Product-led growth — so hot right now. Sam Richard has helped SaaS companies adopt these strategies during her time at OpenView. Today she is Head of Growth at ngrok, the programmable network edge that adds connectivity, security, and observability to your apps with no code changes.
In this conversation, she unpacks how companies of all shapes and sizes can find better ways to grow.
Topics
- Find inspiration everywhere
- What defines product-led?
- Lean into strengths
- Stay focused
- Find your indicator
- PLG exists on a spectrum
- Invest in both product and messaging
- Subscriptions: a tried-and-true revenue model
- How to find your startup idea
- When “doing” matters more than “learning”
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Key Takeaways:
07:07
Looking at b2c products for inspiration, specifically online dating applications and social media platforms.
“I’ve always looked to b2c. I was a huge fan of Joanna Lord, who worked closely in b2c. I looked a lot at online dating applications because they are subscription based and they are optimizing hard to move you into something. And I also look at social media because ultimately, these guys are the masters of psychology. They have millions and millions of users. They know what people want and they know how to move people in that direction by hook or by crook. And, I find much inspiration in those types of products and I feel the B2B world should do that more frequently.”
What defines product-led?
11:29
If you think about the product doing a lot of the heavy lifting, it changes a lot of your go to market.
“But the definition that I to use is where the product itself is the engine of acquisition, monetization, and retention. If you think about the product doing a lot of the heavy lifting, it changes a lot of your go to market. When you see a product doing those things for the bulk of the users, that’s when I would say that becomes product led. A lot of people will say that’s premium, or they’ll say that’s free trial. I don’t necessarily always agree. There’s definitely a spectrum. But that’s a good example of a way that you can look at a product and decide whether or not it’s product led.”
Lean into strengths
15:31
Companies should focus on their strengths in order to be successful.
“Every company has something that’s unique about it or else they wouldn’t probably be successful as is. Sometimes. It’s hard to take a step back and say, what are our strengths as an organization? But there’s always some strength that they can have. To put HubSpot up, as an example, they’ve always spoken well to marketers. They’ve always known their persona. They’ve always known what marketers want and what drives them. HubSpot owns that world, and that’s because they live and breathe marketers and they know what marketers want, that’s one example of a company finding their strength and knowing who their personas are.”
Stay focused
18:34
Staying focused is one of the most important aspects of having a successful startup.
“One of the problems that founders have is they don’t know where to be spending their time and their time is limited. The most important aspect of having a startup is staying focused. My favorite part of the product benchmarks report, which is not getting enough attention is there’s a product benchmarks calculator where you can compare yourself to your peers that has interactive filters. Figure out if it’s by single-payer products versus multi-payer products by different types of software, horizontal or vertical, by companies with different growth rates. These are the guardrails, the speed limits on the highway that you should be following. If you’re not following into the median or top quartile here, you, as a founder should be working on those metrics to figure out how we get them back into place. It can be difficult because it’s not happening as quickly. If I’m running marketing campaigns, and ultimately the goal of that marketing campaign is to get someone activated because I know it correlates to them converting. Three or four days makes a difference in my budget dramatically. I always try to move that activation metric up to like a five to seven day window. I’ll look for something that’s there and has the same sort of correlation to success for that user.”
Find your indicator
23:59
Finding the activation indicator for new companies that come on board, and usually this is more intense than necessary.
“One of the things that I do with open view portfolio companies when they first come on board is I do a deep dive into their data to find their activation indicator. And most of the time it is more intense than it necessarily needs to be. And I try and cast a wide net by saying it is easily achieved by the average user. But most of the time people will use an integration that. I imagine you had something similar at HubSpot. But it can be difficult because it’s not happening as quickly. and if I’m running marketing campaigns, and ultimately the goal of that marketing campaign is to get someone activated because I know it correlates to them.”
PLG exists on a spectrum
30:37
It’s important to experiment to figure out what works best.
“I feel everyone wants one single thing to work for them, and that’s not true. You have to lean into your strengths. To go back to b2c, growth hacker lower. Craigslist worked great for Airbnb that helped them get that started. Gorillas on the ground helped for Uber. I remember when someone handed me that black card and said, take this black card, it’s free. And that worked for them. Is that going to work for every company? If someone handed me an Auburn’s card on the street, would it work as well? No, cause it’s less sexy and there are different things that work as well. And you have to experiment to figure out what. And that’s why it’s helpful to have things an activation metric and a PQL in place.”
Invest in both product and messaging
32:19
Product led growth requires investment in brand and messaging to reach the later half of the bell curve.
“One of the ugly things that is true in product-led growth is that you find these founders who are obsessed with the product and building for the user, and they think that if you build a great product, people will find it and they will come to it. And that’s true for early adopters. And if you put it on ProductHunt, a lot of people will download. But to get the later half of that bell curve, you do have to invest in brand and being critical about how you message your product, because not everyone’s gonna understand why your product’s valuable to them unless you nail it.”
Subscriptions: a tried-and-true revenue model
38:17
Subscription revenue and integrated finance is important for predictability.
“There will always be some element of subscription revenue because it makes it more predictable for a CFO and for the markets. But I do think that integrated finance could be a interesting angle to build better products for less money.”
How to find your startup idea
38:49
Product-led sales tools can be very useful.
“I was shocked when Product led sales tools started coming out, Focus, Calex and game. Because that solved an itch for me that I thought I would have as an operator. I also, I’m also into the data space. I love reverse ETL tools because they were all serious problems that I encountered while operating a dispatch that those seem to be taking taken. I need to find other problems to solve for. The best startups are created by founders who felt a severe pain and who wanna solve for that pain, Thomas Alexa.”
When “doing” matters more than “learning”
42:54
Someone doesn’t think you can learn business at school by not doing it.
“One of my spicier takes, which you can totally cut out of this, is MBAs don’t run the world. Sometimes experience is experience for a reason. And while I use a lot of case studies in my work, a lot of the value that I feel I add for the portfolio comes from me being hands on keyboards from doing it, from sitting in on demos and trying products. And I don’t necessarily think that you can learn business at school, not doing.”
