Product-Led Growth with Breezy Beaumont & Andrew Capland

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Exit Exit.

Hey, thanks for listening to another episode of the Exit 5 podcast. My guests on this episode are Breezy Beaumont and Andrew Kaplan. Hey. Hey. Guest number one. Nice to see you. Thanks for coming. Thanks for doing this.

Hell yeah man. I'm excited to jam. I appreciate you thinking of me. It's also nice to meet you. I feel like I haven't actually seen you and spoken with you like face to face.

Yeah, likewise. Here I am. Nice to meet you. And there she is. Guest number two. It's in the mix. So hey Breezy, what's up? Nice to meet you. Nice to connect over this. Andrew's here, Breezy's here. There's people here live which is cool. It's not that many but I just posted the link like to a small group and sometimes I found that it made a little bit more fun having like people in the chat for the podcast recording because it just gives additional questions for outside of me. So anyway, you. You both have important jobs to do and busy things to do and I don't want to waste any more time. So let I'm going to kick us off and today on this episode of the Exit 5 podcast, we're going to talk a little bit about everything like we usually do. But I think the core focus will be PLG product LED growth and my two awesome guests here will hopefully have you actually not hopefully guaranteed to leave you after this hour feeling smarter and a little bit more informed. But first let's do quick intros and background who you are. What do you do at your company? Background on your company just so people can get the context. Breezy, why don't you go first and then Andrew after that.

Sure, sounds good. So hey everybody, I'm Breezy. I'm the head of growth and marketing over at Correlated. So Correlated is itself a product led growth company. We also work with a bunch of product led growth companies. So we're a SaaS company ourselves. We sell software if that wasn't obvious enough yet. And yeah, and then I'm also just a big product led nerd. So if you follow me on LinkedIn or those other platforms, you will hear lots about it.

Okay, we'll come back to you in a minute. Andrew.

Yeah, I'm Andrew. For anyone that doesn't know me, I'm a former two time head of growth set of growth at Wistia for a long time and most recently at Postscript. But about a year ago I left my full time job to grow a solopreneur biz that's called delivering value, which is my approach to growth which I'm sure we can get into later. And it's all about serving the growth community. So I do one to one coaching for people that lead growth teams and I do advising for product led SaaS companies.

Got it. Okay, awesome. So I have a question. First of all, just curious to hear how do you define product led growth? I see a lot of companies today that they are attracted to this model because they have a product that they want people to sign up for and use. But I also see a lot of people get confused because they're also trying to do more upmarket things and they're trying to do ABM and product led growth. And so just curious to hear like your frame for how you describe it and who creates the fact like is it does marketing decide like oh this is a product led business or like how does that even come up inside of a company?

Yeah, I think there's, we'll both give a good definition here, I think because just like a lot of terms it depends on kind of like how strict you want to create kind of these bumpers on what the definition should be. So like from my point of view, product led growth company is anyone who puts the product at the forefront of everything that like every business function. So sales is thinking product first, marketing thinking product first, et cetera. So this is kind of like an umbrella term for, you know, freemium free trial. All of these different ways for people to be able to go onto your website and easily access and get started with your product. I know some folks have like Sort of a stricter definition that they feel like only can really define product led. That's sort of where I stand.

Do you think this is only related to companies that sell to like small business? Because typically it's like small business, high velocity freemium. Or do you see it across all types of businesses?

No, I think that's one of the most common misconceptions. I'd say like the top two misconceptions are probably like that it's only for companies with low ACV and that there's no sales teams at product led companies. The product just sells itself and it's some like miracle solution for a business. So say that's definitely two of the most common misconceptions. If you look at some of the really successful product led companies, I think like Datadog, their average, their ACV is like 100k, couple others that I'd have to look up the data which I can do on the side really quickly if you want here. But there's definitely some outliers from that low ACP product.

What do you say, Andrew? Don't wait for me to call on you.

Yeah, I mean I agree with all that stuff. At its core, product led is a go to market strategy. It's a company strategy on the go to market side using the product as the main go to market tool. And so I think that people think that this just means self service like they think it means no sales. But really what it means is that there's more than one go to market motion. So instead of just having inside sales or just having self service, it's about finding an environment where you can create self service first or maybe a baseline of self service and then figure out how to balance that with the one to one stuff. I totally agree. I think those are the main misconceptions. Can work in a lot of different businesses. But that's kind of like what it means at its core. But I do think that there are some product led principles. Even if people can't pull out their credit card and buy your product like without talking to someone, there's still some ways that you can use your product as a go to market tool. Like you can embed a version of it on your website. You can like do all these different, you know, create templates that are inside your tool that people can use. And it's just all about using the product to help sell the product.

I love it because I think there's just so much noise and so many tools and so many and so much competition out there. Today. And I think like, especially as a, as a buyer in like a, in a B2B context, I think most of us are like, just show me the freaking thing. Like I need to see it, I need to log in, I need to play around that. Like it's either just show it to me or it can be such a big leap to make this big purchase, 50, 100k, 200k million dollar ACV thing and you've never even gotten a taste of that. And so I think, I love it. But I also think you hit on this important thing which is it can also be beyond product. Like one of my favorite, this isn't really product led growth, but like HubSpot website grader is a fantastic example. That's like, it's not plg, but it's next to it. You know what I'm trying to say? Like it's related because it's the perfect funnel. You get. They got people to come to this website grader, put in their website that said, shit, I need help with my website. Tell me what's wrong with this. It's going to spit out all the things that are broken. And then by the way, surprise, wink, wink, like, oh, you want to fix all these things? Like we can do that in our product. Do you all think about like marketing? Do you see marketing tools as a huge piece of that lead gen funnel?

I think that that's freemium before we do. It was freebie.

Okay.

Like, like I worked at HubSpot in the early days and I don't think anybody would have called that freemium, but really that was kind of free me, right? It was a free tool that could apply to a lot of people. That was a great introductory, attracted the right folks, but it's a really good introductory for the main offering. And they had some, some upsell and like conversion stuff built in, which was primarily using people, right? Like email nurturing campaigns and sales folks following up. But it's pretty similar to a lot of the models I feel like that we're seeing more of today.

Yeah, I feel like we almost did this sort of like crawl walk run into this. Whereas B2C was already just like eons ahead of us and B2B just needed some time to catch up here. But yeah, like the idea of these sort of lead magnet products that people had on the side, I think that was one of them. I think the whole gated content movement to ungate everything and just make it all accessible and just give away the knowledge in the same way sort of like were the baby steps for us to be like, yeah, you know what, maybe we could actually just open up our product a little bit more. I think also like one of these things that people needed to realize to get over this hurdle of being more open to product led was the idea that you're. They're like, well, what if our competitors get into our product and see it? It's like, well, literally like, do you know what your competitor's product looks like? Yeah, you do. Like you've actually seen a live demo of it. Of course you do. And of course they've also looked at yours. Like, that is so silly that people still to this day have like talked to multiple groups of people in the last few months who still feel like somehow their competitors don't know their product, even though they know their competitors like the back of their hands. So I think we're starting to get over some of these hurdles that get in people's way and, and get a better understanding of like it's all already out there and your competitors are already starting to move it in this product LED fashion and you can either go with it or lose out on market share. It's kind of like this is your choice at this point.

I feel like the pricing movement has followed like that same arc breezy where it's like everyone wanted to hide their pricing. They didn't want competitors to know. Competitors knew anyways they were already selling against it. Some competitors were using it in like real shiesty ways. And now you're seeing companies that are like, look, not only are we publishing it, but we're going to create tools and calculators to like make it even easier for you to figure out the price. Everybody knows it's laid out there. Transparency is one of our values. We're going to use that as part of like the end user focus model and a benefit and all that stuff. So it's like funny to see it applied in these different places.

Totally, totally. And we're such the laggards from the other, from B2C like whatever they're doing in B2C, just like, you know, expect that that's where we'll head within a couple years.

One of the reasons that like, and look, there's no like perfect, there's gonna be no per like all marketing stuff. And I think we all, the three of us, I've seen all put content out on LinkedIn and on LinkedIn it's. I come off as very definitive because that's just how you write things. But like there is no Definitive approach. And so, like, the. The reason I have this podcast is just talk about all different things and you're gonna listen to it and next week we might talk about something completely different. And so you're gonna soak this in. But I keep going back to what Breezy's talking about with the consumer product. If you just zoom all the way out and it's like in B2B, we're going to try to sell you something. It's very expensive. It's very expensive. It's very complicated. Your CFO is going to ask a million questions about it. Your tech team has to integrate it. They got 15 questions. But you're never going to actually get to use it before you buy it. Do you want to buy that thing?

And most people are going, what?

No, that's not how I. That's not how I buy. And that doesn't mean that everything that we buy in life has some type of free sample. Right? But if you're going to buy a car, you kind of go and test drive the car. But with B2B software, it's like there hasn't always been that test drive piece put in. Can either of you, just to make this more real for somebody, maybe let's each of you give an example of a company that you work with, a customer, whoever this is the company, they're a PLG company, talk about their funnel and how they acquire customers in the revenue function. Just to give people a specific example of what we mean.

Yeah, sure. I mean, I think one of the things that is important to realize here is that it's product LED is about giving people the choice to go one way or the other. So even in your car example, right? So, yeah, we want to test drive a car before we use it, but there's also some apps out there that now let you just buy a car online and have it dropped off at your house before you ever use it. And the reason both of these models work that you. Some people want to go to the car dealership. Some people want to order their car off of an app and have it just delivered. They're like, I've already bought this car before. I know what I. Exactly what I want. I don't need to drive it. So in that same way that we're giving the consumer the choice on how they want to do it, because as consumers, we just want to pick. Everyone thinks they're like the best at knowing what's best for them, so they just want to be able to carve out their own path and that's how things should work at a product led company.

Well, I love, I love that also because you put that basically acknowledges the fact that like, hey, Dave, everyone who's going to buy your product, they're all going to be at different needs. And so there's needs and wants. So there's going to be the person who, who doesn't care, has the money, whatever, want the car, don't want to deal with any of the process. But then there's going to be the other person, like my dad who wants to go to the freaking car dealership and talk to the Toyota guy for three days before he buys. And I think it's smart because you're coming in and you're acknowledging that like people buy differently. Go ahead, Andrew.

No, no, I love that. I was just going to riff off that, which is I'm seeing more and more product led companies where the first thing you see after you sign up is a question and it's like, oh, how do you want to use the product? I want a guided tour from a real person or I just want to poke around and explore on my own. Like, I think Pendo does that really well, which I think is the future. I totally agree with you, Breezy. You and I have never talked about this, but I just think we're entering this choose your own adventure era of SaaS. Like I think the previous era was like, oh, just make a free trial or free plan and like put everybody there, minimize friction, minimize CTAs, everybody free. Just get in the thing, you'll love it. And now what we're realizing is that that actually leaves big groups of people unserved or underserved. And now it's about creating all these different options and routes. And I don't know, it just to me it just feels like a better experience for a buyer. Like even in the sales LED world, a good sales rep starts the combo by saying, hey, what are you looking to do? Hey, you signed up. Our product can do a whole bunch of stuff. Tell me a little bit more about why you're here today. And then they customize what they show you to, what you answered. And I'm just excited for SaaS to head in that direction.

Yeah, I think when we look at B2B SaaS or even B2C, but the way that that ends up kind of translating when we look at like the funnel or like how things are moving across funnel set, it's a fly, whatever you were calling it, but let's just call it the funnel for Simplicity, because people like it's a good visual, they get it. It's people might come to your website and ask for a demo first. They might come to your website and get right into the product, they might ask for a demo and then while they're in the middle of the sales process, go start using your product, they might be using your product for months and then out of the blue ask for a demo. So it's very much this like back and forth process, which is why the funnel, like it just completely breaks it because it's like the person's at the top and all of a sudden they're at the bottom. And like, it's like, you know, it's more of like, you know, you get someone fully onboarded, you try to move them to the next tier of your product. You kind of like go in the cycle in that way. So there's a lot of expansion that happens in product led, but it really like makes data crucial and at the middle of everything. Because for sales to be able to have a good solid conversation with someone who's already using the product, you're going to need to know what they've been doing, what have they been successful with, who else has been in the product with them, how can we engage them in this conversation, et cetera. So it's kind of like if we have to use the funnel, let's call it a double funnel or. And they're going to overlap with each other. It's like a Venn diagram. But it's very much kind of like this process. And throughout you'll have CS type of conversations coming from your sales team. You'll also have people onboarding people into the product, but also talking, trying to garner more attention from others in the organization and maybe get more of like an enterprise type deal across the table. So it's kind of makes a ton of sense. But it is difficult for companies or folks who have been historically sales led to try to shift their thinking in this way. Because it's definitely very forward thinking.

There's probably some nuance, like, you know, there probably are companies. I was just thinking like, man, it'd be a smart like business decision. If you're a smart founder who is building a company from the beginning, like you would want to build this in and it's hard to do it later. Right. However, it's not always a perfect fit. Right. There are Some types of B2B sections or segments that it's a little bit harder to have like a product LED approach. And so I think like Nobody on this podcast today is going to say, like, every business has to do this. But I think if it comes down to like, that core use case of like, well, who are you trying to sell to?

What are they trying to do?

Is there a product led version here? The reason that I love it as a concept is because I think so much of the marketing and you both are marketing leaders or have been marketing leaders. Like, we spend so much time dealing with bullshit that is not actually like creative problem solving or creating value for people. It's internal bullshit over leads and lead scoring and qualifying this and qualifying. And like, the reason I love PLG as a concept is because, like, what am I arguing with the VP of Sales about? I'm like, this is a list of 500 people who are literally using the product and they're doing X, Y and Z. This is not some webinar list. And I see you both like smiling and nodding as, as I said. And so I like it because I've seen a lot in the B2B marketing space and we waste so much time on like internal bullshit issues that don't actually move anything forward when, like, this is awesome because it aligns everybody around like a core thing that we're trying to get people to use and be successful with our product. And if we can do that, we're going to be able to sell to them.

This is going to sound kind of dorky, but I name my solopreneur business Delivering Value because of that. Like, if you just do that, if you're a SaaS company and you figure out how to deliver value, SaaS, us folks, we use like activation rate as a proxy, right? That's just like a dorky way to measure did somebody get value out of the product or not? At a lot of companies, that becomes the North Star metric. So whether you're on the marketing team or like the growth or onboarding team or the sales team or the CS team, basically if somebody hasn't made it to that point of receiving value, that's what everybody's focused on. You can measure it. Usually it helps to predict pipeline and all kinds of stuff down the road. And so that to me is the whole thing. And people have. They define value in different ways. If they're a big company, they need different types of value than a small company. If they have a different use case, value might be a little different. So that's the name of the game.

I thought you were going to say, and that's why I named my son product led. But you said Your company. Sorry. Somehow we got through that. That rant from all of us. We didn't give anybody an actual example yet. So let's give an example company. That's my fault. Let's give two example companies in funnels.

So I worked at Wistia for a long time as the head of growth. So I'll use Wistia. So Wistia, you can sign up for free. It's a free tool that's the main CTA that's optimized all over the website without sharing anything I shouldn't do. Hundreds of thousands of people have signed up for that thing. When you use it, there's a whole system to understand what's valuable to you and then to help you experience that value inside of the product. That's sort of the onboarding flow. In addition to that, you know, Wistia identifies folks who they think should go to sales at the moment of sign up. They don't stop them from getting in the tool. They just have like a sales assisted motion that uses their data and some information that they know about the users and what they're doing inside of the product. To follow up, the VOS can use Wistia for free. A good population of people sign up their credit card, convert into a paying customer. They're happy to use it forever and ever without ever talking to someone from the team. And then there's about 20% who at some point in the process, whether it's at the moment of signup or later, do get into sort of the traditional sales funnel, either based on their behavior, like they do something that looks and feels like a really large company, or they might raise their hand and say, hey, I just have some like questions. Or maybe they're.

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Usage or something.

Right.

They might just be uploading an insane amount of content and all of a sudden it makes sense to talk to them about volume discounts and things. So that's kind of how Wistia does it. There's some loops built in there. Like it's a free plan. It says powered by Wistia. That helps drive more traffic of people that can sign up for Wistia's free plan. But that's kind of like the skinny.

Yeah. So over at Correlated, if you go on the website, we have the ability for people to directly book a demo, which also I can't believe there's still websites out there that don't let people book on a calendar and actually get time for a demo. So you can book a demo or Start using the product, in which case you sign up for account, drop you in there and usually. So we'll still encourage folks to do like an onboarding call with us. If people want to be totally hands off, that's fine. But there are a couple integrations that go into using correlated because what we're doing is tying together product usage data and CRM data to tell you who you should be talking to, like what product qualified leads should you talk to, kick off some of those campaigns, them in your downstream tools, etc. So with a couple of integrations usually makes sense to get an onboarding call going. So we do try to encourage it, but we won't force it. Some people are super technical and just want to do it all themselves. Great. Then if you're going to be a tool that pulls together product usage and CRM and other business data, of course we're going to dog food that. So we get notified when people take certain key actions in our product, when they've invited other users, when they've hit different milestones that we've sort of created, hit these kind of time to value milestones and then we kind of notify our team. The benefit of that is that one of our places that you can kind of notify folks in is inside of Slack, which gives good visibility to the entire team. So for our customers that also means that by us kind of notifying in Slack, people who might not be already using the correlated platform will also see it. So that's sort of like internal virality loop. It's not the great external one we'd like to see. So hopefully we can build some of that in later. But for now it gives like some internal expansion opportunities for us and then even just dogfooding it internally. It's a great way for engineering, marketing, sales, the SDR team on the outbound. So everyone really gets to kind of see like, all right, how are people doing? Like where are they getting stuck? And it's just actually a really interesting way for everyone to better understand what like the user feels as they go through using the platform as well. So that's kind of how our funnel works. Definitely like a very much a back and forth between the different teams. CS might be involved at the same time that sales is on a call and very open conversation. A lot of data at the center of it all.

Have you had any success with like or do you have an example of like the company? Like you all see some issue of people getting stuck somewhere and then you go and do what about it? Because I've always been told, oh, marketing needs to send some more emails and like, the problem is solved. But like, what usually happens.

Yeah. So I would always suggest, whether I'm suggesting this to internally at the team or externally, we always try to build, if we're getting something on a recurring basis that should definitely go on the product roadmap and be something that you build into the product to improve there. But short term, product can just get turned around in a day. And so then that's where you need to kind of like insert a human or insert some sort of prompt or whatever. It may be something inside of the product or an email of marketing material, whatever it might be. But you gotta fix the problem somehow. You can't just turn a blind eye to it. So I'd say definitely get it in the roadmap and get it in product, that you should always be putting everything in product and making that as seamless as you can. But short term, fix it with people.

And I'll just add. At my last company, postscript, we had two really interesting challenges that the marketing team spearheaded. One is our day one retention was not great. A bunch of people would sign up, poke around for a couple minutes, leave and never come back. And it was super frustrating. And the folks working on onboarding couldn't figure out what to do. And what we realized is there's just a population of people that just want to check it out. They're not ready, they're not ready to buy, they don't have a thing to do yet. They just want to see what it looks like. And so I don't know, we sort of stumbled into it and we're like, what if we just made a version of this thing that people could kind of demo on the website? And to this day it still lives on. And it's basically this thing. If you go to postscript IO features, you can basically text in a number. Like you text a short code and you text the word demo. And it basically uses the product to teach you how postscript works. So you can kind of see it in the way that your customers would. And after we implemented that, signup numbers went slightly down, but those who are actually using the product, like engagement and total activated accounts, went up and we would get a ton of qualitative feedback from folks that were like, oh, that thing was dope. I probably wouldn't have bought it if I didn't get to see it. I couldn't picture it. And so that was really cool. And then there also were a bunch of Folks that signed up after that, like, they thought it was cool. They signed up into the product and then they just got stuck. So postscript, for anyone that doesn't know, it's a text message marketing tool for E commerce brands on Shopify. And so e commerce brands are like fired up about text, but they don't know how to do it. They've never done it. They know it's not email, they don't want to spam their list. They're like, you know, they care about brand, they're really nervous. And so they like wouldn't use the product because they didn't know how to get started. And so someone on our marketing team saw this and was like, well, what if we just made a template library? We'll just make some templates. Let's like ask a bunch of customers for examples. Then we use those examples to kind of white label them and then we can make it into something that people can copy paste inside of the product. And people freaking loved it. It's like all of a sudden they were copying and pasting them. We took it to the next level where you could sign up for the product with them preloaded. The engineering team got excited. Eventually they built them into the tool. So stuff like that gets me really excited where the marketing team can take some stuff, trailblaze it, figure out if it works, see it, you know, see how it resonates, and then the product team can come in or the growth team can come in and like kind of build it into the core experience.

Yeah, you know what? One thing that you hit on Andrew, that sort of cracks me up is that people assume that because someone signed up to use a product, that that means they just want to immediately go and buy it. Like, we don't assume that anyone who comes in and requests a demo, we don't say, well, 100% of those people clearly would like to sign a contract with us. We definitely do not say that all the people who came to sign up for an ebook are about ready to, to sign up and sign a contract either. But there's this funny thing in product LED where we assume that some subset of folks assume, okay, well, they signed up to use the product well, that they're going to use it. No, it's like one piece of your exploratory figuring out if it's for you or not.

Or like that could have wanted to.

Get some education and decide later on.

That could have been such like a transactional thing. It's just like you might go and walk in a Store, not buy something. But, you know, just because you were there and you walked in and you're just checking it out. I don't know, like, it's not like you were like, what am I going to do today? I'm going to sign up for correlated. The only thing I'm going to do, you know, like, it's. But yeah, but I think what's cool is to hear you both. And for those listening, like PLG or not throughout the word, you both have this clear philosophy and understanding of, like, how people actually buy. And you make it seem like marketing and product and sales job is to, like, connect those dots, like, build the bridge and like, make it super easy. And that to me is like, that's what is awesome about marketing and that is the goal of it. And that's also. You can tell if you're not aligned with the CEO, if you're not aligned with sales, if you're not aligned with product, none of this shit is gonna work because it's impossible to do. And so you ultimately have to be aligned across the whole company. And I like this approach because it gets the whole company aligned around one mission, which is like, how do we get more people to find out about us and buy our product and we're all aligned on that. It's not like, well, that's marketing's job. Well, maybe marketing owns the initiative, but like, they gotta work with product and they gotta work with engineering and they gotta do this. Okay, I scribbled down a bunch of random things as you both were talking there. Oh, is Canva PLG to you? Aren't they like the goat? Like, to both to what you're both talking about? Canva to me is the goat. Because you go, and like, if you Google like Instagram post dimensions, right? What's probably. Let me just check this Instagram post first. You gotta spell Instagram, right? Instagram post dimensions. And if you're in traffic now, I'm sorry about that. As you're listening to this Instagram post dimensions, okay, my example is going to fail. But if you search for something related to like creating an image or creating a social media image, right, you're probably going to get a landing page from Canva. And it's not just Canva saying, like, wouldn't it be nice to make an image? It's like, no, here, log in and create this image right now. And so, like, they've created this amazing business that is through content, and now it gives a very clear why for, like marketing content. It's not this siloed thing where like marketing's writing a blog post about a topic, but at the bottom of the blog post it says, like, book a demo and you're wondering why content isn't working. Content has a really strong purpose now because it's to drive traffic to the website for these high intent search terms. And instead of just serving them up like an article on how to do it, they're like, log in and do this yourself. And then when you actually go to download the image out of Canva, that's when you have to create an account. So Canva would be like the gold standard.

I think Canva's right up there. The other one that I always use is Miro. It's a super technical product, which is also why it's a cool example. But they do the same deal. They've got a whole bunch of templates. They ask you your goals when you sign up. They've got different onboarding based on the goals. If you're a big company, you can work with sales. If you're a little company, you can just buy it on your own. That's the other one that I always use. There's just a lot of good stuff that the average SaaS brand can look at. Both of those companies just learn a ton from.

Yeah, one other that I like to toss in there too, because we'll often talk about freemium or free trial, but Asana actually, you know, balances the two of those pretty well. So you sign up for Asana and you get a free trial of their business tier. So like all of the features and everything you could ever want. And then after X amount of time, they move you down to the lower tier and that's where say they have that freemium product, they have that free tier that you can use forever, but they'll kind of show you, oh, like, you know, you start to use these tagging and these other features that are kind of nice, nice to have and then they kind of take it away or you foot the bill and then you get to use them. So I give you options.

They give you options.

Yeah, yeah, exactly.

Okay. I found this. I went Instagram post template. The very first organic search result is Canva. Canva. It's like canva. The URL is canva.com Instagram/templates. Free, beautiful and customizable Instagram post templates. You might not even know what Canva is, but you're going to click on this and you'll be like, holy cow, look at all these examples they have. Then you're going to click. There's no, like, overlay to, like, to get you to log in first. You literally select the template first, then click customize this template. Then you're in Canva, then you're editing. This is like the other thing to your point, Breezy about, like. And both of you actually delivering value, right? To Andrew's company. Delivering value. Like, I've now created and put in all this effort to create this thing and then I have to create the account to get it. That's like the ultimate alignment of marketing initiatives, if you ask me.

And, like, compare that to Photoshop. Like, I took a Photoshop class in high school. Could be more opposite that, right? It's like you buy it, you have no idea how to use it. You open it up with like, basically a blank screen with like a clicking cursor with no instructions. Super long time to value. Super complicated. That's why Canva is so popular.

I just also think, like, especially in B2B, this is a really good approach because so often you're selling to like a, a very specific job, like a role. You're selling to marketers, you're selling to salespeople, you're selling to engineers, you're selling to finance or hr. You can get inside the heads of those people and think about, like, what are the things we could build for them and get them into our product. Anyone have a thought on this before I change directions? What do you talk to the CEO about when it comes to, like, what metrics do you report on? Because I hear a lot of people talk about it and it's like, well, you know, engagement or activation. But I'd love to hear some actual. From people who actually know what they're doing.

Wanna kick it off, Andrew?

Sure. I mean, this is. The challenge with this space, is that there's infinite data you could look at. And I think that there's. I'm gonna go on a slight rant and then I'm gonna give you a really simple answer.

I'm here for the rant.

We're all here for the rant. Well, I just think the SaaS world puts this premium on getting, like, the most data. And it's like everyone's like, oh, I'm doing some deep spreadsheet work. I gotta get more data. I gotta get more data. And early on in my career, I had a mentor of mine who was like, listen, dude, what are you going to do with this information this week or this month if you have this data? And I'd be like, Something, it depends what it shows me I'm going to do something. And he was like, dude, move forward. It's not worth waiting. Let's move forward with what we got. Imperfect and fast is better than perfect. And like very, very slow.

The story of my life. That is my autobiography right there. Imperfect and fast.

Yeah.

Actionable, baby. All right, so with all that in mind, there's basically three metrics that I care a lot about. And if you take reforge, they talk about inputs versus outputs. So I like to focus on inputs, outputs being revenue and number of customers. That's always the last thing that happens. So I care about acquisition, activation and retention, more or less. So on the acquisition side, I actually don't celebrate total signups. I try to celebrate quality signups. So trying to figure out the moment they signed up, should we high five over them or not? Something extremely simple as a definition there, but some quality indicator if we should get excited about them.

Like what, what's an example of a. Because this is basically like lead scoring, right? What's an example?

The super simplest example is Gmail versus business email. Right? Gmails convert very, very low. Business emails convert way.

Oh, I hate this one so much. I don't have a better answer. But no, I'm not, not criticizing you, but the amount of. The amount of hours I've spent in my life arguing between ops and VP of sales, if we should sell to gmails or not.

100%. 100%.

Okay, so I'll give you another conversation.

Once a week at least I'll give.

You another one so we can hit on that one too. Size would be the other one. Right. So if you're selling to E commerce brands, the revenue or number of customers that they have would be another. Right? Some indicator of how large are they or how likely are they to be a good user.

Got it. So something on the way in where like they. It's a demographic or firmographic type thing where it's like they didn't have to do anything in the product yet to determine like Andrew's a good fit regardless of whether he uses the product right now or not.

Totally. And without obsessing over like what page they come in and how many touchpoint and all that stuff. So some measure of quality when they come in. And then the real North Star for me has always been activated accounts. So activated accounts being defined as when did they first receive value. It's a binary thing. You make it there or you don't make it there. If you make it there, you're five to six times more likely to buy than if you don't. That's the goal. Get as many people there as possible. And really my North Star is qualified activated accounts of those who come in that we're excited about, how many make it to the place that we're excited about, that's the main thing that I'm looking at. And then later on I like to get into some kind of a health score metric for existing free users to understand how likely are these folks to upgrade at some point down the road.

What do you say, Breezy?

Yeah, I actually have a little bit of a different take, so this is good. Let me keep the conversation spicy. So I actually, I think a lot of the time what? So we'll leave the personal emails to the side, I think.

Wait, no, I actually, I circled that. I, I, I circled that in my notes. We're going to come back to that because I want to just talk about that separately. I think it'd be interesting for people, but let's go ahead.

Yeah, yeah, yeah. I think the other thing is too, I think the reason why I'm so nervous about the segmenting out by okay, what's their company size or what are these qualifications? I think if you're talking to companies who are born out of product led, this is a good layering for them and a good way to look at it. But for many of the companies who are not coming from a product led point of view or the people who are not coming from historically product led, like companies in their own historic past of their job history, it's a very, very slippery slope because in B2B we love to say, oh yeah, the bigger company the better and they have to have X amount of employees and all these different qualification metrics. We love to just narrow down to these enterprise accounts. And I think if you do that in product led, you are in some ways kind of like missing the point because I think what you should do is you should be segmenting all users just to understand these various segments. So you should have a segment that you can look at that hit that criteria. You should have these other kind of like built out. Maybe there's like a tech stack type of segment here and then you can kind of look at the success metrics of the various segments that you have. But using like companies are tending to lean towards this idea of a product qualified lead and to create a product qualified lead they're only using one. And with only using one product qualified lead, now they're saying, okay, the company size has to be this big, the title has. And they're doing it the same way they did with an MQL which we already saw get broken over the last 20 years anyways. And so it's like I have this fear where instead of it's like I've been trying to talk to everybody about PQL should be pql. There should be these segments and cohorts of your various users that are like PQL number one, number two, number three, number four and, and being able to engage with folks and make them successful that way. And also this is important to me because the needs of the people are different. If you're looking at a really small company where one of the founders is maybe the one who signed up, they don't hit your big company criteria, but they are super technical users. So they can go really far in the product and be successful depending on kind of like what your setup is. So that's kind of what I'd say there. I this if you Talk to historically B2B folks and talk about adding in that company size data, they love it. And like, no, don't do it. They over index way too far on it.

Well, somebody signs up a free account, signs up at a big company, next thing you know the sales rep is literally flying to California to knock on your door, be like, hi, I saw that you signed up. Yeah, I think it's smart to have basically staggered. It's a. Yeah, we used to do this at drift in the early days, for example, like we had certain PQLs and if they were of a certain criteria then they got treated differently than others. And that's what's like great about marketing and email and content is that you can like nurture those conversations at, at scale based on, based on what they've actually done. Here's a question though. Where does like driving pipeline fit in this? Because you, you know the number one thing like especially in the B2B world, which is what everyone's listening to on this podcast, they're being tasked with driving revenue. And so like we got a product led growth approach, we're generating a bunch of active accounts, you know, but I'm getting my ass kicked by the VP of sales because she's like, I don't want any more qualified accounts. We need revenue, we need pipeline. And so where does that fit into this equation as marketers?

I'm gonna let you take this one Breezy. I feel like you've probably got a really cool perspective on this given what y' all do.

Yeah, yeah. Okay, cool. Yeah. So I think first step in this process would be what my last answer was, which was segment out those users and start to understand that piece. Because that way you know how to interact with them. And basically what you should be doing is delivering that information to the sales reps or whoever's going to be working those kind of users inside of the product and being able to have a good conversation with them that way. So you want to be layering in not just like segmenting like who they are and what company they are from, but what have they done inside of the product. Have they invited X amount of users and clicked on this key feature? Okay, great. Then they're more likely to be ready for a conversation. Are they in our free tier and moving the first tier or are they like on a team plan but maybe ready for enterprise? And so kind of creating these different triggers and getting your sales reps armed with that information so that the conversation isn't like, ay, I saw you've been using our product for a year. Want to pay more? Like, there's nothing to say there. You need to be able to be like, hey, saw you just added in like two new users in the last month. Seems like you've built a bunch of this. You know, here's the value that your team's already seeing. Let's see if we can compound that by bringing on the rest of your team and let's have a conversation about it that way. And so that's kind of the revenue approach on taking that product led data and leveraging that to have a sales conversation. Now on top of that, the sales team should also just be doing what we think of as quote unquote traditional sales. So it's sort of this hybrid approach and some companies have chosen to have their sales reps be doing both of this. So just like traditional sales and looking at the existing users, or maybe they've segmented out two teams, one team is working with people there because it is a little bit more of a customer success type of conversation. When you're talking to people who are using a product, it still needs the sales like take and the ability to like kind of push things forward, but it's coming from a more strategic customer first.

Yeah, I think we learned a mistake early once that if you want it seems nice on paper, yeah, we're going to have customer success, but those same personality types are not going to close deals. And it's not a knock, it's just completely different. If you want to close deals, you need to have sales work. Those. What you just laid out is so eye opening because it's like, you can't just make this up. It has to be a fundamental company. You have to like be intentional almost about like what tracks do we want people? So what does our product do? What are the tracks that we want people to take? Right. You're not just like, yeah, we're gonna have a free product and see what happens. It seems like this has to be built into like the DNA of the company at the founder level, at the product level, at the sales and marketing level. And then we're gonna go try and fill these buckets with more stuff. It's not the other way around.

Yeah. And it has to be kind of a top down. Everyone is, there's no way to do product led. Like on the side, like, oh, marketing team. Like, yeah, why don't you just launch product LED and we'll just like use it as a lead gen. Like, absolutely not. Like bound to fail.

That's the kiss of death.

Yeah.

Andrew have any follow up on that?

No, I mean it's pretty similar to how I think about it as your. What I've learned is as the company matures, you get more information that can be really helpful as you scale and as you think about scaling pipeline. So like one of the plays that I really like to run is in the early days to find out like the core number of use cases that people have like their job to be done for signing up for your product in the first place. And for most products there's like five or six of them. And what you learn over time is that certain jobs relate to enterprise buyers, certain jobs buy at different conversion rates, certain jobs are more likely to be a fit for your higher revenue plans and things like that. So as you go, there's this really cool feedback loop that you start to get from your product data and the jobs and what people do with those different jobs, what areas of the tool they use or don't use and how likely it is they're going to buy. And then there's this cool feedback loop that happens from the product team back to the marketing team. So you can say, hey look, we've got six months of data that shows someone who signs up that says goal three, whatever it is, buys and is an enterprise level buyer and we're converting them at a super high rate. Can you help us go get more? And then all of a sudden the marketing can be a little bit more intentional. Going to fill the bucket with some more of those folks you can make use case pages on the website, do more nurturing. You know, it just unlocks some really cool stuff where the product data helps you make better decisions to drive revenue.

On the side here I pulled up the stats. Some stats from different product led companies. Maybe I can run through.

Oh please.

I love that. Yes.

All right, so Saster, I'll give them the due credit here. So Saster pulled together some insights from publicly traded companies. So here's a few of them. I'll just list a few off and maybe we have conversation from there. So 60% of Asana's customers come from self serve and 40% of them come from sales. 80% of Datadog's revenue at 1.2 billion comes from 100k plus customers. But the free edition is where most of those customers began. So they kind of like move through that entire funnel.

100K plus customers, meaning they like the contract. It's $100,000 contract.

Yeah, ending and expanding.

Yeah, yep, exactly. So like starting from free and expanding all the way up to 100k or over 60% of expensifies customers started off in the free edition. Even at their current ipo, that's still the case for their funnel.

Wait, let's pause on that one for a second. I'd love that one because that's probably an example that everybody can understand. Like from a How you sell into a big company. Marketing manager Dave, I need to file an expense report. I sign up as one person or whatever or a small team. Now all of a sudden the whole company gets it. Because I guess the point that I was was getting stuck on for people is. Can be hard to think of the math and how this scales, right? Like if you bring in a free user, I got one salesperson at $10 and CEOs breathing down my neck because we got to get to a million in ARR this year. Like that's where it gets hard. And so like the pricing and expansion has to be so intentional with these companies also, right?

Yeah, actually, and that's a good point too, because expansion, we've always talked about land and expand, right? Every company's like, yeah, land and expand. But in reality, like every company landed and then 365 days later they were like, oh, look at that, the contract's up. Do you want to expand by, ooh, 5%? And they're like, yeah, we got 5% expansion. Like that was the land and expansion. That is not land and expand. That is you landed a customer and your product was sticky enough that they stuck around and stuck with like inflation or maybe a little over inflation.

I just got a bill today from HubSpot. Hey, you are now paying. Congratulations. You're now paying us more money because you got more contacts. And so we will now take more of your money.

Great job.

And I'm like, wow, this is the best business to be in.

Yeah, yeah, exactly. But in product led it's like land and expand. Like actually like expansion is crucial or else everyone's just using your product for free. So you gotta land and expand. And also there's, there's way more expansion opportunity. So in some products you'd move from like just like a low tier to a high tier or like add feature on. But if you look at the pricing pages for most product led companies, you'll see they have like a free tier, the individual tier, a team tier, an enterprise tier, all these different tiers. And then on top of that they often have multiple product line, multiple feature, addition, like all these different things that you can kind of get in there. So there's a ton of expansion.

Well, like I just. Sorry, let's keep going with your list. But I was like, I just plugged in Asana pricing and like I'm on Asana's pricing page. They have a 1099 middle tier. 0, 1099 middle tier. And then business tier is 2499. And then that just is hard math from a marketing standpoint. And then when you go. And then I look at the revenue, Asana revenue last year or last quarter was 100 million. So whatever, whether it's year or quarter, the math doesn't add up. And so you have to have this baked in. It's not just like, go do this, generate a bunch of free users because the math just never makes sense. And you're never going to be able to go and generate war. Hey, next quarter you got to go bring in 50,000 new signups. Like that's going to be a tough task.

Yeah, totally. Yeah. Toast SMB NRR is 114% today, but it took four full years just to get to 100%. So that's. Now we're getting into some like nitty gritty here. So maybe I should have skipped over that. But NRR net retention rate more commonly looked at. But I looked at it all across SaaS but more commonly high in product led companies because of. If you're looking at churn and expansion, which tend to be better in product led companies. We just talked about why all the expansions there and then generally lower churn because They've already been using the product and this and that. And so yeah, so you'll see a higher NRR for a lot of product led folks. So let's see. 38% of Freshworks customers still pay monthly even at 400 million plus in ARR. So that's sort of an interesting one. So that's sort of like, you know, monthly. Maybe they're still on credit card, they might end up, I could see them, you know, making some moves to move something. But you know, that Aside, Sprout Social IPO'd at 180 million ARR with 20,000 plus of its customers paying just $99 a month. So there's kind of like that long tail example. So tons of people still paying a low amount, but so many people all actively using the product that then it kind of like generates like a good chunk of revenue for them.

That's kind of the model I'm most used to. Yeah, from my experience, yeah.

Vimeo 330 million ARR still 75% self serve, 25% sales driven revenue. Monday.com's average customer only pays 2k a year, but they have 400 million plus in ARR. So another long tail one.

Wait, so you chalked that up, you chalked that up to the power of like landing and expanding or that they could have a bunch of huge enterprise.

Customers on which one?

On like Monday.com example?

Yeah, so for them I would guess that they would have just like a really like a ton of users. Even though, so even though the ACV is relatively small, the sheer number of people using it are so high. But what you'll see with those types of companies is they hit this inflection point and like with a metric like that you'll start to see maybe some of those kind of moving to more enterprise type tiers. But yeah, so I think like you know, all across there's MongoDB on this list, Cloudflare. So there's examples that go both ways. There's examples that show a long tail of low ACV and that's how they're just generating a ton of revenue. Then there's companies who, yeah, they have like a good, they use what would be kind of like that long tail as their source of like leads, so to speak, and kind of move those people up and get them to the enterprise tier. So they're enterprise solutions, but they allow you to kind of get started with them and move up quickly in that way. Definitely both sides, definitely both sides on being like a chunk sales like good Chunk from the free version. It's all over the board. It's not quite so simple as people kind of chalk it up to be like, oh, it's a free product or you pay $10 a month, like only calendly. It's like not the case, right?

All right. I wish wasn't the case, but we do have to. The producers are in my ear here at Exit 5 Studios and they're saying that we must wrap this up. But you two drop a ton of knowledge on this and I want people to use this as an opportunity to find you elsewhere. So. So let's do quick plugs where people can get your content, find your stuff. Andrew, go first.

You can find me on LinkedIn or Twitter. I'm most active on LinkedIn. Andrew Kaplan. C A P L A N D. It's both a little different than your other Kaplans, but that's where you can find me. You can also check out my website, deliveringvalue, co. All one word. I've got some digital products on there. I do coaching, I do advising. That's where you can find me.

Breezy.

Yeah, you can find me generally on LinkedIn's My Number One spot. So Breezy Beaumont. There are no other Breezy Beaumonts in the world. Shouldn't be too hard to locate me. And yeah, if you're Interested in product led stuff, you can go to getcorrelated.com, just check out the blog. We also have a bi weekly call, actually, I run a biweekly call with a bunch of product LED folks and then there's a good chunk of folks who just really wanna learn and soak up information. So if you wanna join that, feel free.

I love it and I would definitely recommend taking, going and following both of these two. One of the cool things about this podcast is I just, I've been reaching out more to people who I'm seeing put out content and I'm like, you know what, I don't know this person personally, but I would love just like this person seems smart. Hopefully the podcast validates it and obviously it did in both of your cases. So follow Breezy, follow Andrew, get more PLG in your feed, ask questions, but most importantly, don't take anything verbatim. There is no playbook, there are no fundamentals. I think what I can tell that's cool about both of you is that you look for answers. You have some frameworks and principles for how you might think, but it's going to be different at every company, at every point in time in every market. And so I think that's a really important reminder. Thanks for you both for joining this. I hopefully I will, I will see you around. This podcast will probably be out in a week or two and I'll see you. Okay, awesome.

Thanks, Dave.

Adios.

Thanks for having us.

Bye.

Bye.

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My friends at Hatch. That's Hatch fm. They produce this podcast. It sounds amazing because of the work that they do. And they work with B2B companies just like yours. They offer unlike unlimited podcast editing and strategy for businesses, you can get unlimited podcast editing and on demand strategy for a low monthly cost.

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