How Sales and Product Really Should Work Together with MongoDB | SaaStr Software Community

Thank you, Caitlin. Really excited to be here. So, uh, as Caitlin mentioned, I'm Chief Product Officer at Mongo. A big part of my focus over the last, uh, 4 and a half years since I joined the company has been really helping us transform our business from a software business into a cloud services and SaaS company. So, uh, this is a lot about kind of that transformation, and, um, my friend Javier, who I'll let him introduce himself, has been a big part of that journey on the go-to-market side.

My name's Javier Molina. I'm the SVP of Corporate Sales. For MongoDB, what that means is really companies under 1,500 employees, but I'm here representing sales as we have enterprise coverage in countries like emerging markets like LATAM and APAC. But yeah, working with Sahir, it's been quite the journey and we're happy to be here.

Cool. We'll get into the content here. Just a little bit of an overview of some of the key themes we hope to touch upon in this presentation. First and foremost, we wanted to describe how our company and our technology MongoDB really started with open source as a seeding mechanism for driving our adoption in the market and building the foundation of the early phases of monetization for the company going back 5, 6, 7 years now. We'll obviously double-click quite a bit into how SaaS and shifting our delivery model and business model over to that has really been a revolutionary process in the company and the impact that's had there. And we'll touch upon some of the things we're thinking about now. By no means do we think this journey is over, and a lot of what we're focused on these days is really optimization and scaling sort of what we think of as almost an omnichannel distribution and revenue model that we've built over the last 4 years in particular. So hopefully this color and context is helpful, and we'll kind of phase everything into these sort of 3 key themes. So just for context, MongoDB is an open-source database technology company. I'm sure many of you have heard that the brand perhaps, and it's very much adopted by developers building modern applications. And over 10 years ago, when the initial technology was released and open sourced, there was honestly quite a bit of an open question in the market about whether you could build an open source free technology for developers and scale massive adoption and developer love while at the same time building a sustainable business. It sounds kind of crazy that, you know, I'm opening this conference up, this talk up that way, but it's not as obvious that that's possible now. And, you know, it wasn't as obvious back then as it is now that that was actually possible. So, you know, that was kind of a key thought early days in the company and the foundation of the founders is how do you balance those two seemingly at times incompatible concepts? So, If you look at our journey going back about 10 years, almost 11 years now, the first phase for this technology company was really around driving adoption. For those of you who may not be familiar with the technology itself, MongoDB presents a very different way of doing things in the database market. And the established model, we typically refer to as relational databases, have been around for 30, 40 years. So it's a very entrenched sort of way of doing things. Early on, we were fortunate to have, I would say, patient investors and a long-term outlook in the company to be able to say, the first phase is really about getting developers to understand and love and adopt this new way of doing things. That was really a database built for developers by developers in many ways. But at the same time, there was very much a business focus around that strategy to say, if we drive large-scale open-source adoption, this would lay the foundation for essentially monetizing that base. So think of it as the very foundation or the very top of our funnel. It really starts with that open-source distribution model. And the company spent a lot of time on grassroots sort of tactics to really drive that early flywheel effect in the early years, from 2009 onwards to, you know, 2012. And then from a monetization standpoint, as we really started to think about how to turn this into a viable business, was largely around what are the things we can build that help customers use our technology at scale, but that they would be willing to pay for, right? Because in order— we have this sort of tension because on one hand, we want to drive as much value into the free product for developers as possible so it gets broad-spread adoption, that people really think they can bet their companies, their tech, you know, their applications on it. And so there's a desire to push more and more technology into the free version, But then there's this business reality that we have to drive revenue as well off the backs of free products. How do we figure out where that line is? That was a big part of the constant iteration that happened in the early productization of MongoDB for driving revenue for our business. A lot of that is licensed very differently. It's a proprietary license. People have to pay a subscription license to the company to get access to that functionality to manage, operate, scale MongoDB. Then if you look at the early rise of that monetization methodology around 2016 or so, it was really about scaling that, but where our revenue really came from was only in the top segment of the market. The reason I bring this up is MongoDB's adoption and product-market fit for our free technology serves the entire market, every segment, every vertical, almost every country in the world in terms of the data we have around where it's being used. But in terms of monetization and revenue, we were largely concentrated in large enterprise because the proprietary features we had to build around the database that customers were paying for were naturally a fit for large companies, regulated companies, and less so for, you know, mid-market and SMB businesses. We're relatively kind of concentrated. And what that meant is from a distribution strategy, from a revenue and go-to-market strategy, It meant that we were underserving the value we were delivering to the overall market. And we did have sort of an inside sales team, you know, the corporate team that Javier runs today at that time. But in many ways, we were asking them to take on a really hard job of taking, you know, really sophisticated enterprise software, you know, that was priced as such and trying to find, you know, sort of a needle in the haystack down in smaller companies and startups that had similar requirements and would be willing to pay for it. Javier, I know you have some color on this, obviously having lived it, and especially some of the folks that have been on your team a while. Any color you want to add there?

Yeah, for sure. I think the value of the database was apparent in the adoption of the open source version, obviously. And so there's a reason I came here and you came here as well. But product market fit to monetization was much more complex from a sales perspective. The levers that we had to pull were things like support, which is where many open source companies start, tooling, a commercial license, or additional features that we wanted to offer. But then you're almost selling insurance rather than a product that could attach to things like time to market or using technology as a differentiator. So this made it really difficult to grow the sales force, but especially in the sub-$1 billion space, like Yves had mentioned here, made it really difficult for us. So we couldn't sell subscription licenses to the next low-code, no-code unicorn or the gaming studio that was all in on GCP. But I think there was another factor that also made the sale even more complex. I mentioned we were playing from, from behind, but, you know, so here, I don't know if you want to talk about the monetization aspect of it, but those things really made the open source model for us difficult.

Yeah, and I think beyond, I would say, the segment fit, I think, Javier, that you're really kind of putting some good color around, there was also this aspect that our software solution that we sell tends to really be focused on the tail end of an application's lifecycle. You know, for companies building applications, there's a whole design, development, prototyping phase. There's a lot of testing that happens. And most of the time, customers are absolutely using free technology, open source technology like MongoDB for those early phases. And they may only be willing to pay for that application's functionality later in the game. When it goes into production, they need help from the experts that build the technology. They need capabilities to secure it, to monitor it, to manage it. And so the reason I bring this up is, we have sort of two vectors where we were effectively under-monetizing our total value to customers. One was this concentration of product-market fit for our proprietary technology at the top of the market. The other was if you kind of plotted out the app lifecycle, we were really only monetizing the tail end of that application when it got to production. And so those are things that were very much top of mind at the company, you know, 5, 6 years ago. As we were trying to figure out, you know, how do we reach even more customers. On top of that, you know, there was obviously a secular trend towards cloud adoption, and as we looked at where MongoDB, the free version or commercial software, were being deployed, it was obvious that the majority of the workloads then, and increasingly more so in the future, were going to be in public cloud platforms. So those are, you know, very much things at the executive team level, the board level, that really drove this sort of transition and in many ways massive expansion of our strategy to really become a SaaS company. And that was about 4.5 years ago.

Yeah, and if I could add just from a sales perspective there, so here, yeah, when prospecting, the customer had already adopted best practices to manage the core technology in our database, or they were using other open source products to strengthen their security or backups or use third-party company for support. So it made it really difficult from a sales strategy when we were playing offense, but also most times, they were either in, like you mentioned, or very close to production. So the customers, when the customers actually came inbound to sales, we were relegated to price-only discussions without the ability to multi-thread into other stakeholders or align the business initiatives. So it ultimately led for us from a sales perspective, again, to poor contracts or steep discounting, and we ultimately had to dig out of, you know, dig out of those years later.

Absolutely. So as we made that decision to pivot to SaaS, I think one of the things that worked really well, and I'm, you know, in hindsight being 20/20, I'm really happy we paid a lot of attention to, was the fact that this wasn't just going to be a different version of our product, you know, maybe hosted and delivered as a service as our core, you know, enterprise commercial software. We recognized early that SaaS would allow us to fundamentally expand and diversify our go-to-market strategy. You know, in many ways we had built a lot of muscles and sophistication on the kind of right-hand side of this slide, which is like direct enterprise field sales. But as Javier mentioned, we were really still figuring out the inside sales model due to the product-market fit and other challenges that we had. And we had effectively zero self-service business. We didn't have a product that developers could come on to in a B2C-like model, swipe a credit card, and start consuming in a pay-as-you-go model. So we spent a lot of time studying, you know, these are just example companies that, you know, are in some cases best in class in these different models to understand how we could evolve and diversify our go-to-market strategy by learning from the outside. And we put as much attention to that as we did the product roadmap or learning how to operate, you know, at scale as a SaaS company, you know, from a technology side. And I think that's really important, you know, this shift of, you know, SaaS is for companies that start not SaaS like we did. You know, I think the go-to-market angle of it sometimes gets less attention and tends to just be like a different SKU or a different product that gets sold. And we fundamentally believe the two have to go hand in hand. And so for us, the other angle of this three channels was it allowed us to reach our entire market. You know, we talked about we were sort of limited in our addressable monetization for those factors above earlier. But we also had a huge market that we just can't reach with feet on the ground, with sellers in the field, for example. So the idea of being able to serve a tens of billions of dollar database opportunity for us meant that we couldn't just rely on a single distribution strategy. We needed inside sales to cover mid-market customers and long-tail customers. We needed a self-service model because it's how developers increasingly wanted to purchase and try technology out. And what we saw from our funnel in terms of our open source downloads, our web traffic, all of that is our audience was really global. So even if we wanted to go hire hundreds of sales reps as fast as we could, there's an operational pace that just— in, in hiring pace and quality bar that we want to maintain, that it's a natural limiting factor. So this idea of diversifying into a multichannel strategy was really around reaching our full opportunity. And it's also about efficiency. Because when we're selling to the enterprise, there's a certain sort of bar of entry in terms of average sales price and ARR of a customer that we need to see to make it economically make sense for us. But now we were able to target customers at all spend levels. A new startup that just wants to start off on the free tier, or maybe a hobby developer trying out a new project that may only be spending $5 or $10 on the product. You can't serve that with a highly, no offense, commissible sales force. Like Javier's team. So how do we get that reach? These were all things that were sort of top of mind for us, that were conversations that were only possible because we had this new SaaS approach to delivering our product. So Javier is going to kind of double-click into these channels and some of the dynamics that we've seen over the last few years before we get into some of the other changes that we had to make.

Yeah, definitely. So with our self-service channel, Open source will and always be our top of funnel, just like Tahir said, but that's going to drive adoption and just get an overarching eventual lead into our SaaS product. But the self-service channel really opens up a modernization angle earlier on in the software development lifecycle. And more importantly though, with our SaaS product, we took the plumbing out of managing the database. So now what would be a developer architect that would have historically downloaded a community version of our product into AWS and tried to Mongo the database, Now they can do that, but give them the ability to spin up clusters wherever they want, use monitoring tools to help them use the product better, have toggles for features like security that keep them from having to write additional layers of code. Things like that in our self-service channel really helped drive adoption early on. And I think in sales, we often think we should talk to every lead or every person that is interested. We typically operate from the stance, and I think it was Henry Ford that said, uh, if I would have asked people what they wanted, they would have wanted faster horses, but with SaaS and a product-led growth strategy, technology becomes the way to begin to try and use the product. The self-service channel really allows the customer to prosper, which all leads to a better customer experience and really just the start of their customer journey with Mongo, in which we then begin to see customers with more ambitious intentions that need to align to sales, which leads me to our inside sales team. So similar to, similar to, most sales teams, our inside sales teams, they prospect for new customers, they manage customers, they sell professional service, things of that nature. But I mentioned earlier that with open source, we really lack product market fit to monetize the demand. It was really mostly due to the lack of backend of the software development lifecycle, because we were working with customers that were about to go into production. And the fact high-growth companies weren't looking to invest in ways to add more process into their technology. Everybody wants to move fast. Everybody wants to be agile. The less technologies, the better. Thus, you've seen, you know, a high increase of low-code and no-code software. So with a SaaS offering and the tailwinds of the cloud, innovative digital design platforms, gaming studios, many companies like the ones that are speaking at SaaStr, to be honest with you, began exploring SaaS. So this allowed our inside sales team to begin to find success. But I think there's one caveat at Mongo, which is, which is important. In most go-to-market strategies, the thought of the inside sales team is an overlay or more transactional team. And most certainly, while the deals are quicker at Mongo on the inside sales side, because of the culture of the company, the inside sales org has applied enterprise-level deal qualification to an inside sales motion, which has led our inside sales team to be highly productive, landing multiple 6- and 7-figure deals. For our enterprise team, I mentioned tailwinds earlier, but all of the tailwinds combined, arguably the biggest one of them all in the world right now, it's the push into cloud. It's really a modern-day technology renaissance if we look at it from the big picture. So while thousands of companies are being founded to disrupt or find new markets in the sub-billion-dollar space, this means the enterprises are finding ways to try to keep up or stay ahead. So launching new applications, replacing their applications, or just modernizing their applications with new technologies that allow them to move faster. Where in an open source world, we would be the subscription license that slapped over the top of a big legacy modernization project, the sales team now has been able to attach some of the biggest initiatives in the world and be a part of the planning process. So as you can see here, over half of the Global 100, you know, are looking at Atlas, but also several extremely large banks or even like Square Enix, which is a massive gaming studio in Europe, all looking for modernization because, Moving to the cloud doesn't mean SaaS, and I think many companies sometimes struggle with that. This offers our best-in-class sales org to allow to attach to those initiatives. And because once we tie ourselves to the people that are involved when managing the database in the cloud, the processes required, and the technology to script and automate in the cloud, you know, when for an enterprise, when the anti-waterfall light bulb goes off, Atlas becomes a clear differentiator.

And Javier, I'll add one of the things I think we were lucky to have in the culture of the sales organization, both on the inside sales team and then also now the field sales team, as they've really scaled up into leading with our cloud solutions, is this idea of iteration and agility that people typically associate with software development, but we've embraced that in our go-to-market. I can remember every quarter we're learning what's working in cloud sales, what's not, what do we need to tune in terms of incentive structure, contract models, those types of things, such that we could get that flywheel, that motion, that belief within the sales organization going. So I think that's a really important piece, is to not just be too beholden to the model that worked for software, because what works for cloud is completely different.

Yeah, 100%. I think that's definitely what makes our journey with product and sales a different one from the standard Silicon Valley journey, which is, you know, we started as an open source company and then switched to SaaS. I mean, it's hard to find examples like that that are you know, in our space at the moment. And so, you know, what this one is really speaking to, and so here it showed the slide earlier around being tied to the end of the production lifecycle, because we're able to see customers earlier in their process through our SaaS product and through a sophisticated growth team, we can bubble the right accounts to the right people at the right time while not disrupting or introducing friction to the customer journey. So now we're part of, you know, after the idea comes to fruition and design and prototype, and the customer starts to look to develop their software, that's when we start to see the product signals in Atlas. And I know for you, Suhir, this was a big push for you early on, and Mongo, I don't know if you have any color here that you wanna add.

Yeah, and I think it ties, I look at this as tying back to our opportunity size for monetization. We talked about that kind of area under the curve of an application. The value of a SaaS solution is so different than the software side of things in an open source model that customers— I remember going into Salesforce and finding accounts that had qualified out and said, we're good with your free version. There's no reason we need to pay you a commercial license for the management tooling, the expertise and skills that you can back us up with if something goes wrong. We're good. But those same accounts came back later and said, oh, you have a SaaS service now? This is what I always wanted. And are perfectly willing to spend, you know, high dollar amounts with us to get that value. So that fundamental shift means that we are, you know, sort of area under the curve that we can monetize starts much earlier. And to your point, we can enable a more successful customer journey with our technology, with our company and our business, because we can help them early on get those best practices in and sort of evolve with them, as opposed to coming in later after the app's been built, we have no relationship with them, and trying to ultimately see, you know, be that insurance policy that they were potentially willing to pay for.

Yeah, yeah, you never saw that in my Salesforce though, right?

No.

But so look, so because many believe over 60% of the buying decision is made before ever engaging with the vendor, you have to as a company be sophisticated and build signals across multiple channels, marketing, growth, sales, and And so what this slide really talks to is, and how it's relevant to Mongo is, IDC has a stat that over the next 3 years, over 500 million applications get built, more than the previous 40 years combined. And so we believe, as you know, one of the biggest risks in our organization is not focusing on driving best practices and feature adoption early. And so this can be done with the product like Zaher's been talking about, but we took it even further for us, and we built a team that sits in between the self-service channel and the sales team, and we call that team the cloud team. So when we say we're blurring the lines between channels, we're really blurring the lines in regards to responsibilities and ownership. So because most of these customers come from a different background, for us, we are the disruptors. The customers know that how to properly use our product would lead them to, you know, if they didn't know how to use the product properly, sorry, it would lead them to throw more hardware at query errors or lead them to higher costs and eventual churn, which is the value of the team that we created. So being able to act on leading indicators or bad behavior, sell professional services, educate the customers en masse, early on in their lifecycle, you know, we thought about this team as like a long tail CSM with product signals and MQL. So what's been interesting as a sales organization, as the lines have started to blur, is the less we try to sell contracts or annualized customers for growth and ACV and instead focus on feature adoption and education, the more we see increased retention. We've seen multiple 6, 7-figure deals come from the CloudMotion across all sales channels. And when you see those kind of results, That's the omnichannel strategy, sales strategy that make you really want to think about how do you attack different segments of your market in different ways. That's truly an omnichannel strategy that we want to drive. So it's not just self-service and it's a major driver of our growth sales organization. So if I was, you know, to the fellow sales leaders out there that are watching this, I think the advice I would give is to be customer-centric and less about trying to go after a typical sales motion, but be part of the transformation and the journey that the customer is going through with you and be a part of the leading indicators that we know that drive success within the product.

Yeah, and I'd add that this, it's easier said than done. I mean, this requires some significant changes in terms of how the company thinks about cash flow, how the company thinks about profile of sellers. And, you know, it's almost more of a customer success style profile, perhaps more technical in some of these phases. And, you know, the way the comp models actually work. And so getting consensus and tuning those incentives such that, you know, these channels are additive to each other and not creating channel conflict or cannibalization between them is an important part of sort of the pieces that need to be thought through very carefully to do this right. And, you know, it looks, uh, quite easy and linear and straightforward on a slide like this, but that's the part that takes the hard iteration, the hard lessons, and honestly, the management leadership to take some risk and try some new approaches. And thankfully for us, this has worked well, and we are kind of leaning in even more to this kind of transformation. Now, I'd say this talk is largely focused on sort of how sales interacts with the product shift to SaaS and diversification of go-to-market strategy. But in general, for software companies that are embarking on a SaaS transformation like this, it really is a company-wide transformation. And so it's not just sales and, you know, the distribution model that changes, but, you know, things like product-led growth. How do you drive more virality and upsell and acquisition from the product itself? You know, growth marketing. We refactored the way our marketing organization was structured, incentivized to constantly be obsessing around experimentation and data. And, you know, that's not only skillset change, but it's culture change, it's technology change, it's investment in analytics, it's, you know, a very different way versus a traditional kind of B2B marketing kind of focus that we had 3 or 4 years ago prior to having a SaaS business. I mentioned finance needs to change, you know, whether it's different styles of contract, I like to think that a consumption-based cloud business is as different from a subscription software business, which is kind of our transition, as 10 years ago perpetual software was to subscription. You know, it's that fundamental of a difference in terms of the economics and customer incentives and how you want to align your organization around that. And finally, you know, obviously on the product and engineering side, the fact that We went from being a technology company that sells a mission-critical database, which is naturally conservative in the way we have to build it, meaning to make sure it's ultra robust in terms of scalability, stability, security. Now we've been able to really move things much more quickly into market to iterate faster and get that feedback, just like any other SaaS company, the value of getting those signals. And so, you know, our advice to any software company going on this journey is invest in that instrumentation and those analytics early because The sooner your go-to-market teams or your product organization or your engineering organization can learn from what's happening around that consumption, the better decisions you're going to make along the entirety of the value chain that a business delivers. So it is very much thought of and has been for MongoDB a company transformation, not just a product shift or not just a sales motion shift. It's been a complete company evolution to get to this. That's had a transformational force on our business. We had our earnings call last night. You know, our cloud business is growing over 60%, you know, year over year. It's now 47% of our total company revenue. And, you know, that's competing against a software business that's also doing extremely well, you know, in the enterprise. So, you know, we really have this dynamic of multiple, you know, growth engines in the company with cloud obviously growing quite fast. We see a massive expansion of customer reach, you know, so what we're showing here is, you know, the total number of paying customers in the company has really skyrocketed since we've launched our cloud product. So the brand relationship, the economic relationship we have now has just so much, you know, reach comparatively to just that top-down selling that we had in the past. And that overall volume has fed our ability to have more direct sales engagement. So you see that sort of spike really in direct customer acquisition as well, being fed from the cloud self-service model, feeding our sales engine. So we're really starting to see that flow through and create that flywheel effect that I hinted at earlier. And net-net, I mean, for us, it took us about 100— to get to $100 million took our company about 10 years, you know. And granted, there was a lot of adoption that needed to happen there, you know, a lot of early development of our technology. So it's not a perfect apples-to-apples comparison, but it took us 10 years to get to that $100 million sort of ARR run rate. And it took us another 4 years to get to 500. And I think if you ask anyone who's watched MongoDB, been at the company, you know, been part of this change, there's no question that that shift to SaaS has been really the core tenet of what's driving that acceleration and expansion of our business worldwide. And that, you know, that has massive long-term effects in terms of perception of the brand and, you know, the ability for us to expand our portfolio and drive even more of that adoption of the open source. So we're seeing all of these things across the board sort of really accelerate foundationally because of this pivot that we've had. And so, I think this top takeaway here that SaaS is the most powerful way to monetize open source is by now not at all controversial in the market, but MongoDB, I hope, is a good sort of proof point of the possibility of that. And hopefully some of the things that Javier and I talked about are informative on your own journey. And I think Javier made a really good point thinking— it sounds so obvious, but it's so hard to do. Like, think what benefits the customer first and adapt your go-to-market around that instead of this sort of more historical enterprise software model of creating tension between the organization to monetize and, you know, drive a deal transaction at the front end of that relationship. I think it's just the wrong way to think about it. And for us, we don't think of ourselves as an enterprise software distribution model or a self-service distribution model or any one of those. We're really trying to master for all of those distribution models. And there's a whole other angle with partners that we're not touching on today. And so this internal term we use of kind of omnichannel distribution, we're really trying to build something that's good at all those different models because we're in a market where you have large banks that are going to buy on a large committed contract from a very sophisticated sales force, just like we have millions of developers that want to try and use our product for free without anyone involved. So we really have to serve, you know, both, both sides of that equation effectively. And I think, you know, that really touches on to our last point. The intersection of sales and product-led or marketing-led acquisition is a big part of where our iteration is happening on today. You know, uh, the last 2 years was largely around optimizing each of those channels independently, but now in the next few years is about sort of that interaction point and making sure that they all feed off each other in a way that's great for the customer and ultimately maximizes our return from the market. So hopefully, uh, we covered a lot of ground, but hopefully that was valuable. Yeah, getting some great comments and feedback from panelists. So many nuggets of gold. So thank you both, and thanks everyone for joining.