Optimizing GTM for PLG with Stage 2 Capital | Mark Roberge, Co-Founder and Managing Director @ Stage 2 Capital
•Download as PPTX, PDF•
0 likes•7 views
Mastermind Masterclass: Optimizing GTM for PLG with Stage 2 Capital Mark Roberge, Co-Founder and Managing Director @ Stage 2 Capital
Recommended
More Related Content
More from saastr
More from saastr (20)
Optimizing GTM for PLG with Stage 2 Capital | Mark Roberge, Co-Founder and Managing Director @ Stage 2 Capital
- 1. Optimizing GTM for PLG Mark Roberge Co-Founder Stage 2 Capital @markroberge
- 2. CEO Product Engineering Finance Human Resources Sales Marketing Customer Success Growth What does this team do?
- 3. The “Growth” Team Uses the Product, Rather than People, to Drive Users through the Adoption Funnel Free User Acquisition Free User Retention Monetization Expansion
- 5. #1: Establish Flow of Free Users for Experimentation (i.e. new free users per day) #1 Four Stages of Sequential “North Star” Metrics Free User Acquisition Free User Retention Monetization Expansion
- 6. #2: Prove Free User Retention (i.e. Free User -> WAU %) #1: Establish Flow of Free Users for Experimentation (i.e. new free users per day) #1 Four Stages of Sequential “North Star” Metrics Free User Acquisition Free User Retention Monetization Expansion
- 8. #3: Prove Scalable Quality User Acquisition (i.e. Cost per Quality User) #2: Prove Free User Retention (i.e. Free User -> WAU %) #1: Establish Flow of Free Users for Experimentation (i.e. new free users per day) #1 Four Stages of Sequential “North Star” Metrics Free User Acquisition Free User Retention Monetization Expansion
- 9. #4: Prove Monetization and Expansion (i.e. Quality User->Paid User % and Net Dollar Retention) #3: Prove Scalable Quality User Acquisition (i.e. Cost per Quality User) #2: Prove Free User Retention (i.e. Free User -> WAU %) #1: Establish Flow of Free Users for Experimentation (i.e. new free users per day) #1 Four Stages of Sequential “North Star” Metrics Free User Acquisition Free User Retention Monetization Expansion
- 10. #2 High Quality, Rapid, Data-Driven Experimentation Define and measure the growth funnel Analyze through segmentation Develop infrastructure for non- technical resources to run and analyze experiments Buyer Personas Acquisition Date User Perceptions Content Creators Content Consumers Pinterest https://www.productled.marketing/c/general/need-a-plg-focused- tech-stack-here-s-our-ultimate-product-led-growth-vendor-landscape
- 11. Maintain an Experiment Log Experiment #3 Brief Description When eSig users submit a signature request to a non-user, prompt the non-user to create an eSig account. Owner: Dennis Flacke Supporting Resources: Christine Khemmich for design support Business Goal: Increase user acquisition through a scalable, cost efficient viral marketing program. Hypothesis: This test will be our first non-incentive viral experiment. We hope the quality of users will be higher since there is no potential social pressure from an existing user to join and there should be no fake user risk. Also, with no on-going cost for the program, there is low bar to the volume of users needed from the campaign to justify keeping it active. We expect average volume with high activation and MAU retention rates. Experiment Design: When a non-user receives a signature request from an eSig user and executes the signature, prompt the non-user with an offer to sign up to eSig for free. Aggregate the results into the Sharelink medium on our growth dashboard but instrument the test so that the users acquired through this experiment can be identified separate from other experiments that are also aggregated into the Sharelink medium. Success Metrics: A volume of users that elevates the current user contribution of the Sharelink medium and, in turn, the viral coefficient of eSig combined with high activation rates and MAU retention rates. Experiment Limitations: Although we have heard that our competitors saw sizeable returns from this viral design, our research has shown that we struggle to create value for signature requestors versus signers. Therefore, we may have limited opportunities here, especially compared to our competition. We also run the risk that existing users get upset that we promote eSig to their contacts without their permission. Results 1.Test ran from 6/20 to 6/30. Results delivered on July 1st, 2015 2.There were 2,137 signatures executed by non-users during the test period. 3.See “eSig - Growth Action Items 2-4 Results - 2015-06” Insights: Exciting performance. User creation volume was low but the test was only run for 1/3 of the month. For the first time, we saw activation rates and MAU retention rates much higher than the average in the Sharelink medium and on-par with other high performing mediums. Next Steps • Run for a full month • Optimize the CTA and sign up form • Should we explore if we can get more users to request signatures?
- 12. PM Data Scientist Engineer Engineer Designer Engineer VP of Product Marketer Data Analyst Designer PM Data Scientist Engineer Engineer Designer Engineer VP of Growth #3 Cross-functional team WHY? Focus all resources on the north star metric
- 13. MARKETING Acquire Users PRODUCT Retain Users GROWTH Acquire and Retain Quality Users WHY? Avoid Local Maximums #3 Cross-functional team “Product doesn’t build the right features!” “Marketing doesn’t target the right users!”
- 14. #3 Cross-functional team How the “growth” team evolves with stage Seed Stage (Athletes) Product Manager (w/some Paid Marketing skills) Engineer (w/ some design skills) Marketer Data Analyst Designer PM CSM Engineer Engineer Designer Engineer Engineer (w/ some data analyst skills) Series A-B Stage (Specialists by Function) Marketer Designer PM CSM Engineer Engineer Series C-D Stage (Cross-Functional Teams Organized by Feature) VP of Growth Feature A Marketer Designer PM CSM Engineer Engineer Feature B Marketer Data Analyst Designer PM CSM Engineer Engineer Feature C Data Analyst Data Analyst
- 15. 4 Mistakes Companies Make When Adding GTM to PLG
- 16. Growth Team Reports into Marketing vs. Product (or the CEO) CEO Marketing Sales Engineering Product Growth Growth Team Limited to User Acquisition 1. Engineers don’t want to work in Marketing 2. Growth team limited to Marketing resources 3. Growth experiments limited to user acquisition 4. Competition beats you CEO Marketing Sales Engineering Product Growth* Growth Team Impacts Entire Funnel 1. Growth team is cross-functional 2. Growth experiments across entire funnel 3. You beat competition *A common concern with this approach is that the marketers on the growth team will be turned into Product Marketers, tasked with documenting product features. However, that approach is not correct. Product organizations using the above approach segment the department into Core Product, which owns product roadmap, and Growth, which owns the user adoption funnel. Marketers on the Core Product team tend to be Product Marketers. Marketers on the Growth team drive the funnel. Mistake #1
- 17. Mistake #2 Scale Sales Team Disproportionately to Growth Funnel Scaling Sales Team Faster than Growth Funnel 1. Sales team scales faster than the Growth funnel 2. Product Qualified Leads (PQLs) per Salesperson declines 3. Salespeople call free users before users can adopt the product 4. Funnel transitions from Adopt-Before-Buy to Buy-Before-Adopt 5. CAC increases. User retention decreases. Expansion decreases. Scaling Growth Funnel Faster than Sales Team 1. Growth funnel scales faster than the Sales team 2. Product Qualified Leads (PQLs) per Salesperson increases 3. Free users adopt the product deeper before salespeople reach out 4. Adopt-Before-Buy behavior strengthens 5. CAC decreases. User retention increases. Expansion increases.
- 18. RESULTS WITH A SALES-LED COMP PLAN Salesperson compensated more for first revenue from a customer and little to none for expansion revenue BUYER “I’d like to upgrade my account to the Pro version” SELLER “You need to upgrade your entire team to Pro.” High CAC Low Retention Low Expansion BUY BEFORE ADOPT RESULTS WITH A PRODUCT-LED COMP PLAN* Salesperson compensated more for expansion revenue than first revenue from a customer BUYER “I’d like to upgrade my account to the Pro version” SELLER “Great! Can we also get your team setup with free accounts?” ADOPT BEFORE BUY Sales Commission Plan Designed for Sales-Led-Growth vs. PLG Mistake #3 Low CAC High Retention High Expansion *A common concern with this approach is turning your hunting salespeople into CSMs. I am not implying that change. The CSM should continue to own the onboarding, retention, and even potentially the expansion of the account. This plan simply incents the salesperson to set good expectations with the first user and let future users move through the PLG adoption funnel. There are ways to create a shared compensation structure so both the hunting salesperson and CSM benefit as the account expands.
- 19. Mistake #4 Pricing that Creates Friction for Free User Adoption and Virality BAD GOOD BETTER BEST Ah- hah Moment End User Adoption Setup Power User User #2 User #3 User #4 Enterprise Integration 3 Messages 1 MB 1 Day Trial 500 Messages 1 GB 30 Day Trial Unlimited Usage Up to 5 Users User Role Admin Tech Stack Integration Enterprise Security Executive Reporting Team Adoption Enterprise Adoption Where to implement the paid tier?
- 20. What if we try PLG and fail? ⮚ End up with a very easy to adopt and use product ⮚ Transition to Sales-Led-Growth ⮚ No longer paranoid about PLG attackers
- 21. Waiting to Implement PLG As a business acquires revenue and customers, implementing PLG becomes exponentially more difficult due to cannibalization concern. Pothole Alert!
- 22. Is PLG Applicable to My Category? Considerations Challenging for PLG Favourable for PLG EXAMPLE CATEGORIES https://blog.stage2.capital/should-i-pursue-product-led-growth-for-my-startup
- 23. Closing Takeaways - Avoid These Mistakes ⮚ Growth Team Reports into Marketing vs. Product (or the CEO) ⮚ Scale Sales Team Disproportionately to Growth Funnel ⮚ Sales Commission Plan Designed for Sales-Led-Growth vs. PLG ⮚ Pricing that Creates Friction for Free User Adoption and Virality
- 24. The 1st VC firm … CROs CMOs CCOs SVPs VPs Directors Managers Post-Seed Pre-Series A Seed ● Hiring Leaders ● Demand Gen ● Sales Playbook ● Org Design ● Forecasting ● Revenue Plan ● 1st Sales Hire ● 1st Comp Plan ● 1st Pricing Model ● 1st Demand Gen ● 1st Rev Plan run and backed by 500+ GTM leaders… from the top tech companies in the world… supporting the next generation of startups… with capital… and GTM best practices Dev Tech Vertical Marketplaces Healthcare Fintech Industrial SaaS Dev / Security
- 26. Optimizing GTM for PLG Mark Roberge Co-Founder @Stage2Capital Prof @HBS Founding CRO @HubSpot