Product-Led Growth - Devon McDonald, OpenView Venture Partners

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Traditional software organizations have spent the last decade+ adding sales headcount as revenue targets increase, fine-tuning cold calling strategies, and pushing reps "always be closing." But, it’s time to face the harsh reality: the future of a successful go-to-market strategy is product-led. In fact, the most successful IPOs and fastest growing private companies of the past five years all orient themselves around a cost-efficient product-led go-to-market. You have the opportunity to get ahead of the curve and change your sales motion, but only if you commit now to building a product-first organization. In this session, Devon will discuss: - How to adapt your organization to a product-first model - Optimize conversion through stronger prospect engagement with a focus on customer success - Lead your organization internally to make the shift to Product Qualified Leads - Redirect spend and maximize output

Devon McDonald
@DevMcDee
SURVIVING IN A
PRODUCT-LED WORLD

the expansion stage VC
Based in Boston, we invest in
software companies around
the world aimed at improving
people’s working lives.
ov.vc
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 2

Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 3
Product-led growth (n):
Instances when product usage serves as the
primary driver of user acquisition, expansion,
and retention.
3

Think…
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 4

Think…
• Consumerization of IT
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 5

Think…
• Consumerization of IT
• Viral growth
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 6

Think…
• Consumerization of IT
• Viral growth
• Freemium
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 7

Think…
• Consumerization of IT
• Viral growth
• Freemium
• Product qualified leads
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 8

Think…
• Consumerization of IT
• Viral growth
• Freemium
• Product qualified leads
• Bottoms-up sales
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 9

Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 10
Companies that are Product-Led tend to have:
Lower cost of customer acquisition (CAC)
Shorter pay-back periods
Greater life time value of the customer (LTV)
Faster growth rates
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 10

Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 11
PLG is the new expectation.
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 11

PRODUCT LED
COMPANIES FLIP THE
SCRIPT ON EVERY
ASPECT OF THEIR
BUSINESS.
Product Marketing
Pricing Sales
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 12

Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 13
• Start with real user pain
• Deliver value immediately
• Strip out the uncritical
• Make the product stick
PRODUCT
PRINCIPLES.

Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 15
• Enable virality, internally and externally
• Your product is a marketing channel
• Target users, not just buyers
MARKETING
PRINCIPLES.

Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 17
• Remove any barriers from initial usage
• Enforce paywalls only after value
• Expand customers with scalable
expansion paths
• Use product data to upsell users
PRICING
PRINCIPLES.

PRODUCT LED
COMPANIES FLIP THE
SCRIPT ON EVER
ASPECT OF THEIR
BUSINESS.
Product Marketing
Pricing Sales
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 18

Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 19
• Everyone is a product evangelist
• Customer success is your north star
• You empower self-service
• Create opportunities for upsell
SALES
PRINCIPLES.

Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 20
Are you thinking…
This won’t work with my product / market / business model?
We are not Slack. We are not Dropbox.
We are true enterprise software!
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 20

Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 21
I bring you Logikcull
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 21

• Enterprise Subscription turned
“Pay as you go” Pricing Model
• Tripled Customer Success Team in
2017
• Grew customer base by 500% in
less than 12 months (100% growth
year prior)
• Company maintained a 97%
customer satisfaction score
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 22

Get the Product Led Growth
Playbook Now
Implementing an Effective PLG Strategy
for Faster More Cost Effective Growth
download at openview.vc/PLG-playbook
23

Not just another buzzword…product-led growth is an important go-to-market strategy that underpins some of today’s most successful businesses. Think Dropbox, Slack, Intercom, Expensify and Datadog. At OpenView, we define product-led growth (PLG) as a strategy that puts the product front and center when it comes to how a company acquires, expands and retains customers. Relying on a product-led strategy yields rapid, extremely efficient growth. Although similar to a freemium approach, a product-led growth strategy doesn’t actually require that you offer your product for free. It does however necessitate an amazing product and customer experience. In fact, PLG companies make it frictionless for users to start using their products. They deliver value extremely quickly and target users rather than buyers.

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