journey, they developed a set of frameworks to rationalize their product offerings and understand which growth strategies would work for different types of products. One framework they created was to put products on a spectrum from whether they’re ‘bought’ versus ‘sold.’ Very few people will go out and buy new HR software, for example: that’s a classic ‘sold’ product. At HubSpot, they have products on both sides of the spectrum.
Bought products are most ripe to take full advantage of product led growth. These products tend to have the following characteristics: low ASP, adoption before purchase, individual user use case, retail/self-service purchase. Product led growth is about driving product adoption before the point of purchase consideration.
O’Donnell also shared that getting product led growth right is as much a human challenge as a math or marketing challenge. Companies need to get people to take a risk together. HubSpot started on the ‘sold’ side with its core marketing product. Their Sidekick product gave them muscle memory for a ‘buy’ side product, which helped them successfully launch their completely touchless HubSpot Sales product. Over time, they’ve introduced more and more ‘buy’ offerings, but they had the DNA to know what to look at, know how to run QBRs and know what success looked like.Figure out the levers that will help you grow your specific products. Don’t simply copy and paste the tactics of other companies. #plgsummit18 Click To Tweet
Product is the new battleground for winning customers (Eric Boduch, Founder of Pendo)
It used to be that marketing helped you discover a product, sales helped you buy and support helped you post purchase. Nowadays, it’s more of a cycle, according to Pendo Founder, Eric Boduch. People come in for a trial, they adopt the product, become advocates, enter into renewal/expansion and then the cycle starts over again.
Boduch implores other companies to think about their customer journey from a product perspective. More and more of the journey is taking place inside your application rather than through human interaction. Product is the new battleground and Boduch is seeing more and more services (e.g. onboarding, purchase, support) built into the product experience.
To win in this product-first world, start by modeling what the happy path to conversion looks like. You can separate past trials into ‘green’ trials (which convert) and ‘red’ trials (which don’t). Then you want to find the qualities of the green trials to understand what characteristics and user activities best predict success. From there, you need to design user paths that lead to those activities and in-product messaging that supports your ideal paths. Focus on trial engagement and you’ll see conversion rates go through the roof.Product experiences are the new battleground for customers. Make sure your product is your best sales and customer success rep. You should expect to measure every aspect of the product journey. #plgsummit18 Click To Tweet
B2B SaaS has to learn from casual games (Catharina Lavers Mallet, Head of Concept Development for Consumer Electronics at Bose)
Catharina Lavers Mallet knows a thing or two about the gaming industry. As General Manager and Studio Head for King, she built, scaled and managed the successful game studios of Farm Heroes and Monarch. Under her operational leadership, King’s portfolio grew to $2 billion in revenue. Mallet has also held leadership roles in B2B software and now at Bose Corporation, the consumer electronics giant. Here are two of her key principles that B2B SaaS companies should learn from the casual gaming world.
First and foremost is to validate your ‘core loop.’ The core loop is the most important action that your user will do and they’ll need to do it again and again. In Candy Crush, this core loop is to move candies to have three in a row. This must be compelling and repeatable. If it’s not incredibly clear what users are supposed to do and why they should do it, all other features will just make it collapse on itself. Mallet looked at day two active user retention to measure that their ‘core loop’ was working. She aimed for 50% or higher retention before a product could go to market.
Secondly, companies must design with monetization in mind. Monetization in a free to play game is all about fairness and a reasonable exchange of value. Players will pay exactly as much as the value they get out of it. To design monetization models, Mallet looked to augment things that players could otherwise do for free to make it easier to progress; this included boosts, extra lives, additional levels, or something else entirely.Obsess over the core actions that you want users to complete in your product and make sure it’s intuitive, easy and even fun for them. Your core loop is critical to user activation, retention and - ultimately - monetization.… Click To Tweet
Double down on what’s working and play to your strengths (Dave Grow, President and COO of Lucidchart)
Oftentimes we look at companies we admire, assess their features, marketing channels, customer segments and label that as success with the aim to replicate it. In fact, it is usually the opposite according to Dave Grow at Lucidchart. Grow says it’s better to double down on what is working today and remain focused.
When Grow joined Lucidchart as one of their earliest business hires, he started building out an advanced SEO strategy. Grow saw that there were tons of people looking for flowchart software, so they built out content and landing pages around targeted keywords. Eventually, they started to reach the last drop of their potential. At that point, he could’ve had his team move on to the next channel. Instead, he doubled down on what was working and focused on SEO opportunities higher up in the funnel, to search terms with a lower purchase intent. They are seven years into this effort and they still haven’t exhausted all the opportunities within this channel.Spend 80% of your time doubling down on what’s working for your business and 20% on what is up for tomorrow. Don’t get distracted trying to copy what others are doing. #plgsummit18 Click To Tweet
Everything in marketing can and should be measured (Heather Zynczak, CMO at Pluralsight)
The first thing the head of a company should expect of marketing is that everything can and should be measured, according to Pluralsight CMO, Heather Zynczak. You need your marketing team to be maniacally data driven – they should be able to tell you how many leads or opportunities they get from every dollar spent. There are the obvious things like LTV: CAC and return on ad spend, but Zynczak implored companies to look for ways to measure even the non-obvious things like airport ads or swag at trade shows. Everything can be measured in some way or another.
Here’s another one of Zynczak’s secrets of a growth marketer: a B2C2B strategy is the most lucrative thing you can do for getting leads. These leads have the highest conversion and are the cheapest to acquire. Pluralsight’s funnel starts with free skill tests. Those skill tests naturally lead consumers to the free trial of Pluralsight, which they can use to improve their skills on specific programming languages or other fundamental skills. These free trial users create an army of champions and success stories that ultimately convince a company to buy Pluralsight licenses for their entire team or even company.
The magic happens when you combine a maniacal data-orientation to an abundance of consumer users. You can pinpoint exactly where the sales team should focus their efforts. You can arm the sales team with insights about their target accounts and how they’re using the product. Good data makes sales easier, ultimately driving more conversions at a lower cost. What’s not to like?You don’t need a freemium strategy to sell bottoms-up. Look for creative ways to add value to individual users through free products and even single-user paid products. #plgsummit18 Click To Tweet
Brand is at least as important as demand gen for appealing to modern buyers (Dave Gerhardt, VP Marketing at Drift and Jessica Meher, VP Marketing at Notarize)
Brand is what will drive demand today, according to Drift’s VP of Marketing, Dave Gerhardt. In a world where information is free, companies don’t get to dictate how a customer will buy. Nowadays everyone has a podcast, blog and paid search tactics – these don’t make you unique anymore. You need brand to stand out and open the door to draw your customers in. The great thing about brand marketing is that it makes demand generation activities even more successful.
Many companies want their brand to appeal to everyone, but you cannot do that anymore. You have to pick sides and stand for something according to Notarize’s VP of Marketing, Jessica Meher. As a fellow marketer, she loves how brands like Drift and Greenhouse really stand for something. That gets customers excited, even in product categories that often get overlooked.Supplement a product led growth strategy with a powerful brand to achieve outsized results. Strong brands make everything else you do more successful. #plgsummit18 Click To Tweet
Your products are only as good as your team and processes (Scott Williamson, VP Product at SendGrid)
When Scott Williamson joined SendGrid in 2013, the team had recently raised a Series B and had a small product team consisting of only three other people. Fast forward to today and the company has introduced multiple product lines, gone public, and was most recently acquired by Twilio for a whopping $2 billion.
In the process, Williamson had to do a whole lot of hiring. He believes that as a product leader, you’re only as good as your team and hiring should be your #1 priority. Williamson shared that between January and June of this year, he conducted over 100 interviews and hiring took up 25% of his time. He recommends investing in a great interviewing and hiring process and never compromising on candidate quality. Specifically, he suggests an interview panel of four people across a variety of levels and functions. Each interviewer should have a clear topic that they will go deep on and one should be a case study, which makes candidates show how they think about a problem.
Outside of hiring, Williamson has built out clear processes, frameworks, and templates to drive consistency in everything from how they conduct customer development, prioritize their roadmap, and rollout new products. This helps people play their positions to the best of their abilities. Not all of these practices need to be created from scratch, too. To support product prioritization, for instance, Williamson recommends Intercom’s RICE tool (Reach, Impact, Confidence, Effort).
Don’t skimp out on hiring. Make time for it and enforce high standards for your team. Roll up your sleeves to source your own candidates and commit to debriefing on interviews within 24 hours. #plgsummit18 Click To Tweet
Formalize your design principles to accelerate innovation (Justin Gallagher, Head of Product Management at Trello by Atlassian)
Justin Gallagher helped design and build the first version of Trello and launched it back in 2011. By January of 2017, the company reported having more than 19 million users and, fresh off their $425M acquisition by Atlassian, their growth isn’t likely to slow down any time soon. With all of that user growth comes an influx in feature requests from customers as well as new team members to iterate on the product. At the beginning, when Trello was a small team, they could hold regular in-person meetings about what each person was doing and what Trello stood for. As the company grew and grew, it became more difficult to operate as a single team and it was challenging to onboard new employees to help them understand what it meant to build ‘Trello-y’ products. Gallagher knew that if they were to continue to scale the team, they were going to have to do better.
He and his team embarked on a major effort to define Trello, which eventually resulted in the Trello principles. These are the things that Trello will not compromise on. They’ll always be universal, easy, personal, visual & tactile, familiar, succinct, direct, flexible, collaborative, and fun. Gallagher credits the Trello principles with helping them onboard new employees faster and with introducing a common language for the team. It also creates a shared accountability in building a product and brand that upholds their principles.
To create your own design principles, Gallagher recommends having a single owner but still involving lots of people across functions and up and down the hierarchy. Talk to anyone who has been around for a significant amount of time to learn what they love about the product and what customers love in the product. This isn’t for the faint of heart; it will require time and iteration until it feels right. That said, you can work on this forever, but at a certain point there are diminishing returns. After several iterations, call it done and move forward. At that point, polish and publish your principles to make it official. It doesn’t need to be public (as Trello’s are), but publishing them gives them weight and importance in the organization.Align on a clear set of principles and then publish them. That allows your whole organization to move faster and play from the same playbook. #plgsummit18 Click To Tweet
Conclusion: Nine lessons to accelerate product led growth
- The #1 thing companies can do is talk to customers and launch a customer research program. To get started, put a number on a whiteboard and say ‘we will talk to this many people this month’ and expand from there.
- Figure out the levers that will help you grow your specific products. Don’t simply copy and paste the tactics of other companies.
- Product experiences are the new battleground for customers. Make sure your product is your best sales and customer success rep. You should expect to measure every aspect of the product journey, from initial trial to activation to expansion and renewal.
- Obsess over the core actions that you want users to complete in your product and make sure that it’s intuitive, easy, and even fun for them. Your core loop is critical to user activation, retention and – ultimately – conversion.
- Spend 80% of your time doubling down on what’s working for your business and 20% on what is up for tomorrow. Don’t get distracted trying to copy what others are doing.
- You don’t need a freemium strategy to sell bottoms-up. Look for creative ways to add value to individual users through free products and even single-user paid products.
- Supplement a product led growth strategy with a powerful brand to achieve outsized results. Strong brands make everything else you do more successful.
- Don’t skimp out on hiring. Make time for it and enforce high standards for your team. Roll up your sleeves to source your own candidates and commit to debriefing on interviews within 24 hours.
- Align on a clear set of principles and then publish them. That allows your whole organization to move faster and play from the same playbook.
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