How to succeed in product led growth with Atlassian Global Head of EDR Sales, Kristen Habacht

set up those meetings and take advantage of some of the great networking with our other registrants here at SCaLE. So without further ado, Kristen, I'm gonna go ahead and pass it over to you. We're continuing to get some more folks joining in as well. So welcome everyone. We'll have time for questions at the end and feel free to use that raise hand function or unmute yourself when we get to that point. All right, Kristen, take it away.

Great. Thanks. Well, hi everyone. I'm sure everyone's across different time zones, but I'm in Connecticut, so it's lunchtime here. So hopefully if you're East Coast, you're having a snack, and if you're West Coast, you're having coffee. And I don't know what the other time zones should be having, but, but thanks for coming and spending a little bit of time with me today. So I'm going to be talking about non-traditional sales and talking about product-led growth, freemium sales, and You know, anything that doesn't fit into the traditional motion. So let's, let's jump into that. I'm sure I'll be able to unlock all those secrets in 30 minutes. So we'll, we'll try to get through what we can. I want to leave about 10 or 15 minutes for Q&A too, so that we can walk through some real scenarios with everybody. But some of the key topics we're going to break this down into today is, is really embracing a different sales cycle. So When we talk about product-led growth or freemium, whatever it might be, ultimately we're really talking about taking your sales cycle and customizing it to some extent, really adjusting what we all kind of know and think of as a traditional sales cycle and sales motion. Then we're going to talk about specializing, um, and specializing both in the individual end users at your company, how they're going to be, whether it's going to be an AE, an SDR, whatever it might be, but also specializing the cohorts or of who you're going to be going after, right? And really deciding how much are you going to allow to really be true PLG or somebody else driving that sales motion versus where you want to be involved versus where you want to have a real high-touch motion. And then finally, talking a little bit about, um, the data, right? The data is the backbone of all of this. And how do you run your sales team and sales motion inside a PLG or freemium motion and in the most effective way? And really, that ultimately means bringing a lot of analytics into the, into the story. So those are going to be the 3 key topics we're going to try and touch on today. Why do you care what I have to say? You might not, we'll find out at the end of this, but I was the VP of sales at Trello. If you're familiar with Trello, I was the first sales hire there, but we already had about 5 million users on Trello. There was just no monetization strategy in place, especially for enterprise. It was a true PLG motion there. Trello was a freemium tool. You basically could use it forever with, without having to pay for it. And I joined Atlassian through the Trello acquisition, and I ran Atlassian's America and APAC enterprise sales team before I moved on to building out a global EDR team for Atlassian. And that's basically our custom SDR and BDR team that we're beginning to scale out here. If you want to follow me on Twitter, there's my contact information. I can't promise I tweet very interesting things, but definitely please, please follow and maybe I'll try to up my content there. And what we're going to talk through today is some of the stuff that I learned from scaling Trello through that acquisition and the combination of the hybrid of Atlassian's, you know, really famous PLG motion, but also where Trello was at in a freemium model, which was, which was slightly different than that. So try to call on those different components. So I think we have a poll here to do. And what I wanted to know just generally from the audience, as we kind of get to know you guys a little bit better, is what is your current sales approach? So is it PLG? Is it freemium? Is it more traditional top-down? Or is there a hybrid of those in place? So see, I don't actually know if the poll is popping up. I guess I should have checked this part first.

Yeah, sorry, Kristen. I'm not seeing it pop up. If anyone wants to just verbally jump in, feel free.

Or maybe in the chat, write if you're 1, 2, 3, or 4 so we can get a sense of what— Chat is turned off. Oh, chat's turned off. Okay. All right, well, raise your hands if you're doing a PLG, just so we can kind of see it. Okay. Um, cool. All right, got some hands. Uh, freemium. I saw a few people indicating that. Okay, great. Traditional, tops-down, enterprise, standard. Okay, awesome. Anybody trying to hybrid that, make it, make a little bit of best of both worlds? Okay, cool. All right, so we got some mix, that's good. Okay, great. All right. So let's see, we can go back. So what I wanted to start with was, you know, this kind of generic image of what a normal sales cycle is, right? And start to talk about how the adjustments when you start looking at PLG or freemium starts to adjust there, right? And so in a normal, quote unquote, normal sales cycle, You know, a customer is contacting you or you have an SDR team that's going out and doing some outbound cold calling to target personas. You get somebody on the line, you're making sure that they're qualified, and then you're setting that call up with a salesperson. And that salesperson is doing whatever, whether it's a standard BANT, if they're taking on some kind of Sandler methodology, they're doing the Challenger Sale, whatever it is, right? They're getting in there, they're going through the methodology that they're used to. They're presenting the solution. Maybe you're doing a proof of concept, some other negotiation, right? And then ideally, right, the customer either buys or doesn't buy. And it's pretty straightforward. And if they don't buy, you're popping that person back into a nurture campaign. If they buy, they go on to some kind of account management or customer success motion. When you start to talk about these non-traditional sales cycles, a lot of these stages all of a sudden start to disappear. And so I kind of pick some spots where you might have changes. But really at the very beginning, the concept of a customer contacting your company or you cold calling them, that very first step might be the thing that goes away in a PLG or freemium cycle. So at Trello, right, just to take an example, we might have customers contacting us that wanted to purchase or wanted to have conversations with a salesperson. But if they weren't within kind of the target cohort, they weren't interested in enterprise, they weren't at the right size, we pushed them back into the self-guided materials. Let the product guide that journey. We answer them in a kind of queue-based support function. But you didn't have that concept of somebody's called in, they're interested in the product, let's get them on a sales qualification call and see if they're the right person and start to do the full sales cycle. So whether it's a change of that stage or another common stage, especially with freemium that you'll see differences in, is the concept of the customer evaluating your solution and making a final decision. That very common trigger is now removed, right? Because somebody's already using your software. They're already They're already getting value out of it. And it's not, the sales cycle no longer is about making sure the product is solving a problem for them. It's really about talking to them about the scale of where that product needs to go, because you're not trying to prove value of the solution itself now. They already have that with the freemium. You need to show them that freemium's not, the free version's not sufficient, or the pro version or whatever the lower level version they might be on is not sufficient. If they're within that target cohort. So a lot of those triggers that a salesperson would think about and a sales manager would think about, right? Like, hey, do you have, do they have budget? Do they have the need? What's their timing? A lot of those things suddenly might be gone in this kind of cycle, especially with freemium, because the concept of, do they have a need? Yes, they do. That's why they're using the free version already. Okay. So need is not enough now. You know, what about timing, things like that? So, so you have to start to really take a look at what your sales cycle is for the model you're starting to build and adjust. And what that might mean is that taking off-the-shelf sales methodologies won't be able to support your sales reps and your sales managers like it would in a normal sales motion, right? And so you might not be able to apply Challenger here or Sandler, whatever it might be, because suddenly those triggers don't make sense in this kind of cycle. Or if it's PLG, Right? You might not be planning to talk to that customer at all. And then maybe you want customer success on the backend. So that whole phase 1 and phase 2 on this page goes away and your entire sales methodology and process sits down at the account management layer. And so when you start talking about the changes in the sales methodology and the sales cycle, it has a lot of impacts down the line. Right? So for freemium, at least when you start to think about how you're going to negotiate things like pricing and cycles and all this kind of stuff, The challenge with freemium is that you have this anchored cost, right? You've given something away for free. And so the challenge to get somebody to pay for it is harder than somebody coming in looking at a net new product and being asked to pay for it, right? It's like if you had a cell phone plan right now that gave you unlimited minutes and all of a sudden your cell phone company wants to start charging you for minutes, right? You have a much more visceral reaction to that than if you had been out buying a cell phone plan that was a minutes-based plan. The expectation is slightly off. And so the, the hurdle for a customer to pay for it has to be a much more solutions-based conversation versus just the product and the pain point being resolved, which is a more standard sales motion, at least at a transactional level. Your cycles can be unpredictable, especially early on. If you're an early-stage sales company trying to do PLG or freemium, whatever it might be, This might not be something where you can say, hey, I've done sales at this level, at this price point, and our sales cycles have always been 90 days, right? And this is what you need and this is how the process goes. That standardization is oftentimes uneven, especially at the beginning until you kind of start to nail down the cohort you're going to be pursuing and what the pain points are that they're going to feel. Um, and so it means that early conversions are often unpredictable as well. So if you're building out a sales team, from scratch at this point, right, and you don't have 12 months, 2 months, 2 years, whatever it is of data, compensation for the team can be really challenging here. So it's not uncommon in a lot of these models to think about it at a bonus level where the team owns a number, to have it be thought of at a logo level, which I'll touch on a little bit later instead of a dollar item. But also, you might want to think about not doing a 50/50 split for your sales team here. And so thinking about something along the lines of 60/40 or 70/30, where there's still enough upside, but the customer journey, because they are ideally going to be staying on your product, either freemium or a lower version of it, regardless of what happens at the end, is still taken into account there, right? You don't want to burn through these folks because they are your, your marketing team, all those customers out using it and promoting it. So you want to make sure that their sales journey is a pleasant one as much as possible. Um, from a product growth and conversion standpoint, if anyone's product team here works closely with the product team, a real common challenge is what features go where, right? And you want to delight a customer, you want to keep getting folks in the door, but you have to really think about what that product journey is and what somebody is going on so that when they look at those pricing plans, they can make those decisions or they can upgrade themselves without talking to a salesperson as much as possible, right? You want to take that friction away where they have to talk to a salesperson to upgrade or to pay or to go to another plan. And so things like removing pricing from your page because it gets people to contact you is a good example of put pricing up, make it easy to understand. Try not to mix your metaphors, right? So don't do a per user and a per usage plan, kind of pick what the journey is that somebody would be going on so they understand where those upgrade points are at. And can upgrade easily through that journey. And then one of the other challenges, you know, and I've talked to folks that have open source tools, that have freemium tools, that have, you know, low barrier of entry tools, and this is like a very common theme, which is that you get a lot of anonymous usage or non-business email address usage. So this is something where potentially the product can support that. So allowing people to have multiple email addresses set up for, you know, security purposes, perspectives or having an account switcher so that people can have personal and professional, if it makes sense to have that on the products that allows you to start to expand who you know is using your tool as much as possible. So let's see, I think that's skipped ahead. So when we talk about specializing, we'll talk about specializing in the team model here, but I also wanna say that one of the most important things when you decide to take on PLG or freemium or whatever it might be is to cohort your customers. Base, right? And I would think about it like, you know, red, yellow, green, right? Red is going to be that base of customers you're not going to apply any sales touch to. Yellow might be that, that cohort that you're going to do some modified versions. So maybe that's what we talked about before, right? With this, maybe the sales process doesn't get touched, but account management does happen here. This is going to be a customer success motion post-sales. And then green might become your high-touch tier that you're proactively pursuing. And if you decide to go with that tier, you might want to have an SDR or BDR team, but instead of that team going after net new companies that have never heard of the business before, they're really focused on that green tier that have some engagement but have a lot of potential to expand. So they're almost doing SDR work inside of account management tiers. Having account executives and that focus exclusively on the logo land, right? And to not be greedy here. And what I mean by that is get the logo in the door, get an MSA in place, get billing, get security, get legal out of the way, if it's one of those top-tier accounts, and then hope that either the product is going to drive that additional growth or your customer success is going to drive that additional growth. But don't— this, and this is counterintuitive, right? You don't necessarily need to have a giant top-down sale, at least initially, just getting that logo in and letting the rest of that motion play out. Sometimes that's going to simplify your sales cycle by, you know, anywhere from 6 to 12 months and just getting them in the door sooner and allowing them to expand is going to pick up whatever revenue you would have lost waiting. You know, this is standard stuff, but if you're technical, have an SE team so that your, your AEs don't have to be the tech experts. You really want this to be a fast-moving machine. You want it to be high velocity as much as possible. Think about that AM and that customer success team, like where are they landing in that cycle? Our account management team at Trello at least had a revenue number and that was their most important number. So they were responsible for retention, but also for that expansion. And so their goal was really to make sure that the product was working well and people were advocates for it so that they continue to bring more people into using it. And then finally, I think this is one of the things that Atlassian is really famous for, which is exploring channel and partnerships. And there was just an article out from Andreessen, where one of the things that was highlighted there was that especially tools that have a lot of implementation work or work that can be done from a third party is really ripe for a channel dynamic to also take that on from a sales perspective. So some considerations, right? Again, I mentioned this before, you really wanna make sure you're focusing on the goodwill. So whether it's NPS or however you wanna measure that, ultimately in all these models, for the most part, your customers are your biggest marketing engine. And that through the sales process, they usually are choosing between a lower version of your software and a higher version or a free version and a paid version. So in that situation, your competitor is you, right? So do right by your competitor, really make sure that you show the value value without having to have it be, you know, an experience where the customer questions if they even want to stay on that lower version or that free version. Because hopefully, if you lose that deal, instead of having to go back through nurture, really the product is going to nurture for you. Trees for the forest, you know, don't extend your sales cycle. Really focus on the fact that you expect the product and the experience to drive a lot of your expansion, which means that you don't need to optimize for the biggest initial contract value. You want to get somebody in the door and growing. You want to get them sticky and not choosing something else. And what that means is that sometimes it might be a smaller group or team that gets product. Have a product story that's easy to understand without a salesperson explaining it. So even if you plan to have a full cycle sales team, right, you should be thinking about this no matter what, right? Which is if I lost all of my salespeople tomorrow, Could a customer easily figure out what plan they should be on, how they would upgrade, when they would upgrade, and how much they would pay for it? If the answer is no, even if you plan to have 1,000 salespeople supporting it, you need to go back and work on that product journey for them, because that will only make the salespeople you have be more successful. And if you don't want to have a giant sales team, it's going to allow you to have a lot of your customers self-serve through that journey. And then this is something I always throw out there, but I think bringing in sales operations early is key. It used to be, I think that sales ops was a nice to have, and whether it's the tooling and processes or the analytics, I think now it's table stakes, especially if you want to build a high-performing, high-velocity team, which is understanding what those cohorts are, measuring it, having those experiments being run. You know, you might decide that this is your, your red tier, this is your yellow tier, this is your green tier. And then you want to peel some folks off of all those tiers and keep them as a control group. And you know, that's your placebo group in your vaccine trial, right? Like what happens to those guys? You want to have a good analytics team that can help you track that. And you want to give yourself a long enough time to let that experiment run out. So that's one of the things I always highlight out for folks, because I think sales ops and analytics doesn't always get the credit it deserves in that process. So quick recap and then we'll do questions. I realized I talked quickly because I wanted to leave time for Q&A. But, you know, freemium and PLG sales are unique and you need to treat them as such. And I think the important thing is that you can't just take a sales methodology off the shelf and a sales cycle and a sales management style and hope to change one or two pieces of it. And assume that it'll fit a PLG motion. It really does have to be something that is an evolving process, and you have to be open to the fact that it might not fit what a sales trainer or somebody else could come in and teach your team, that it's going to have to be potentially custom. Streamline and specialize your team to keep that machine running, right? Cohort your tiers and keep your team in their swim lanes. You want to think about it. It's high velocity, right? You want to think about it as that conveyor belt as much as possible. My big thing that I recommend here is, is the AE and the account manager being different teams, right? I like that handoff. I know there's a lot of folks that try to keep them being both, and I think you end up losing a lot of efficiency there. And then data and operations are, are absolutely crucial because you're going to want to be constantly looking and partnering with marketing to, to see if those cohorts are the right cohorts. You know, are we touching those folks the right way? Should we be adjusting that? And that'll impact everything else that you do. So, so that's all of the secrets of PLG and freemium in 20 minutes, but would love to, you know, happy to have you guys unmute or raise your hands, but love to have some Q&A with the last kind of 9 minutes that we have here. I'm interested in B2B enterprise freemium, if you have any examples of that. Yeah, I mean, I think there's a lot of, there's a lot of B2B enterprise freemium and I think, you know, Trello definitely, was one. It also had a B2C component of it. Um, but there's a lot of tools similar to that. And I think there's a lot of folks now that are starting to explore, um, versions of their solutions now and making them freemium versions. Um, but I think it's definitely more common. I think at an enterprise level, it's uncommon to see a B2B freemium top-down solution, right? So if you're looking at something that is gonna be a product that has to be implemented at like a CTO level or something along those lines, that's harder, right? You really want to think about tools that are easily bottoms up. So something that can be adopted by a small group of folks, that those are the ones that I've seen be more successful on the freemium side. Thanks. Like a department, maybe. Yeah, a department. Yeah, exactly. I would definitely say that. Or like, if you want to think of like a cross-functional team, kind of usage, things where there's that stickiness there. There's sales tools that are off of that. There's a bunch of different examples, but I think that narrative is easier when it's an end-user focus versus like an executive level. Like I wouldn't say Tableau shouldn't go freemium, right? Like, you know, something where someone needs to plug a bunch of data in and look at it at a high level.

Mark, you want to unmute? It looks like you have a question.

Sure, yeah. So we have an implementation period before users of our products receive value, and it's like, you know, 6 to 8 weeks. So it's not something where we can do a full-blown self-serve PLG model. We also serve enterprise, so we, you know, we don't sell seats. Growth isn't really based on usage or adoption, it's larger fixed ACV. Given that context, I was just wondering if there were any PLG tactics that you think can still be implemented and would be especially effective, you know, perhaps around account expansion or feature discovery, or, you know, what can work in that environment?

Yeah, I mean, I would say for that, right, that's a good example where freemium is probably not going to be a good fit. You're not going to want to set folks loose and let them experiment with that. That might be something where a channel or partnerships relationship proves to be really valuable, where somebody can help take on that implementation phase. And really help folks understand that value. And that might be where the PLG motion is the most useful. You know, without knowing the specifics, I would say if there's not a bunch of expansion opportunity, it might be slightly more challenging, right? Because part of the benefit is picking up other teams or having it grow on its own. But I would definitely say channel partnerships, folks who can come in, you know, think about Salesforce's model, same thing, right? Which is it can be very complex. But if you want it to be very complex and custom set up, you're going to use a Salesforce vendor for that. They're not going to come in and do it themselves. Atlassian's a similar way, right? They have a large channel team that would take part in that.

Hey, Kristen, real quick, um, what is the minimum ACV to look for in the SMB space? Or maybe give a little insight on the biggest misstep in this type of model for the SMB space. And I'm not talking about 3 employees type thing, but true SMB.

Yeah, I mean, I think it depends on how your pricing is and from a seat perspective. You know, I kind of tend to stick with like the $10,000 minimum range at that size. I think about, you know, even down to $5,000 potentially. I try to think about the customers that I've dealt with at the SMB level and at what point does putting a credit card down to buy something become challenging and you kind of get up at that tier where you might want to apply some kind of sales to it. I would just say if you start down at like the $5K range, $10K range, as you evolve, I would just make sure that you constantly question like, okay, what if we go to $25K? What if we go to $30K? Right? And we did that at Trello, early days at least. Like we started lower, but then we very quickly were like, too small. And we like ramped it up. And there might be tiers within that, right, where $5K you'll do a PO billing, but you're not going to do a security review, but at $25K you'll do a security review, and at $100K you'll do a legal review, right? You might, again, like when you think about that red, yellow, green kind of cohort, there might be criteria there of how much you're willing to support based on those sizes.

Thanks.

Sure. Any other questions?

Kristen, it looks like we have a few in the chat. If you can pop that up, or I can read them out to you.

Yep. What kind of tool stack are you using to get analytics and understand the buying experience? Yeah, I think it depends on, you know, on a couple from the sales side, right? We're using, we use Salesforce as the source of truth, which allows us to track a lot of this information. And so then there's an overlay with like, Tableau, um, and other tools that kind of let us slice and dice on top of that. We also use, um, you know, any kind of email automation tool, whether it's Groove or Chorus or somebody who can let you see from your rep's perspective, like what kind of response rates are they getting in campaigning. Um, but I think it definitely depends on, on what part of that cycle you're trying to look at. But I would say that the more— we also use a tool called Mode back with Trello, but things that could connect in from a database, a billing perspective, and the sales perspective. So we can see how those different cohorts performed. Um, see, yeah. So the, the, I will say, I saw the question about the slide. I could definitely, we can share this. I will say like my slides were a little cheeky. I was just kind of putting X's generally. So you'd see that there was a challenge there, but in the case of The sales presentation in the case of PLG. I can speak to the Trello side, right? Which is that at a freemium level, we didn't do a ton of sales.