From PLG to PLG+SLG - How Lucid Scaled to 70M+ Users with Lucid Software's VP, GTM and VP of Sales

Please welcome to the stage Stephanie Cousin, Vice President, Go-to-Market Strategy and Operations at Lucid, and Roderick de Greef, Vice President of Sales and GM EMEA at Lucid. Good morning. I'm Steph Cousin. I'm the Vice President of Go-to-Market Strategy and Operations at Lucid Software.

And I'm Roderick de Greef. I'm the VP of Sales and GM of EMEA. And today we're walking you through a couple of things through product-led growth to sales-led growth.

Yeah, so in order to do that, we thought we'd give you a bit of context on Lucid first. Who we are. We're the leading provider of visual collaboration software with over 70 million users around the world. I've met a few at this conference and it's been great to get to know you. We serve that global customer base from, based on our, our office in the US as well as offices in Amsterdam, Melbourne, and in the US, both Utah and North Carolina.

So our product suite includes Lucidchart, an intelligent diagramming tool. Lucidspark, a virtual collaboration tool, and Lucidskill, a cloud visualization application. And we focus to help teams build and collaborate together in a visual way, whether it's engineering teams for creating network architecture diagrams, HR building org charts, agile teams to do PI planning, or sales, CS teams to do collaboration on how to serve their customers in a more efficient and safe time and enhance productivity.

All right, so let's dive in. We thought we'd start with a little bit on Lucid's history from our launch to today, sharing some of our key milestones and our firsts. We'll talk a bit about our first paying customer and the beginnings of our product-led growth motion. We'll then touch on our first enterprise customer and our first sales hire. And then we'll go deeper on how we grew our PLG and PLS motions in parallel, including how we expanded internationally. We launched Lucidchart in 2010, our flagship product. In the beginning, we were very much focused on product development, and primarily engineers— we had primarily engineers, like many early companies. And— excuse me— and from there, we, in that first year, we had launched— we had our first paying customer, pictured here with our chief engineering officer and co-founder. And this is a major milestone for our company, of course for any company. And we began to think about our business model. And what I'd like to do is share a couple of principles that we thought through. As we developed that business model. And while PLG was, I don't think, yet a term in 2010, these have ended up being quite foundational to our PLG model. So I said, as I said, a strong product-led motion starts with a strong product. And this intense focus early on our product was not limited to, to just our product and engineering teams. In fact, when I joined Lucid 7 years ago as our Chief of Staff, one of the first things I learned about my new boss, who was then our COO, now our CEO, was that he was a fervent reader of customer support tickets. In fact, he was famous internally for having read over 100,000 customer support tickets. Yeah, so of all the unscalable things that he could do, why read that many customer support tickets? And it's because we've learned that there is absolutely no substitute for the voice of the customer. And we don't mean some report aggregated, or I know there's many AI tools that allow you to do this now, But these are the, the pure and simple words that come from the mouth or, or the keyboard of your customer. And this is a great example of one of the keys to our success, is that oftentimes you have to do something quite unscaled to do something more scaled quicker. I apologize, the clicker isn't working. Would you be able to?

Nope.

All right. Our second principle, simple pricing and seamless expansion. Lucid employs a, a freemium model, and earlier on that meant converting our users to our paid plans. But as we began to differentiate our product, add more value, add more features, that also meant upselling them and creating an expansion path. And to do this, we invested very significantly in a growth team that was tasked with iterating on all aspects of our pricing and packaging, our click pathing, and our CTAs. And this became a, a true champion of our culture of experimentation internally, which has really defined our PLG model. And so our last principle, widespread discoverability. This is really to drive distribution. For Lucid, this meant a few things. First, we must be found where our users are looking. We invested a lot early on, put a lot of effort into making sure that both our potential and existing users, uh, had to know that we have— we can solve a problem that they have. And the best place that you could see this is in our investment in our SEO program. In, in that content. We rank for over 1,000 keywords and phrases, and that started very early on. And in this regard, I think the term product-led sales actually doesn't give marketing enough credit. There's a substantial contribution from marketing in that. It also meant that we joined— we might— we have to join ecosystems so that Lucid works where our users work. This is a huge tenet for us as a product, is let's make sure that we work exactly where our users are. Earlier on, that meant a lot of investment in, in integration so that We were able to be part of the launch of a— we were able to be a part of the launch of the Google App Marketplace. And since then, we've invested a lot in this and are now available in the Atlassian Marketplace, in Microsoft 365, in Slack. We also have integrations that allow our users to bring in data from platforms like AWS and Salesforce, and of course, SSO providers. But the biggest thing there was to really be available in those ecosystems. And then last but not least, really important that we could drive that discoverability and distribution through our own product. Making sure that users could discover our product through their colleagues using it, through teams at their companies using it.

As Steph mentioned, these principles were key to our commercialization efforts. And it was not long before we had our substantial paying user base, leading to our first enterprise customer. In 2022— in 2012, we landed our first enterprise customer. Funny enough, here in the UK, it was a large publishing house. We were— they were in the midst of a significant digital transformation, and they chose Lucidchart at that time for their portfolio to enhance collaboration, productivity, and as well among a shift from Microsoft Office to G Suite. It required really some changes to both our product and process, a significant overhaul of our user and admin systems in the product to scale with Enterprise Client. In addition, it required to negotiate our first enterprise customer contract undergo deep security reviews, etc. This was a major proof point for us in enterprise space. Every product-led growth company will remember when they do that first product-led sales deal. They will learn so much of that milestone, and I'm proud that this customer is still customer today, over 10 years further. After that first enterprise customer, we were ready for more. It was time to build our first sales team, and we started our first sales hire in 2014. We realized that we had enough users, but they were scattered all over, over hundreds of organizations, so probably would be beneficial to start talking to them a little bit more. And we hired somebody with a business background under a special project and threw the project at him. So he started talking to customers and peers in the industry, started to build out the inside sales motion. The first sales hire after that was flying solo for a while, testing different sales strategies to find the right formula. He hired then his first 4 salespeople. And even when we hired the initial team, there were many multi-phase groups. One comparison I like to make is that you build a sales team in different— with like players, like a basketball team. At a basketball team, everybody needs to be able to play multiple positions. First, the football team, or soccer for the Americans here, the 5 players are there to mingle. Nowadays, we then started to fill the sales strategies. We got the first playbooks in. And then we start to hire more. We built the sales teams in difference between the football team, yeah, where we have multiple positions. You have offense, defense, strikers, defenders. We do that because it really helps you. But it does sound familiar that you wear many hats in the beginning, doesn't it? So we're going to hit a little bit more in-depth on some of those additional expansion milestones. But let me share a high-level overview. We expanded into new languages first. Nowadays, Our solution supports 12 languages, and we support over 31 languages in our customer-facing and go-to-market teams. And we embarked further on localization efforts with our growth marketing and product team. We opened offic— offices internationally in Amsterdam and in Melbourne. And we continue to introduce new products like the Visual Collaboration Suite and LucidScale.

All right, so we've talked a bit about firsts, giving a sense of how we've built our PLG and PLS motions through those milestones. But now we'd like to go deeper on how we built our product-led sales motion. Lucid's products are, are generally what we consider horizontal, meaning that we would, every knowledge worker can use them. And with the success of our PLG motion, that meant we had a, a very scaled user base, but also a very diversified user base with those users being a part of all kinds of organizations, organizations with a variety of documented use cases, spanning teams of all sizes, organizations of all sizes. Organizations within several different industries, and of course across many geographies speaking many different languages. And these characteristics are what define an organization as a customer. So while when we think about PLG, we generally think about the user's needs, the user's discovery, the user's path to value, when we talk about product-led sales, we now need to incorporate the customer's needs based on those characteristics. And those characteristics determine how a customer purchases our software, how a customer adopts our software, and also how our customer engage— engages with Lucid, with our account team, to derive value from our software. And these, of course, all more complex at larger organizations, at organizations within certain regulatory environments, at organizations within certain industries. And this is really where product-led sales comes into the picture. But really important to note that here we stay true to our PLG principles. Have they purchased our software? We still need to have that, that simple pricing and seamless expansion. How they adopt our software, we still need to focus on the time to value. And of course, when they engage with us, we need to drive that discoverability, right?

With that PLG motion, more complex purchasing behaviors come there. With the PLG motion, first we had standardized documents, terms of service. We had our documents, security documents ready. Payments was just through the online platform. It was simple and easy. However, we're introducing a product-led sales motion. As I said before, it involves addressing more complex purchasing behaviors, necessitating enhanced legal and security and compliance measures. We need to really— legal and security team to be involved more in the negotiations, compliance efforts, and of course effectively train our sales teams on regulatory requirements to navigate these complex complexities. I know you will be tempted, because we were as well, to facilitate every customer as much as we can with their wishes on, for example, jurisdictions or security certifications. But I would advise you to minimize as much as we can— as you can. Your legal and security teams can only handle a limited amount of jurisdictions and security certifications, for example. Even today, with 17 million users on our system, tens of thousands of customers, Lucid will still only allow a limited of countries of legal jurisdiction, and we have a small team of corporate lawyers supporting us. With that said as well, I can give you one more tip. There's a lot of software resellers, and they— every big enterprise customer has a software reseller on their side as well. They already have two framework agreements. They most time have all security documentation already for you. And it's a lot easier to run through those and still lend to enterprise customers and basically work in an easier way.

All right, so next, more complex adoption and usage. As one example, one piece of differentiation here, onboarding and training looks quite different for a customer versus a user in PLG. So in PLG, you're onboarding your users, your day zero, and their path, their journey is quite quite defined, right? But in product-led sales, every user's day zero is actually quite different. And so we may be onboarding a customer onto our enterprise plan, and there are many users that already have their day zero. Some will have their day zero as we onboard that enterprise plan, and still some may, may have their day zero and, and begin their journey with us throughout that year, right? So this creates a, a very unique dynamic in our customer journey, which is not as much aligned to the single user journey, but rather a collection of user journeys, and this makes it far more complex. And last, more complex engagement. I'll see that earlier sales team that Rod described, as they began to engage with large organizations, they often— our customers often had more, more complex and technical needs, which is a bit challenging for those, those reps, especially because we hadn't anticipated this. Our product is known for being quite user-friendly. And so to fill this gap, the— our sales folks began really leaning internally on, on certain resources. In particular, a very skilled member of our technical support team who already had a day job, of course. And so she was tapped to increasingly attend customer meetings on top of her normal workload. And so while this is another example of something that was quite unscalable, it helped us learn what those technical needs were from our customers. And, and, and we began developing some pattern recognition from that while also meeting their needs, right? So we eventually did formalize her role as Lucy's first staff a sales engineer, and she was quickly instrumental in many of our largest deals. But it was a major proof point to us on how we could add value and scale that function, which is now a very pivotal part of our sales motion today. Uh, so, so one last point here. Uh, I think it's really important to note that, uh, we've layered on, on our product-led sales motion. Um, it has not replaced our product-led growth motion, and they actually build on and, and, uh, and connect with one another. And leverage and create multiple layers within each other.

So as we shared earlier, one of the most significant milestones in scaling from product-led growth to product sales, POS motion, was expanding internationally. As this was really a milestone for many scaling companies, we thought we'd touch a little bit more on our decision-making process and experience adding an international a first international office. Like we covered in our timeline, we had to invest a lot up front in making so that we were ready to meet the needs for a global user. This effort started already way before the decision to open the Exene office. Going back to the PLG principles we shared earlier, each of them applies expanding to a global user. We needed to expand our language offerings and product to improve the user experience, the easy fast path to user value of a non-English user. Keeping pricing simple and local was key. We expanded in currencies in which we— you could buy Lucid, and we're still expanding today. Making Lucid discoverable in these new languages and also invested significantly translating and localization of all our websites, or our website content, was a thing that we had to do. These efforts were extensions to our product-led growth motion and accelerated accelerated our growth internationally, building a user base and the customer base that it is today. As we mentioned earlier, core to our product for productless sales is understanding our customers' complex needs— how they purchase software, how they adopt our software, how they engage with our account team to derive value from our software. And these customers' needs are quite different from region to region. So how did we solve that complexity? First and foremost, we want to have proximity to our customers. We want to be close by, able easily to travel to them, be near them, speak to them on a daily basis in their hours. And then second, language specifics. Again, we want to speak— we want to have as many languages in our company to service our customers, because really it's twisted together. And how you use— intertwist together the culture and the language is something that you really use. Third, regulatory compliance. As I said before, there are certain rules in a local— in the local space, or mandatory things you want to have there that you need to be able to service. And as well, sometimes meaning having people in a certain region. And fourth, operational efficiency. We wanted to make sure that we can operate in the most efficient way, that we can speak to our customers on a daily basis, as well feeding information back to to our headquarters in the US. It's so intertwined with each other. When we started the EMEA office, due to the size and growth we were experiencing in the region, first we— when we kicked off our expansion team for EMEA, we sat down to determine what matters. There's a lot of fantastic hubs in Europe. Ultimately, it came down to 3 key factors. First and foremost, we need to find a solution where the type of talent that could help or achieve our goals. Our talent pool is so important, and as well, it's something that makes your hiring so much easier. Second, of course, we had to consider costs. Costs are for great talent, for office space, and for taxes. And third, we had to consider ease of operations. From these factors, we narrowed down the list of 3 cities and visited each location, meeting with the peer SaaS companies with local offices already there, as well local governments helping on regulatory tax schemes or other investment schemes that are there. And that basically helps us to make our final decision. So I joined the team about 18 months after our office opened, but I want to touch briefly on the importance of our approach to the original lending team, especially in the context of our product-led sales motion. We brought a lending team of 3 seasoned mid-level managers, sales, CS, and rev ops. This team was comprised of people who have been at Lucid for some time. Therefore, they worked highly cross-functional and knew how to navigate as well our sales motion and as well to get engagement and the interest in the US still. The first few years, our office had only customer-facing roles. It was critical that we had these people could help us create a feedback loop, as I said, for our marketing project teams. And then the organizations at HQ back, ensuring EMEA customers were an integral part in evolving our product-led sales motion. Nowadays, 33% of our revenue is international, and we're very proud of that. Again, when we go back to our key factors, the regional HQ was so successful that we added an APAC HQ as well in 2020. With these regional offices, we have been able to scale quicker, operate more efficiently. We achieved our goals to have a fully operational autonomous office in region, and that doesn't happen in day one. It happens over the years. When I started, we only had the customer-facing roles. Nowadays, we added a lot of supporting roles: HR, recruitment, RevOps, growth marketing, implementation, and so on. And with the success, again, we are doing now 30%— 33% of our revenue there.

So that international expansion was only possible with us having the internal alignment between product, marketing, and sales to scale our motion. And a strong partnership between product, marketing, and sales is core to the product-led sales motion. So let's talk a little bit about that partnership. As I mentioned earlier, the customer journey is quite different in a product-led sales motion. and it creates a lot of blurred lines of ownership internally. And therefore we have to be incredibly tight on our objectives between product, marketing, and sales. And as I, I look back on when we began layering on sales to our product-led motion, the special sauce here was really establishing how we inter— was really in how we integrated sales. So as Rod mentioned earlier, our first sales hire was actually not a salesperson, and this was the person who not only built out the sales function, became a very senior level leader, and it was someone who was deeply familiar with our product-led motion, already had strong relationships with our marketing and product teams, and a working knowledge of those functions. And this was absolutely key. And to scale product-led sales, you, you have to have that strong feedback loop, and, and this was a person that could uniquely do it. And this is not just for sales, it's really for the rest of your company as well. As you layer on sales, you will keep in mind that scaling that motion will also require a good amount of evangelism, a good amount of integration, a good amount of disruption in order for the entire company to really evolve the culture around having two motions, a product-led and a sales motion. So when I, when I think about this partnership, I think there's no better, better way internally to reflect upon this than to talk about signal optimization and our signal optimization framework. So what do I mean by signal optimization? Organization. I think many of you are familiar with product qualified leads, product qualified accounts, product qualified users, all of the PQs, right? I think there's probably more, but what this really means and comes down to is identifying the right people on the right accounts at the right time with the right actions. And, and product, marketing, and sales must be tightly aligned on the definitions of each of these because they'll be constantly evolving. They'll be evolving as you, as you iterate on your product. As you launch new products, as you evolve your motion. And so you must always be signal optimizing. When I joined Lucid 7 years ago, I wasn't in a revenue role, but I— my first day, actually, I was thrown into a meeting where the first thing we were doing was talking about our, our user scoring model and how we were going to add to it. And over the last 7 years, I've worn many different hats at the company, and I can't even tell you how many product projects I've worked on and initiatives I've worked on related to signal optimization. And even last quarter, a couple Couple of things that my team has worked on are we revamped our user scoring model, we debuted a new prospecting tool for our new logo teams, we created a new playbook for collaboration signals for our customer success teams. And I think this speaks a lot to the success we've had with the culture of experimentation that started with our product-led motion, has now been very core to our sales, our product, product-led sales motion as well. Some learnings from those 7 years of signal optimization. In the beginning, I think the most important important alignment that we could have is not actually identifying so much who we want sales to engage with, but rather who we don't want sales to engage with. And this process of elimination will help you calibrate your, your PQPQL PQA model. Um, and it also leverages one of the chief advantages of product-led growth, which is volume. And the more sample size you have, the more you can learn and then the quicker you can learn. Secondly, I would encourage you to start with actions. And then build the signals. So focus just as much on the actions as on the signals that you want to lead to those actions. And what do I mean by that? I think for a lot of product-led growth companies, they have a strong motion, that culture of experimentation. They'll focus on like over-calibrating what those signals are. You have a very engaged user base, a, a highly scaled user base, and so you'll spend a lot of time on the experimentation between, between those signals as opposed to what is sales doing to engage with each of those users, right? Right? And that needs to be just as much a, a part of it. And so you need to start with the actions, start with the plays, and then build the signals to support those. And of course, as you, as you scale your team, you're gonna have more segmentation in your sales roles, and you'll find that you have a quite different set of actions or plays, and therefore a quite different set of act— of signals for each of those teams. As an example, our enterprise team that's, that, that works with our very largest customers, they have a very different set of plays and signals than our SMB new logo team, as an example. And lastly, I would just encourage you to think that there's far more to this than lead and account scoring. So beyond all the PQUs, PQLs, what this really means is everyone at the company should be leveraging information about your users, about your customers to inform how they add value to your customers and users. And in that same sense, this is more than just lead and account scoring. Scoring, it really needs to be— have a democratized set of information that everyone is using. They're all singing from the same song sheet.

Okay, so when we talk about partnership between— in sales, we're talking about sales loosely. We really mean is that we work together as an account team, our AEs, our BDRs, our STRs, our CSMs, our SEs, implementation team, professional services, and consultants. But we first layered that on the product-led sales motion, which like most PLG companies do. We very, very were heavily R&D focused. We didn't have all these rules. As we saw success in layering on the product-led sales, we took decisions about scaling the product-led sales motion. It's about structuring the account team and their roles and responsibilities. In product-led growth, each of the members of the account team must understand how the account's users are using Lucid. In order to engage with them effectively. The same culture of experimentation initiated through our product-led growth roots had driven our literate and learn how to best structure our coverage strategy to meet the needs of our customers. So we changed a lot of things. We changed our CSM motion. We split it into an implementation versus SEs versus true customer success. We split our Sales Motion into new logo and expansion, just to make sure that we cover the needs of our customers. Our customers are central. And as I said, we want to focus on this. Every digital transformation looks different. Our sales and customer success and product must all be lightly aligned to— on our objectives with the customer and activities that we engage. We must tightly be aligned on our people. Processes, systems, what we use all together, how we work all together, and as well everybody's roles. Naturally, we use our own products to drive alignment. A few examples: our marketing, sales, and customer success teams align on communication sequences with our customers and lifecycle management. Our account teams leverage shared account planning to drive alignment between the customer objectives and activities. And similarly for our QBRs. Again, it probably sounds familiar, but in the first years you usually don't have the funds to have every tool or hire for every role. Your day consists of wearing different caps from CEO to CRO to VP of Sales and marketing director or chief apologizing officer sometimes. And there are examples of in every department in your company. And Lucid started to draw out this already from the beginning. Every process was drawn out. It made it even easier to drive our scalability into new markets, and as well in a consistent way, but as well to hire new people and get them onboard quicker, or optimizing our tech stack. But just as important, demonstrating maturity too in a transparent way to our investors. Having established processes, potential and current investor— to current and potential investors, made that we are well managed, that we're made for scaling, and which is attractive to investors looking for stability and predictability. We are almost at the end of our presentation. I want to close off with one more thing before I hand it over to Steph. At the core of this alignment is a practice of team-based sales. Selling. Even today, our chief product officer meets with our clients on a daily basis. Our chief marketing officer is right now in Amsterdam to speak to our reps to hear and learn what they hear in the field. Yeah, it is really team-based selling. And that's with all our executive group. Steph is here. I'm traveling to the US. Our executives are still just as much in the product-led growth motion as they are in the sales-led motion. So I wanna close off with saying there is no I in product-led growth and there is no I in product-led sales growth. Steph?

Yeah, so we've covered a lot today. To quickly recap some of the key takeaways and that we had in helping you build and scale your PLG and PLS motion. First, experimentation must be at the core of how you operate. And this can't just, this is a well-known principle in PLG, but it must extend to your PLS. Motion. And of course, it, it should extend well beyond your product and engineering teams. It needs to extend to the whole company. This has been really core to Lucid. Um, second, doing something unscaled can enable you to scale faster, whether that's reading hundreds of thousands of customer support tickets or, uh, having a customer support rep moonlight as a, a solution engineer. Um, these are things that help you uniquely learn from your customers in an unscaled way so that you can scale faster. And last, You must stay true to your, your business model principles, your PLG principles. And in our case, this was really just that product-led sales is applying those same PLG principles, but for the customer.

Thank you so much.

Thank you.