This session was presented at the LSA’s Tech Adoption Summit in San Francisco on November 6-7, 2018.

1. Product First
Go To Market
Strategy
2018 Tech
Adoption Summit

2. I’ve Been a SMB Owner and
Spent the Last 13 Years
Trying to Sell to SMBs
Currently CMO at ThriveHive where
we provide everything you need to
market your business online - all
wrapped in Guided Marketing

3. The Elephant in the Room: Customer Acquisition Costs
are Up Over 50% in the Last 5 Years
Source: Price Intelligently

4. Product First Go To Market Strategies are a Remedy for
Increasing Customer Acquisition Costs
Source: Price Intelligently

5. Sales Efficiency is at the Heart of Why Product First
Customer Acquisition Makes Sense Numerically
Outbound Cold Calling
Close Rates:
0.1%
Inbound Warm Calling
Close Rates (MQLs):
1%
Product Qualified Lead
Close Rates (PQLs):
10%

6. Changing Consumer Behavior is at the Heart of Why
Product First Customer Acquisition Makes Sense
Strategically

7. Product First Go To Market Companies Perform Better
Source: OpenView
Company
Shopify (NYSE:SHOP)
Atlassian (NASDAQ:TEAM)
DocuSign (NASDAQ:DOCU)
Dropbox (NASDAQ:DBX)
Zendesk (NASDAQ:ZEN)
New Relic (NYSE:NEWR)
Twilio (NYSE:TWLO)
LogMeIn (NASDAQ:LOGM)
HubSpot (NYSE:HUBS)
Wix (NASDAQ:WIX)
Smartsheet (NYSE:SMAR)
Pluralsight (NASDAQ:PS)
SendGrid (NYSE:SEND)
MongoDB (NASDAQ:MDB)
PLG Index Median
SaaS Index Median
Median Metrics
PLG Companies 35.1% 26.6% 73.8% 42.8% 37.7% 10.0x 7.6x
Non-PLG
Companies
25.3% 21.0% 69.3% 37.0% 31.4% 7.7x 6.2x
Delta, PLG to
Non-PLG
9.8% 5.6% 4.5% 5.9% 6.2% 2.2x 1.4x
Valuation Drivers
Revenue Growth
Gross Margin Rule of 40
2018E 2019P TTM 2018E 2019P
Valuation
EV / Revenue Multiple
2018E 2019P

8. What Defines a PQL with SMBs?
1. Firmographic Fit - I have the right type
of business

9. What Defines a PQL with SMBs?
1. Firmographic Fit - I have the right type
of business
2. Marketing Behavior - The marketing
behavior indicates a need for a
solution in my space

10. What Defines a PQL with SMBs?
1. Firmographic Fit - I have the right type
of business
2. Marketing Behavior - The marketing
behavior indicates a need for a
solution in my space
3. Product Behavior - The product
usage indicates that my product is a
good fit with this buyer

11. MQL Funnel
ProductAwareness
Content
Download
Traffic
Email
Nurture
Sales
Interaction
Completed
Sale
Time
Marketing focus is on
developing signals to tell sales
who the best prospects are

12. MQL Funnel
ProductAwareness
Content
Download
Traffic
Email
Nurture
Sales
Interaction
Completed
Sale
Time
Marketing focus is on
developing signals to tell sales
who the best prospects are
Free
Product

13. What are Hallmarks of an Effective Product First Go To
Market Strategy?
● Free forever product instead of a free trial

14. What are Hallmarks of an Effective Product First Go To
Market Strategy?
● Free forever product instead of a free trial
● Simple freemium product value proposition that marketing can explain

15. What are Hallmarks of an Effective Product First Go To
Market Strategy?
● Free forever product instead of a free trial
● Simple freemium product value proposition that marketing can explain
● Ability of a customer to completely self -provision free product

16. What are Hallmarks of an Effective Product First Go To
Market Strategy?
● Free forever product instead of a free trial
● Simple freemium product value proposition that marketing can explain
● Ability of a customer to completely self -provision free product
● A large top of the funnel (you’re converting a subset of your MQLs)

17. What are Hallmarks of an Effective Product First Go To
Market Strategy?
● Free forever product instead of a free trial
● Simple freemium product value proposition that marketing can explain
● Ability of a customer to completely self -provision free product
● A large top of the funnel (you’re converting a subset of your MQLs)
● Viral adoption of the free product

18. What are Hallmarks of an Effective Product First Go To
Market Strategy?
● Free forever product instead of a free trial
● Simple freemium product value proposition that marketing can explain
● Ability of a customer to completely self -provision free product
● A large top of the funnel (you’re converting a subset of your MQLs)
● Viral adoption of the free product
● Tight connection between the free product and the paid product

19. What are Hallmarks of an Effective Product First Go To
Market Strategy?
● Free forever product instead of a free trial
● Simple freemium product value proposition that marketing can explain
● Ability of a customer to completely self -provision free product
● A large top of the funnel (you’re converting a subset of your MQLs)
● Viral adoption of the free product
● Tight connection between the free product and the paid product
● Tight integration between the product and your CRM

20. Building a Great Free Product is Usually Harder than
Converting Free Users into Paid Users

21. When Should Sales Contact a PQL?
1. Hand Raise 2. Usage Limit Reached 3. Feature LImit
Encountered

22. ThriveHive is Investing Heavily in Product First Go To
Market
● Acquired Closely (Perch App)
● Launched ThriveHive Grader with Conversational Interface

23. Thank You
adam@thrivehive.com