OpenView’s Kyle Poyar on sidecar products and product-led growth

00:00:01:20 - 00:00:47:05

Ben Hillman

Imagine you're at an exquisite feast with every dish prepared to perfection. The tantalizing aroma fills the air, and your taste buds are eager to savor the flavors. But what makes this piece truly exceptional is the master chef's ability to understand the subtle nuances of each ingredient, creating a symphony of taste that leaves every guest yearning for more. This art of culinary mastery and the customer desiring more as they consume it parallels the importance of understanding and perfecting product led growth in the world of B2B SaaS businesses are akin to those master chefs seeking to blend their unique features and benefits into a memorable experience for their customers.

00:00:47:16 - 00:01:15:07

Ben Hillman

The key to success lies in truly understanding the delicate balance between product development, marketing and sales. Orchestrating a seamless journey that draws users in and keeps them engaged. This is what makes product led growth a prime recipe for creating a scalable and sustainable business. In today's ever evolving market. But you don't need to attend Le Cordon Bleu in order to protect product cloud growth.

00:01:15:20 - 00:01:40:21

Ben Hillman

You can just listen to Kyle Poyar, a michelin star. PLG Chef at Open View, a.k.a. the folks who coined product led growth with an incredible breadth of knowledge and a unique perspective on the challenges and opportunities facing B2B SaaS companies. Kyle is the ultimate guide in this thrilling adventure of mastering product led growth. In today's episode, we'll dive into the secret ingredients that make products LED growth.

00:01:40:22 - 00:02:09:05

Ben Hillman

Explore the challenges faced by businesses transitioning from sales led to product lead and uncover the best strategies for maximizing user acquisition and revenue growth. Sit back, relax, and get ready for a delectable journey into the world of product led growth. With Kyle, PR is our master Chef. Bon appetit. From Paddle, it's Protect the Hustle, where we explore the truth behind the strategy and tactics of B2B SaaS growth to make you an outstanding operator.

00:02:09:07 - 00:02:33:15

Ben Hillman

On today's episode, Kyle PR talks to Patrick Campbell at SaaS Oct 20, 22 about product LED growth. They talk about confronting hiring concerns with consultants, using product LED growth to solve friction points. How to commoditize your Compliments. How companies at different stages should start with product growth. And finally, a Q&A from you at SaaSt, Oct 20, 22. After you finish the episode.

00:02:33:16 - 00:02:46:11

Ben Hillman

Check out the show notes for an in-depth field guide focused on better understanding product led growth. And then, while you're leaving your five star review of the podcast, tell us what resonated most about the advice Kyle had to share.

00:02:51:17 - 00:02:56:00

Ben Hillman

First up, Kyle talks about confronting hiring concerns with consultants.

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Patrick Campbell

Why introduce yourself? Tell us all about you, what you're up to, what you love, all those likes.

00:03:04:09 - 00:03:24:19

Kyle Poyar

Definitely. So Kyle Poyer, an operating partner at Open View Open Views VC Firm Investing in Expansion Safe Software Company, has been with the firm for six and a half years, and our claim to fame is that we coined the term product led growth. And then in my role, I get to work with really amazing software companies around figuring out what product led growth looks like for their business and live in Boston.

00:03:25:07 - 00:03:29:21

Kyle Poyar

Have a dog. A Boston terrier has to be Ed just bought a new place.

00:03:30:05 - 00:03:37:19

Patrick Campbell

All right. So where'd you buy in? Jamaica Plain. Oh, there you go. Taking it back. Taking it back. Jamaica Plains making its comeback.

00:03:37:19 - 00:03:39:12

Kyle Poyar

I love that it's made its comeback.

00:03:39:13 - 00:03:57:18

Patrick Campbell

There you go. There you go. And I what's kind of funny, I want to get to product like growth, because you guys did invent the term product like growth. And I do remember when you guys started publishing about it, I was like, are they just talking about self-serve? Why is this need a term? I, I do remember being that guy, like in my head, but over time, like, I was like, Oh, no, this is brilliant.

00:03:57:18 - 00:04:12:13

Patrick Campbell

But we'll get to that in a second. I'm kind of curious, like your background in particular. How did you get to venture? And I know I know a little bit of the story because we were pricing compadres, but why this over being a fire fireman over anything else? Like why did you get into Venture?

00:04:12:14 - 00:04:18:18

Kyle Poyar

Yeah, I mean, I didn't plan to go into venture when I went to college or graduated college or any of that. But now you're very.

00:04:18:18 - 00:04:21:01

Patrick Campbell

Weird, kid. If that was it, that was your bet with me.

00:04:21:07 - 00:04:40:03

Kyle Poyar

So going back in time, I actually was an environmental studies major in college, and so anything in business is actually quite a departure. Went into consulting because I was drawn to the problem solving and the variety of work and the ability to have an impact early on in your career, which was not very possible in an environmental field.

00:04:40:16 - 00:05:02:12

Kyle Poyar

And so I spent six years in pricing and packaging consulting. I was trained that anything that you built that had value, you need to find a way to monetize. That was really like the philosophy. And at a certain point in consulting, it's less about doing that project work, getting to interact with clients on really difficult challenges they're facing, and it's more about selling the work.

00:05:02:19 - 00:05:27:11

Kyle Poyar

And that's what your goal is, is how much business can you sell? And it's a little bit repetitive, right, because you're selling the same kind of service. In fact, the goal is to make it as repeatable as possible, to have as high margins as possible. And I was drawn to working with earlier stage companies that had complex problems and really wanted to follow Parker around it and also wanted to broaden my experience beyond the pricing IT work that I knew and loved.

00:05:27:23 - 00:05:50:00

Kyle Poyar

And so was looking at opportunities and the fitted open view and venture was just such a great and in glove fit because of it is still an advisory role working with portfolio companies and a variety of companies who all have different challenges and experiences. But it's also one where you we invest in companies four, six, seven, eight, you know, even ten plus years at certain cases.

00:05:50:08 - 00:05:58:09

Kyle Poyar

And so you get to see how they evolve and how that challenges they face, adjust and get and really feel like you're a part of their team on that journey.

00:05:58:19 - 00:06:25:17

Patrick Campbell

It's more as if you're you're your partner, which I know is, you know, the nomenclature a lot of people like to use, right? You're like a partner on their journey rather than, Oh, we figured this thing out, Hand it off and have a nice day. Is it something where I doubt you regret your experience, but is it something where you would suggest everyone's trying to, you know, get into startups now, tech, even in this market, like, oh, this is what a venture capitalist is like these types of terms.

00:06:25:17 - 00:06:41:12

Patrick Campbell

When we were growing up, you know, we didn't hear a lot about it. You know, there were movies about these things, television shows. If someone's sitting out there early in their career listening and thinking about where they want to go. Like, do you think consulting is still a really, really good path to then get back into this space?

00:06:41:12 - 00:06:48:03

Patrick Campbell

Or is it something where no, go work in a startup, go work at a venture firm, even if you're like a, you know, associate or something like that?

00:06:48:21 - 00:07:22:00

Kyle Poyar

You know, it's a it's a great question. I still think consulting is a helpful skill set early in your career. What I last six years, if or would I recommend staying six years? Probably not. A 2 to 3 years is probably a good amount, but it is teaches you how to think critically about problems, how to figure things out about a new business very quickly, how to structure your analysis, to take something from an insight into an actual recommendation and a story, and then also how to convey your findings at an executive level, which is really important skills for anything you're going to do.

00:07:22:00 - 00:07:47:07

Kyle Poyar

And like for me, I was 24 presenting to CEOs of tech companies, right? I wouldn't have that opportunity and many other businesses. It was funny. I actually spent so much time onsite with one client. When we had the final presentation, the CEO stopped me midway through. I said, Oh, you're leading this project. I thought you were a new SDR, And so you just get so much more opportunity for growth.

00:07:47:07 - 00:08:23:19

Kyle Poyar

And they say like, you know, consulting years are kind of like dog years. Like you just time accelerates. And then from there I would honestly recommend moving on to a startup and getting more of that experience. I went straight from consulting to VC, but when I hire for my team, I want to see consulting and operating experience. Is there something about that operating experience that instills scrappiness, helps people realize that there's the we have three months to solve this approach, but there's also the we have 3 hours to spot this and you have to be able to figure out how to flex and what's the right approach for the situation.

00:08:24:08 - 00:08:38:16

Kyle Poyar

And it also just I think you see a lot of empathy for what founders are going through and how that what the journey looks like from their end. And so that's important for me. And I don't know anyone that that I hire, even though I can't check that box myself. Yeah.

00:08:39:03 - 00:08:55:02

Patrick Campbell

Do you find why do you think there is this like and maybe you don't you haven't heard this. I've heard definitely an aversion to hiring consultants, not hiring consultants as like a consulting firm, but. Oh, you're a former consultant that wants to work at a startup. Oh, don't hire consultants. I won't tell you who famously, like, stated this.

00:08:55:02 - 00:09:05:09

Patrick Campbell

So obviously that's someone we both know. But where do you think that comes from? Is it just because people believe that they don't have operating experience or is it something else like.

00:09:05:10 - 00:09:22:15

Kyle Poyar

Well, yeah, it's it's a good question. There's a lot of difference of opinion here. I would point to Dave Grow, the CEO of Lucid. Jared. Yep. Was a consultant before that and so there's you can have a really big impact in a startup environment. Coming from a consulting background, I think that.

00:09:23:04 - 00:09:23:11

Patrick Campbell

There's.

00:09:23:19 - 00:09:45:01

Kyle Poyar

There's fear around consulting, partly because McKinsey and like other big names are in the news and some of their ethical behavior is a little bit questionable at certain times. There's also a perception that consultants like Take your Watch and then tell you what time it is and that they're not actually delivering incremental net new kind of valuable insights.

00:09:45:08 - 00:10:12:05

Kyle Poyar

And then a lot of the work that they do is more around getting consensus or just being that giving a recommendation that you would come to on your own and making you feel good about it because it comes from this external brand. So it creates that alignment but not actually really solving the problem themselves. I also think people have a fear that relying on consultants is like a crutch, like they're not building the muscle internally to answer questions about their business.

00:10:12:15 - 00:10:38:12

Kyle Poyar

Where I differ, Tim, to me, good consulting is a consultative process, right? You're bringing in your experience and what you know, your example, your track record with other companies. You have frameworks for solving problems that have worked for others. You don't have the answer, but you have the approach to solving it, and then you need the subject matter expertise around the table at the company to go through that framework to solve a problem.

00:10:38:12 - 00:10:59:21

Kyle Poyar

And so for me, it's more of like facilitating really challenging cross-functional challenges and both companies have really great executives who lead different functions like marketing, sales, product, you name it, but they're not great at these cross-functional challenges that don't have one clear owner and don't have that KPI that is tied to one person's role. Yeah.

00:11:00:11 - 00:11:24:03

Patrick Campbell

They had no idea. That makes sense. But one thing, I think. So we started recruiting exclusively from consulting firms for one of our roles, a role that is very consultative and the reason we did it, in addition to what you just kind of talked about, like the inverse of what you talked about is that it's really hard to teach first principles thinking and somehow consulting firms like aren't able to teach that because that's a lot of the stuff that you have to end up doing.

00:11:24:13 - 00:11:46:11

Patrick Campbell

And our strategy kind of became basically like finding the person who was a year or two at a consulting firm, sees the future of their life and a consulting firm and goes, I don't want that, but wants like, you know, 45, 50 hours a week paid less than they would maybe if they were at the consulting firm. But like you know, want a better life or a happier life.

00:11:46:11 - 00:12:09:22

Patrick Campbell

So I think it's I think it's a pool of talent that there's this weird, you know, kind of vibe around that is totally misguided. Like, there definitely are consultants that are, Oh, what did you just say? Like, there's a lot of that. But I think it's a really good point that you're making where if you get a consulting person who also had operational experience, as for a couple of years, like it's like a powerhouse, you know, in terms of, you know, a hire and those types of things, which is really cool.

00:12:09:22 - 00:12:27:07

Kyle Poyar

Exactly. I think just the goal is having that person not be so steeped in that DNA of the consulting firm that that becomes really all that they know at a to. Yeah, yeah totally. But that first couple of years is really formative.

00:12:27:07 - 00:12:35:21

Ben Hillman

Max Kyle talks about using product led growth to solve friction points.

00:12:35:21 - 00:12:38:05

Patrick Campbell

Well let's get into the big one product led growth.

00:12:38:15 - 00:12:39:03

Kyle Poyar

My favorite.

00:12:39:03 - 00:12:43:01

Patrick Campbell

Topic. So you invent it. I'm going to say you invented product led grow.

00:12:43:05 - 00:12:44:04

Kyle Poyar

Blake invented it.

00:12:44:04 - 00:13:07:20

Patrick Campbell

But no, no, no. I say you did it because Blake Blake's not here, so I'm going to say you invented it. But in all seriousness, what? Let's start with the basics. What is product like growth? Because you're seeing all the little talks, all the traffic's ticking up, there's all this other stuff going on it. What is product like growth and then why did you as open you kind of feel like you needed to codify this, you know, inside the market?

00:13:07:20 - 00:13:27:18

Kyle Poyar

Well, you know, it's not it's not a buzz word. That's the next ABM that everyone should try right now. And that realized doesn't add any value. I don't think it's that what I think about product led growth, it's instances where you're able to use your products as a primary driver of how you acquire, convert and expand your customers.

00:13:28:07 - 00:13:58:08

Kyle Poyar

And we normally think about you're a sales and marketing team doing that work right on everything from acquisition to expansion. But if you can actually take things that would normally be done by humans at a manually intensive way, right, like with outbound calling as your approach to acquisition, if you can take those things and build product solutions around them, you can offer a better customer experience, You can be always available, which means you can scale faster and more efficiently and it's just a win win for your business.

00:13:58:08 - 00:14:21:21

Kyle Poyar

And so as people right now are thinking about how do I do more with less? How do I continue these aggressive growth targets I have, but not spend a lot of money to be able to hit those goals? Product led growth is a really powerful way of doing that. I think another thing to to call out is that there are companies that are all in on product led growth, that are that have dogs to sort of baked into their DNA.

00:14:21:21 - 00:14:52:14

Kyle Poyar

I'm thinking about companies like Kylie in our portfolio or Slack or Dropbox that, you know, there's a whole host of these folks, but that isn't what most companies should aspire to be when it comes to product led growth. In fact, for a lot of companies, product led growth is more looking at the friction points in your specific funnel and customer experience and thinking at first principles to your point about what are the best product based solutions to solve for those friction points rather than copying someone else's PLG strategy.

00:14:52:19 - 00:15:09:09

Patrick Campbell

Got it. Yeah, I think that's what happens with a lot of way of trendy. I think. I think it is beyond the trend as you you're referring to. But so it happens with a lot of it. It's like, well, what do I have to copy and paste? And so to kind of bring this to life a little bit, self-serve seems like an obvious one, right?

00:15:09:09 - 00:15:24:13

Patrick Campbell

Like someone being able to come in without having to talk to a human, get onboarded, good user experience, etc. Freemium or a free trial seems like obvious ones are there other like motions with product like growth that I'm missing there besides like those big three?

00:15:25:12 - 00:15:56:06

Kyle Poyar

Well, first motion is having an end user value proposition. And so you're executive buyer is probably not going to self-serve your products. Like they don't have time to do it. They don't have the inclination. It's also really hard to get their attention. And so having a really clear and user specific pain point that you sell for and being able to speak to that pain and market to the end user actually opens up a lot of acquisition channels because you can do more of like B2C style marketing as opposed to B2B expensive marketing.

00:15:56:06 - 00:16:16:13

Kyle Poyar

So an end user pain point, I do think that there's some element of self-serve in most big companies. You should be able to try out the product or get a feel for the product without having to talk to a rep. It's actually not usually self-serve for just saying I'll we can get into that. But self-serve purchasing is only a small percentage of revenue at the average value company.

00:16:16:13 - 00:16:41:06

Kyle Poyar

It's self-serve value delivery or proof of value. I do think that in order to enable the self-serve experience, you have to let folks see value before you capture value. So you need some sort of freemium free trial for, I think, increasingly free sidecar products as well, or underrated product experiences where folks can start to try something out for themselves before they have to immediately kind of pull out their credit card.

00:16:41:18 - 00:17:05:14

Kyle Poyar

And then there's other just more infrastructure level things, right? Like one thing I just call out as a final, final thing is getting visibility into how your users interact with a product for things like product analytics platforms is a key part of product led growth because we normally think about your CRM as that source of truth around our customers and where they are the funnel and their purchase intent.

00:17:06:00 - 00:17:18:07

Kyle Poyar

But we can actually use product interactions as a really interesting proxy that's either a replacement or a supplement for CRM, and we should be using that product data to drive decision making and experimentation.

00:17:19:01 - 00:17:40:18

Patrick Campbell

So if I had to summarize and this is kind of just repeating what you just said maybe a little bit differently, is frog like growth really comes down to allowing someone at a prospects to use your products before having to talk to human beings and starting that value proposition journey earlier rather than like forcing them on the phone with someone.

00:17:40:18 - 00:17:43:19

Patrick Campbell

Is that like a very archaic, basic way to describe it?

00:17:43:19 - 00:17:46:03

Kyle Poyar

That's the TLDR. Okay, great, great.

00:17:46:03 - 00:18:05:03

Patrick Campbell

You're like mostly wrong, but mostly right. Yeah. That type of a thing. Yeah, that's fair. That's what I'm supposed to be doing. I suppose. I want to get into like where folks go wrong a little bit, but like, I don't want to go too far without the why. Like, why is this so important? Like, I think OpenView I'm saying this, you know, you didn't say this.

00:18:05:03 - 00:18:20:09

Patrick Campbell

I think you guys really started to center around your content strategy as well as like, who you go after around this concept. And so that's an interesting why. But like for everyone else listening, like, why is this so crucial? Why was this something that was so powerful when you think about it.

00:18:20:10 - 00:18:46:05

Kyle Poyar

Going back to why we created the term product like growth in the first place, we invested in an amazing companies like Datadog and Expensify that had a very different playbook around how they grew their business. They were not following the traditional SaaS advice, right? Like one of the actually the risks about Datadog in our investment memo was that they couldn't we didn't have a way to spend money to make money because they didn't have a traditional outbound sales machine at the time.

00:18:46:05 - 00:19:08:01

Kyle Poyar

And we saw that as a risk. Turns out there wasn't a risk at all. They just had a different approach to scaling. And so we we studied how these companies were operating and they were actually outliers in the best possible sense. So we had a different strategy around growth, but they also continued to grow at very fast. Rates at scale might have even accelerated growth at scale, which is very rare for a software company.

00:19:08:08 - 00:19:40:06

Kyle Poyar

And they were extremely efficient and how they grew. So companies often managed to bootstrap or remain close to break even, don't spend a whole lot of outside capital despite having extremely fast growth rates. So we were saying if these companies all kind of are creating their own playbook around growth and it's turning them into outliers in the best possible sense, let's go study how these companies operate and figure out what what a set of best practices looks like so that other companies can be inspired to follow the same direction.

00:19:40:06 - 00:20:04:10

Kyle Poyar

And it doesn't feel like you're starting something from scratch, but it feels like you're actually able to follow the path that's already been laid out by more successful peers. And so that was our impetus around it. And then for us, you know, selfishly, as a VC firm, we want more companies to be adopting product like growth because we think it will help their businesses and we think that it will make them more attractive investment targets for us.

00:20:04:10 - 00:20:37:20

Kyle Poyar

But then I think there's a there's a broader why around a number of friends, right? So increasingly, folks don't want to have to talk to a sales rep before they buy a product. People are doing a lot more research online about products. They're looking at reviews, they're on your website, they're talking to peers. If you're if your product is in self-service of all odds are that someone is going to try out a competitor's product, see value with it, essentially make a purchase decision with their product actions and do all of that before they ever talk to an SDR on your team.

00:20:38:13 - 00:21:00:19

Kyle Poyar

And we see it as a more modern buying experience and just aligned where things are going one kind of one way of summarizing this is that B2B buyers and users are generally just consumers, but at work, and they have the same expectations about their quality of art out of experiences that they expect in B2B products that they have with their personal products.

00:21:01:01 - 00:21:16:03

Kyle Poyar

And as the lines blur between B2B and B2C, as people were at home with COVID, I think that it's just an expectation or it's becoming table stakes in the market.

00:21:16:03 - 00:21:22:20

Ben Hillman

And now Kyle talks about how to commoditize your complements.

00:21:22:20 - 00:21:46:00

Patrick Campbell

B2B buyers are just consumers at work that like really clicked it for me. And I think that the other piece of that and you kind of touched on this is what I see a lot of people who struggle with the concept of PLG. They don't realize that like the best contact you have is your product or should be at least like the best content you have should be some sort of product experience.

00:21:46:13 - 00:22:07:05

Patrick Campbell

And that normally a LOX folks has concept around this because they're like, Oh, it's like content. I want someone to read something or watch a video or something like that in order to either feel comfortable or qualify themselves in order to raise their hand and talk to a salesperson very similarly, like what a better experience theoretically than, Oh, they use this particular product.

00:22:07:15 - 00:22:17:16

Patrick Campbell

I start to see the engagement like you were talking about, and then all of a sudden, like, I know when to reach out or I know when to trigger some sort of like CTA or something like that, which I think is pretty cool.

00:22:17:16 - 00:22:42:06

Kyle Poyar

One thing I always challenge folks with is instead of spending, you know, tens of thousands of dollars Billion an outbound team or sponsoring a trade show or like paying for Gartner enforcer and all that, what if you took some of that budget and built a product solution, a product as marketing? What could that unlock for your business? And I and it's a, you know, not something that many marketers are comfortable with, right?

00:22:42:06 - 00:22:59:14

Kyle Poyar

But it's it can be extremely powerful because once you've built it, you're able to attract a lot of folks and you're able to show them, get that, give them a taste of the value that your product delivers and you're starting to kind of dip your toe into PLG. I think like one of my favorite examples of this is HubSpot.

00:22:59:14 - 00:23:20:22

Kyle Poyar

So website grader before HubSpot was all in on product led growth, they had their website, Greater Product, where you could put in the website URL and they'd give you feedback on overall website performance, how mobile friendly it was, how good you are at SEO security issues. You ultimately get a score and then a set of recommendations for how to improve.

00:23:21:07 - 00:23:46:10

Kyle Poyar

And then, hey, HubSpot was a great product for addressing all of those issues that were pointed out and going through this website, greater also helped make the business case for why you should adopt HubSpot and would allow you to see whether you were actually improving around these capabilities after you adopted it and so it's a lead in for essentially making the case for HubSpot, but it's also something that, like everyone wants to know, how am I doing?

00:23:46:10 - 00:23:54:03

Kyle Poyar

How can I improve? What should I be doing next? And so it's a product experience as content marketing essentially, that offers real value.

00:23:54:18 - 00:24:12:22

Patrick Campbell

Yeah, I mean, speaking from personal experience and we're very flattered to be put on an early product led growth list, even though we didn't understand it. When you guys are performing the nomenclature around, it was like our analytics products very much focused on exactly what you just said. It started off we were going to try to sell it.

00:24:13:08 - 00:24:33:08

Patrick Campbell

Then we realized analytics businesses are terrible businesses. Retention is our monetization is really, really hard. And so we started realizing like, Oh, there's this play where if we gave it away for free, we get this network effects not only in terms of more users, but we also get this network effect in terms of our algorithms get better for these paid products that we're thinking about.

00:24:33:20 - 00:24:51:23

Patrick Campbell

And then when they like log in and they use the product, they get a ton of value. So there's good a brand affinity and then all of a sudden they also eventually get prompted with, Oh, by the way, this number is bad. If you just turn this thing on, the number could be good, right? Which it's not as simple as I just described, but the logic behind it is that simple.

00:24:51:23 - 00:25:10:04

Patrick Campbell

And I think that I think that one of the biggest problems that we face of why product like growth is now in vogue is because back in the day the levers were more salespeople, more advertising, etc., and you had marketing channels where you could do that because you just had this brand new marketing channel and you just go spend a lot of money in it.

00:25:10:10 - 00:25:25:04

Patrick Campbell

And you were the first one ever to be there. Therefore, like you were able to get a lot of gains, you didn't really need great product, I would argue, let alone product that helped to bring in users or leads. And so I think that's the wave where like when I think about right now, it's very much consumer behavior.

00:25:25:04 - 00:25:44:00

Patrick Campbell

It's very much all of the the unit economics and dynamics that you just talked about. But I also think it's just because, like this is now the cheapest way to get really good credit. That's hard to believe for a lot of folks because it's not the path of least resistance. But the numbers don't lie in terms of your portfolio as well as the products like growth portfolios that are, you know, popping up everywhere.

00:25:44:14 - 00:25:55:20

Patrick Campbell

I guess to kind of go deeper on that or like to shift a little bit like where do you see most people go wrong with product growth? Where do you see people start with product like growth, if that makes sense, amaze the and.

00:25:56:14 - 00:26:18:15

Kyle Poyar

The number one area where folks go wrong with the LG is trying to copy the policy strategies they see from folks like Slack and apply them to a business where it doesn't really make sense and it doesn't solve an immediate problem. Right. So let's say you're a company that's historically been sales led top down selling to a decision maker.

00:26:18:19 - 00:26:54:17

Kyle Poyar

You have a complicated product and the first thing you do is introduce a freemium experience. What probably happens is that your sales team gets pissed off because there's all of these potential leads that don't reach out to them and are using the product instead. You also probably haven't built a really great self-serve experience yet, and so you also have a lot of folks that get into your product and that do nothing, and that's extremely frustrating to see because if you spent money on acquiring these great users from these great logos, the last thing you want is for them to not take any action once they get in your product.

00:26:54:17 - 00:27:20:14

Kyle Poyar

And so it starts to become something that people are fighting against internally. And it's creating friction as essentially having two competing go to market motions, the plug motion kind of owned by the product or and the sales lead motion by the sales or AD. There's a lot of tension really, in theory, a product like growth company needs to be thinking about PLG across every function because every function changes in a V LG company.

00:27:20:14 - 00:27:44:04

Kyle Poyar

And in terms of like advice around how to start layering in product led growth, thing I was talking to companies about is start by understanding where you're you're essentially customer journey or your growth growth flywheel that you want to build and where there the biggest friction points is it really hard for you to attract more users or out of demo requests or whatever that your metric is for top of funnel acquisition?

00:27:44:11 - 00:28:08:14

Kyle Poyar

Is it challenging to scale that and is it is it really expensive to acquire folks? Well, that's going to lead to different product solutions versus if your challenge is we've actually I've launched a bunch of new products, it's hard for us to drive, cross-sell or upsell within our customer base and we want to make it more self-service of all the people that are already using our product can try out these new products that we've created or new valuable experiences we've created.

00:28:09:00 - 00:28:23:10

Kyle Poyar

And so start with with our friction points and then kind of take an approach of bottling the right PLG strategy that allows you to see immediate value on the thing that you care about and that helps you build into a bigger PLG strategy over time.

00:28:23:10 - 00:28:43:17

Patrick Campbell

The way I would describe that, and this is something that I think a lot of founders and execs have a problem with is like, you have to see the journey, the customer journey, or even just the value journey as a multi move game. And that opens up when you start to think of it that way, meaning like, I'm not just trying to get the conversion and SEO, but like I try to think through the steps a little bit further.

00:28:44:03 - 00:29:05:01

Patrick Campbell

It opens up things like freemium, it opens up free trials. I think you call them side site card fraud products, which hey, my user has this pain. It's kind of if I squid related to the thing we do, but if I solve that pain, I can then get that user in my like in my brand and all of a sudden I can like make the pitch to go to my pay it product.

00:29:05:13 - 00:29:23:06

Patrick Campbell

As soon as I started thinking that way, it helped me like understand product like growth, like a lot more because I think the struggle a lot of folks have and I'd love your thoughts on this is like, I don't know if you saw this. Lumpkin tweeted recently, like, you know, it's not a strategy. It's emotion. Right? And those words are harder to find.

00:29:23:06 - 00:29:42:23

Patrick Campbell

So we could probably agree or disagree depending on our definitions of those. But I think the issue that people have with product like growth is like is what you just said, which is it encompasses everything. Like it's it's like if you're a content based company, meaning that's where you get a lot of leads. Content's going to be in your sales, content's going to be in your retention, content's going to be at the top of the funnel, it's going to be everywhere.

00:29:42:23 - 00:29:54:18

Patrick Campbell

It's just one of those things that I think a lot of people, they're they're trying to like wedge it into their overarching strategy rather than just like make it a part of the entire kind of, you know, brand of sense. Do you see that as well?

00:29:55:08 - 00:30:16:20

Kyle Poyar

Well, yeah. If you try to adopt product like growth overnight, you'll realize that I'll take you a very long time and a lot of investment to see real value and you'll probably get discouraged from it. And so it's it's a multi move game and starting to take actions that actually add value for your customers and improves your overall sales efficiency.

00:30:17:05 - 00:30:40:05

Kyle Poyar

And then they'll start to unlock that next move. Because once you set up product analytics to understand how people use their products, maybe you initially use that for churn reduction, but that becomes really important for maybe product onboarding as your next step. And then once you've nailed product, onboarding then unlocks offering freemium opportunity because now you feel confident that you can open up your product and people will get value over really quickly.

00:30:40:05 - 00:31:04:06

Kyle Poyar

To your point about these sidecar products, there's like an economic theory concept around commoditize your complements. And so when you think about like if you're a MailChimp and you're monetizing email marketing and you're going after your small business persona, the first thing that business needs is a website. They need to get contacts that they can market to and they need to have a site in order to do that.

00:31:04:10 - 00:31:22:20

Kyle Poyar

And so MailChimp launched a free website, build their product. They even have a free domain on where you could get a like free domain for free your first year. And they do that because they actually want to make it really easy to do the thing that you need to do before you're going to be interested in MailChimp.

00:31:25:23 - 00:31:34:22

Ben Hillman

Next up, Kyle talks about how companies at different stages should start with product led growth.

00:31:34:22 - 00:31:57:10

Patrick Campbell

Yeah, and I think that's a smart way to think about it is like actually mapping. It's a really great like product or market research question is like, what did you do before you logged in or what did you do before you created this thing? What did you do after? I think that's also really important because it allows you to kind of discover where those opportunities are to either add to your like core product or to do exactly what you said, like catch them earlier.

00:31:57:10 - 00:32:19:12

Patrick Campbell

Right. And I think that what I struggle with and what I think a lot of people start to love of product like growth is like, where do you start? Right? And let's imagine your Jonny or Jane startup here. You've just gotten going in the last year or two and then the alternative is you're scale up. You got maybe eight figures of revenue, maybe high seven figures there tried to get to three figures.

00:32:19:19 - 00:32:35:18

Patrick Campbell

I think that's most of the audience. Like what do you see? You know, for for those two kind of verbs and then maybe let's go all the way up, let's go for like what should HubSpot be doing? HubSpot does really well at this, but like, imagine you're a HubSpot that doesn't do well at this. Like, what should you also be doing those three personas?

00:32:36:09 - 00:33:04:09

Kyle Poyar

All right, so starting in the early stage persona, what should they be doing? Well, in the early stages, I think going self-serve too soon can actually be a challenge because you actually want you really need the customer feedback and you want to have that close relationship, guide them through with the onboarding experience because you need that close loop with your customers in order to design a product that people love using and is is going to be great for a plug motion.

00:33:04:19 - 00:33:37:16

Kyle Poyar

And so to me, the thing is that I would continue to follow a more traditional like closed beta closed alpha type of approach, and that was early stages. But have a mind to how can you reduce friction? What are the common questions that folks have? What are the things I'm saying over and over again on these calls that I should just build into the product experience and then work to to improve that time to value and make it as self-service friendly as possible, because that will be what unlocks future offers and opportunities around going further into PLG.

00:33:38:04 - 00:33:57:02

Kyle Poyar

And if you've realized, Hey, that's not possible or that's not going to work for the target persona I have, you'll be able to generate those insights because you're having those regular interactions with your customers. And so don't essentially don't go self-serve too soon as you're building a product. Make sure you're close. Have that close relationship with your customers.

00:33:57:02 - 00:34:20:05

Patrick Campbell

My take there and I want to know if you agree with this, is that you shouldn't go self-serve or I would argue freemium until you understand like truly but you understand on a pretty deep and maybe not perfectly confident level who you're selling to and you understand how to convert them into being a customer because if you do it before then you end up just with a lot of noise.

00:34:20:05 - 00:34:23:23

Patrick Campbell

And I think part of that contradicts what you're saying and part of that agrees. Like what's your take on that?

00:34:24:13 - 00:34:48:10

Kyle Poyar

Well, yeah, you need to know building towards product market fit, right? You need to have a defined audience that you want to reach. You have to know you have to have a specific job that you're be hired to do or problem that you're solving for them. And if someone goes out and talks to them, they should start to hear consistency across why people are hiring your product and what's the what's the value that that that it brings for that organization.

00:34:48:23 - 00:35:06:08

Kyle Poyar

And so that's the goal in the early stages to just build something that has real value to a specific group of people. And then you think about how do I build a go to market motion around that that is able to reach that target audience and help them see value quickly and then help us, you know, ideally generate revenue as fast as we can.

00:35:06:18 - 00:35:24:13

Kyle Poyar

And so that's when you think about what are the right channels to distribute my product. And those channels could be, you know, there's a marketing element to it. Then there's a, there's a sales that go to market strategy element to it. But at the end of the day it boils down to is this going to be a sales led motion as the primary channel?

00:35:24:13 - 00:35:54:18

Kyle Poyar

Is it going to be a marketing led motion or a product led motion? And it's hard to do too many of those at once, especially in the early stages. You want it now your first channel, then you can start to layer on other channels. After that. And so as a founder, you should be thinking about what is going to be the right way of unlocking this opportunity at my market with my target customer, where I have the capabilities, I have the product experience, that support says I have appetite to go, you know, aggressively build out this motion.

00:35:55:02 - 00:35:59:13

Kyle Poyar

And it it takes discipline to say no to going to try to do too much all at once.

00:35:59:13 - 00:36:09:10

Patrick Campbell

Second persona, we're scaling 7,000,010 million they're trying to get to three figure her order Ltd what do you do there with product but growth don't have a strategy.

00:36:09:10 - 00:36:35:05

Kyle Poyar

Yeah well the so there's a chicken and egg problem at that stage right so there's a lot of advice out there around focus on nailing activation and retention, especially user level retention before you start spending a lot of money on marketing to acquire more new users. And so there's a rule of thumb that says, Hey, go nail that and then you won't have a leaky bucket, and then you can afford to spend a lot more money to acquire users.

00:36:35:05 - 00:37:00:10

Kyle Poyar

In my mind, what the magic of apology motion is when you have enough users that you can run experiments regularly to constantly iterate and improve the experience. And every time you run those experiments, you know a good percentage are going to fail. But the ones that succeed can have a meaningful impact on your future trajectory. So you need users and signups in your target audience to be able to generate the learnings that allow you to scale faster.

00:37:00:10 - 00:37:20:21

Kyle Poyar

And so a lot of folks are torn between those two. I'd encourage people to invest in, well, essentially organic marketing channels where you're not paying on a per user basis alongside your product efforts to make sure that you have that fast time to value that activation, that stickiness in the product, because you really need to do both at the same time.

00:37:20:21 - 00:37:41:17

Kyle Poyar

It's just really challenging to do that. EDGE Unpack that for folks. When we look at product led growth organizations and how they acquire new users. Generally, about 40% of new signups come from organic sources or SEO. About 15% come from product driven sources. So you think of that as like virality, word of mouth invites and so and so on.

00:37:42:02 - 00:37:57:05

Kyle Poyar

And then there's a long tail, there's a portion from paid marketing, there's a portion from partnerships, from marketplaces, from actually outbound or sales generated leads. But the two that I would start with, you know, organic search and product driven signups for.

00:37:57:05 - 00:38:02:04

Patrick Campbell

The big dogs who don't necessarily have product like growth anything yet they're seeing.

00:38:02:04 - 00:38:03:05

Kyle Poyar

What HubSpot steward.

00:38:03:14 - 00:38:07:15

Patrick Campbell

They're seeing, what other folks are doing, and they're like, Oh, what should I do? Where should they start?

00:38:07:15 - 00:38:17:14

Kyle Poyar

Well, let me turn this back to you. Have you seen a successful at scale software company that was sales led fully pivot to PLG.

00:38:17:19 - 00:38:44:20

Patrick Campbell

The only one I can think of and it depends on your definition of some of those words is HubSpot, because I remember HubSpot started going after freemium for a little while. I think this was post IPO, but like very near post IPO, kind of a maybe it was pre kind of failed with it. Like the work kind of rejected it because they were such and they still are one of the best sales organizations.

00:38:44:20 - 00:39:05:05

Patrick Campbell

I would argue, in SaaS. And then later when Jim Walsh who Kieran started working on it, then now they become a juggernaut. So but I don't know, SaaS referencing them is kind of like referencing like Apple in general. It's like, yeah, I worked for them, but I don't know if is the word for everybody else, so I don't know if that's what you're getting at, but you know how, I would say.

00:39:05:06 - 00:39:15:07

Kyle Poyar

Yeah, but I mean, the summary is it's really hard to go from sales lead to PLG when you're at that scale of a business, there's just too much of.

00:39:15:21 - 00:39:17:14

Patrick Campbell

Inertia. There's just too much inertia.

00:39:18:00 - 00:39:39:10

Kyle Poyar

Yeah, it's too big of a change to buy off. The way that I found it'd be most successful to doing it is through either acquisitions or new products where there's not that install base, not that fear, not that cannibalization, because that way you're not actually creating friction with the sales team and you're not starting with all of this kind of prebuilt technology.

00:39:39:10 - 00:40:02:07

Kyle Poyar

Like by the time you're a hundred million in revenue, you built so many features, so much and you sell product problems for so many different use cases, you might even reach everywhere from SMB to enterprise and international markets. U.S. market. It's helpful. Start from that blank slate because in PLG, you actually want to solve a specific problem really quickly and then start to unlock more of that complexity.

00:40:02:13 - 00:40:35:14

Kyle Poyar

But you don't want to showcase that complexity early on. And so starting with a new product opportunity, where that Tiger team from an acquisition allows you to bring it start, see success from PLG and bring those learnings to the rest of the company. And that's actually how HubSpot did it. They started with a HubSpot sales product, which they acquired through an acquisition and was a at a different persona where they didn't have really much meaningful revenue attached to it and they were able to take their learnings from HubSpot sales and start to apply that to every other part of their business.

00:40:36:07 - 00:41:12:16

Patrick Campbell

I think Octave is another example buying up Auth0. They weren't open about this, but it felt as if that was very much a like moves to, you know, bring bring kind of that bottoms up approach to Okta, which was very top down. I don't know if you could make that argument about Adobe with Sigma. I think like Adobe was already very lean self-service, like kind of a big but I think they were doing it because they knew like Perpetual license software was going down and they also knew that, you know, their obsolescence was, you know, going to be happening at Adobe is one of those really interesting companies because I think they're making they're not

00:41:12:16 - 00:41:26:11

Patrick Campbell

leading you know, they're leading some markets, obviously, but they're not leading. And like SaaS, you don't think of them as SaaS, but they're making all the right moves as a company that knows that they're not leading. If that makes sense. And so they're an interesting one to watch.

00:41:29:12 - 00:41:36:09

Ben Hillman

And now a Q&A from you at SaaSt Oct 20, 22.

00:41:36:09 - 00:41:45:04

Patrick Campbell

I got a couple more questions, but any questions from you guys? What do you recommend for in-app feedback from end users or customers, I imagine? Yep.

00:41:45:04 - 00:42:06:17

Kyle Poyar

Yeah, it is a is a great question. Well, first, having a product analytics platform, take that quantitative insights into the user journey. What features folks are using and looking at that from a journey perspective, Here's the first thing they did. Here's the second thing, and so on. And here's what our users that converted, here's what their journey looked like, here's what an unsuccessful journey looked like.

00:42:06:21 - 00:42:28:01

Kyle Poyar

I think that quantitative data is really helpful. There's player tools, amplitude Mixpanel he panned out. Your name. There's a cottage industry of vendors that do that I think from there. So that would be the first investment. From there I like to actually be able to look at session replays or recordings of user journeys to get empathy into the team.

00:42:28:01 - 00:42:49:10

Kyle Poyar

Hey, for that unsuccessful user that was in our ICP that we should have really nailed like what did it look like from their experience so that Hotjar or Full Story would be great there? I then an emerging product category for in-app feedback is more Mike gross surveys and you don't want to over rely on surveys in app like you don't want to turn your app into.

00:42:50:05 - 00:43:16:06

Kyle Poyar

But we all see those like websites in the early 2000s where like that when you land on it that it's just a big survey but there's tools like Sprigg that formerly usually that have that allow you to do micro surveys with your base around the kind of user experience, usability, product feedback. And those experiences can be really helpful because they're from the user's perspective and they start this to a dialog with your users.

00:43:17:04 - 00:43:44:19

Kyle Poyar

Final thing is actually a highlight user testing, which kind of takes that usability feedback, but also helps you reach users that aren't already user using your product. And so with user testing, you essentially send out prototypes and then you get real life user feedback in the form of videos and answering questions. And so that's helpful. I think in terms of an audience that you haven't reached yet, if you're going after a new persona and you want to say, Hey, does this sound compelling for them?

00:43:44:19 - 00:43:54:18

Kyle Poyar

Are they wanting to take this next step? Where are they running into issues? I think that's also a useful point for those audiences that you're not getting data from an app already.

00:43:54:18 - 00:44:19:15

Patrick Campbell

Yeah, and there's a there's a lot of these apps, another one that's for more marketing messaging that's similar to user testing, but less for product is winter w y anti we are that one's been useful and others. Pando has a long list of competitors all with different value props and different differentiation and stuff like that. But even Intercom is getting in more and more that space, which I think is really interesting as well.

00:44:19:17 - 00:44:31:09

Patrick Campbell

Any other questions? But we had to shout it out, just request it on when you're moving from sales led to product, but always kind of like be like you are adding that sales staff, what's your thoughts on them.

00:44:31:09 - 00:44:34:01

Kyle Poyar

Like it further should do was momentus.

00:44:34:01 - 00:44:41:05

Patrick Campbell

Parties both of course if it just out of equal it are still included in the early data about front of all were in onboarding and then.

00:44:41:14 - 00:44:43:04

Kyle Poyar

In sales part or bringing the.

00:44:43:04 - 00:44:43:20

Patrick Campbell

Customers on.

00:44:44:06 - 00:45:06:05

Kyle Poyar

And so do you still include a sales touchpoint or sales motion even as you're trying to move towards product led growth? Great question. Different takes, because part of the thesis around PLG is probably efficiency and not needing as many sales interactions with your customers. What I like to do is get to you, so when folks sign up, you'll get email from them.

00:45:06:11 - 00:45:39:10

Kyle Poyar

If it's a business email, you can run in a restaurant through a service like Clear bit or there's a number of others you can get a sense for the company size, what's their fit with your ideal customer profile, and then use that to help inform what level of resource advancement you want to put on that account. From a sales asset standpoint, if it's an enterprise and it's a director level or above, you probably want to make sure they have that best possible quality of experience and you want to allow them to start having that sales assist motion and getting access to a person from your team.

00:45:39:10 - 00:45:59:15

Kyle Poyar

And that will honestly help with conversion. And these folks generally have a harder time fully self serving anyway given where they come from. But if it if the sign up comes from a personal emails or someone testing out the product outside of a business context, or if it's someone from a really small business and somebody that worth your sales team, time to interact with them.

00:45:59:21 - 00:46:21:13

Kyle Poyar

So I try to be segmented on it and I'd also try to make sure that the sales touchpoint that you have is more like a customer success start point. And what I mean by that is I though HubSpot is another great example here. They have, I think they call their team like inbound consultants. They're not necessarily compensated on a traditional quota basis based on revenue they generate.

00:46:21:13 - 00:46:42:06

Kyle Poyar

They're compensated more around interactions with customers. And so your goal is to help the customer get set up at the product and see value, because you know that once someone's done that, they're much more likely to buy in the future. And so you would want to actually help them with this sort of guided onboarding or sales assist motion, see value.

00:46:42:06 - 00:47:01:04

Kyle Poyar

And then that unlocks having a commercial conversation later and you might need a different person that better traditional API was get out immediately after the sale and like the first call will be about brand qualification rather than product experience. And that's not really how you want to run your product led motion.

00:47:01:11 - 00:47:21:23

Patrick Campbell

And their questions on it. All right, let's give it up. Oh, we're going to the your site sidecar topics. You see the upward set. That's tough. But like, what if everybody moves on now? It's a basic like at sidebar, gone to Vivo's. Any other successful sidecar projects?

00:47:22:06 - 00:47:27:14

Kyle Poyar

Yeah, there's a I mean, there's a lot of them profit. Well the metrics product I would consider.

00:47:28:01 - 00:47:31:11

Patrick Campbell

A little bit bigger than a sidecar project, I feel. But typically true.

00:47:31:14 - 00:47:51:17

Kyle Poyar

What I call a sidecar products is they sit alongside the core product that you might I there's a one that I like is at Zenefits. They actually have a very broad suite of people ops products and I think one of their insights is that before you're ready for a people ops platform, there's other things that are signals that you're getting to that point as a business.

00:47:52:03 - 00:48:19:23

Kyle Poyar

And those were things they used to only have in their paid product. And so they essentially split them out as these sidecar products that are like free to use and they are sort of searchable. They allow Zenefits as actually a track top of an acquisition. An example is their health insurance marketplace. So before you maybe even have a people leader on your team, you need to figure out health insurance for your employees or setting up your first employee hand handbook.

00:48:19:23 - 00:48:32:18

Kyle Poyar

They've got products around how to do that. And so I think that's a smart approach because it is really actually taking something they built as a product experience but unearthing that so that people could use it as the first step in their product journey.

00:48:32:18 - 00:48:35:16

Patrick Campbell

All right, let's give it up for Kyle. What do.

00:48:35:18 - 00:48:37:03

Kyle Poyar

I use? Patrick, thanks for.

00:48:39:12 - 00:49:05:14

Ben Hillman

Shout out to Kyle for doing this podcast. Now you've had a crash course on product side growth. Today. We talked about confronting hiring concerns with consultants, using product led growth to solve friction points, how to commoditize your complements, how companies at different stages should start with product led growth and a Q&A from SaaSt, Oct 2022. Make sure to give Protect the Hustle a five star review and tell us what lesson Kyle taught you from today's episode.

00:49:05:20 - 00:49:16:02

Ben Hillman

Thanks for listening. Subscribe to and tell your friends about Protect the Hustle, a podcast from Paddle Studios dedicated to helping you build better SaaS.