10,000 Free Trials per Month by Removing Friction & Creating PLG w/ BEE CEO Massimo Arrigoni

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Alright, thank you. So, well, thanks everybody for joining today. We're going to have a fun discussion about product-led growth and why is product-led different from just being product-focused. I know some of you are probably at the end of a long day of watching some awesome sessions at SaaS or Scale. If we were at one of the great SaaS events, there'd be an awesome happy hour after this, but we'll, we'll do that next year, not this year, unfortunately. My name is Massimo Arrigoni, and I'm the CEO of a company called Bee. And I'll talk about that a little bit during the presentation because it's kind of relevant to, to the topic. But a little bit about myself. I grew up in Italy, and then when I was in college, I had the privilege to study in Los Angeles. And after that, I met the person that later became my wife, and I moved to the United States. So I've kind of lived half of my life in, in Italy, in Europe, and, and half of my life here in, in the United States. And I'm calling in from, uh, the San Francisco Bay Area. I actually live on the Monterey Bay in a little town called Santa Cruz, which is a great place. And so let's, let's get started. This is a topic that I'm very passionate about. I've been in, in software for over 20 years and, and always a product person. And product-led is a— it's something that I've experienced in my daily job now for a long, long time. And so happy to share what I've learned with you. And especially happy to have a conversation with you about what you've experienced and questions that you might have and suggestions, etc. So let's get started, but please interact with this presentation asking questions, etc., in, in the chat. So what is product-led growth? Product-led growth is a growth model, and what's special about this model is that it's centered on the idea that the product can be the primary driver of acquisition, of conversion, of expansion and retention. Not the only driver, but a primary driver of, of your growth. Now, why am I talking about product-led growth? Well, like I said, I've been in software for over 20 years and I've been involved in many different products and software projects. And specifically about 20 years ago with some friends, I started an e-commerce commerce company. Uh, the name of the product was Product Cart, and we were among the first to develop a shopping cart system for, um, small businesses. And it was a great product, uh, and it grew and it powered, uh, thousands of online stores. In fact, it's still up and running today, and many stores still use Product Cart. Um, it was a very feature-rich product. In fact, we integrated literally dozens of payment gateways, shipping systems like UPS and FedEx and USPS, etc., etc. It was very, very strong in terms of the features, but there was some friction at adoption. You couldn't just deploy Product Cart and be up and running in minutes. It took some time. It was also at the beginning, it was pre-SaaS, so already things were a little bit harder back then. But overall, it was hard to get the value of the product right away. It took a number of steps. When Shopify came onto the scene, one of the first things that they said was, "Hey, let's simplify this and remove friction." And for example, instead of supporting dozens of different payment gateways, they only supported one. You had no options, but you could get up and running very, very quickly. And history shows how well that has worked for Shopify, for example, that now is a company worth over $130 billion. We ended up selling the company. Uh, it was a nice exit. We didn't hit it out of the park, and we believe that one of the very reasons why we weren't able to hit it out of the park was precisely that friction that was part of our business model, despite the product being a very good product. Now, years later, the company that I run now, Bee, came out of an idea that we could turn things around. And we had developed at MailUp, which is an email marketing company, we had developed a nice drag-and-drop email editor. And one day, about 5 years ago, we thought, well, what if we take this product and throw it up on the web? And see if anybody cares. From the very, very first moment of the life of this product, you could literally start using Bee in 2 clicks. And if you go to the website today, beefree.io, you'll see that that persists as a fundamental truth about how we let people experience the value that we believe created. So he was product-led from day one. The product itself was the primary driver of acquisition, conversion, expansion, etc. And it's paying off. The company has grown very fast, and to this day we remain true to that initial user experience. So what's the difference What's the difference between product focus and being product-led? Well, let's go through some fundamental ideas behind this. And obviously, first of all, you are solving a fundamental need, right? So finding a job to be done and finding a job to be done that's not done well today Solving in a way that's clear and understanding that the job is big enough, the market is big enough that it makes sense for you to step into the game. That's fundamental to any product. Your product needs to get the job done for the very people that decide to adopt it, right? Nothing different there, nothing particularly product-led. Finding great product-market fit also is fundamental to any successful product. The idea that Your product is good within a certain set of circumstances for a certain type of customer at a certain point in time, et cetera, et cetera, what you call a product-market fit. You fit well with the people that adopt it. Deriving great value, so the idea that in their view, from their perspective, your product makes sense. It's priced right, they perceive the good value. Those are things that are fundamental to any successful product. So, so far we haven't found anything that's different about being product-led, about putting the product in the driver's seat in terms of being a driver of growth. So let's get into the things that are different. First of all, letting the customers into the product as soon as you can. How can you reduce the path between the customer and experiencing some, at least some of the core value that your product delivers. Reducing that path to something that is as short as possible is fundamental to the idea of delivering growth through the product. Second aspect that's specific to product-led growth is the idea of relentlessly looking for friction and removing friction at every step, precisely because the product will be your primary driver, not just of initial conversion, but also of expansion, retention, etc. Removing friction is fundamental to the success of the model. And by the way, this is a great exercise that you can do with your team. Um, go through the signup process, or if it's an existing customer, Upgrade to a new plan. Look at all the steps that are required. Look for friction and label it as friction. Decide what can be removed immediately and what could be removed, uh, at a later point. That's a great exercise that you can do with the entire team and regularly as well. Another element that's specific to product-led growth is creating product-driven expansion. So Not just at the initial signup process, it makes sense to put the product in the hands of the customers as soon as you can, right? So that they can give you feedback, they can see whether it fits with them, et cetera, et cetera. But this also applies to expansion. So let's say that you deliver a new feature. Can they try it? Can they experience the value of what's new? If it's— if that's a feature that's only available on a higher plan, how can they experience that value? Are you sure that the path between them and that additional value that they can get is short enough that the product can help with that expansion activity. And finally, investing heavily in virality. Because the product is supposed to be a primary driver, then if built into the product, there are ways for the people that found it to be a good fit to spread the word, that's gonna automatically help you get more people into the funnel and get more people successfully through that product-led funnel. Does this apply to every product? Can you do this with any product? Well, the answer is no, and it's not good or bad. Some products are simply not a good fit for this kind of model. How do you find out? There's obviously many, many ways and more complex models to answer the question, but fundamentally the key question is, can customers experience some of the core product value on their own? Can they do this or not? For example, Bee is part of a larger company called MailUp Group. Recently we decided to switch ERP system. Is an ERP system a good example of a candidate for product-led growth? Typically no. It's a product that's very complex, where the end user is typically not the buyer. It requires a lot of knowledge to actually get it up and running, and it's hard to experience the value that it delivers right away. So What do you do in the different models? Well, when the product is not a good candidate for product-like growth, and you typically go through what you could call a traditional model, right? You get people into the funnel and they're what's called typically a marketing qualified lead. They could come through content, etc. And then you put them in touch with the sales team that will help them through. In the example that I just provided, our finance team talked to the salespeople for the new ERP system, and they went through an analysis, etc., etc. It's not good or bad. There are different models that fit different scenarios. But what if the product is a good fit for product-led growth? Well, then the funnel changes as we discuss earlier, you try to reduce to a minimum the distance between the prospect and the product. So somebody visits the website, you want to make that path as short as possible. As I mentioned, for example, in our case, when you visit our website, within a couple of clicks you can be into the product. And this is true for many other product-led software. Think about Slack, think about things like Grammarly or Calendly. Within a few clicks, you sign up. Typically it's a, it's a completely free signup and you can get to experience at least some of the core value very, very quickly. When you experience some of that core value successfully, you become what in product-led, in a product-led growth model is called a product qualified lead. Qualified, why? Because you believe that that person experience some of the core value of your product that makes them a successful user of the product. And this is different for very different products. It's up to you to try to figure out when you believe that somebody is product qualified. Even better when you try to attach conversion data and you find correlation between certain steps that a person has taken in the product and a conversion event later. The more correlation you find, the more precise the definition becomes of product— a product qualified lead. And a product qualified lead in a product-led growth typically turns into a paying customer without necessarily any intervention of sales. So what is the, the, the, the importance of sales in a product-led model? Well, depending on how big that customer is, depending on what their needs are, sales could come, uh, could become part of the equation early on, or maybe much, much later in the process. The, the most important thing to remember is that sales typically does not play a substantial role in the initial conversion. In many cases, they don't even play a role in the initial expansion, but they're there ready to help when that customer needs the additional help. Think about something like Slack. When people start or started using Slack, it was typically a bottom-up adoption. Some people in the organization started using it, et cetera, et cetera. But what if you're a 500-person organization? At some point, the number of people using the application grows, and you're thinking about adopting the application at the entire company level. Well, typically there will be questions about security and then discounts, et cetera, et cetera. And that's a perfect time for the salespeople to come in and to help that customer through the additional steps that they will go through. Atlassian, for example, which is another company that's been very successful at this, follow the same idea that sales, sales is there to be a consultant through the process. Why does being a product-led organization matter? Well, there's now a lot of research done on this been done on this. And for example, OpenView Partners has written extensively about it. They have an index of companies that are product-led and they track how that index is doing compared to the overall market. And there's many other companies that have gone through a similar process. And it appears that for a lot of indicators, for example, the cost, the customer acquisition cost, speed of growth, etc., retention, etc., etc., product-led companies tend to do very, very well, and in many cases better than a non-product-led company. So some takeaways, and then very happy to answer any questions that you might have. Quick takeaways on becoming a product-led organization and maybe using a product-led approach in your next, uh, project or switching an existing product to a product-led model. First of all, find friction. And like I said earlier, this is actually a great exercise to do as a team. Go through the signup of your own product, find elements of friction, write them down, take screenshots, uh, put them up on a wall with Post-its, find a which ones could be removed and maybe flag them with different colors depending on how urgent they are. Also flag something that maybe could be asked or done later and those that can be completely removed because they're probably not, not that relevant. It's a great exercise that helps you on this, take the first steps on this idea of shortening the path between your customers, your prospects, and your product, or an upgrade to a higher price product, etc. So this process of removing friction does not happen overnight. In some cases, it might be just a matter of removing a couple of fields from a signup form. In other cases, you have to intervene at the product level. Which is why it's important that you become an evangelist of the idea of product-led growth for your entire organization, because you will need buy-in from all, all sides of your company to really deliver on the promise of becoming a more product-led organization. For example, sales, as we said, In a product-led growth model, the, the, the role of sales changes dramatically and they become very much more of a consultant, a product-oriented consultant that will help customers through their growth with your product. It might sound easy to just shorten the distance between your customers and your product. It's not. In fact, in our own organization, I can tell you it's a constant effort to find new areas of friction, to find new correlations between usage and conversion or expansion events. It's ongoing, and in some cases it is tricky. So I'd love to hear from you at this point, what— if you've found in your experience, what have been the trickiest parts? What is it that you've found difficult to achieve if you've tried to switch some projects to a product-led model? Anybody? Don't be shy. I know some of you are at the end of your workday, but we'd love to have a— conversation with, you know, some of your experiences on this. So question said, what are good ideas of viral marketing that helps with PLG? Okay, so for example, if— well, some products are just fantastic for that, right? Because if the product has a component of of sharing or messaging like Slack, the virality is built in. But what if the virality is not built in? Well, I can give you, for example, some of the examples that we've used. So Bee is a, is a tool to create emails. Obviously, at some point you may want to test that email. And so the testing tool allows you to add emails of your colleagues, etc., and you can share it. You can also turn an email into a PDF. And typically a PDF is something that you send to somebody else. So find, find features in your product that trigger that user as a next step to take what they just did and share it with someone else in the organization. And that, for example, is a, is a good way to build some virality into it. Another question: How do you reduce friction for a more technical product, specifically B2B space? Great question. And in fact, how do you make a product product-led for developers? As I said, it's a, it's an ongoing effort, right? So in our own company, for example, it's something that we're working on right now because the developer part of the business is not really product-led. One way is to have sort of a playground where developers can actually experience some of the features of your product without necessarily having to install it, without having to do major development efforts. Another way, if you, if you remember when Stripe came into the scene as a payment gateway, they had an example of the code that you would embed into your application right on their home page, right? Trying to reduce for a developer to a minimum the distance between their idea of what it would mean to embed Stripe and the actual code that they would actually use. To embed that application. So if it's a technical product, think of ways where you can showcase, uh, um, uh, to a developer or another engineer the value and have them either play around with it or give them some, uh, you know, immediate access to some of the, the software source code pairs, for example, so that they can experience how easy it would be to take the further steps. See other questions. Um, what's a good way to think about PLG for companies that require the user to provide an input before they see value? Um, great question again. So that's one of those cases where there might be friction right at the start. So a great way to reduce that friction and show them some of the value right away is with, say, sample data. So I log in and the first thing that you ask me is not to import my data, but actually see how that product, something like a mixed panel, as you said in, in your question, how does it look like with some fictional data? So I can see immediately what the reports look like and I can dig deeper, etc. So sample data, for example, is a good way to reduce that, that friction instead of getting somebody to import things right away. "Is it necessary to have a free tier for PLG since by definition making customers pay is a significant form of friction?" Okay, well, first of all, there is a difference between freemium and free trial, right? So should you be an application that goes for a free trial or friction— oh, sorry, or freemium? I don't know if any of you has read Product-Led Growth by Wes Bush, but he has a great quiz on productled.com, his website, and it's a quiz that actually takes, takes you through a series of questions and helps you answer that question: should I go for a free trial or a freemium tier? And typically you are thinking about things like what's the cost of supporting a customer? Is it just a marginal cost for an additional customer, or is it a big cost. And what is the average contract value? Is it typically small or is it for any customer pretty large? Because if it's pretty large, you know, very likely you're not going to go to a freemium. And there's a number of other questions that you answer. So that's a good quiz to, to take. In terms of the free tier, So if, uh, if this is a product that again costs a significant amount of money, especially if it requires, um, the, the buyer to get involved and the buyer is not the user, etc., typically what you want is a free trial, not necessarily a free tier. And through the free trial, uh, you need to try as much as you can to get them to experience that value. As using some of the examples that we use earlier and also using all the other things that you can do from onboarding, product tours, you name it, all the tools that you can put to work within that free trial to again reduce that distance between that, that free trial user and the value that they can get out of the product. Can product-led growth replace sales? Um, So no, it doesn't. And the reason is because sales typically comes in when the customer needs more. And that more could mean that they need help with scaling usage of that product within the organization or answering some security-related questions or maybe legal issues, etc., etc. There's a number. Number of reasons for sales to come in when the customer needs it. Um, the beauty about product-led is that you have a customer that does not need to be sold on the product. They've already experienced some of the core value that you provide. Sales will just be there to let them explore additional value that you may provide and also let them remove some of this additional friction between them and maybe a larger contract throughout the organization, etc. See another question. Um, could you please let us know BeeFree's conversion rate? Um, yeah, absolutely. So for example, in our own, uh, in our own model, we convert around 9% of all site visitors to a free trial of what we call, what we call BeePro. About 50% of all site visitors experience the free product. So, um, As you might have seen in our funnel, literally within 2 clicks, you are experiencing this drag-and-drop email editor, and about 50% do that. 9% of all site visitors become free trial users, and then around 7% of all free trial users become paid customers. So maybe that gives you an idea of how that's working in our funnel. And again, it's a constant Product-led growth is not a one-time exercise. It's a decision that you make in terms of growing your business. And so it's a constant, constant effort of finding new, new ways to remove friction, new ways to help the customer through the, through the funnel by enabling them to experience the product. So we're looking at a number of ways to make those conversion statistics even, even better. Let's see another question. In your example of ERP, can we do a simplified version as a free trial and later convert into paying customers? Most important, without jeopardizing the main buying customer who are willing to pay from the beginning. So when you have a really complex product The answer is yes. Can you find areas of value where you can apply a product-led growth model? You might. There might be areas of value where you can reduce the distance and let customers experience what they would get later, right? So for example, Reports is a great area where by using sample data, fictional data, um, you could allow somebody to see the reports that they might get out of the ERP system, right, right away. That's an area where you might be able to do that. Or for example, let's say it's a complex HR system. Well, uh, you might let them see how onboarding a new employee might look like through that HR system. Because again, you can do a fictitious sort of onboarding of a new employee and experience yourself how that might look like in that new HR system. Now, typically again, these are large applications where a free trial of the entire application doesn't make sense. It's hard for the customer to experience the entire product value. But you can isolate areas of the application and, you know, and shorten the distance between them and the value you created in those areas. Why product-led companies focus on product-qualified leads rather than marketing-qualified leads? Well, because a marketing-qualified lead doesn't actually tell you anything about whether that customer, whether your product is a good fit for that customer and whether that customer has experienced any of that value that you created for them. A marketing qualified lead tells you something about the interest of that customer in what you might deliver. It tells you something about who they are if they filled out something right before before they downloaded a white paper or something like that. But because at the core of product-led growth, there's the idea that the product is the primary driver of conversion, etc., then you want to have customers that become product qualified. And the definition of, of product qualified lead is important when you align the entire organization around goals, right? So for example, let's say that, um, the— a lead becomes product qualified when they have sent 1,000 messages on Slack. Well, then you're gonna have the entire organization focus on getting as many customers as possible to that level by doing, you know, internal onboarding, etc., etc. Um, and, and it's up to you to find what that qualification is is for your product. Ultimately, it's, it's, it's of great help to arrive at a definition of what is a product qualified lead in my business. Again, that is a person that has successfully experienced at least some of your core product value.

Gosh, there's a lot of questions coming in, and thank you so much. I know we are over the time, and you've just been incredible in fielding all these questions that have come through. Massimo, let's wrap this up, I think, with one last question. And then, if you wouldn't mind sharing as well how folks can get in touch with you or reach out to you or learn more from what you are doing, I think that would be a great opportunity. And then we'll wrap up after this one question.

Yes, Tammy, thanks so much. And you're going to share this Google Slides with them, right?

Is that correct? Yes. The slides will be available as well as the recording. Fantastic.

So there's links there, but you can find me @massyari on Twitter. Here, let me put it into the chat and happy to answer any questions there. There's great resources on the web for product-led growth. OpenView Partners is one of them. There's also the Product-Led initiative. ProductLed.com is another great resource. If you do a search for product-led growth, you're going to find some tremendous resources about this. And because they're product-led themselves, they're going to give you a lot of the value free of charge. So back to you, Tammy. Thanks for— thanks so much for having us.

Alright, thank you everyone so much for joining this DisasterScale. We have another full day of content tomorrow. Join us again. Thank you so much, Matzmo, for an incredible product-led growth presentation. Fantastic to have you. And to everyone who joined today, thank you so much for your time. Looking forward to seeing you again tomorrow.