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CNCF Webinar June 20 _ McMahon v2.pptx
- 1. June 20, 2023 Is Open Source the Original Product-Led Growth Motion? Kim McMahon - Leader, Outshift Community and Open Source
- 2. © 2023 Outshift by Cisco and/or its affiliates. All rights reserved. How We Got Here… My A-Ha Moment “We are growing our business using Product-Led Growth” “We need someone to support our PLG Motion” “Navigating the developer-centric landscape is our focus.” “Supporting the Practitioner audience and their use of our software will drive technology adoption.” “Use of open source is the first step in use of our technology. This will drive adoption to our free tier.” Organizations need to give these highly talented developers, DevOps teams and operators (collectively “practitioners”) the freedom to get what they need to do their job. If they don’t, these talented individuals will go to an organization that will let them do their job, and your organization will be stuck with the super-hard problem of replacing that talent.
- 3. © 2023 Outshift by Cisco and/or its affiliates. All rights reserved. Product-Led Growth Flywheel Open Source Project Growth Flywheel Source: Cloud Native Computing Foundation Source: PLG Collective
- 4. © 2023 Outshift by Cisco and/or its affiliates. All rights reserved. Activate Adopt Advocate Awareness via Events & Digital Content nurture Open source adoption User Product demo Customer How community feeds PLG motion Open Source and Community Feeding the PLG Motion
- 5. © 2023 Outshift by Cisco and/or its affiliates. All rights reserved. When we let go of control and put the technology decision in the hands of the users, people will choose to use something because it’s good.
- 6. © 2023 Outshift by Cisco and/or its affiliates. All rights reserved. Atlassian Source: From: https://mattryall.net/blog/product-led-growth
- 7. © 2023 Outshift by Cisco and/or its affiliates. All rights reserved. Developer-First Approach Snyk Winning strategy: 1. Developer-First Approach 2. Community 3. Data 4. Investing 5. Focus Community-Led Growth Product-Led Sales Source: https://www.lennysnewsletter.com/p/how-snyk-built-a-product-led-growth#details
- 8. © 2023 Outshift by Cisco and/or its affiliates. All rights reserved. What now? - WIP It’s ok to not pretend you are not selling to someone. We are all selling something: Technology Software licenses Add twitter
- 10. © 2023 Outshift by Cisco and/or its affiliates. All rights reserved. • Speaker role • Speaker name growth, courtesy of Wes Bush: Unlike sales-led companies where the whole goal is to take a buyer from Point A to Point B in a sales cycle, product- led companies flip the traditional sales model on its head. Product-led companies make this possible by giving the buyer the “keys” to use the product and helping them experience a meaningful outcome while using the product. At this point, upgrading to a
Editor's Notes
- Hello! I’m Kim McMahon, long-time open source, cloud native, community building person. I’m excited to present to you today with our new brand Outshift by Cisco. Cisco Emerging Technologies and Incubation has morphed into Outshift, serving as Cisco’s incubation engine from emerging technologies to emerging customers. Our new identity is built on the foundation of Cisco’s decades-long track record of innovating technology solutions for the world’s biggest and best organizations. We have closed the loop time again from innovation to action as it consistently builds and launches successful new products used by billions of people worldwide. Today, we are all going on a journey to discover, is open source the original product-led growth motion. I’ll be presenting some information on product-led growth and what it is, open source project growth and how is it similar and different, and how other companies have done it. This will not take the full hour. I hope you stick around because at the end of the presentation we can ask questions, share information, and keep digging into this topic.
- How did we get here. I don’t know where you are in your journey or how you got where you are, but here is My A-Ha moment. It’s late 2022 and in conversations, I hear Product-Led Growth and PLG in the same breath as technology adoption. In conversations, things such as We are growing our business using Product-Led Growth or we need someone to support our PLG motion. Navigating the developer-centric landscape is our focus. Supporting the developer and operator audience and their use of our software will drive technology adoption. <arm in the air> Use of open source is the first tsep in the use of our technology. This will drive adoption to our free tier. <arms in the air> I read some articles and the more I learned about PLG, the more I realized that this is the open source software use model I’ve been working with for nearly a decade. Let me give you another reference point. Stephen O’Grady’s book, The New Kingmakers: How Developers Conquered the World, “explores the rise of the developer class, its implications and provides suggestions for navigating the new developer-centric landscape.” (If you are a developer or working with developers and you haven’t read this book, you should!) To summarize, developers are the most important asset organizations have. With the availability of open source and free versions of software, they (the developers) go out and find the tool (tools) they need. They don’t ask, they just download and start using them. Or they take the technology they find, build upon it, contribute their enhancements (or not) back to the open source project and use the technology to make their day-to-day tasks better. <click> Organizations need to give these highly talented developers, DevOps teams and operators (collectively “practitioners”) the freedom to get what they need to do their job. If they don’t, these talented individuals will go to an organization that will let them do their job, and your organization will be stuck with the super-hard problem of replacing that talent. So, I need to do my job and get the software in the hands of the users. Work with them to help them get past any bumps in the road. Talk to them to get their feedback and share that feedback with Product Management and Engineering. Oh – for you 80’s people, have I put a song in your head? If so, sorry. If not, I’m sure I have now!
- To be clear, I do not believe, nor will ever support, the thought that open source software is around to support a PLG model. Open source software has a set of benefits that we all know and live by. Things like transparency, collaboration, Inclusivity, community. And the benefits of working with open source technologies is speed to innovation, drive adoption, shared resources, improved reliability, to name a few. That being said, I do believe that the goals for an open source project is to (1) get users and (2) get contributors. This is simplified, I know, but for the sake of this talk, I’m going to focus on these two audiences. If you want to dig deeper into personas, goals, and open source project success, come to Suzanne Ambiel’s and my (hopefully!) accepted CFP for KubeCon North America <wink> where we will dig deep into these topics and provide the attendees specific examples and worksheets they can use in their organization. In a nutshell, bringing in users at the open source software level is a great first step in giving users hands-on experience with the technology. And the benefit to the project is driving it through project levels and maturity levels. <MOUSE CLICK> On the product side, you have the product let growth flywheel. This version from the PLG Collective. The PLG Flywheel is a framework for growing your business by investing in a product-led user experience. In this framework, the experience is designed to generate higher user satisfaction and increased advocacy, which in turn drives compounding growth of new user acquisition. It depicts 5 user segments that correlate with stages in the user journey from awareness to evangelism—Stranger, Explorer, Beginner, Regular, and Champion—and the key actions that users need to take to graduate to the next phase—Evaluate, Activate, Adopt, Expand, and Advocate. The goal is to focus company and team-level strategies on optimizing the user experience to move users from one stage to the next. As the rate that users complete each action increases, the flywheel spins faster—increasing the rate that users move from one segment to the next. This creates a positive feedback loop. As more users become Advocates, they drive more acquisition—and growth increases exponentially.
- PLG is not a well-known path for technology adoption, especially for organizations that are focused on top-down selling. For our organization, I created my own version of the open source, community, and PLG flywheel to align our team on how closely our activities for user adoption are while the “how” we do it and the content we provide is where the differences come in. For the technology user, we seek to “activate” through easy access to our technologies for testing and use in their environment. As they use the technology, they ”adopt” it – make the commitment to use the technology in a production environment. This may be open source, this may be free-tier, or this may be enterprise. As they become a fan of the technology, they become a fan and “advocate”. This is done through some typical marketing motions: Events like conferences, workshops, and webinars Digital such as Twitter and GitHub High-value content that give the user what they need, when they need it, and is easy to find. You know – like getting started, or debugging when attaching to a Kubernetes cluster. To Open Source adoption where they become a user of the technology.
- I’m not sure where this quote came from, possibly me. It was in the article I wrote for The New Stack. When we let go of control and put the technology decision in the hands of the users, people will choose to use something because it’s good. What this means is make the technology accessible for someone to easily download it and start using it. If the technology works and solves a problem, then you are in!
- From: https://mattryall.net/blog/product-led-growth I promised some examples of product led growth companies. The first example is on Atlassian, information gathered from a blog by Matt Ryall, who has led product teams at Atlassian, the company behind Jira, Confluence, and Trelllo. Some notables from the blog (linked in the meeting notes). Atlassian was a PLG company from the start. Their typical evaluator was a developer or manager of a dev team, who had heard about Jira, Confluence, Trello, etc. and came to their website to get started with one of their products. Their product could be adopted self-serve. Their target persona were individuals who actually prefer trying and buying their own products. They would set a price that is affordable that is relatively full-featured and easy for a customer to set up themselves. It’s important to note, one focus is on the user. The other on the organization. As Matt highlighted, there is work to be done internally in your target organizations: Your product needs an internal champion, who has the idea of trying out your product and evaluating it. Once they’ve fallen in love with it, they invite their colleagues, who use the product and give their approval back to the champion. The champion uses their internal support to drive the process of purchasing and rolling out the product across the organization. A direct quote from Matt: “Perhaps it’s obvious, but it’s also worth pointing out why you might want product-led growth for your business. Having a product-led sales process means you can spend less on salespeople, and your business will start to grow organically over time, with a sustainable or even decreasing customer acquisition cost (CAC). Product-led growth enables the so-called “hockey stick graph” that internet startups love”
- Snyk: Source: https://www.lennysnewsletter.com/p/how-snyk-built-a-product-led-growth#details The second example is Snyk. Lenny Rachitsky had Ben Williams, VP of Product at Snyk on his podcast. In November 2022 when this podcast was recorded, Snyk was valued at $8.5b. Ben is a product and growth advisor with over 20 years of experience building and scaling high-performing product and growth teams. Through product-led growth, product-led sales, and community, Snyk rapidly scaled and won over the lucrative developer audience. The podcast is (long…) and goes into a lot of information including how Snyk structured their growth to set them up for success, how their initial plan for self-serve monetization fell flat, and how they grew the team including sales, marketing, engineering. It’s a very good listen! In the Podcast, Ben discusses the Winning Strategy: Developer-First Approach: Snyk founders, Guy, Danny and Assaf, saw a real opportunity to do things differently. They believed that the most effective way to improve application security posture was a developer-first approach. They knew that the developers were increasingly caring about the security of their code in the same way that they cared about performance and functional quality of their code. But they also knew that to empower developers to own that security, they needed just much better tools with way less friction than they ever had before. And their approach was focus on a community. Community: Community focus was a really important element. They started with a narrow focus and built around community engagement. This turned into a community-led model and community-led growth. They presented at developer conferences, meetups, and creating online content. add sentence on their target Data: We all know data is important to measure your efforts. Snyk took it to the next level and had a team of data analysts combing through data to answer the questions they needed and communicate a shared understanding of how you grow. Investing: Snyk augumented the quantitative with the qualitative side of things to drive a quarter to quarter focus and ensure they were intentional about where they were investing from budgets to headcount. Focus: You're never going to have a shortage of ideas in a high performing growth team. So, knowing where to focus amidst that kind of sea of ideas is a really important role of the strategy. At the time, a few things were in place. Valuable product, strong developer user growth, strong retention, but the first self-serve monetization efforts only really saw traction with individual developers paying a hundred dollars a month. What they learned is that they needed to build relationships with security leaders and educate at a high level the need for security. This is where sales and marketing came in – to grow monetization. And by-the-way, I really like how Ben pivoted from PLG to community-led growth, which is closer to the activities I'm doing. You all might see a change in how I'm approaching this topic!
- In my view, a product-led sales model is dependent on: A product which can be adopted self-serve, and An audience which actually prefer trying and buying their own products. Back in the early ’00s, Atlassian had quite a revolutionary model for selling business software. They set a price which was affordable (starting at ~$1k per year), for products which were relatively full-featured, and easy for customers to set up by themselves. This covered off the first point. The second one was addressed by the main “land” market for Atlassian’s products, software teams. Software people are happy to be early adopters of new products, because they like being seen as the computer experts by their friends. t’s worth going into a bit more detail about how the adoption process works in a product-led model. The diagram below shows how it works: Your product needs an internal champion, who has the idea of trying out your product and evaluating it. Once they’ve fallen in love with it, they invite their colleagues, who use the product and give their approval back to the champion. The champion uses their internal support to drive the process of purchasing and rolling out the product across the organisation.