5 Customer Challenges as You Scale and How to Fix Them with mParticle, Confluent, and Cribl

This time of day, you have the brownie and then you regret having the brownie.

Yeah, the post lunch.

Hi, everyone. We're just gonna do a quick round of interactions and then we'll get going. It was kind of positioned as a panel, but it's more of like a group talk that we've been working on together. And it's been a pleasure getting this talk together with these amazing ops ladies. So I'm Vani Peli. I'm currently the COO of mParticle, which is a customer data infrastructure platform. And I was previously head of strategy operations at New Relic, which is a much bigger company.

Hi, I'm Shraddha. I'm also at Imparticle. I'm the senior director of strategic initiatives. Interestingly, at the time of signing up for Sastra, I was actually working with Twilio as head of product operations and then decided to work with Vani.

Hi, I'm Patricia Hanna. I'm with Confluent. I'm the VP of America sales operations. I also run our global shared services team there. Before Confluent, I was at Twilio, where Shirata was, and at New Relics with Bonnie. So excited to be back on stage with everyone.

Cool.

Hi, everyone.

Farrah Bui. I'm the vice President of business operations and strategy at Kribble. I joined the company when we were about 20 people and now we're north of 400 employees. And I think I cold emailed or LinkedIn Bonnie, and we got connected and here I am.

I'm always up for networking with cool ops ladies. So happy to connect. So let's get rolling. So many of you may have already seen this pain scale, like on the wall of a doctor's office or in a hospital. Like, hopefully nothing too serious. My husband's a physician and we were talking about the pain scale the other day, not in reference to our marriage. And I just had this thought of, this is actually really applicable to my chosen craft of operations and scaling. And I would hope that most of you are in the green part of the scale right now. You got your first round of funding, you have a product that customers love. You might have even sold some stuff, and you're probably not feeling a whole lot of pain. And so you're in the green zone. But as some of us who have seen scale know that the little pains become big pains really quickly as you grow in scale. Scale. But it doesn't have to be that way. We don't have to get to the red crying eyes part. And I think Sometimes going into more of a startup environment. I think of myself as a time traveler, and I feel like we are all coming back from the future because we've seen companies grow at incredible scale. With all the joy and the pain that comes along with that journey, I think we'd be able to see what really matters. When you're building those foundations that are going to help you grow and accelerate and continue to scale, and I think we see time and time again, you'll hear it so many times at Saster that customers are really at the heart of all these problems, understanding your customers and being focused on them. And so today we just wanted to come back from the future and share with you, hopefully some insights on that journey and then share kind of five things across product pricing, go to market that we've seen time and time again, and the pain that it can cause. So hopefully you can avoid that red part of the scale.

So here we are.

Here's five things that break as you.

Scale and how to fix them.

So I'm going to hand it over.

Yeah.

Cool.

Thanks, Bonnie.

All right.

So the first kind of pain that we thought about that really starts to break or you start to feel when you're scaling is you start to lose a sense of what value your customers are actually getting from your product. And for many of you here, founders, early employees at startups, you get. You get to go into a room and you're with your product leader and your marketing leader and your sales leader, and you have a good sense of what's in your pipeline and who your customers are. In fact, you probably talk to a lot of them. But what you start to see happen in a lot of common mistakes is as you grow, it's really hard to constantly pitch as maybe the CEO or founder, because you know the product so well to every single prospect, but you're trying to scale that and you're realizing there are only so many hours in a day and so many prospects to talk to. The second is as you're starting to scale, you're also seeing all the various touch points that you can measure and learn more about. I think technology companies are really keen, right? Data kind of sets you free and tells you a little bit more about how to scale. But when you're trying to measure multiple points of the customer data all at once, it can be really overwhelming and lead to analysis paralysis. And then, of course, as you're scaling, you're also building out your various functions. And so no longer is your marketing team a team of one. You have multiple People now you have an analytics team, go to market sales team, a sales operations team, and they're all tracking what they think could be product utilization or how customers are interacting with your product, all in their own disparate systems. So what this leads to is a lot of chaos and it becomes really hard to actually figure out what exactly customers are doing with your product. And if you're trying to scale and build out that roadmap or figure out your pricing model, it's really tough. So what we would urge you to really consider is to invest in systems sooner than you actually think. And this can be a really tough thing to do because the idea of investing in this versus hiring another developer, it's a massive trade off. And what we would urge you is to think about it incrementally. So we often say, or I think about innovation. Iteration is innovation. So first enabling your go to market teams on that ideal customer profile and journey. How do you scale that? Maybe you centralize it into a single source of truth document and it could be as simple as a shared Google folder and then eventually building it out into a content management system that your field team can access. The second is prioritizing the leading indicators. Something we found at our company was people would talk about product utilization and we'd realize they're measuring logins. And then the other teams were measuring capacity, usage. And not having a common understanding of what those indicators are was really tough to actually figure out what the heck we're measuring and then what do we do with that data? So pick a handful, stay really focused on that, and then iterate as you scale and then finally invest in some sort of single source of truth for all this data, whether it's a spreadsheet or Excel file and eventually building a BI system on top of that. It's really important that no matter what you're measuring, that all your teams have a central place to go to to know what you're looking at in your QBRs or MBRS. So with that, I will turn it over to Shraddha.

Thanks, Farah. This is a fun one. Customers have taken over our roadmap, so I'm gonna start with a quick pulse, especially for the folks who are from product. How many times have you felt that you're not able to innovate because either you're getting endless fire drills from sales or customers or you just feel you have this endless backlog of feature requests and yeah, as a result you just cannot innovate ever. Anyone here? That's it. I was expecting more we all talked about it. It was quite a pain. Thank you. And it's just not common. It happens, at least in our experience. Also, we've seen that happen across all our companies and there are some common mistakes we make. So this happens particularly in earlier stage companies where you still don't have very mature sales and product processes in place. So you end up being in like this massive reactive mode. And here just a list of some of the common mistakes we made from just how we run our processes. One is about feedback, like how much you're investing in actually streamlining your feedback channels. So you've got multiple channels from sale, I mean pre sales, post sales support. And then you're suddenly bombarded with a lot of feedback from different channels. And you just, you know, you're suddenly in this, you know so much information that you just don't know how to act on it. The other thing is, okay, so you've collected the feedback, but you don't know how to validate it, right? Is it one customer? Is it the CEO who wants this? Is it lots of customers? You're not able to really like validate or prioritize that feedback. And often we end up also just taking one off requests as we make assumptions, especially on the product side, that hey, this is what every customer wants. And as a result, what ends up happening is you have a lot of priority ones in your backlog, right? And defeats the purpose of prioritization. Your teams are constantly dealing with fire drills, they're burnt out and you just cannot innovate. So again, we're not here to just tell you all the problems. There are a few things which, based on our experience, we think work. Number one is investing, like establishing a clear mechanism to collect feedback and also have a clear owner. I think the big distinction we've seen is to have an owner for that mechanism because otherwise it just, a lot of times we end up overlooking all the information that's already out there. So with an owner with a clear mechanism, you put in a process to collect it from all the channels. That owner should also then partner with their product teams to prioritize that and validate. Is this coming from a single customer? Are we hearing the same feedback from multiple channels? And that then goes into your prioritization process with your product teams. And last but not the least, you go and create like a closed loop feedback back to the sales team telling them what you are doing and what you're not doing, so that it just reduces some of the noise. Otherwise again, in a week you'll have the same feature request coming from sales. So that's number one. Number two is around prioritization. I know we say we should be, you know, have corporate priorities, but it's about defining those priorities as well as clearly communicating them not only at a corporate level, but also at like a high level, initiative level. Because ultimately your product teams and engineering teams are having to work across all of those things. So if you really clearly define that and create a line of protection, for lack of a better word that anything above that line of protection is your uncuttable stage. Stuff like this is stuff you must deliver on. And anything that's below the line of protection is things which could be your area for creating trade offs. And what goes above the line can vary depending on the maturity of your product. Like it could be about scalability, infrastructure, it could be product features. So that'll vary. So you need to think about, be mindful about how you're balancing it. And the last one is this may be controversial to some people, but this is something I learned at Twilio where try not to commit 100% of your bandwidth, your engineering and product bandwidth upfront. And what that means is we're not saying that. No, you know, everybody should operating at 70% capacity. But a good rule of thumb there is if you try 70% towards the uncuttable stuff and you leave room for surprises in the 30, 40%, it just gives you. Because the thing that's constant is surprises will always come in. But it just makes the prioritization and the trade offs much easier as and when those come up. So with that, hopefully those were helpful just to help you become more intentional about what you put on your roadmaps. And with that, Bonnie, I think I'm handing it back to you.

I get to take a fun topic. Our customers aren't paying enough. I think, you know, when you start out, you know, you're anxious to prove that customer value, that product value. And so you want to get that first contract in the door. It's a big moment for you and your team. It's kind of like framing that dollar bill you put up on your restaurant wall when you make your first sale. I've seen a lot of those examples of those first contracts doing venture capital due diligence. And they often have like very impressive round numbers, like, you know, $1 million. And that's just because you're trying to get there quickly. And I think we want to avoid having a model that backs you in the corner. And I think things we've Seen here is first and foremost, if you don't understand your cost, it's going to be hard to price. You need to make sure your price is covering your costs. And I think at best the pricing model is a guess and at worst it's a really complicated Google sheets model that you've tweaked for hours and hours. That is still a guess. So you know, it's tricky and so I think you have to design for flexibility up front. You also see cases where people are locked into contracts or pricing structures that make renewal conversations difficult. Three year deals make renewal conversations difficult if at one year the customer is using, you know, well above what they contracted for. A really big problem that I've experienced in New Relic, and we're actually dealing with it in particle right now is you're seeing the cost or the price to the customer not scaling linearly with customer value. And that can create some really awkward conversations with your customers. And then of course when you're starting out, you have your product that you started out with and your pricing model doesn't necessarily foresee these new products and features you're going to be adding later. And so we want to help you future proof your pricing model with a few suggestions. So I think even though it's not the most fun thing, you know, talking about pricing versus cost I think is more fun. Try to deeply understand your cost model from day one. And when I understand your cost model, I don't just mean your hosting costs, I mean the cost to provide service and support to your customer. Are there other costs that you incur supporting that customer and, and try to build that into your operating cadence and your understanding from day one. And I would really encourage you not to make this a go to market or pricing exercise only. This is really critical information from your product teams as well. Talk to your developers about this. It's really important they understand the cost of what they're building, how they can be more efficient and to communicate, hey, yeah, we can build that thing, but just be aware that it's going to be very expensive from a computer or a storage perspective. So really try to understand that from day one you're not going to have a perfect model. It's going to evolve over time, but this is really a cross functional focus that it's good to kind of get in the bones early. I think, you know, when you're starting those first contracts, it's really important not to get overexcited. You know, a three year deal may sound great when you're first starting out and it may be a great deal, but maybe a one year deal with the option to renegotiate. If that customer is successful with you and is is growing in terms of usage of your platform or your product, that may be a better deal. So you know, try to use creative ways to, you know, introduce usage caps on say API calls into your contracts or just have time limits on the contract. So it's very clear to the customer from the outset that they're not going to be grandfathered in on special pricing forever. Because if that is a successful customer, they need to continue to be a major revenue contributor to your business. This is something I learned pretty painfully at New Relic. Differentiate the value drivers in your product and price accordingly, which probably doesn't make a lot of sense on the slide. So for example, at New Relic we found that we were asking customers to send us their data, their observability data, and the goal was always for them to send us all of it to instrument everything, because to deliver on the promise of observability we needed to see everything. But what we discovered is the very thing we were asking them to do, send us all their data was prohibitively expensive. So they were choosing to not instrument or flying blind in some areas of their stack because it was too expensive. So when New Relic moved to a usage based pricing model, which I'll talk about in just a second, we separated the data ingest piece and made that very cheap, very low margin for us. And we made the high value where the customer got value in the visualizations, the connections, the intelligence, much more high margin for us because that's where the customer got value. So just making sure you're teasing apart the value drivers in your product and deeply understanding what it costs you, but also what value it gives to your customers. And then I would say in closing, strongly consider if you're not already a usage based product pricing model. There's so many beautiful things about ubp, but at the heart of it, it deeply aligns customer value with pricing. It scales as they grow. And I think as like an added bonus, you can align the entire company on the kind of singular focused mission of customer adoption and usage. It's very powerful. So if you haven't considered that, there's plenty of resources online, I've done talks on it, lots of people have done talks on it. So it's something to strongly consider as you're building your pricing model.

Patty all right, this is one thing that I heard quite a bit when I first started at Twilio Our inbound funnel is drying up. When you probably first got started as a smaller company, maybe it took a little bit of work to get your first customers in the door. But as you started selling to SMB to mid market, people started coming to your website, maybe even in droves and signing up. And so the sales team just had this plethora of leads that they could take in, they could follow up on and it was just really great, like warm introductions to customers that they could go on. But eventually, as you continue to scale, you're hiring more and more salespeople and there just aren't enough leads, enough inbound to basically feed every sales teams. All the sales mouths that there are to feed, you probably are seeing maybe some of your website signups are slowing or you're entering new markets where customers just don't know who you are. How many times have we heard sales saying inbound leads are drying up, we need more marketing. And marketing is saying we don't have enough budget. We're burning through it and we still need more than that, even sometimes. At New Relic, we were laughing because when I first started there, marketing was really catchy and it was cool. There was poop emojis all over it. Customers thought it was really funny. But as we continue to scale up into the enterprise, poop emojis didn't quite cut it anymore. And we really needed to make sure that we were continuing to be able to bring in the inbound and convert our leads at a high enough pace to keep up with our revenue goals. And so what can we do about that? Your pipeline engine probably needs a revisit and a tune up. It's really common when you're in this situation for your internal departments to start the blame game. Is it marketing's job to bring in new leads? Is it the SDR's job to do do more prospecting? Where does sales play a role? What about our partner's team? Whose job is it to bring it in? Number one thing you need to do is immediately stop assuming that pipeline generation is everyone else's job, especially if you're in sales. If you're in sales, you'll think, I'm waiting for my marketing or my SDR team to create my pipeline for me. But at the end of the day, it's your quota, it is your goals and your targets that you have to go hit. And so pipeline generation is everyone's responsibility. Secondly, take a look at your lead generation strategies. Website sign ups are great and a freemium model is awesome to get people in the door, particularly people who are comfortable enough to come in and sign up and use your products. But as you start to mature and particularly move into the enterprise, you'll start to see people ask for field marketing events and other things that are actually quite costly. And so you need to really make sure that you're diligently tracking your campaigns, their conversion rates, their metrics, and what the ROI is on that. So you make sure that you're wisely spending your money because you'll always, you know, again, marketing is always asking for more budget. We want to make sure we're spending that wisely. I'd also say building prospecting into your sales cadence is a big one. Really making it at the heart of part of the sales motion. It's not something that they do.

From.

Time to time or, you know, if they don't have a customer meeting going on, it's something that has to happen diligently. It's like when you're trying to lose weight and you're going to the gym. You don't just eat healthy. Sometimes you have to really be disciplined. You have to be going to the gym on a weekly basis, eating your vegetables.

Right?

That is pipeline generation. You have to be disciplined about it. Build it into your operating cadence. Make sure that it's part of the sales process. There should be playbooks supporting systems around it. This should be a huge focus and not something that's forgotten afterwards in light of deals. Right? The pipeline of today or your deals of tomorrow. And lastly, I would say investing in your inbound infrastructure. It's super important. Eventually you'll get to a point where it's like leads are drying up. Where's the marketing spend going? Are we getting the biggest bang for our buck? How can we either bring in more pipeline quicker or how can we divert some of our spend or fund things that we're going to see immediate action from? And the only way you're going to understand or know your data is if you actually had captured that data through the sales funnel. So making sure that you're investing in that inbound engine, lead enrichment, lead conversion strategies, outbound motions and campaigns, marketing automation. It is a huge part of your business. It is the whole funnel for the revenue of your business. This for tomorrow. So speaking about revenue, I'll go into our last one. Customers love our product, but why are they churning or why are they downgrading? I would say that the biggest driver for your revenue is actually consumption. Right? Making sure that your customers are actually realizing the value that you sold to them up front. You sold them something that was really exciting. The hope and the promise and the vision of what they can do with your product. But they're struggling to really realize that vision or even just to get started. Sometimes you'll see that user adoption is low or your CSM will reach out and like not really engaging in a thoughtful and meaningful way with your customers or maybe even at all. And then you're getting to this time of renewal and you're starting to see customers either fully churning because they really weren't able to get away from your shelfware or they kind of got oversold to start with. You sold them a ton of licenses, they were delayed in getting started. Customer projects always get delayed in getting.

Started.

Either just by a little bit of time or sometimes at all, or just user adoption is generally low. So it cuts time to renewal. And even if you're not in a UBB type model that Bonnie spoke about, even if you're in a subscription based model at time of renewal, maybe they're only using half of what you sold them.

So.

So you're gonna see them right size a little bit. Right? And that is a huge revenue risk to you because then you're gonna start seeing customers.

Right.

Sizing from that vision. So how do we get customers to adopt your product fully? And I say this, consumption isn't just a buzzword. You've probably heard it a handful of times this week. We've even said it on the stage just a few times here. So really focus on that land and expand motion. It's so tempting sometimes for sales to get in and sell the vision and sell them this huge commitment or this huge pack of licenses.

Right?

And so really be thoughtful about what you're selling to customers. Build realistic proposals. Make sure you have a deal desk that's there that can help you scale your proposals, making sure that there's something that's realistic for the customer to consume. And then you're in an expansion motion. When you get to time of renewal, you're not worried about did my customer even consume? You're actually having an expansion conversation and how the value of the product has demonstrated over the period of time that they've already been using it and how they can continue to take on new use cases as they expand the usage of your product. Don't be scared to land small. I think that's something that people want. They want these big lands. They want a big win and a big success. But get your foot in the door. Get your customers to realize value. You'll have a stickier product and a stickier customer over the time. Over the life cycle with your customer. I'd also say laid the foundation for tracking consumption through systems and data. Systems and data are the foundation for scale. I have been at a couple of companies where sometimes they don't even know which customers have what when they're renewing what they got sold to begin with. And so it makes the renewal conversation pretty awkward with your customers. Making sure that you know and you're tracking your solid entitlement management system so that you are really clear on what was sold, when, to whom, how and for how much money so you can have a really realistic conversation with your customer. And then also if you need a data science degree to be able to understand what your customers are using, you're probably not tracking your product consumption in a digestible way for your sales teams. They need to be able to easily find those data, those metrics in your BI system of record in your tool. I think Farrah talked a little bit about laying building infrastructure around your data in a way that's consumable and, and then you can add a BI system on top of that so that everyone has visibility to the customer's consumption. You'd be surprised. I think this was something we built at new Relic when it was like we should make this information that everyone can consume. This is something also the journey we've gone through at Confluent as well. And finally, I'd say operationalize consumption. Even if you are in a subscription model, consumption and how customers are using product is at the core of your revenue. So making sure that it's clear on the roles and responsibilities. Consumption isn't just the job of customer success. Even sales job is to continue to make sure that your customers are realizing the value and the vision that you sold them. Make sure that you have playbooks. What's happening if a customer is under consuming? But even better yet, what happens if a customer is over consuming? Right? We're not just looking for the customers that are struggling. We're looking for your next big whale. And you will see that through the consumption data and finally operationalizing that into your day to day rhythm and your cadence. Don't just leave a consumption conversation for something that happens two to three months before renewal. It should actually be something that you're talking about in an ongoing basis. Make it part of your forecasting discussions every week. Make it part of your QBRs. And this should be something that should be front and center. It's like the heart of Your revenue and the heart of your business. So with that, I'll hand it back over to Bonnie to summarize it.

Yeah, so in closing, you know, we just want to, I mean, I think you've probably heard it a million times at the conference. You know, we find it again and again. You know, as you're growing and scaling, it's really easy to get your attention pulled away from customers, customer value. So just always return to that in all that you do. And it's a big part of what we talked about today. So first and foremost, know your ideal customer profile and center your data around customers. We want to make sure you're speaking shipping, products and systems at scale. You know, you need to operationalize your product and engineering teams just the way you do your go to market teams future proof your pricing model. Don't paint yourself into a corner that you're going to be very upset about later. Give yourself flexibility and options, making sure you're building a cross functional and repeatable pipeline. Gen Motion. This is a combination of people, systems, cadences, Pipeline Mondays, whatever you need to do to kind of instill that into your organization and then making sure you deeply understand how your product is being used by your customers, whether it's being used and if they're basically running our hot or cold to what you sold them, because that is going to make that renewal and upsell, hopefully upsell conversation a lot easier. So with that, we just want to say hopefully we provided you with some practical tips. Is anyone worried? I'm not worried just yet. Practical tips on how you might avoid the crying red part portion of the pain scale. We wish you all the best of luck. Thank you so much for coming out today and hearing us talk. And if you have questions, I think we're going to hang around a little bit by the stage. Thanks again. Have a great night.

All right.