20 Top PLG Learnings from the Leaders in Cloud!

Hey everybody, One of the topics we're all talking the most about is PLG product led growth and it is interesting. What does it mean? Is it free and freemium in a new package? Is it next generation tweaks to our website and our motion so that our product can generate more leads? Is it something old in a new packaging? It's a lot of things. Maybe what it most most is, as Aaron Levy said at the Sester angle this year, is the ability to instrument how our funnel works and instrument how users can convert through from free to free trial to paid. And the fact that we now have tools and data to understand how this happens means we can improve it. We can do PLG better even if we've been doing PLG for a long time. So I thought, hey, let's take our five interesting learning series at Saster, where over the last year and a half, two years we have looked at all the leaders in Cloud, Slack, Zoom, Asana, Monday, everyone, or at least a good chunk of them. And I thought I would re look at those and pick out the 20 most interesting learnings from those leaders in terms of product led growth, free premium and similar motions. And I think that may probably all 20 of these won't apply to your startup, but maybe three, four, five of them, maybe even more will resonate and maybe even challenge a few assumptions you have. And maybe the biggest learning is just how long. And the PLG motion scales to 100 million, 200 million, 400 million, a billion and beyond. There now is no ceiling to a lot of the things we do to acquire companies through our customers, through our product. So let's go through the 20. The first one is Asana. And Asana has been on a tear. It is accelerating. It is growing faster 400 million in AR than it did at IPO and at 240 million in ARR, which is crazy. And what is interesting at Asana is that even today, half of its customers come from self service. That was 60% at IPO. At IPO, 60% came from self service and 40% through sales. And maybe this shouldn't be a surprise. The ACV today at Asana is still just $3,600 a year, 300 bucks a month. And it was only $3,000 a year at IPO. So plenty of small businesses are using Asana to track the way they build software and manage other projects. And that hasn't changed. But what's interesting is that it scales. It scales all the way to 400 million in ARR. So for folks that Say a self service motion can't scale that. It has a natural ceiling. Well maybe, well maybe. But Asana says otherwise. Asana says you can get half your customers from self serve even at 400 million in ARR. Okay, number two, Datadog. Now Datadog has gone very enterprise. You know, at 100 million it got the majority of its revenue from smaller customers. Now 1.2 billion in ARR. Datadog gets the vast majority of its revenue from 100k plus customers. But what's interesting for PLG is that free today free is still a primary source of leads. Leads and we'll see this in a minute for MongoDB and others. And maybe it's especially common in the developer community, but it's true with Slack and others as well, which is even if you do go very enterprise over time like Datadog, DataDog started very SMB and PLG and it's become quite enterprise as it's gotten to have be have a very rich feature set. Free still has huge value even if its direct contribution to revenue is lower. It is still core to Legion. And Datadog has not left Free behind. Go to datadog.com today you will see a whole suite of products compared to when the company launched, but you will see free editions in many of it in quarters including its original core APM products. There's still a free version of Datadog. It's still a good deal. You can still use it. It's just Datadog has grown from one motion to three. From self serve to commercial or inside sales and then to enterprise sales. But it has not left Free behind. It has not left that top of the funnel behind even as 80% of its revenue comes from 100k plus deals. 3. Let's talk about Expensify. Expensify is a fun one that IPO'd this last year. One of the early great leaders in mobile where you could just grab your phone, take a picture of an expense report and magic would happen. It would get submitted for you. And Expensify saw this earlier than others. And what's interesting is while the space has gotten very dynamic and crowded as adjacent folks from divvies to ramps to Brexit have come at it from a different angle because Expensify started here on sort of the mobile warrior self serve first. It's very interesting case study of PLG sort of never ending and as expensive is crossing 150 million in revenue today. Not only do 60% of its customers come from free, it's more interesting than that 60% of its customers come from free end users that don't even buy. These are folks in the office that use expensive I to manage their own expense reports. They use it enough and they tell their manager who then buys their company then buys. So it's pretty crazy. You can imagine that happening in the early days. Many of us have seen it, but at 150 million in revenue at expense of I, 60% of its customers still come not just from free, but from free end users that don't even end up paying themselves. So again, that doesn't work for all of us. The idea There have been many apps that have crashed, crashed and burned, hoping that end users who would never pay would somehow tell their boss to pay. With all the explosion we've seen now in next generation sales tools which has been stunning, very few of them really are adopted from end sales reps convincing sales ops or the VP of sales to buy the app. It happens sometimes, but it's rare but expensive example that does happen that your end users, if they find something free that is so valuable like expensify to automate their expense reports in a click they really can get the org not only to buy but to buy seemingly forever. Up to 150 million in revenue. Okay for toast. A lot of interesting plt like motions with toast. Even with that hardware in a lot of restaurants. The most interesting one is going long on NRR net recurring revenue and Toast NRR is 114% today from SMBs. That's pretty good. That's pretty darn good. It's not the very best like a bill.com that we'll see in a minute or Zoom, but it's pretty Darn Good for SMBs. And likely it's the case because there is that investment in hardware and infrastructure that is stickier than just basic SMB software you can throw away. Nevertheless, it's 114% today. But what's interesting what's interesting for PLG and SMBs is that it took four years just to get to 100. And why is this important? Well, the SaaS models are much more stressful. Below 100% net revenue retention, you're in a churn cycle. You have even at 90% NRR you have a slowly leaking bucket. It's not a horrendously leaking bucket, but boy, nothing's more frustrating than to start the year with 10 millionaire and lose a million just by running your company. The datadogs automatically almost go from 10 to 14 with that 140% NRR and few things are more frustrating than being below 100. But toast is reminded that they didn't start there. It was a simple app and it took a while to get going. And NRR was not even 100% for its first four years. But today it's 114. And I see this with a lot of SMB SaaS companies I meet or work with which is that in the early days the NRR is not, it's not quite what they'd like and it can take until 10, 20, 30 million ARR oftentimes well past 10 until they can cross that 100 million NRR. And it's often from adding more val product stickier, increasing the surface area with SMBs so that. So they don't want to cancel. And it can take a while to figure that out and build that software. But it's a reminder that you can, you can get to world class NRR from SMBs. But. But. And it's okay if you didn't start there. That's toast at 114% NRR today. 5 Freshworks Freshworks a great leader, maybe one of the very first Indian SaaS leaders to IPO. Certainly that at 400 million plus in ARR. Freshworks is going up market as many folks are. You can go to SASTR and read the five interesting learning about Freshworks. They're getting more and more 50k 100k plus deals as they compete with Zendesk and others. But the majority of the customer are small $3,600 a year customers around that and 38% still pay monthly at 400 million AR 38% so only 62% pay annually. So. So that's a challenge. And we'll see that with Zoom in a minute and a few others. There are times when it makes sense for SMBs to pay annually and we'll see that in a minute with Smartsheet. But usually the path of least resistance is the right thing for all type of sales and especially SMB sales. And Fractures has found for its smallest customers just let them go on a credit card to pay monthly and go. And they're not forcing it, they're not forcing you to go annual. And we'll see some other case studies in the next next to the 20 top learnings of PLG plus that it really helps not to force your customers to buy the way they don't. They don't want to. So don't feel pressured to do an annual plan if finance wants to, if sales wants to, it doesn't mean they're right. Freshworks 38% at 400 million in revenue, still pay monthly.6. Sprout Social, a leader in social media marketing. They were able to IPO at 100 million, 180 million in arrival last year. Just an interesting point that 20,000 of its customers still pay 100 bucks a month. They still pay 100 bucks a month. This is a US based company. Now this works for Sprout Social because a lot of them do migrate to larger accounts and they have that classic small, medium and large mix. SMBs, Mid Market Enterprise and a large chunk from agencies. But it is able to function very successfully at $99 a month. So it's a challenge that you cannot sell a product at 100 bucks a month and scale to 200 million and beyond ARR and IPO, Sprout Social did it. Maybe not every Customer can pay $99 a month, but there is a group, think a meme with VCs, with others that even a $3,000 ACV is tough to sustain. It's tough to get to 100 million AR. Well, Asana did it Monday, did it. As we'll see next, Sprout Social has done it at 100 bucks a month. So yes, at 100 bucks a month, boy, you need a lot of customers. And sprout social needs 20,000 of them just just to make up it's the small, the small portion of its customer base. But they've done it successfully at 100 bucks, so it can be done. 7. Vimeo. Vimeo is a very interesting web video service. I've certainly used it for professional video since longer than I care to remember. In fact, since it did HD before, YouTube was particularly good at it. Today they're at 3. They're their own company at 330 million in error. They IPO last year and 75% is self serve, 25% is self driven. And this is an interesting complement to what we just talked about with Asana and also Sprout social. They have 1.5 million self service customers that pay 20 bucks a month, $214 a year, 1.5 million pay 20 bucks a month and then they have 3300 enterprise customers that make up this 330 million in error. They pay 20 grand a year. So Vimeo is able to do both. It's able to have a sort of a B2C like motion. 20 bucks a month for 1.5 million customers for basically professional video to embed on their website, et cetera. And then 3,000 plus enterprise customers paying 20 grand and up and they compliment each other. They don't compliment each other perfectly. Some of the use cases for these, these, these 20 bucks a month customers do not naturally upgrade to these enterprise functionality. They're not all marketing teams using Vimeo across all their customers and across all their properties. Sometimes they're just embedding one video on their website and 20 buc. But. But it's a reminder you can do both. You don't have to give up this low end of the market to go enterprise. You can have 1.5 million 20 bucks a month customers at Vimeo and 3,000 to $20,000 a year. It's pretty interesting. Okay, point eight related to us and some of this will get redundant but I think in a good way to rattle around in your head that there are different ways to go up. Market number eight Monday. Com incredible company at 400 million growing almost 100% a year. Wow. Monday Asana Smartsheet this whole category Atlassian. Everything is on fire. Everything is growing faster coming out of COVID not slower like a Zoom or Shopify. We are just living in the cloud and we clearly need project management tools to be distributed workforces. So they're all on fire. And Monday, what's interesting about Monday is even as it goes more enterprise and it touts its bigger and bigger deals and congrats to them, the average customer still only pays two grand a year. Two grand a year. So it can be done folks, it can be done again with that motion and that brand. And also Monday was late to add a free edition. Did not launch it but once they found it they grew even faster. So it's never too late to add free to that to that product. LED motion number nine HubSpot, one of our favorites at Saster for a variety of reasons they've done it the hard way, right? They've done it with a 10k price point for SMBs and they've done it in a very competitive space where so many of the folks from Marketos to Braze and others went enterprise where there was more money in marketing automation. But HubSpot said no. HubSpot said no. We're going to stick to our SMB roots. We're going to do it the hard way. And they won. They have a 20 plus billion dollar market cap which exceeds almost probably all its other sort of competitors combined at this point that are independent. And what's interesting, at 1.5 billion in ARR. At 1.5 billion ARR, HubSpot's number one source of customers is still Word of mouth and this is so important to product led growth. At the end of the day, where does it come from? Like, yes, the product can create product like growth. Someone's got to get there. Someone's got to get to your marketing site, to your application, to your homepage. And how do they get there? Sure, you can buy it and you can do events and so many other things, but for SMBs, it's tough, it's tough to get the kind of scale you need for SMBs. And if your product isn't viral and I don't really think HubSpot is all that viral, some of its products have little elements. You know, you can see HubSpot and social media and an email, but it's not incredibly viral. But word of mouth is number one. Word of mouth was number one before they IPO'd. Word of mouth was number one as the IPO'd word of mouth was number one at a billion in ARR and it's still number one at 1.5 billion in ARR. And it can scale forever. So invest in brand, invest in your community, invest in happy customers. That's the magic in SMBs. And of course in the very early days there's no word of mouth because you don't have enough customers. And actually I think that word of mouth, usually you can see it even your first year. Many of us do get a happy customer and they'll tell someone else. And within the first 12 months it's entirely possible to get a second order customer and to see empirical evidence of word of mouth. But it's hard to have enough of a corpus of customers in the first year or two for that to be your main field, to be number one, because you just don't have enough of a base. But if you could push even to a mini brand, even to 3 to 4 million in ARR, even at that point, especially with SMBs, maybe even a couple hundred customers, a word of mouth can quickly become number one. And it is just fuel. And it always works. It always works. And if you have decently high NPS from small businesses and you don't know what to do, invest in customer happiness. And HubSpot did inbound. You know, it was, it was the number one live event behind Dreamforce. Why did they do it? It was to get their customers together. It was to bring everybody together, be happy, build community again, invest in word of mouth. 10 Shopify picked out one interesting of so many PLG insights from Shopify. What's interesting is that Shopify post IPO has gone more and more enterprise. It added a whole edition called Shopify Plus. You can see it on their website. It's got tools, process and systems for big stores, for fancy brands to list on them. Many of the best top brands you've heard of use Shopify plus to sell at scale. But what's interesting is, and that's worked, it's over 20% of the revenue. But SMBs have grown even faster. And we've also seen this at Zoom, even as the enterprise explodes. Zoom. Enterprise exploded. Its SMBs grew even faster. And so they did for Shopify. So in fact, SMBs at 4 billion in ARR for Shopify are now growing even faster than Enterprise. So enterprise is slightly shrinking as a percent of revenue. So what's the takeaway here? Mainly just that you just don't know. You don't know that even as you go more and more upmarket, you don't know that that's going to compress your SMEs. You don't know that it's going to squish them out of the way. And your SMBs are your, in many cases, your heart and soul, your brand ambassadors, your PLG warriors. Because even if you go quite enterprise like Datadog with 80% of its revenue from 100k plus deals, you'll never have enough. You'll never have as many advocates in the enterprise as you could if you have 10,000, 20,000, 30,000 SMBs singing your praises. So Shopify is a reminder that you sometimes, at least you can have it both ways. You can go more Enterprise and your SMBs can keep up. You can get both more enterprise and more SMB at the same time. Point 11 Bill.com, we did a great video before on the Saster channel with Renee Lacert, CEO of Bill.com, it was really one of the favorite interviews I did. It's also on the Saster podcast. Take a look at it. We do a deep dive on so many things, including their EPIC NRR. And it has gone from 110% at IPO to 121% and then 125% from small businesses like a couple of seats. And if you're very small and PLG oriented, you've got to study build.com because they're and I love bill.com they're doing almost 300 million revenue. We run a lot of saster billing on bill.com I log in every day to to approve bills and manage our small business. But they've gotten more and more val over time and their NRR has gone up. And so it's just a reminder that 125% NRR is possible for SMBs. And we hit that a little bit above and we, and we will see that with zoom at the end. But, but bill.com is a nuts and bolts application. It's. It's to process checks, it's to process bills, it's to manage finances. And folks like Xero actually struggle, they struggle to hit 100% NRR, but bill.com is down 124%. So don't settle for less or at least, at least be challenged. Counter example 12 is Squarespace. And I do love Squarespace as an application. A lot of our Saster websites run on Squarespace, Saster Europa, Saster Annual. Most of our events do. We've standardized on a set of Squarespace templates. We've gotten good at it, collaboration tools. We like Squarespace. We like, we like Webflow too. We love WordPress, of course, and Wix. But, but Squarespace is where a lot of our events are running. It is pretty and easy to use. But it only has 85% NRR. It only has 85% NRR. And that's interesting. It makes sense. People may set up a website and not need it later. There's a lot of free solutions to start. But what's interesting about it, and it's the opposite of some of the other ones we've talked about here, is they push. They push annual. And 75% of Squarespace customers pay annually. And why that is, I don't exactly know. It's not disclosed. But it would make sense that you're masking Churn, right? If you can get folks to. And I've signed up for many Squarespace websites. I do love the product, but they really push you to pay annually quickly when you set up that website, they really don't want you trying it for very long. And they must know that so many folks that get excited, oh, mom, dad, I'm going to build a website. They never really finish the project or they never really monetize it. And if they don't get that money up front, you're going to churn. So they push very hard for annual. That's probably one of the two times you should push for annual with SMBs. And there's another, which we'll see with Smartsheet in a minute. Okay. 13. Pager duty now. Pager duty today coming up on 300 million has actually gone quite enterprise and we won't chat about that. Much here today, but through the IPO they were very SMB through 125 million in ARR. In fact they basically were only SMB 10,000 plus SMB customers at IPO. And two very interesting learnings from it. One, they never raised prices. So it's a challenge that you don't have to constantly raise prices to get to 100 million and beyond from customers. They just had a great product that people would hear from word of mouth that they, they would see other people using Patriot and they would adopt it. And importantly, they never raised prices through the ipo. They later went more enterprise and they've done an incredible job going up market and building out their feature suite. Past 200 million in AR, but all the way to 100 plus million AR. They had their one core product mainly and they never raised prices. It was very consistent. HubSpot did the same thing until very recently. In fact it's never really raised prices. HubSpot has thrown in more and more for the most part, more and more features and products for the same price. And I assume both of them have ab tested it, they've tried whether price increases are worth it, are worth the churn and competitive risks. But the challenge from both of them is raising prices is not always the answer and it wasn't with pager duty. And to finish the point through IPO, even just from SMBs, they had 95% renewal rate from SMBs. That's really good. If you're selling to SMBs, you may be hoping just to get past 95% NRR, they have 95% renewal rate. GRR at IPO. That's pretty good. That's a product people love and it can be done with SMBs. Okay, point 14, we're on the home stretch here but hopefully this is helpful to folks. Number one, PLG learning from BigCommerce. If you have not heard of BigCommerce, it is the distant number two to Shopify. There are other e commerce vendors. There's Magento, there's certainly. And there's lower end ones. There's, there's, there's, there's WIX and Woocommerce and Squarespace itself and others. But for products like Shopify, which is like a whole store in a bag in a box In a click, BigCommerce is the most similar. It offers the most similar feature set, the most similar amount of functionality, all encompassing functionality, yet with far more ease of use than like enterprise solutions like Salesforce or Magento. And they're very similar except big, bigcommerce wants to be a smidge more enterprise and a smidge richer. And what's interesting is that they adopted the same pricing as Shopify. Why is this a PLG motion? Well, it's interesting to see a number two. Not price higher, not price lower, not price in the bellpark, but price the same, clone it. So imagine you're, you're, you're surfing and you're comparing Shopify and BigCommerce. If the pricing's the same, you've eliminated one piece of friction from a buying process. I'm not sure which one's better. You might be a buyer. Well, Shopify, of course. I've certainly heard of Shopify, but BigCommerce has this one really cool feature. I'm not sure Shopify has it. All of a sudden, the prospect, the potential customer does not have to worry about price. So identical pricing, especially in a complicated space, can be very powerful in terms of removing an objection. It's not always the right thing. Asana is more expensive than Monday, and maybe that's the right positioning for them. And actually Smartsheet is more expensive than both. That may help people think, okay, wow, well, Smartsheet must be a powerful app if it's more expensive than, say, Monday. But identical pricing is a powerful strategy to remove friction from sales. It's something to think about if there's clearly a number one and number two in the space, or at least there's clearly number one and clearly you. Sometimes identical pricing just simplifies things. Okay, point 15. Smartsheet, which we touched on another leader in the vague space of Asana and Atlassian and Monday, they took a different approach, they took a different approach to others. And Smartsheet is a terrific application, but it is a little bit of work to get the workflows going to get it set up. So they have decided almost only annual pricing makes sense. Over 90% of its SMBs pay annually. And there could be a couple of reasons. First of all, Smartsheet is going much more enterprise as it scales to 500 million and beyond. And so naturally enterprises more comfortable with annual payments. But really, if you listen to what, what, what Mark Mater CEOs and others have said at SAS or another advances, they want to make sure the onboarding happens, they want to make sure the customer is bought in. And if they don't pay annually, they worry that they will turn out before they put in the effort to deploy. That's not a standard approach, but I think it's quite logical if your application is by its Nature. Work to deploy. If it's work to deploy, maybe push your customers to annual. If they can deploy in moments like a Zoom, maybe don't. Because as we'll see in our last point, Zoom is 50% monthly payments today at over 4 billion. Over half of Zoom's revenue and customers pay monthly. That'll be our last point. Just a moment. Okay, two quick points. I'm going to give MongoDB 2, 16 and 17 just because it's so interesting. Mongo. If you've deployed Mongo, worked with Mongo in a larger tech company, you'll think of it as very enterprise, but it's not. It's actually very interesting how so many tiny customers use Mongo as well as large enterprises. And I think that is generally interesting. But boy, for something like database software, it's amazing to me that everyone can use it because it's so mission critical. I mean, look, I'm dating myself. But when I was a SAS CEO, a few things worried me more than database corruption. I knew it was replicated, I knew we had some protection from sharding and backups. And I'm like, gosh, if this database is ever corrupted, if all these millions and millions of contracts in Adobe Sign or Echo Sign are ever impacted or lost, what a disaster. And you know, it's amazing because, you know, 15 plus years after founding, all my contracts from 2006 are still in Adobe Sign and Examine in the managed page, which is wonderful. It's an incredible thing of the cloud. And so it's very interesting that Mongo is able to do all types of customers. And what's interesting is When Mongo had 25,000 customers after its IPO, only 2,800 went through the sales team. Only 2,800 went through the sales team. The vast majority self served. It's a reminder you can do them together. Now what Mongo does is the same thing the Twilio does and Slack does, which is they look for signals. They have a lot of analytics. And this is again going back to the first point when we started narrative. What is PLG versus just self service and freedom? It's data, it's analytics, it's signals. And in the old days we would guess for like one or two signal to see if maybe a sales team should jump into a deal. But Mongo has very sophisticated data and signals and they can sense when a deal will be large enough where sales can jump in to help and ultimately sell them into a larger into a larger deal. But related to that super interesting point, 17 Mongo found annual contracts did not help. Okay, what do you mean? Well, as Mongo scaled up, they brought in their first heavy duty sales team and they put in an incentive program. They heavily incented annual contracts. And this is something that you may consider doing. A lot of startups, especially if you get advice from your VCs and board, will be like, annual contracts are amazing. Like, they generate such great cash flow. They're an annuity. Incent the sales team to get annual, but that's the wrong advice. What you want to incent the sales team to do is what removes friction from the deal and what's best for the customers. And Mongo did the classic thing where they had a big spiff, a big accelerator for annual contracts. And so the sales team went out and pushed, pushed, pushed. And you know what happened? It got worse. Sales declined, or at least the growth rate declined because it created massive friction. Especially that probably engineers and developers were not used to for trying a product like Mongo that they felt like it should be tried before you buy and pay incrementally. They didn't want to be shoved into annual contracts before they were ready. And so Dev and the team pulled that back. They pulled that back quickly and they said, this isn't going to work for us. When you're ready to move to annual, of course the sales team will convert you to annual. But they changed the incentives for sales to just close the customer. We're going to incent you on monthly or quarterly deals as well as annual. And it works. Sales went up. Take friction out at work. So super interesting that pushing annual contracts, it's just an advice you'll get so often on the Internet and from VCs and others. Mongo said it doesn't really work. Work for Smartsheet didn't work for Mongo. Not magic for Zoom, not magic for Expensify, not magic for others. So, you know, take friction. PLG is taking friction out of a process. Okay, last three. Cloudflare. Cloudflare. You know, everyone probably uses Cloudflare in one of their products. What I think is interesting about Cloudflare from a PLG perspective is conversion rates. And all across the Internet, especially our B2C friends or our Salesforce friends, they're all, they're all obsessed about conversion rates. We got to get our conversion rates up. Like we only convert from free to pay to 2% or 3% or 4%. It's got to be 10%. But that is almost always the wrong way to look at it. The larger your denominator you know, probably your conversion rate is going to be lower. And maybe that's okay. If you, if you have thousands or even millions of happy users, your conversion doesn't have to be high. You don't need that choke to be too aggressive to build a wonderful free premium business. And Cloudflare is the case in coin. 500 million plus ARR. 3.2 million free users and only a hundred thousand pay. Okay, that's however you want to look at 3% conversion. If you talk to a lot of classic SMB and B2C markets, say 3% conversion, that's terrible. We got to get up to 4%. We got to get up to 5. No, that's the wrong way to look at it. Now, of course, all things being equal, if you, if you move up your conversion rate, you will make more money. And if it, and perhaps more worrisome if it, if it, if your conversion rate goes down, if all things are equal, that could be a flag, right? If it goes down, that could be a sign that competition is getting better, or there are other issues, but there isn't. You've got to be very thoughtful about your funnel design. And if you want everyone in the world using your product as Cloudflare does, they want everyone in the world protecting their websites with, with, with Cloudflare, maybe your conversion rate has to be quite low to accommodate that. And Cloudflare was fine with that and built an epic company on its way to a billion in ARR with quote only air quotes, only a 3% converture rate from 3.2 million free to 100,000. Okay, two last ones. But we have to end with our classic PLG companies, Slack. And we have to end our PLG session with, you know, at least at the last generation, the iconic PLG companies for the next generation it could be Calendly and notion and more. But if we're looking back over the last five years, what was more PLG than Slack and Zoom that the applications we all adopted on our own. Slack, which many of us used for years for free before paying Zoom, which was famous especially pre Covid for its 40 some odd minutes of Free. I mean Zoom and Slack are these applications that you could use the free versions forever. And they were wonderful. We'd never had in some ways such amazing free versions. So let's talk about Slack first and then we'll end on Zoom. Slack changed a lot from the Slack we knew in the beginning. And I still love Slack. I'm sure you still love Slack, Saster. We run our whole team on Slack, much more than before COVID Now that we're distributed, we all live in Slack. We all live in Slack and zoom and notion at our team. But as it IPO'd, as it got big, as it began to approach a billion in revenue, only 8% of Slack's revenue was free to pay conversion. And this is such an important PLG point, which is actually how and when the funnel works. And you know, you really have to segment your funnel and how PLG works because it may only be a small segment that converts directly, but it doesn't mean the rest of your free users don't influence revenue. And so what Slack said is look at this point as we IPO, only 8% directly went to free to paid. And interestingly, that's almost the exact same number that box sees. At 800 million in revenue, only 8% truly go from a free to paid. Like this classic, this classic low end path. But the 500,000 orgs using the free plans were one of their top sources of awareness, of awareness. And I know you know this, but it's a reminder that free free also is some of your best brand marketing. If your free users are happy and this is a cultural choice so many startups have to make, are we willing to invest in free and the very low end because they need support, they need help, they need documentation. And many folks flee the free and the bottom end of the market just because it's work. You know, you close a million dollar deal and you're like, wow, you know, one person can handle a million dollar customer, but you can't handle the 500,000 orgs that are using Slack for free. How are you going to support them? And then they want different features and they complain even though it's free. I mean not, not everyone has the culture to make these folks happy, but if you do, they're your army of warriors. And maybe, maybe you open up your Twitter and you see everyone saying how wonderful teams is, but I don't think so. I think Slack is near and dear to our heart. And Stuart and the team saw that it had to go more enterprise. It was going more enterprise. The majority of its revenue at IPO was enterprise. 50% enterprise, 50% SMB. The old Slack of just startups using it and developers, that's still there, but it's a minority of the revenue today. They saw that coming and that was the future. But they did not give up their route, they did not give up their free routes. And, and even as free to paid went from you know 98 at the first Saster annual 2015 to 8% at IPO, it became one of the top sources of awareness and also one of the top sources of hunting grounds for their sales team. Okay, last point. 20. So Slack got more enterprise and less free to pay. Zoom didn't. And Zoom is kind of this one. And go to saster.com and read our five interesting learnings about Zoom. Because Zoom. Zoom is just so interesting how it has grown and 50% of its customers pay monthly. 50% still pay monthly. There's so many things we can talk about Zoom, but let's end with this on the PLG side. And that's up. That went up from 40%. If Zoom had pushed everyone into annual plans, if Zoom had forced that choke tighter, it would not be the Zoom it is today at 4 billion in revenue. Even with some of the challenges coming out of COVID it is absolutely one of the fastest growing cloud and SAS comp software companies of all time. Half still pay monthly. Eric is insistent on customer happiness. It has been core to the company's value since the beginning. He has never forced anybody to buy the way they don't want to buy. And it has been part of their wildfire and their success. So a last one to end on. You would not think today at 4 billion revenue that intuitively that with all the enterprise, with all the features Zoom is adding, with all the big companies adopting it, you would not think half their customers, half their revenue. Not just half their customers, half their revenue comes monthly. But it does. And it's going up, not down. So follow those customers. That's part of plg. Make free work. Make the free trial work. Make them happy. Let them buy the way they want to buy. Don't force them to buy ways they don't. And don't give up on free. And don't give up on word of mouth. You can find ways to measure word of mouth like HubSpot. HubSpot, it is forever. If word of mouth is the number one source of new customers for HubSpot. At 1.5 billion in revenue and and half of Zoom's customers pay monthly, this PLG playbook, it's just got no ceiling. It can last forever.