What's Changed in Product-led Growth with Calendly CMO Patrick Moran

The average meeting in a business context takes four to five emails to even get the thing scheduled. They want to embed that scheduling inside their workflow. Calendly is a scheduling platform. We help individuals and enterprises automate scheduling. Every minute matters. I want to manage my time doing high value things. Wow. What just happened? That was so much easier than the back and forth. It's an aha moment. The number of people that sign up as a result of that experience. There aren't many companies that are growing as remarkably as Calendly. It's a viral loop that creates a flywheel that is just unbelievable. I love building teams. So awesome to be able to go find talent no matter where they are. The goal has to be to be additive and to be an accelerator.

Thank you both so much for joining us. I'm going to let you take it away first. I'd love you to just start off with why the data matter. So can you just quickly tell us what results people can expect or highlight from the presentation today that people can take away?

I think the takeaway is as I put slides together, I focused on the last 15 years of experience going from what was originally called application service providing all the way to PLG and everything in between and finding the common patterns. Cause a lot has changed and a lot hasn't changed and I'll try to touch on those. Love it.

Let's hear what you got.

All right, let's do it. So by way of introduction for both Garrett and I, I am the CMO of Calendly. For the last year I've been the CRO and the cmo so I got to experience both the sales side and the marketing side. In my background, I've been fortunate to work with some great founders across WebEx and New Relic and Quip that got bought by Salesforce and Garrett has come along on the journey with me and we've learned together on what to do and more important perhaps what not to do when scaling an organization. So we will again we'll share some stories. These are just meant to be jumping off points for conversation after going through the slides. So by all means please have questions or thoughts. Would love to hear them, but I'll jump in. I'll walk through some content to share. As I mentioned, I wanted to cover things like PLG. Let's start there. As you're on your path to 100 million in revenue as a growing company in the SaaS or PLG world, there's a bunch of words that you see pretty consistently. There tends to be a Free trial involved. When it's B2B, you see end user focus rather than maybe tops down. You see freemium online buying, the ability to purchase without talking to a sales rep. That lends itself to an SMB business, right? At least to start in many, many cases, low prices, it's adoptable, viral spread. All of these things are part of PLG attributes in the 2021 heading into 2022 business. You know what's interesting though, is those same attributes, literally now, 20 years ago, were actually very similar and weren't called these things. And, and maybe freemium wasn't as understood, but if you go back, literally back to 2020, excuse me, 25, 24, 23, we were starting to build these business models, starting to understand what it meant to deliver software as a service, which again is a given term now. But my point is there's been a lot of similarities and we've just matured. And the and I'll speak to some of the differences as we go. We started with I remember I joined a company called intranets.com in 2002 and SAS wasn't a word yet, so we called it an application service provider, which just meant we're delivering stuff over the cloud, which also wasn't called the cloud back then. But thanks to Benioff and all those fine folks for giving us the right language for doing this. So I'll pause there and I'll say all of those delivery vehicles ultimately don't matter. The business model in a sense, grossly oversimplifying, but doesn't matter. What matters is that you solve customer problems and the companies that I've had the privilege to at least try to contribute to solve the problem better than any other companies. A new relic. We were in the category of application performance management, which meant transaction traces and digging into the code of web software. But we did it better than anybody else for the masses of developers that needed that capability. At calendly, we do calendaring or calendar scheduling and scheduling automation better than anybody else. That's ultimate. Business models matter. I'm such a nerd around this stuff, but at the end of the day you want to start with a product that actually solves customer's problem and does it in a scalable way. And Aaron, I think this was Sunday or Saturday, had written something that I thought was appropriate, which is just remember, users don't care about your underlying tech choices, only how well you solve the problem for them. Very largely true and is an underpinning of any of the business model stuff that sort of comes second as you do this going back to the going back in time sort of metaphor. A question that I'd ask we don't have to do it via although feel free to put it in chat or what have you is who is the OG PLG company? Again, I'm biased but I believe that company is WebEx. Not when it was part of Cisco, but back in again 2002, 2003, 2004 I think we were pioneering and I joined a little bit after that so I can't take credit for it. But Ryan Azus, who spoke this morning on the Saster event, was busy building and figuring out what it meant to have a sales model that got mixed with a self serve model and what it meant to have freemium users and free users and paid users and per minute usage. So they had a usage based pricing as well. All of these things. A lot of that was founded early on in the WebEx days. As you'll notice in the PLG narratives it's coming back around where people are like hey, we should do usage based pricing. It's like well permanent pricing back then was also a thing. It's just interesting. My point isn't to say that nothing's new. It is to say that the foundations of where we're at, we're standing on tall shoulders and there's a lot to learn from the past. And so I'll do that. But digging in like sometimes home pages on websites are the best way to see what actually how the business is run as who knows in the top right. I think Garrett and I put the free trial button above the view demo above the buy WebEx. You know these ideas. Even then the free trial was a relatively new model and people weren't sure whether it was lasting and all that. And it turned out to be pretty darn powerful. But those attributes that I mentioned back on PLG also are applicable to a company like WebEx. And I'll note from a segmentation perspective, which is the middle of that page there, that is also something that companies are still dealing with and it's a very natural part of the business. Where WebEx largely started in the middle there with small and medium businesses started to eke our way into enterprise but also thanks to gotomeeting forced us into the individual space. And I'll talk a little bit more about that later. But as you look at PLG companies today, oft they start in SMB, they start to win a bigger deal or two and then they also and depending on the company calendly happened to start with individuals and is moving right to left or on your screen again, these models exist. I've had the pleasure and challenge of trying to figure out when do you go up market? And again, I'll talk about it. Let's get in. What's new in 2021 into 2022 is scale. Even the number of users globally using the Internet. Back at the beginning, it was just a smaller universe and never mind the companies that were willing to give the cloud a try. And so the numbers get really, really small when you add in who's actually ready and willing to do this. And so scale is probably the number one thing that is bigger and interesting in today's world. And that scale, looking back, I'm going to run through some lessons. Given the title of this, this presentation, I thought it'd be useful to actually look at real use cases. And Garrett, this is when I'm going to ping you for ideas and conversation. Too universal to all these things to a company is this progression. And I'm sure Jason has talked about it on stage at Saastr, but I can't stress how predictable this is. And if you know that it's predictable, then you can actually address it as a go to market professional. But it's always, you started, you started a startup and it's like, I'll never hire salespeople because my product sells itself. Never, ever, ever. And you know, for some companies that's true, but it's literally less than 1% of the ones that really break through that $100 million revenue number year two. It's like, hey, see, I got a million in sales. PLG will take us to the moon, right? There's no reason I'd ever have a salesperson involved. They don't add any value, right? That sort of narra. Then a couple years later, it's like, all right, fine, fine. Yes, I get it. Some SMB customers need a little bit of help to purchase, but they're just going to be a year out of college and they're just going to help move the company along. And then two years later and again, I swear I've seen this time and time again, it's like, all right, how quickly can I hire a massive enterprise sales team? An anecdote at New Relic. Back in that time period I joined in 2009, 2010, and Lou Cern, the CEO, had a blog post that was like, we'll never hire salespeople or we certainly will never give them gold watches or all the expenses that go to salespeople. We're going to invest in the product and the blog post lived for a couple of years and then sure enough, as we across the 200 salesperson threshold, we put that blog post further and further in the past. In fact, I don't know that you could find it today on their site because it was so ironic and comical. My point is again that, wow, this is once again a predictable thing. That if you're in a 5, 10 million ARR company today, you can predict that and see around the corner that you're going to want to add these capabilities to your organization. It does not mean that the PLG model is flawed, quite the contrary. It means that you now have product market fit and customers want to buy the way they want to buy and a big chunk of them want to buy based on sales, relationships and or understanding the company beyond just the product interface. I touched on this for a second, but I'll dig in a little bit. In 2004, the early PLG days, I thought it was interesting as I was reflecting that the biggest threat at the time we were a public company, I don't know, a billion or two valuation, couple hundred million in revenue. Meanwhile, GoToMeeting was the scrappy startup out of Santa Barbara and had a $49 or $50 a month product that you could buy as a single user. As innovative as WebEx was, we were consciously forcing customers to talk to a sales rep, even with a free trial. And then we were saying, oh no, you have to buy five seats. You can be a three person company but you got to buy five seats. It's how we sell WebEx and how we provide such a great service. Meanwhile, go to meetings coming in and say 50 bucks a month, no annual agreement, no sales rep, just go buy it online. That was an example of a disruption that we still have the versions of that today. But to me that was a good example of like, hey, we're going to, you're going to be out innovated and you're going to constantly have to keep moving as you figure out how your business goes. At Calendly, we have scrappy startups that are on the fringe of us and we take them very seriously because we know that they are the next. Using this example, GoToMeeting came up behind WebEx and we had to innovate quickly. Luckily we did. We came out with a competitive single seat product that you could buy online. That took off. I think it went from zero to $20 million in the first 18 months of business. It was a rocket ship which yielded more revenue than if we had stayed true to the only sell five seats. So I guess lessons for me is the scrappier PLG codes can disrupt you and and don't be afraid to learn from your competitors maybe is the other thing to learn as long as you can move quickly and execute. Garrett, I assume you remember those days when the product that we launched was called MeetMeNow and there was internal competition as well because the company wasn't used to having the single C product that had a different name and so we had this constant back and forth internally about how do we handle this disruption that we were feeling in real time.

Yeah, I mean the hardest part too is how valuable was a single seat of a monthly user versus the five how much did I so on the demand gen growth side like how much can I pay for somebody to sign up for MeetMeNow versus Meeting center which had a minimum you have to pay meet me now could be anything from $49 to hundreds of dollars. And so knowing that your metrics are going to change and that's okay, but just be on top of it and.

Know that.

Disruption is fun even internally. It makes everybody think and think on their toes.

That's right. I think that's right. And following that thread, the other thing we learned is that that $49 product became essentially a paid trial. So you could watch someone from Coca Cola or some large company start using the Mimi now product and we got good at the data and underst and clearly that Coca Cola person is going to become a five person seat, then 100 person and then an enterprise deal. So those models are great but you have to be open to that disruption. The second one I've been fast forwarding eight years, but why not? And part of the reason it's eight years because I joined bad startups and had bad ideas in between the WebEx, Cisco days and New Relic, but landed at New Relic as I mentioned in 2010. And and this is the story of there's a couple different stories in this learning. First of all, I am a big believer and advocate and loud voice that once you hit 100 million in ARR, if you're not prepared for it, you can almost guarantee that gravity is going to start to pull your growth rate down. Of course not every company and if I unmuted everyone would have one or two examples or 10 examples of maybe collectively of when this isn't true Dropbox but they're named on one or two hands and it's not a common Thing And I think the gravity happens in a bunch of ways. One is you reach the early adopting low hanging fruit or whatever the cliches are for that early success. Two is competitors I think start to arise. So they start to nibble at your dominance and your growth rate. Because we are all part of a venture capital community which is like, oh wait, I saw that thing grow from 5 to 10, I'm going to, I need to invest one of those. And then that cycle continueth. And so we see that. And then I think third is you do end up transitioning the total addressable market. The TAM that a company focuses on, we always use these big numbers. 4 billion, 5 billion, 20 billion. It's $100 billion market if we can just get 1%. Those types of sound bites. The reality is the true TAM without a sales team. I can't believe I'm the guy that's now arguing to build a sales team early in a startup. But the, the true TAM is number of customers that are willing to put in a credit card and buy a business tool. Or in neural case, it was a developer tool by myself. For me as an individual, right, that tam, the number of people that are willing to do that and willing to part with their own money, even if they can expense it later, is a much smaller tam. And so if you're successful there, you can almost guarantee that you have product market fit and then can go up into bigger organizations here. For us, this was the biggest transition that the company probably had to make, similar to WebEx in that transformation, which is we actually not only had to change from developers to someone buying on behalf of the developers, but we had to change the buyer entirely. So we ended up having to win the IT group instead of the individual developer. That is a big shift for a company I mentioned. Like the website is a great example, the homepage is a great example of these transitions. We had to go from talking about, I think our tagline was the developer's best friend, right? And with a picture of developer with headphones. And yes, some of it was cliche, but we had that story and then we had to transition to the enterprise. IT buyer does not wear headphones and a hoodie and some slinging code all day long. And so that was a big transition for us as a company culturally who we sold to. And then it was of course, how quickly can we build a sales team? Because those IT organizations are expecting you to have a sales organization to meet their needs. They're not just there to bridge the gap. These customers have A long list of security needs, integration challenges and all those things. And so you hit that gravity at $100 million. It just starts to pull you down in recurring revenue. And you have to see around that corner and start building the infrastructure to go do that. So you want to see around the corner and start to invest. In this case, it's sales. But the see around the corner metaphor is very useful as you scale up to and past $100 million. Garrett, not to put you on the spot, but anything to add on that? As I think about our developer's best.

Friend experience, I mean we were their best friend and they were our best friend. It was a huge shift. We had a predictable model that I could do almost anything to for three or four years of if I spend this amount of money, we'll get this amount of money and no matter what I did, it didn't break. And then once we started realizing the majority of our customers are 1,000 employees or more, you start to realize that at those places processes and rules are in place and you have to start to see them coming. We ran into procurement a lot more. We started running into legal a lot more. Security was becoming more of a thing and then eventually just completely stopped. It was all it. We didn't have on the marketing side, candidly, all on it. We didn't have the materials ready to go to them.

Right.

We didn't know how to do anything really other than get somebody into the free trial, get them to put up, deploy our code and then we could easily sell them. We had to learn that very, very quickly. Luckily we did because we had a great team. But see around, when you start to see your average company size of your deal coming in, your customers as they creep up, those hindrances or friction in your deals start to happen. Right. Legal will start to play the biggest part. Or a procurement person who doesn't understand what code is because it's all a new thing. And that's fine, it's not their job. But we needed to, as a marketing team and as a go to market team, help sales have those conversations a lot quicker than we thought we would. So pay attention to who's buying your software.

You know, and I'm thinking back because you mentioned like we would spend to bring in more free trials. It wasn't spent recklessly, but like we knew who we wanted to target, which community and all that good stuff. But I remember board meetings leading up to 100 million, which I know these conversations are still happening. They don't have a calendly interestingly, but like they happen almost everywhere else, which is like how quickly can you spend? Money's cheap. So the valuations were high, they kept getting higher. But you could invest capital to go. And the phrase that the board meeting had, the VCs that were part of the board had, were spend until you break the model, keep going. And for us, the model was a payback time period on the marketing investment of one year. So spend a dollar, get $1 in ARR kind of mentality. And when I started, we were probably spending a dollar to get $10 in revenue. And by the time we hit 100 million, we were spending that $110 to get to 10 in new ARR. That model didn't work after we like literally $101 million as we were preparing for the IPO. It didn't work the same way. And that's when we had a transition to the IT buyer. So you're absolutely right. And, and my point in bringing that up is like this slide is about transitioning to it. But there was a fundamental go to market strategy shift that we also had to deal with and wrap our heads around. I'll never forget the conversation of giving up money marketing dollars because we were very marketing heavy go to market spend and giving it to the sales leader because she was busy hiring an enterprise sales team that didn't need the same level of marketing support. So fun to watch. A couple years later, after the new relic ipo, Garrett and I went over to a little company called Quip. We were, I don't know, I'll make up the number, but probably 25 people being incubated in a modest office, to say the least. Incubated underneath benchmark capital on a anyone that knows San Francisco 6th and Market. So a tough neighborhood. But Quip was on its path to greatness. We had less than a million dollars in ARR when we joined, but the optics of the company were so different than that ARR reality. And it's not to say this was a strategic problem. We knew it. But at the end of the day we were claiming and we had over 2 million mobile registered users that were using it for everything. Shopping lists to business use cases and everything in between. But we weren't in the business of monetizing that interest in that demand. And candidly, when we went to try the mental model that those customers had, in part because the way we interacted with them at the beginning was like, no, no, no, this is a free service. It's chill. I like it on my Mobile device. The lesson being that like those optics that matter, how great to have 2 million people download and use your app. But the optics were far different from the reality. And it was the next year and change prior to the Salesforce acquisition was moving us from being the end user centric story to a B2B like hey, we actually solve problems for teams, right? And yes we do all the things your Document Surface does with Google Docs or Microsoft or what have you. But our special sauce through research and talking to customers was the collaborative pieces, which means we weren't a single person product. We started focusing on collaboration and that's when the sales started to accelerate. And of course Salesforce came in and embodied us because they saw that acceleration and they saw a guy named Brett Taylor who was the founder and CEO of Quip and now the co CEO of Salesforce. But the takeaway for me is be careful of the big numbers, track them, celebrate them. But as most of the people I think on this call are going to be go to market professionals or entrepreneurs starting companies or founders, the cautionary tale is don't get too drunk on the number of mobile registered users and instead make sure that you have a business model that converts that to arrangement. And from a cautionary tale perspective, it's because we'll have to deal with that at some point and at some point perhaps getting more VC capital will be a little bit harder to get. So those are, I will translate that or transition that nicely into the Salesforce thing. We got bought by Salesforce. If you have the fortunate opportunity to join a company's greatest salesforce, but also the pain of the transition, it always goes like this. We're going to keep your brand separate, you're going to run, you can sit in a different office, we're not going to influence your business model. You're doing great the first year or nine months to a year kick in. And if you have a different culture and a different DNA, if you're plg, which is what Quip was and you're in a company that is not a PLG company. Salesforce is an amazing company but it ain't a one thing. It ain't is a PLG or product led growth company. Maybe it's a platform led growth company if you squint but really it's customers led, founder led and it is, excuse me, sales led for sure with you know, I'm not privy to how many reps they have now but you know, a couple years back it was 5,7000 people that were selling Salesforce, I'm sure it's way more than double that now. So the takeaway for me was. And so year two it was why am I fighting or why are we. Why are Garrett and I trying to defend the PLG business model, the self serve and the viral bottom up led growth model when sales reps are within Salesforce are dying to sell crypt to the enterprise. We had proven that that large customers wanted Amazon had a couple hundred thousand people using it every day. Like we had all of these signals and yet you defend the PLG storyline and the business model and who knows, maybe, maybe quip would be even more impactful in the world if we had committed to that. But I also think, you know it's a multi hundred, I assume it's a multi hundred million dollar contributor to Salesforce and a big chunk of Salesforce transition to more than a CRM company. Gary, any anecdotes as we. As you think about that transition? That one personally for me it was a challenge. So I can only imagine for you it was too.

This one was the, this was the biggest challenge and I say a lot like this one was the biggest hit to the ego. It took us a long time to admit to ourselves that trying to get quip to every single person out there, every single company and every single use case wasn't going. Although we did it and we did it well and we did it better than others in some cases. We did a certain, we did certain things really well for the enterprises, for the bigger companies. And once we sort of checked that ego at the door and trust me, it took months and honestly, candidly, a couple of good deals to be like oh that was nice to see. We checked it and then we really refocused. We had the harder conversations of like we can do this and companies will still buy it. We didn't stop the PLG side of quip. We just didn't market it. We didn't take it to market which are two different things. And it was a nice transition. And after that salespeople were happy, engineers were happy, marketers were happy, executives were happy. Most importantly and so have that conversation of like going to market and what your product does can be two different things and done well. Happy customers in the enterprise can lead to other press and whatnot that drives the rest of your business.

I think that's right. And then internally every metric that we had to measure instead of cost per sign up or even traffic conversion rates, a lot of that fell away in exchange for pipeline. Pipeline became the. These single number we all cared about how much pipeline can we give to this overlay sales team within quip, how much pipeline can we add to the bigger Salesforce engine? And that is a cultural shift that you go through. But the reason to focus on pipeline is because it's much closer to the action in terms of revenue production once you're in Flip. So, yeah, man, those were for me as well, like the cultural defensiveness of yeah, but we are building this this way. And I'm proud of the engine we built. That was a hard one for me as well. Now, after taking a little bit of time off, at least personally, I then landed at Calendly and Garrett was, I think the first call or second call or so that I made. I needed to build a sales team and a marketing organization. I'll give you a sense of Calendly in a nutshell though. We are 300 people growing at a rapid pace. We raised a bunch of money in January of last year, but we're profitable, highly scaled. I feel like we've found the perfect storm of goodness where we have virality, the use case is ubiquitous, and we have very high ease of use. And I got here challenged with having both sales and marketing and I thought I'd be doing my marketing thing, same deal. It's like a PLG group juggernaut. We're not going to focus on sales. Right? And when I got here, I realized or saw immediately, it's not that I'm clairvoyant or anything, it was clear that there's such a big opportunity. The largest companies on the planet were saying to Calendly, we want to purchase and we want to roll Calendly out to every one of our users. But you got to, you got to go along with us on this journey. Now, that's not to say Calendly was incapable, but we hadn't made it a priority because the plg, the viral flywheel that was helping the company grow was so powerful that we didn't have the same urgency that a startup that was focusing on larger customers has to focus on. So that again, as I walk through these things, I think this presentation ended up being a little bit more about cultural changes as you scale, but because that is largely what we're doing at Calendly. So today, looking out, we basically had a very, very small sales team about a year and change ago. We now have a still relative to other peers, a small sales team, but it's 5,6x what it was again a year ago. And the contribution from a revenue perspective is Much larger than even that multiple. Right. And so I think there's a bunch of stories in there. It's seeing around the corner for sure or seeing what the next horizon is for the company. I don't know if this is fair or not and so I'll say this cautiously, but the sound bite that I always use is the Evernote story. I adore Evernote. I at the time I was a rabid fan and evangelist and yet they hit that $100 million revenue number and they didn't quite have the second act ready or the next level ready. And I think they suffered from that. I don't know where they are in terms of again revenue or growth. I know that it's still a heck of a company, but the story at the time versus and they innovated freemium. They did all of these things and yet because they didn't have that second act which as this presentation suggests, it's building a B2B product that can be purchased centrally, et cetera, et cetera, they missed the next phase of life where maybe it's 75 million into 100 and beyond. And I think that's a drag because it's it really was and is a remarkable company and for all I know it could be a $10 billion revenue run rate company. But I don't think it is. I think it struggled to find the next thing. So at calendly to give you again, the business model is so unique and remarkable because the little equation of what makes PLG great of of product market fit plus virality man that is something that if I don't think you can engineer for it, I don't know that Toper founder fully understood what he was the incredible value that that would create. But those two things together combined again with making it dead easy to use and really solving a customer pain point has taken off in the transition for us as marketers and Garrett can hopefully you'll attest to this is instead of focusing on amazing content for that end user, we got to do that still. And our blog is alive and well. But we're building a lot of muscle in making sure that people know that we're so much more than just that scheduling link. Underneath that scheduling link is an enterprise platform and it has security features that rival Salesforce in terms of being ready to handle enterprise customers. Then the use cases that we can provide both via API and with features that we're building underneath just the link are incredible. That is tope seeing around the corner and saying hey, I'm going To invest a lot of product resource and making sure that we are enterprise ready and man has it paid off. It's been fun to watch and be part of the transition and Garrett's been here about a year too and same deal. The metrics for the first sub 100 million were X and then this next leg of the journey or Y and they're very different and shocker pipeline becomes a much more used word internally. So I think again similar story but I think that hopefully hits the nail on what we're saying. Garrett, anything to add as we transition?

Not really. Just be okay with change. It's going to happen and sometimes it's cultural, sometimes it's data and it's uncomfortable. But uncomfortable means you're trying something new and so have the harder conversations. Even though, yeah, stick to your guns.

Totally. I had thrown this slide. I think I covered all of this stuff. First of all, it is not the enemy. When you're a startup and it saying no because you don't have this part of soft2compliance or whatever it is, they're not the enemy. Ultimately count the right things we covered sales isn't the enemy. And I would add too that product LED doesn't mean you get to skip all the capabilities regarding go to market stuff. Invest early just like you would if you weren't product led. Because all of those skills are needed. But let's chat. I can't see the Q and A, so I'm going to trust y' all to raise them and we'll figure out how to answer them.

Yeah, we have a few. Keep them coming. But this one seems very timely. But what's your best advice for transitioning your team from PLG to enterprise?

First of all, admit that you're doing it. I think there's like harsh, there's harsh decisions to make. Meaning can the PLG team. And again, it's a gross reduction in people's skills. But make sure the people that got you here can get you to the next level. That is a hard management lesson, but you should evaluate that as part. As part of the process. Assuming that you have the team that can make the transition, then be dead honest about why. I have been spread too thin over the last year. But one of the things that I really focus on as a marketing leader and challenge anyone to do is really understand the business part of your business. Right. So why does cost per acquisition matter? What is lifetime value? What is the cost to acquire like all of these things? The more you understand the business then and if you bring everyone on the team along the journey. Then it's like, why would we keep focusing there or only focus on single seed end user adoption? That's a great model. But look at the opportunity we have in the enterprise and walk people, show the math, show the business and be transparent about why and what the opportunity is. I think those are so. Those are like, it's one part cultural, one part leadership. Just showing this is how and why I think is huge. Garrett, you've been on both sides of this. Anything to add as you reflect?

No, I think the honesty and upfrontness is key. Right. Like this has to change a little bit. Do it a little bit at a time. I just like I've worked with you for a long time. Just being honest about stuff like this is what's happening and the why will help people understand. It can be very messy, you know, certainly for people or organizations have been around a long time and have a very unique culture.

Just, you know. Sorry, you say that reminded me that like 2, it's growth is a team sport. Kyle over at Openview wrote a blog post this year that showed up in my inbox this morning. For some reason, it's like who owns growth at a PLG company? And if you're asking that question, it's actually you're already in a tough spot because the answer is everybody product does, marketing does, and then sales increasingly does. Right. But it's not any one of the three. So it requires a collaborative mindset. And. And if the person that asked the question, if you're a leader of that team, you have to lead through that and show that. No, no, no, no. Like none of us own, we collectively own. And maybe that means we need a biz ops team or we need like this. Like we need finance to take. Objective view at the challenge, but lead through it and acknowledge that no one single team as much as earlier in my career I thought it was all marketing owns everything. If you want to grow a company, invest in marketing. I was bullish on that. Now I see that it's a much more nuanced answer of collaboration.

Can you unshare your screen so they can see our faces bigger?

Thank you.

A couple on sort of converting free to paid and how do you avoid the high churn rates from free trials for starter plans? And then what are the targets for converting free to paid? Have you thought about that world and as it's progressed?

Yeah, I think there's two directions there. One is free trials and the urgency that a trial that has an expiration date provides. So if you're a B2B software player, really understanding how much time to value you need, don't do 14 days because it's what everyone does. Don't do 30 days because it's what everyone used to do. Figure out what that time to value is. I think that's super critical on the trial side. I think what's been a learning curve for me is on the calendly side is finding we have a free trial. Everyone that creates an account gets access to all the features for 14 days. But on the 15th day, honestly, we don't make that big of a deal about it. We don't use the urgency of the trial period because we want people to adopt the product. So when those features that we offered as the trial drop off, we keep telling the customer, hoping you're liking it if you didn't use those features, keep using it for free forever, basically. But that doesn't mean that we're not capitalistic like any other good, good software company. It means that they will ultimately, and I mean this, you know, sounds like whatever, but like they will ultimately bump into some of our paywalls. And understanding what those paywalls are, at what point do you expose a feature that is worth investing in? It is worth taking your credit card out. If it's an individual user or a small team, we're still, we still experiment on that. The key is like writing the hypotheses down, running the test, or surveying users if it's too hard to run it as a test. I think now we have a list of again, I'll make it up. But I think it's more than 10 different paywall opportunities, meaning free user bumps into a. They want to add another event to their calendly. And so we introduce saying, hey, that's great, but you're past your 14 days. If you want to do that, you have to, you have to choose a paid plan. That model has served us very well. And I'll shut up because I want Garrett to actually talk, because he's probably closer to it. But like that model led to, or rather still true, is that most of our customers convert to revenue in the first five or six weeks. So we still have a finite amount of time to move a customer from interest to purchase, because from there it's diminishing returns. Because if they didn't see the value, they're not going to keep investing their time. So there's urgency that we create upon ourselves, but we don't force the customer through that urgency hole.

This one's tough to balance between keeping the free version useful and people wanting to use it but also making money. And the best example was New Relic. We were extremely good. We had transaction tracing. We got you signed up, you put it in and then that was what we showed you and that's what you loved. It's also the hardest thing that we built. So you have to charge for it. And so we very quickly showed them value as value of something they had to pay for. But we also explained it well in our communications. We're like, this is why it's important. When you have an issue, we tell you exactly where that is and identifying those extremely high value, extremely easy to understand and extremely easy to use features that end up costing money. Doing that well in the however long your free trial is. On the free trial front, we had the 14 day free trial equipped and it was what it was. But quickly as we realized buyers need a little more time. It takes some time to get because it's collaborative. Right. And it's not like New Relic. Do it by yourself, you instantly see results. A collaborative or user based trial takes time to get everybody in and get everybody understanding. And so we then transition or gave sales the ability to have an extended trial. Like let it morph into what it needs to be in order to see the value. Right. Just doing something because everybody does it or it's what you want to do is helpful at the beginning and helps you set your path. But you have to adjust to what the customers want and or need and then tell them exactly their language.

That's right in that transition. I think that language is exactly the essence of the amazing part of plg which is have your hypotheses but then watch what users are doing and ask them what they're doing, what they need. That user centricity is what makes PLG magical. More so than the business model, more so than anything else. It's understanding your users, making them delighted and happy and psyched to use your product. I see that it's time. I don't know if we have one more. Probably don't.

Do we have time, Caitlin?

Yeah, you guys can answer a couple.

More because there's a question from Jason. So there's a couple. So I figured I might as well answer one. So in a viral platform, do you get to count the free acquisition in your CPA or you get credit for free in or what are our ROI and our metrics for a product that has hundreds of thousands of users? I'm selfishly asking this in case that.

Was such a quiet question. Yeah. So the question is like, great. When you're wearing your marketing hat and you have some amount of dollars to invest, do you get to count the free users, the virality in your cost to acquire metrics and lifetime value and all that good stuff? The short answer is no. The longer answer is yes. Right. And I believe this to be true. We have to be able to. You have to measure your campaigns with honesty and that requires you to measure what you can and not take credit for the things that were already coming in. You have to start there. I also believe every dollar that you put out into the market has benefit outside of the trackable. Does the user have a UTM attached to it? And so you have to be comfortable with investing beyond that, knowing that the viral stuff that you in quotes get for free is going to lift when you're out there telling the story now, it matters what story you're telling. Garrett has a job that's very specific, which is to tell the world. Calendly is more than what you know or knew it as. And instead it's something bigger and better and it's got these amazing features that you may not know. That story yields much higher value customers, but not a ton more signup. So cost per signup will get worse in a sense because we're now targeting the higher value customers that want access to those types of things. So that's my answer. Gary, the plant question is Garrett and I are constantly dealing with this, right? And maybe just one more internal thing really quick is we know now who the buyers that are the most valuable for calendly. And I had learned from GC Giancarlo who was at Dropbox during this similar growth phase. And he's like, yeah, we had lots and lots of viral Dropbox users that were sharing music videos and doing all these things. But it was designers, it was designers that were making the platform success and we're willing to pay and we're spreading it collaboratively every time that they were sharing a design. And so they only spent money marketing to designers. At least that's the folklore. And it's what he said he did. And so we're doing a similar model where we're only focusing our dollars, where we actually put focus and investment in places where we know those customers have like literally 10x the value of, of that other user. And that doesn't mean that we don't love the other user. It just means that from a return on investment, that's how we look at it.

That's fair. And yeah, there's so much behind that we'll go real quick, we've got probably two minutes left. But how do we mine our viral user base to find potential sales leads for the mid market the enterprise because.

Yeah, so yeah, so first of all we're not necessarily aces at it yet. Not at all. No offense Garrett, but we translate that into product qualified leads. Right. So you have hundreds of thousands of hundreds of thousands of people signing up through the get started with calendly the 14 day trial of the individual seed. Meanwhile we have a sales team that is thriving and making these very large transactions and in a lot of ways until very recently they were two separate pools. Rightfully so. But today we are busy trying to find those signals, finding the uses that trigger someone from being oh no, they're happy as a self serve user short of them raising their hand obviously we try to get them to join webinars to educate them and then that off turns into hey, I'd like to learn more. I'd like to have have SAML or SSO or whatever it is that the customer needs. So that's one path and that's the easy path, the data version of it. The two answers. One is we made hypotheses and bets based on like all right, if someone's turning on our salesforce integration self serve inside their trial, it probably means that they're going to be using it with many seats and have a business use case. And so we'll take take those who activated this feature or that feature will kick them over. Sometimes that works and sometimes sales starts to ignore them because they don't convert as well. So that's one and then two. I love all of these companies, whether it's Pocus or Endgame and all the companies that are coming up in trying to solve this, we'll absolutely use one of those, I'm sure in our journey this year. But we will also continue to invest in data science because. Because I don't think a tool can be as intimate with our users and how they use it to discover that aha moment as much. How's that? It looks like we're at time.

Does look like we are at time.

We are. So many great insights and also great questions. So Patrick, Garrett, thank you both for walking us through your journey and sharing some of the lessons learned and some of the things you do differently. Really enjoy it. We've got a couple more sessions for the remainder of the day so be sure to check those out and hope you all are enjoying Saster scale. Patrick Garrett.