0:00
PLG, I always say, is actually fundamentally DLG, data-led growth. Mhm.
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0:06
So, when you give away your free product, what you want to get in exchange are two things.
0:09
One is a broader reach because free product spread itself is lower barrier to entry.
0:17
Two, you want to understand usage behavior of those free users.
0:20
Which features do they use?
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And which features kind of correlates with a higher conversion rate, retention rate, all of that.
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If you don't have a foundation of data and an understanding of how to analyze those data, you're giving away a free product for nothing.
0:43
Welcome to Lenny's Podcast where I interview world-class product leaders and growth experts to learn from their hard-won experiences building and growing today's most successful products.
0:52
Today, my guest is Hila Chee.
0:55
I've heard some listeners have been doing listening parties with this podcast where their team listens to an episode all at the same time over Zoom and shares their insights and lessons in a shared chat.
1:04
And I would say that this episode is a great candidate for that.
1:09
It's incredibly packed with advice on how to start and optimize your product-led growth motion.
1:12
We talked through common pitfalls that you probably run into, where to get started, Hila's favorite tools, what she recommends for an initial PLG-oriented team, how to audit your existing funnel, plus tangents on how to improve your activation and retention, and some foundational overviews of product-led growth and some of the core concepts associated with it.
1:33
Like I say at the end of the episode, this episode delivers tens of thousands of dollars in value, something you won't find for free anywhere else.
1:40
I am really excited to bring it to you.
1:42
With that, I bring you Hila Chee after a short word from our sponsors.
1:49
This episode is brought to you by Amplitude.
1:51
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1:55
Anyone can sell you analytics, while Amplitude unlocks the power of your product and guides you every step of the way.
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Today's episode is brought to you by Miro, an online collaborative whiteboard that's designed specifically for teams like yours. I have a quick request.
2:23
Head on over to my Miro board at miro.
2:26
com/lenny and let me know which guests you'd want me to have on this year.
2:31
I've already gotten a bunch of great suggestions, which you'll see when you go there, so just keep it coming.
2:36
And while you're on the Miro board, I encourage you to play around with the tool.
2:39
It's a great shared space to capture ideas, get feedback, and collaborate with your colleagues on anything that you're working on.
2:47
For example, with Miro, you can plan out next quarter's entire product strategy.
2:50
You can start by brainstorming using sticky notes, add reactions, a voting tool, even an estimation app to scope out your team sprints.
2:58
Then your whole distributed team can come together around wireframes, draw ideas with the pen tool, and then put full mocks right into the Miro board.
3:05
And with one of Miro's ready-made templates, you can go from discovery and research to product roadmaps to customer journey flows to final mocks, all in Miro. Head on over to miro.
3:16
com/lenny to leave your suggestions. That's m i r o. com/lenny.
3:26
Hila, welcome to the podcast.
3:29
Thank you, Lenny, for having me. I'm so excited. I'm excited as well.
3:30
I don't know if you know this, but you have the very unique distinction of having two posts in my top 25 most read post of all time in my newsletter, which are the two parts of your series on how to add a product-led growth motion.
3:44
And so, I'm really excited to dig into product-led growth and help more people be successful product-led growth. Awesome.
3:51
I should have made it three posts, three part. I like that ambition. The more is more. Yeah.
3:59
Well, I think the next the next milestone is getting to the top 10. Get two into the top 10. Yes. Yes. Okay.
4:06
Maybe this podcast will Okay, this podcast will be in the feed of the newsletter, so maybe we'll get there. Okay.
4:11
No pressure, no pressure.
4:14
One question I want to ask you is anything come out of writing those guest posts?
4:18
Has anything good happened as a result?
4:20
I always take a very long-term view for writing. I enjoy writing myself.
4:24
Um spent actually 4 months on that one.
4:27
Uh after it's published, I I see a lot of sharers kind of um and people writing very long summary of it.
4:37
That's always like a very encouraging.
4:39
And also, many people I didn't expect reading it reach out to me, let me know, "Hey, I read that."
4:45
For example, I think Ravi, he is also on your podcast.
4:50
I didn't know him personally.
4:52
One day, he's just like, "Hila, I read that. That's awesome."
4:53
And I uh a bunch of friends in VC and they they kind of read that. They told me it's great.
5:01
I even have a advisory client kind of landed because of that as well. So, it's it's awesome. Amazing.
5:07
It makes me really happy to hear all that.
5:12
I was also curious, has anything We're going to get into the details of all of all of the stuff you wrote about and even beyond what you wrote about, but is there anything your thinking has shifted on having after having written that that series in terms of PLG?
5:23
I I wouldn't say it's say it's shifted completely because I always believe you don't need to be a PLG purist, meaning there are kind of people who are like, "PLG is the future.
5:38
It's only saying you don't need sales, right?"
5:40
I I was never like that, but recently, kind of by working with a few of my clients, I witnessed in reality like many startups actually are having both.
5:51
They have a PLG motion, they have a sales team as well.
5:54
PLG motion is perfect for lowering the barrier for more people to try, broader the reach.
6:02
It's a kind of a volume kind of game.
6:05
And then the sales motion, you can have very targeted list of big customers you you go after.
6:10
You close them and it's a big order, usually revenue, a very strong foundation for your company.
6:16
And I've seen actually like a lot of my clients that are doing they have both. They're doing that.
6:23
They try to get the benefit of both from their early stage and it's super cool.
6:29
Is this simple way to think about this trend that eventually everyone will need to do both?
6:34
It's not one or the other.
6:36
It's just both and it's just a matter of when you add the other?
6:38
I would think so because if you are like let's say if you are in a sales motion-dominated kind of traditional B2B software industry, your competitors will be adding PLG, right?
6:50
As soon as they added, they will have a benefit of attracting more end users and the end users become advocates to the employer, to the clients, and you you lose that.
7:03
And if you're only in PLG, somewhere else may go after the big customers.
7:06
It takes time for PLG to go to the big customer and close them, right?
7:11
So, you lose a little bit time there as well.
7:14
I think eventually you need both. Cool.
7:19
That's kind of the way I've been seeing it like I did a few series on uh product-led like traditional product-led growth companies, Slack and Figma all those guys, and they all add sales teams eventually.
7:29
Like LastPass was famous for being product-led only.
7:31
And so, like everyone ends up adding sales team.
7:33
I think more recent trend is sales-led enterprise-y products are all just realizing they need a product-led growth component.
7:41
So, it's kind of what I've been seeing, too. Yeah. Exactly.
7:42
But, I would say it is easier if you have PLG from early on.
7:47
If you're pure sales-led, you try to add PLG, that's the harder thing to to to change, basically. Interesting.
7:57
To set a little foundation before we get into a lot of this stuff, it actually would be helpful just to explain like what is product-led growth just simply cuz uh people hear this term a lot and it'd be helpful just to understand it broadly and then also just like why is it so popular?
8:09
Why does everyone want a product-led growth component to their business?
8:14
Just use a simple example.
8:14
Um in B2C product, when you think about Facebook, when you think about a lot of the the the the products you use every day as an consumer, it's always by default product-led growth because there's no sales team in a the LTV of the product doesn't support that.
8:34
I think PLG, the term, become popular because traditionally in B2B world, sales is the main motion.
8:41
You need a sales team to close the deal.
8:43
After the contract is signed, the end users can now finally use it, right?
8:48
But, um nowadays, it's not necessarily case.
8:52
You can have your B2B SaaS product develop in a way to allow end users to try before you buy.
9:00
So, that's the reason I think this is becoming more popular and uh the fundamental driver behind this is the user of B2B softwares are also human.
9:12
It's the same human using B2 B2C softwares and we're already trained to use product, try, and before we make any decision and we demand that in B2B as well.
9:23
So, like it needs to happen and more and more companies are capturing that trend, basically.
9:27
And they're trying to utilizing that as a entry point to either disrupt existing B2B players or build something really awesome for end users.
9:37
So, that's why it's becoming more and more popular.
9:42
To pull on that thread a little bit more even, to help people like visualize a product-led growth product, what makes it product-led?
9:50
Like there's a self-serve component.
9:51
Is there any like what other attributes or just kind kind common elements of something that's product-led versus sales-led, let's say. Yeah, definitely.
9:59
I think maybe we can use a product as a example, right? Like think about Zoom.
10:05
How me or you, maybe everyday users, how we get to know Zoom is not necessarily through a sales team call me cold or email me cold and introducing me this, showing a demo of Zoom, and I get to know Zoom, right?
10:20
It's because like maybe Lenny, you hosted a webinar, I joined, and I get to just use this software already without even knowing it's Zoom.
10:30
And then afterwards, I may one day think about I want to do this myself, and I just do that and then sign up, and I already create a host a webinar, and I can pay if I need a paid plan, or I can use a lot of more advanced features when I, let's say, hit the 40-minutes limit.
10:47
I can already click that and then pay and become a paid customer already.
10:52
So, I think the key properties of a PLG product, think about it should have a very low barrier to entry.
11:01
Usually, it has a free version, free trial.
11:03
You don't need get get approval from your boss to use it. You can use it today.
11:09
And then, it has some sort of a self-service checkout flow.
11:15
If you need a better version, you can buy yourself as well.
11:17
And this product, basically, the free product will spread on its own in some way or another. Okay, perfect.
11:24
I think that was really helpful.
11:27
I think we dive in to some of the meat of the discussion that um that we have planned, and where I thought it'd be fun to start is the common pitfalls that people fall into when they're trying to add a product-led growth motion.
11:39
And so, what are the most common ways people fail when they're trying to figure out product-led growth?
11:44
The first of all, as I mentioned, you need to have some sort of vehicle, right?
11:49
A lot of the companies, if you go to the their website, especially B2B companies, you will see the biggest CTA is called book a demo. Mhm.
11:59
Like they don't have anything else.
11:59
You The first step for you to do is submit a form and kind of basically explain yourself to this company, I'm from who and who company, and uh I want to use the tool.
12:12
Can you come back to me and allow me to see a demo of your product?
12:17
That means the the entry point to PLG is cut off.
12:22
Instead, the first step is you need to either have a free product, free trial, some sort of low barrier entry for anyone who stumble upon this product to give it a try.
12:31
A lot of companies don't have that.
12:34
That's the first, I would say, hurdle or pitfall.
12:36
And especially if you're sales-led, and you already have all those things figured out, you try to go to add PLG.
12:46
It's not as easy as just say add a kind of free trial CTA on your website.
12:49
You need to build this free experience.
12:52
You also need to convince your sales team, your existing product team, your marketing team, hey, let's try this out.
13:02
Be- because before this process is super clean.
13:05
Like everyone only get only selected featured leads, right? And sales work on those.
13:10
But now you you need to allow more people in, and there need to be more understanding of their behavior, data.
13:17
The process need to change.
13:20
So, like it's actually a whole process.
13:22
So, I would say that's first one.
13:24
And along with that is some companies didn't think it thoroughly, and they are just kind of saying, "Oh, PLG is cool. Let's do PLG." Yeah.
13:31
And then, they maybe spend 3 months build a kind of some sort of a very basic free trial, like and then they think that's it.
13:41
They think the leads will come, conversion will come, uh self-service revenue will come. It's not that easy. It's not that simple.
13:49
It is definitely a entire motion.
13:51
So, I would say you need to commit to it.
13:55
Maybe you can do some thinking, collecting some data, build your conviction, but to a certain point, you need to commit to at least a year or even 2 years kind of road map to build this entire thing out and change the process internally sometimes as well to support that.
14:14
The last one, I would say, a lot of times the the companies committed.
14:18
They want to do this, but they don't know the right way, or they don't have the foundation.
14:23
They don't have the expertise of PLG.
14:24
Their internal team, they're really good at sales, or maybe really good at as the traditional motion, but they don't have this part of expertise and foundation.
14:35
A common thing I see is that company want to do PLG, and they have no usage data at all.
14:45
And they're like, I was doing PLG, but PLG, I always say, is actually fundamentally DLG, data-led growth. Mhm.
14:55
So, when you give away your free product, what you want to get in exchange are two things.
14:58
One is a broader reach, because free product spread itself is lower barrier to entry.
15:06
Two, you want to understand the usage behavior of those free users.
15:09
Which features do they use?
15:11
And which features kind of correlates with a higher conversion rate, retention rate, all of that.
15:19
If you don't have a foundation of data and and understanding of how to analyze those data, you are giving away a free product for nothing.
15:29
Like you are really not being able to utilize all of that to to build your PLG motion.
15:34
So, I think data foundation and expertise in terms of how do I design that user journey?
15:39
That journey is very different from the sales user journey.
15:43
Like those are sometimes missing in company when they just begin to doing this.
15:49
And in those cases, I think it's super helpful to maybe either find someone who have done this as advisor, or hire someone, like you need to have that expertise in-house or or through advisor to support your PLG motion. This is great.
16:06
We're going to talk about the data piece more in-depth later, but on the commitment piece, I thought that was really interesting.
16:13
I imagine many times founders or leaders think they have commitment, and then they realize maybe not so much. Yeah.
16:20
Are there any kind of flags that tell you that like, oh, you're they're not actually committed to working on this for year or 2 years, whatever it takes?
16:26
The red flags I've seen, basically, uh sometimes like they they first of all, they think about PLG equals launch a free version or launch a free trial.
16:38
Like they made this assumption in their head, "Oh, I already have a product.
16:42
I already have a software that's working, customers are using.
16:47
Now, if I add a free version, if I open a free trial, that's it.
16:53
Like that's basically a PLG, and I will have conversions.
16:55
I will have people becoming a product-qualified leads just because I have it.
17:03
Hey, I opened this for you.
17:03
Just just just come and use it and then and convert."
17:07
I think that's one red flag, basically.
17:09
They are not thinking about the entire thing through, understanding the implication.
17:14
Not only the free product, it's really just a start.
17:16
You need to think about how to activate, how to design the upgrade path, how that those teams, like those new growth teams work with other, like sales and marketing teams, all of that. So, that's one.
17:29
The other one is like they they don't have a dedicated team.
17:32
They just basically assign one person to to this thing, right?
17:36
They are imagine, "Hey, we you already have this.
17:39
It's not it's not that big of deal.
17:41
You can just figure this out by borrowing resources from everywhere, and try to coordinate all the stakeholders from sales, marketing, product.
17:49
Like that person need to be a magician in order to be successful in in that, basically.
17:54
And I think the third thing is like basically, they are really doing this because it's trendy.
18:00
They didn't think about the deeper strategic reason why this is a good fit for their business, right?
18:09
Do you have a product that's relatively low complexity, doesn't require a lot of customization for the customer to see value?
18:18
Like time to value need to be relatively short, or you can figure it out out a way to make it short.
18:23
And then, do you have a lot of potentially end user SMB business?
18:29
They are interested in the solution. They want to try it out.
18:34
If you do not have both, if you, for example, develop a software for the air fly companies, like a Boeing Boeing, or defense companies, like only three target customer exist in the entire world, you don't probably you don't want to do PLG, right?
18:51
So, like think deeper about the fit, and then commit.
18:54
And I would say those are the red flags.
18:56
Okay, so on that last point, I thought that was really interesting.
19:00
We talked about how every company probably should add a product-led growth piece, but I think what you're also saying is actually not every company.
19:09
There are some companies, like defense contractors, are probably going to be sales-led.
19:13
I think it's a spectrum, right?
19:15
I would say the defense company, defense software company, is a pretty extreme Yeah. example. Yeah.
19:22
And of course, in those case, I don't think it makes sense.
19:27
But I think majority of B2B software I've seen, you've seen, we've used, even some more complicated ones, like Salesforce used to be this example of like sales motion, right?
19:40
They are they they are the uh they are the pioneer of SaaS, and they do this so well, but they begin to add look into kind of self-service portal and all of that.
19:50
And even a lot of the bigger players are looking into that.
19:56
So, I think majority of the B2B software, probably they are in the middle of the spectrum rather than the defense company.
20:03
You kind of shared some of the attributes of what allows you to be product-led like quick time to value.
20:09
If you have this in your head like what are some of those bullet points of like what you need to figure out for it to be successful potentially as product-led?
20:18
The first thing is that have a let let let an animation.
20:20
You you are able to build a have a vehicle, right?
20:25
Have a free version, have a free trial, sometimes it's a open source product.
20:29
A lot of like developer products start as a open source product.
20:33
It has its constraints, but it's also a great kind of vehicle for PLG.
20:39
Or you can build If none of those are option, you can build a really realistic kind of experience.
20:45
For example, I I I remember Amplitude.
20:48
They are pursuing PLG now, but they used to have a lot of barrier.
20:55
Like as a end user, it's hard for me to put that code into my product and see my data, right?
21:03
But they build a really realistic interactive demo that's getting closer to PLG.
21:08
So, it's not PLG, but it's getting closer and you can already see the value and play with it yourself.
21:13
So, that's the first step, have a vehicle.
21:17
The second step step is time to value.
21:20
Basically, just because you have this vehicle, mean people will come and use it and see the value.
21:25
So, you need to figure out how do you give your users a warm start and help them get started.
21:30
I was talking with a kind of company today.
21:34
They just realized like we have this tool and when people come in into the free trial, they are asked to do some action.
21:43
But nobody know how to do that.
21:46
Like they may not have everything ready to take that action.
21:50
So, we're like, "What about we gave them some sample video or sample action they can they can try, right?"
21:55
It's not the same as they do it themselves, but it's better, it's getting closer and after that you can ask them to try the thing on their own and they need to do more work.
22:06
So, kind of think about all the ways you can reduce time to value.
22:09
It doesn't need to be this big aha moment in the first 5 minutes, but at least give them some mini aha moments, right?
22:18
So, so that's the third uh two second thing.
22:20
Third thing is think about from there, if they get aha moment, if they want to buy, you need to have this self-checkout uh flow ready, self-service flow. It's the foundation.
22:34
It You have it, it doesn't mean they won't buy immediately, but they at least it gave them this option to do that themselves.
22:41
And the fourth thing I would say between this kind of activation usage aha moment to this conversion moment, actually there's a big gap. And what is the gap?
22:53
How you can understand the gap?
22:55
How you can uh guide people along that journey is basically you need to have a very good grasp of data.
23:02
You need to have the foundation to understand their usage, their behavior, and then you can design a user journey in the product, in in email, in all those tools to guide user to the next step.
23:14
So, like have a very strong data foundation there.
23:18
I would say I think those are the main thing and there are other things like your pricing need to be relatively simple.
23:25
If your pricing is super complicated, they they need to whenever they they prick for example, they try the product, they love it, they have a self-checkout flow, but in order to decide how much they need to pay, they need to send your sales kind of some information, you need to do a code, then that's broken, right?
23:45
Or they're already confused about this process.
23:49
So, that is another kind of important thing as well. Cool.
23:53
So, just to summarize, I took notes on this.
23:55
Uh kind of the things that you got to get right if you want to add a product-led growth component.
24:00
There needs to be something free and kind of self-serve that you can just start using on your own.
24:04
There needs to be a quick time to value.
24:06
There needs to be a self-serve checkout experience. Mhm.
24:07
You need a data foundation.
24:10
I really love your the way you phrased it where like kind of one of the benefits of product-led growth is the data component that will help you understand what to build and how to monetize these folks.
24:19
And then the last piece is pricing.
24:20
Uh that's simple that people understand. Yeah. Yeah.
24:24
Yeah, just imagine you are building a you're selling kind of something on e-commerce side.
24:31
You need all of this, right?
24:31
Just in order for the B2B buyer to buy your software in PLG motion, you need to make all those those available to him.
24:42
It doesn't mean if you build this, it will happen again, right?
24:43
That's the data experimentation, a lot of that need need to be there to support a lot of iteration and make this work. Awesome.
24:52
Okay, so we've been going in a lot of directions.
24:54
We started with pitfalls and things you probably will you'll run into that may set you off track, but let's zoom out again and let's get into just say you're convinced we need to invest in adding a product-led growth motion to our product.
25:08
What's the first step that you recommend for people to go down?
25:10
I think the first step actually I would recommend founders and leaders to just understand what's PLG funnel, what's sales-led funnel, what's uh SLG funnel.
25:23
Because when I I remember when I begin to work on PLG at GitLab, it was not that clear to me, right?
25:28
It's there's a lot of things you can read, but they're not all super clear. What is PLG?
25:37
Like how is that different?
25:37
And through working on that myself, I begin to develop this conviction and kind of this clear picture.
25:45
The biggest difference from SLG and PLG is that the sales funnel traditionally work like something you have marketing team working on the top of funnel, bring visitor, and then they need to have a process to turn the visitors into lead.
26:05
And leads is something it is basically very very popular and widely used in the B2B business and you go through some qualification process and leads needs to be from your target kind of customer, target industry, the company need to meet certain size, but they also need to show interest and how marketing team historically gauge interest is how much they interact with your marketing campaigns. Do they open email?
26:33
Do they read three white papers?
26:35
Do they go to this webinar, right?
26:38
Like that's how they gauge interest and for each positive action you did as a buyer, they add some points to you.
26:44
And once you reach certain points, you become this marketing qualified leads.
26:49
Basically, those are the better ones we filtered through that process.
26:53
And we give that to the sales team and sales team has more process, but then they choose some of them, work on them and they close some of them.
27:01
So, that's kind of traditionally B2B sales-led motion works.
27:06
And then product-led funnel is is different.
27:09
It's much more similar to B2C.
27:11
Basically, you can still have people visit your website and they sign up for free version or free account or free trial.
27:20
The most important thing, the biggest difference is now you want them to use the product.
27:24
You can still send all the marketing emails, all of that, but those are supplemental.
27:28
Those are kind of trying to get them to the product to to use, to try.
27:33
And the usage, product usage is the almost like the leading indicator for success for PLG.
27:42
Whereas in the sales funnel, it's like almost like how many do you get and do they interact with the marketing campaigns, right?
27:52
Which in the old days, it's what you have because nobody can access your product unless the con contract is signed.
28:00
But nowadays, that's almost like artificial barrier. It's not there, right?
28:04
You can totally build a product in a free version to let people to use.
28:09
So, usage becomes so important and that's the biggest difference.
28:12
From the usage, then you have two potential conversion paths.
28:16
One is that if this product is not that expensive, the price point fits in most companies' budget, some companies may just use their credit card and they buy a lie, right? That's awesome.
28:31
You then don't even need sales team to be involved.
28:34
And it's very similar to the B2C product, e-commerce product buying process. And it's awesome, right?
28:41
Like because it's automated, you don't need to have more sales team involved, it's low cost, it's efficient.
28:47
It can happen on its own every day.
28:50
Like it it will just add up to your revenue.
28:52
And then the other potential conversion path is where the product usage is high, but also this customer, this potential prospect fits into your ideal customer profile, right?
29:06
It's a from a Fortune 500 company or it's from a target industry that you know they they need your solution.
29:12
Then this customer worth more of your time and you you should actually not even even if they may want to buy on their own, you may want to still have your sales team or have your customer success team to reach out to them to understand a little bit more of the situation, give them some white glove service.
29:35
Hopefully, you can even close a bigger deal than if they would have buy on their own, right? So, that's another path.
29:42
I call that PQL, PQA like sales path.
29:45
And that sense for product qualified lead.
29:47
Product qualified leads, product qualified account.
29:49
So, the first step is for you to understand those two funnels.
29:53
And then think about if you want to add PLG, right? What is this journey?
29:58
What are the steps along that funnel you need to establish for your product in order for your user to be able to like like convert in that funnel.
30:11
So, you you talked about these two funnels.
30:13
One question is are they basically the same for almost every product?
30:17
Or should you try to figure out what's like really unique about my funnel?
30:20
And then second, is there an example of product they can think about like here's the sales led funnel for them and then here's the product led version of that just to give make it a little more real even.
30:30
Maybe I can give an example first and then we can talk about the the other question.
30:34
So, I can use GitLab as an example since that's where I'm most familiar.
30:39
GitLab actually have a enterprise sales team, very strong sales team from the very beginning.
30:44
But the company also we started out from open source product.
30:49
Maybe describe what GitLab is for folks that aren't super familiar with it.
30:52
Yeah, so GitLab, we are a developer platform, DevOps platform.
30:57
Basically, uh engineer teams, developer teams, they use the this product to manage their their entire uh DevOps process from storing their code, kind of managing the version control, uh releasing, CI/CD, like security scan, all of that.
31:15
Like it's a all-in-one platform to for that team.
31:19
So, for the sales led motion, right?
31:22
Like I mentioned, the teams will the the the our marketing team were working bring a lot of visitors to our website and they sign up for a free trial free for free accounts.
31:30
And then we have this lead nurturing and lead scoring process to surface which are the good ones for our sales team.
31:38
And our sales team, we have uh SMB, we have like the the mid-market, we have enterprise.
31:43
And they each kind of took their buckets of leads and work on them and close them, they become revenue.
31:52
And then how the product led funnel work for us is uh someone maybe as a developer, I heard about GitLab, I go to website, I see, "Oh, I can actually sign up for a free account."
32:03
I may use it for my personal project.
32:05
My company may be using another solution, but I have some side project I'm doing as a developer, I want to use GitLab to host that. And I I did that, right?
32:15
And so, you begin to see this individual users having some usage.
32:20
But nothing to do with his company.
32:20
And then when they maybe this this person's employer, they're like, "I we we want to look into some other solutions.
32:29
We have way too many point solutions for each step of DevOps.
32:34
Now we want to potentially consolidate them.
32:37
So, what are the options?"
32:37
And this engineer raised his hand, "Hey, I have been using GitLab for a very long time I really like it.
32:44
I think we should check them out."
32:46
And then this team maybe this engineer manager or or CTO, depending on the size of company, they're like, "Okay."
32:53
He went to their website and he kind of signed up for free trial because that allow him to test some more advanced features.
33:01
It's 30 days and but but he already has this person knows how to use it, right?
33:05
This person already set up the foundation with the free version and they they started a free trial.
33:11
They used their 30 day to do a proof of concept.
33:14
The entire company already using it for part of their process.
33:19
And they're like, "Oh, awesome.
33:21
I tried this feature, that feature, that feature.
33:23
It's a really it's a great tool.
33:25
It can support our workflow and I I'm pretty sure we we should be able to kind of get ROI from this this product."
33:35
And then in this case like they're like, "I only need five seats. It's cheap.
33:40
I will just go to the pricing page, I check out the pricing and buy from there."
33:44
Or like in some cases this is a bigger company and we see like this bigger company is using our product.
33:52
Our sales team get that data signal, they may send an email or reach out and say, "Hey, I saw you are checking out. How can I help?"
34:00
And that may start a sales conversation eventually become a uh become a contract from there. Great.
34:08
Thank you so much for sharing that example.
34:09
Maybe a last question on this first step of mapping out the funnel, do you recommend people just get in front of a whiteboard and just sit together and like, "Here's what it would be potentially if we added a product led growth motion." Yes. Yes.
34:19
And I think it's not that it like the devil is in the details. Mhm.
34:24
Uh just mapping out the big steps is not that hard, right?
34:29
You think about I have a marketing side already.
34:32
I can build a free version and then they use the free version and I build a checkout flow and like and that's it.
34:40
That's the the story, right?
34:40
But that's that's the first step.
34:42
If you don't even have those components, right?
34:44
Building like mapping out the funnel will allow you to see I'm missing checkout flow, I'm missing free version.
34:50
Like you already identified that.
34:51
But the devil is in the detail one layer down.
34:54
How do you design this experience for each of the step?
35:00
What do you say on your marketing side, right? To drive free sign up.
35:03
In the free sign up, what how do you guide them to use the three most important features?
35:08
Uh and in the checkout flow, which payment option do you offer so that customers from everywhere can buy very smoothly.
35:15
So, that's that's the next layers kind of uh detail that's actually has so many opportunities for optimization, maximization and all of that.
35:27
That's actually a really good segue to the next question which is just okay, mapped out the funnel, what do you do next?
35:32
If you don't have the foundational components, you need to build all of that.
35:37
But if you kind of have something, if you already have this funnel exist, right?
35:42
It's just not working perfectly.
35:44
At least but it's working, it's there.
35:47
I think the next step is you need to pick a starting point.
35:49
Like where do you want to focus first to drive the maximum impact.
35:54
Personally, I'm a big fan of finding leverage.
35:57
Like I think doing growth is always about finding leverage.
36:02
If you can always find the area that with relatively small investment can give you the biggest results, that can be such a kind of a momentum can empower you through future experiments and more work.
36:18
And just like finding leverage is a is a beautiful thing in in in my mind.
36:23
So, I always want to do that.
36:25
So, when I think about pick a starting point, one thing I actually do with a lot of my advisor clients as a first step is we do a full funnel audit. Mhm. Full PLG funnel audit.
36:37
Think about we go through me as a kind of end user go through the entire journey uh pretend I'm interested, semi-interested, I want to buy from the website.
36:49
Does that kind of attract me?
36:52
Does that is it super clear the value proposition?
36:55
And then from there going through the sign up of the free account or free trial, is that smooth?
37:03
And when I begin to use the product, do I get to my aha moment fast or I'm very confused and frustrated uh abandoned at that moment?
37:13
And from there if I'm like think this is good, right?
37:18
I hit my aha moment, I want to buy. Can I even buy?
37:23
Like you you you will you will never believe like when I do this audit, there are so many low-hanging fruits usually in this process.
37:30
For example, one client, when I go to the checkout flow, the kind of checkout form is so confusing, they ask a bunch of questions that only let's say UK customer need.
37:42
Every word every other places they don't need to answer, but they ask the question anyway and I as a US kind of based person is very confused and I drop off at that point.
37:51
And then there are other things like for example, the aha moments I like I talked about.
37:58
I don't know what to do when I'm land on the inside the product for the first time, I'm super excited and ready, but I don't know what to do.
38:05
Like I'm so lost and confused.
38:08
That's usually a pretty big focus area and opportunity area.
38:12
Like just getting your users to aha moments.
38:15
They already over so many hurdles here, but don't just like turn down them and they they leave because it's so confusing.
38:23
Might be helpful just to explain an aha moment.
38:25
I know people hear this term a lot.
38:28
What's like a simple way to think about what is an aha moment?
38:31
I think it as a moment as a first time a user experience the value of your product.
38:39
So, it is kind of it gets popular because Facebook has this like example from the early growth days like you add I think you add a 10 friends in 7 days, you hit your aha moment.
38:51
But there are many layers under that.
38:53
The reason why Facebook used that to define its aha moment is because in early days, if you add these friends, right?
39:03
You begin to form some connection, you can see uh interesting feeds, you can interact with your friends.
39:10
And that's social interaction, it's the core value of Facebook.
39:15
And Facebook believes by looking at a lot of data, if you meet that data metric criteria, it's it's kind of very likely you will hit hit that aha moment.
39:26
But I think for a lot of especially we're talking about many SaaS product, B2B software, right?
39:31
The value of such product is usually either you see a workflow can be supported by this, it can save your time. It can save your money.
39:42
It can help you make more money.
39:45
Or it just meets all this pain point that you you you you never get to solve like on your own without a software product.
39:54
So, at GitLab we actually did a bunch of analysis.
40:00
We're trying to understand what is the aha moment for our new users.
40:04
We ended up have something along the line of two users, two features used in the first 14 days.
40:13
So, kind of it's very similar to Facebook's kind of the format, but deep down because we are a platform, we are a team product, two users is talking about the team components.
40:26
Whatever the first user is trying and using, that is so valuable, he or she is confident to invite another coworker to come in.
40:36
That itself is very very valuable action and indicates this first user is seeing value.
40:44
And if together they use two or more features, that means they're seeing the collaboration, the platform components of the product.
40:53
And within the first 14 days because it has to be reasonably quick, but not unrealistic because it we're a we're a complicated product. We're not Facebook.
41:04
We're not Zynga or our game game app.
41:06
Like it's hard for you to figure it out in the first day.
41:11
So, is it Yeah, I think it's a very important concept for any PLG company to figure out because that's often the biggest uh opportunity area I see.
41:21
Aha moment and activation is often interchangeable, right?
41:25
So, those are kind of two things you'll hear.
41:27
And just to reframe re-say what you say.
41:30
So, GitLab's activation {slash} aha moment milestone was two users using two features in 14 days. Mhm. Mhm.
41:36
And I imagine the way you got to that was you looked at at what point does retention improve if they got to a certain milestone, right?
41:46
Is that roughly how you figured Yeah, exactly.
41:47
So, there are how you can get to that, right?
41:50
First of all, we um the the internal team our growth team actually we did out some brainstorming.
41:57
We think about what are the potential action or or behavior that indicate they're getting value.
42:03
We ideally want to do something like they maybe successfully um merge their first PR or they success successfully run their first pipeline, all of that.
42:14
Like there are some potential high value actions we can think of.
42:18
We just list all of them.
42:18
And then the next step is we did a correlation analysis to understand hey, those are the 10 high value actions we believe.
42:30
We want to look at if a use new user did this action, what's the maybe 30-day conversion rate?
42:38
Oh, and not 30-day, 90-day conversion rate.
42:40
What's the 30-day retention rate? Because we look at both.
42:44
Sometimes um you you you only look at retention or you only look at conversion, it doesn't give you the full picture.
42:50
So, we look at if you did this action, let's say if Lenny, you're trying our product, you are able to successfully merge the PR in your first 30 days, does that improve your likelihood to convert?
43:04
Does that improve your likelihood to retain?
43:06
And we compare across those 10 high value actions, compare with the average.
43:15
And we begin to see, oh, some actions actually if you do that, it lift your conversion, lift your retention much bigger.
43:22
And those are the candidates for potential aha moments.
43:24
And from there, the reason why we ended up not picking one single action.
43:30
For some for some products actually you can pick a single action.
43:35
If one action really stands out, I don't know.
43:37
For Airbnb in your days probably is your your go you go you book a hotel, you go to there, you are so happy, right?
43:43
You leave a high star review.
43:45
That's the key action for this platform.
43:48
For GitLab, we have so many different workflow components.
43:51
Teams are here for different reasons.
43:53
Some are here for security, some are here for like CI/CD.
43:58
So, that's why we ended up combining like two action, right?
44:01
It can be any of the two high high value features.
44:05
The next step is actually you need to launch some experiments to try to get more people to do those high value action. Mhm.
44:14
And you then see, do I see higher conversion?
44:17
Do I see higher retention?
44:18
Because in data you are only isolating correlation.
44:21
You are not proving causation.
44:24
You just saw people who are doing this are more likely to convert, but it doesn't mean if you get people to do this, they will convert.
44:31
So, at experimentation is the step you will finally kind of validate that. Hila, this is amazing.
44:38
It's like a mini podcast on activation.
44:42
We should do another one just on this.
44:44
And then in the show notes I'll link to a couple posts that I've written with a bunch of advice on setting activation milestones and improving them.
44:50
I forget if you've contributed to that post or not, but if not, we should add some some of these stories.
44:54
But let's get back to our core.
44:57
We have enough to talk about on just product led growth. Mhm.
44:58
And so, just to summarize the audit that you do, I wrote some notes as you were talking. Mhm.
45:04
And maybe we can keep going from that point.
45:07
What you look for when you're auditing uh a product to see where they need where they may pick a starting point.
45:13
What I wrote down is one, are you just excited to try it?
45:15
Like is the landing page pulling you in?
45:18
Two, can you actually use it on your own and just try it?
45:20
Three, do you get to the aha moment where you're like, okay, I get it. I'm excited.
45:24
And then can actually buy this on my own.
45:26
Is that roughly the audit?
45:28
Is there anything more to that? Exactly.
45:29
And I'm I also look at their initial first few emails they send to me because sometimes the email magically can help a lot.
45:37
Like if I'm frustrated the first time the other day, I'm trying a product, I'm frustrated.
45:44
I'm like I I I will give up.
45:46
And then in the night and I saw email, I'm like, oh, maybe I just click the CTA and give it one more try.
45:52
And that time actually I figured out I get to the aha moment.
45:56
So, I also look at the email, that first initial emails.
45:58
And then when I map this out, I asked the company to give me the data at very high level for each of the step.
46:07
How many people are on your website?
46:10
How many people go through sign up?
46:12
How many people hit this aha moment? We need to define that.
46:14
We need to usually a lot of discussion like, how many people get to the aha moment?
46:18
How many people started self-checkout and be successful?
46:23
And then like that between the my experience from a user perspective and the data we usually immediately begin to see, oh, this is the biggest opportunity.
46:35
Uh usually activation conversion are two of the common starting places.
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47:30
Okay, so let's let's get into that then.
47:32
So, you've done this audit, what other advice do you have for folks to figure out where they should start and invest in that part of the product to help launch product led growth?
47:40
You can do a audit like this yourself, right?
47:43
Just imagine you if you are B2C user trying to buy a product, you want to we want it to be easy.
47:51
Ideally PLG for B2B can be that easy as well.
47:54
So, go through that process and identify where is confusing, where do you get stuck?
48:01
If you find that you have a problem with activation, meaning if you enter into the product, you're like, what do I do?
48:08
I don't know what should I do and maybe I just um left and then if that's the biggest opportunity activation, then you need to think about find the right aha moment metric as the first step as we just talked about because that's the success, that's the goal post.
48:26
And then design a product experience to help help more people to get there.
48:32
And I usually think about do is better than the show is better than tell.
48:38
Meaning, you want to remove all the frictions and somehow give them a warm start, give them some sample template, gives them some sample thing they can play with initially in that very moment already.
48:51
And you can supplement that with your email to bring them to the product if they don't do that. So, that's activation.
48:58
If activation is okay, but your conversion, your self-check checkout flow usually there are also room for improvement.
49:09
Many company I work with, when I try to buy, I cannot even find a way to buy.
49:15
Like it's that hard to find like, where do I click to start this checkout process?
49:19
Or they may have some frictions in the checkout flow where it's not localized.
49:26
Uh one company, when I look at their data, they found that India has very low success rate, which is expected, but we begin to say is because the payment solution they choose actually doesn't support that market well, and they added another payment solution immediately they're seeing much better success rate.
49:46
And it's If they're already in the checkout, you don't want to lose any of them, right?
49:50
Like just take do 100 experiments to get to as much as get get to as much higher kind of commercial impossible because you don't want to lose any of them.
50:00
So activation conversion usually are two great place to start.
50:07
And then from there, I would say think about your PQL PQA motion, which is the other conversion path, which is if you also want to have sales blended into this, right?
50:19
Product product led sales motion, how do you set up the structure, the foundation so that you can know what are some data signal to tell you those are better leads, and what are some customer criteria in terms of size segment you should set up, how do you get those data, and then how do you handle hand this to your sales team, how they can close using those data use not use use this knowledge.
50:43
That's another a very big opportunity area.
50:47
That's a bigger kind of effort compared to those two low-hanging fruits.
50:51
And the last thing I would say product led acquisition is a great place to start if you your product is a collaboration software.
51:00
Think about Airtable and and like it's collab Figma, right?
51:05
I As part of my workflow, I invite my team to join. I spread this out.
51:10
If you have that use case, you can build that into a product, that's awesome.
51:15
That's kind of very powerful. So there's a lot there.
51:18
So let me try to summarize what you just shared and and how connect.
51:21
So you have a self-serve product.
51:23
You've kind of gotten to a point where you can sign up and try something for free. Mhm.
51:29
And then you do this audit of like where along this journey do we think the biggest opportunities lie in the most leverage lives.
51:34
And these you have these I think four buckets of opportunity.
51:40
Acquisition, which is like top of funnel.
51:41
Do you want to double down and invest there first?
51:44
Or activation, which is like help people see the value more quickly? Mhm.
51:47
Bucket three would be uh you call the conversion, which essentially like help them buy it more efficiently. Mhm.
51:54
And then there's like a bucket of retention of just like keeping them around longer, which I don't know if you mentioned this, but I know you're just like that's probably not where you want to start.
52:00
So it's even not worth chatting about too much. Yeah. Cool.
52:04
And so so the question basically a founder product team has to decide is where which of these three buckets do they go in on when they're trying to add product like growth?
52:13
Acquisition, activation, or conversion? Mhm. Mhm.
52:15
It'd be cool maybe just like one example of each of these three buckets.
52:19
Like what's a product that did a good job here?
52:21
And then you also talked about how to know which one to start with.
52:24
Maybe just like again just a quick summary of like you should probably start activation if this if you have something like that.
52:31
You should probably start with activation.
52:33
Activation is actually a common good starting place for most B2B software because usually B2B softwares are not designed to really get you to use quickly historically.
52:46
A good example, there aren't I think all the best PLG companies, they do a awesome job.
52:54
That's all that's almost like my criteria to see whether this is a great PLG product or not.
52:58
Think about Miro as an example.
53:01
If you go through their activation years, the sign up to usage, they ask very limited questions, very targeted.
53:09
They drop you kind of they ask you about your use case. What are you here for?
53:14
Are you here to do a brainstorm session?
53:16
Are you here to develop a road map?
53:18
And they quickly gave you templates to get started.
53:21
Just like in maybe 5 minutes, you finish the entire journey from go to the website and sign up, answer a few questions, and you're already using the like using the template the prod they provided to do the thing you want to do. That's time to value. That's a success.
53:39
I think that's a a really great standard for all the PLG like a B2B product try to follow.
53:45
So that's activation is a usually a good place if you don't know where to start. Like do that.
53:53
And then conversion I would say is a place again worth investing, but there are two layers.
54:02
One is the self-checkout flow.
54:05
Just do some experiments there.
54:07
You can actually go to any e-commerce website.
54:10
Like I don't know, go to Lululemon, go to Amazon.
54:16
Make your conversion process as easy as theirs.
54:18
That should be your goal.
54:18
The consumers shouldn't be confused about complicated pricing, where to find uh like all of that.
54:26
So that's a that's a always that's a place always worth investing testing more because that's revenue so close to be to be kind of added into your book.
54:39
And then the PQL PQA part, the other more complicated path, I would say that's something you want to figure out activation and self-checkout a little bit, and you want to have a some reasonable user number, and then invest there.
54:55
Otherwise, it it can be a little bit kind of jumping too fast and jumping too too ahead.
55:00
And the acquisition product led acquisition is a great place to invest if you have a collaboration workflow.
55:08
You have some inherent internal viral components in your product.
55:12
Think about uh Figma, think about like Calendly even, right? It It can spread. This product is so easy.
55:18
You can build something to allow it to spread on its own. Okay.
55:22
That was uh I'm hoping that was really helpful cuz I think a lot of people are like, "Where Where do I start?
55:29
What do I do to help start moving down this road of of product like growth?"
55:34
And like what I'm hearing generally is just activation is probably where you want to focus, which is essentially getting people to your value quicker.
55:41
And what's cool about that, and we had a podcast with Lauren Isford from formerly Airtable now Notion talking about all the ways to do that.
55:51
And interestingly, one of the biggest levers for retention and moving retention is often onboarding and improving activation. So win-win. Yeah, definitely.
55:59
And I I would talk a little bit about retention expansion if you think that's helpful. Sure.
56:06
Let's let's chat Yeah, I know I didn't talk about that in the post, and there are people asking, "Hey, do you plan to write another post on this specific topic?"
56:13
So the reason why I didn't cover too much retention expansion is as you mentioned, it's not a usually a first place to start.
56:22
I call retention the messy middle.
56:25
It's actually a messy part of the entire funnel.
56:27
A quick activation conversion, those are fast.
56:34
Those are almost like almost sometimes shorter time span, right?
56:36
You have a lot of leverage, and you can test there quickly.
56:41
And the acquisition is a very big leverage.
56:44
You need to get more users always.
56:47
Retention is super important, but it's a little bit messy.
56:49
It's over a very long period of time.
56:53
And your customers can be at any given moment, they can be retained or not.
56:58
Like if they just cancel or they just decided not to use anymore, you already already lost them.
57:06
So it's a very messy part.
57:06
But how I think about retention, there are two steps.
57:11
One is how to build a habit in their usage pattern so that they're using this maybe every week, every day.
57:22
Like the the key to do that is first of all, your product need to have a high enough frequency.
57:30
Like if you're using this once per month, it's not likely you can build this into a product into a habit.
57:36
Like when I before GitLab, I worked at Acorns.
57:39
We started as an investment app, and the whole thing is kind of passive investment.
57:48
Passive investing, you bought some ETFs, and then you basically don't even need to check, and you just keep adding money, and it will it will grow, and after 10 years is awesome.
58:00
It's actually a the right investment philosophy, but when I work as a head of growth, it made a big challenge for me because like think about set it and forget it, they don't even need to go to go back to the product to be successful.
58:14
And that make it very hard as a head of growth to drive engagement, drive retention.
58:20
I don't even know whether they're retained or not if they're they're not coming back, right?
58:26
I can only gauge some other indicators.
58:28
So I think one one thing I would say about building habit is think about how to build those habit feature or collaboration feature into your workflow already, into the product already.
58:42
That is the reason they can retain fundamentally.
58:44
If it's high frequency, it if it involves collaboration with other people, if it's part of their workflow.
58:52
So that's the first step.
58:54
You can obviously use a lot of the loops to reinforce that.
58:57
You can send them an email if they take certain action and get them back and to repeat that action.
59:03
But fundamentally, you need to build that into the your product.
59:08
And then the next part around retention is I think it I actually think extension is part of retention.
59:17
Basically, you already have a steady usage flow.
59:21
You are using this habitually, like every week, every day.
59:25
What are the right moment to prompt you to think about maybe buying more.
59:29
And there three buckets of product product led extension.
59:34
The first one is up upgrade to a higher tier.
59:37
The second one is a buying more seats, buying more license.
59:42
The third one is if you have some sort of some sort of a consumption add on component, just consuming more, right?
59:51
Like for GitLab, you can go from bronze tier to like a silver tier, you can go to a higher tier, and then you can buy more seats.
59:58
And you can also buy more CAC CD minutes to consume.
1:00:02
Those are all the different moments.
1:00:06
How I how you can do that is really understand data, understand usage, and trigger a lot of the right conversation at the right moment to the right person.
1:00:17
And you can again, a lot of similar tactics you're using activation conversion, actually can be beautifully applied in expansion because it's almost a combination of getting people to the aha of that feature, use that feature, try that feature, getting them to convert.
1:00:33
You're leaving all these gold bricks that I have to resist not follow getting off track with cuz there's so much that like a whole retention is its own conversation we could have.
1:00:41
Maybe just one question along those lines.
1:00:45
What's something that you've launched that had a tremendous impact on retention?
1:00:50
Is there an example of just like wow, that really had a big impact?
1:00:53
You're talking about frequency maybe, but what comes to mind?
1:00:54
I can share some of my example at a course my um I think there are two things.
1:01:00
One thing is actually very similar to what you just said.
1:01:05
When I was asked to work on retention, I did a bunch of analysis.
1:01:08
The biggest leverage for me is actually activation.
1:01:13
So I ended up doing a tons of experiments in activation.
1:01:16
I identified what are the features to for users to take experience value quickly so that they are more likely to retain.
1:01:25
For us, it's a feature called recurring investment, which makes sense in hindsight, but at that time nobody's caring about that.
1:01:32
Like there we have some other very cool investment features called round up investment.
1:01:37
So nobody is really paying a lot of attention on this.
1:01:42
But when I look at data, I saw recurring investment has a high correlation with retention.
1:01:46
So I did a lot of work trying to get more people to set this up, and which has been a great success actually in a very short period of time.
1:01:57
And then from there, I would say we begin to add more use cases that has a higher frequency.
1:02:03
Like like I mentioned, right?
1:02:06
If your only come here once per month to check your investment, it's very hard to retain you.
1:02:11
Uh we don't have any lever to engagement with you as well if you you you're not in the product.
1:02:18
So we ended up adding IRA account, retirement account.
1:02:21
We ended up adding spending account, like a debit card, like more high frequency use cases.
1:02:30
Those use cases come with higher frequency and better retention by nature.
1:02:35
So now you change the problem from how do I improve retention to how do I I drive adoption of higher frequency use cases.
1:02:43
So I did again a bunch of experiments how to drive more adoption of retirement account.
1:02:48
Once you have a retirement account IRA, there's tax consequences, all of that, there's very hard for you to leave.
1:02:55
So you flip the question into again a adoption activation problem in that case as well. Amazing.
1:03:04
Thank you for sharing those.
1:03:06
Oh man, there's so many other things we could talk about retention, but we have enough to talk about on product led growth.
1:03:11
So there's two other areas that I want to touch on.
1:03:15
One is data and infrastructure and what people should know about how to set that up for success.
1:03:20
And the other is hiring your team and how to build out your product led growth team.
1:03:26
So starting with the data piece, maybe just as a big picture just like what are the buckets of data and infrastructure people should be thinking about that they're going to have to invest in or should start thinking about early?
1:03:36
I think there are two big buckets.
1:03:38
The first buckets is product usage data.
1:03:43
As I mentioned, a lot of B2B software, they're really lacking in that because when you sell via sales team, you don't need to know so many details, so granular usage data, all of that.
1:03:53
The second bucket is I call this customer 360 data base because product usage data is one component, it's the most essential in order for your product led growth motion to be successful, you also need to connect that with your marketing team's marketing campaigns, your CRM, your salesforce, like who are the customers, prospects, what their stage.
1:04:20
So those ideally need to be connected so that you have a 360 picture of your customer.
1:04:26
If I have a Airbnb as a potential like a target account, do I know there are users from Airbnb that are using my product?
1:04:36
Which features are they using?
1:04:39
And and do I send any marketing campaigns to each of them? Do they respond? All of that.
1:04:46
All of those ideally need to be connected, but in reality it's like all all over the place.
1:04:52
It's all in its own tools in most of the B2B companies.
1:04:54
What are just some tools that you think people should check out, start with maybe?
1:05:01
What's like Hila's recommendations on like a initial stack or areas to explore in terms of tooling?
1:05:08
I I say there are two piece.
1:05:08
One is infra, the other piece are some tools that are kind of secondary.
1:05:13
So from infrastructure perspective on data tool, my first tool usually one is some sort of a data hub segment, right?
1:05:23
The the next one is some sort of a product analytics tool. Think about Amplitude.
1:05:28
I know PostHog is actually a pretty popular one.
1:05:33
It's a open source product analytics tool.
1:05:35
There are Mixpanel, Pendo, all of that.
1:05:37
So have some sort of data hub data collection tool and have some sort of product analytics tool.
1:05:46
That's the data infrastructure.
1:05:46
And then you need to have a experimentation tool because like I said, you cannot just imagine you build everything and everything works perfectly.
1:05:57
So you need either like Optimizely.
1:06:00
I know Amplitude has some experimentation components.
1:06:05
Appcues is a new and upcoming one.
1:06:05
Like you need some tool to allow you to do experimentation.
1:06:12
The third piece, I think that's pretty essential, I counted in the infra, is some sort of a life cycle marketing tool.
1:06:19
I know many B2B companies, they use HubSpot or they use something like for their email marketing, but those are usually lead nurturing.
1:06:27
And it's very different from life cycle marketing tool, meaning you need to connect with segment Amplitude, you know what customers are doing in your product, you design your email, your in-app, your push notification based on their behavior at the right moment to the right person.
1:06:46
And you measure success by do they take the right action in the product versus the lead nurture email marketing tool is do I get them to read article, open the email, I add 10 points to their lead score, and they're next step further in their lead lead funnel.
1:07:03
So data tool, experimentation tool, life cycle marketing tool, those are the infra.
1:07:10
And then from there, there are a lot of PLG tools you can add on top to make your day-to-day much easier.
1:07:16
Just to start, I saw like that that are most most essential.
1:07:20
For acquisition, you need to have some sort of a lead like a data enrichment tool.
1:07:27
Think about ZoomInfo, Clearbit because the biggest difference between B2B and B2C is that you still need to know about their company.
1:07:35
Like you want you want to know this person, but you also want to know this person's company, right?
1:07:39
That's a very important thing, and you can get a lot out of those data enrichment tool.
1:07:48
And then you can design your journey differently based on that.
1:07:51
For activation, I a lot of my clients are finding a lot of value in those tools like Appcues, Userpilot.
1:08:00
Basically, the tools that allow you to build onboarding flow quickly in a product without engineer kind of resource.
1:08:06
So you need to do some initial integration, but as soon as you did that, a marketing manager, a PM, or or someone can just build some customized onboarding step-by-step flows himself.
1:08:19
I think that's quite neat because you need to test a ton in that area.
1:08:24
And in terms of conversion, I would say there are many product led growth product led sales tools.
1:08:32
I think those are great if you want to build out your PQL PQL PQA kind of conversion path.
1:08:40
Think about Endgame, Pocus, Toplyne, Pace.
1:08:43
Like there are a couple of them. Wow, amazing.
1:08:49
That was an awesome list and really well structured.
1:08:51
Is there anything else along the data or infrastructure piece that you want to touch on before we move on to hiring and team?
1:08:58
I just want to go back to the point as I mentioned, product led growth is data led growth deep down.
1:09:05
So like in most of the situation when I see a company want to get started, where they are really missing or they need to invest more is data.
1:09:15
So if you identify you have a gap in this area, don't feel bad as well.
1:09:21
Like a lot of B2B companies are in the same shoes.
1:09:24
And if you can invest the time, money, the team, the tool to figure this out, uh the benefit of this, right?
1:09:32
The data collection, usage, understanding usage data cannot only uh power your PLG motion, it can really power your entire product team, even your customer success team.
1:09:45
Now you gave them the ingredients they need to develop the next feature based on not only what their top top customer asked for, but also whatever way it's using, right?
1:09:57
Like your customer success team can take a much deeper view in understanding what the clients are using rather than just talk with the executives from the client and get a rough kind of sketch of the situation.
1:10:14
So, it is a I think it is a area worth investing and every B2B company should be investing in.
1:10:19
I'm trying to channel what uh listeners might be thinking right now, and I imagine some people might be like, what if I pick the wrong tool?
1:10:27
Like I'm kind of stressed, I have to do all this research, I'm kind of worried about starting cuz it'll set me up for failure later.
1:10:33
Which of these buckets do you think is most important to get right right from the beginning?
1:10:36
And any advice on how to just avoid messing that up?
1:10:38
To get started, I would say probably a product analytics tool is the first step and maybe like the the data hub such as Segment.
1:10:49
So, if you have Segment and particle tools like that, it allow you to plug into so many different tools.
1:10:57
You can basically try all the different tools, and if it doesn't work, you you just flick flick a switch, you can try another tool.
1:11:04
So, there's a benefit there, but it is expensive.
1:11:06
So, I I I know companies may just go right into the product analytics tool.
1:11:12
I would say it's hard to get it wrong completely, right?
1:11:18
In in order for a product analytics tool to be meaningful, the first step is you need to collect the data.
1:11:23
You need to do some instrumentation.
1:11:25
You need to have the foundation, then because it's garbage in, garbage out.
1:11:30
If you send a bunch of garbage data into your product analytics tool, your analyst will be just even more confusing, right?
1:11:38
It's like he doesn't know whether to trust the data, what to use.
1:11:44
So, a lot of uh company I work with, the first step is maybe not looking into tool, but do a audit of your data instrumentation situation to understand how many of the key actions are you tracked? Is the format correct? Is the data right? What are the gaps?
1:11:59
And you may need to do some reinstrumentation, reformatting, and things like that before you even plug into a product analytics tool to make it useful.
1:12:08
For someone that may want to do that audit, is there thing you would point them to or I don't know, blog, course, something uh to help them understand if they're doing it right, or is it like bring Hila on and and you need someone like you to help them through it?
1:12:24
No, you you can bring me, but you don't have to bring me.
1:12:26
Uh I think there are if you search on Google like just the data dictionary or data product usage data audit, a lot of companies published template and spreadsheet you can use.
1:12:38
I can even send you a few after. amazing.
1:12:43
And then you can just go through basically the key idea is go through your product experience, identify the key actions, and go through your data instrumentation and see do they match.
1:12:57
And the success of this is you have a you identify the gaps, and eventually you want to establish something called a data dictionary.
1:13:04
Like I basically do that for a lot of my clients, and the data dictionary will include here are all the key actions, what's the event name for each of those, and what are the property and things like that.
1:13:15
But you now know, hey, I have this action tracked, this is the name.
1:13:21
If I have a new product manager analyst, they can all refer to this, and everyone know this thing means the uh same definition rather than people are interpreting differently.
1:13:32
So, that's a very important part to success even before the tooling. Awesome.
1:13:38
It also reminds me uh a previous guest, Crystal Widjaja, has a awesome post on why most analytics efforts fail, and she talks a lot about this of how to set your events up for success, so we'll link to that as well.
1:13:50
Maybe one last thing here.
1:13:50
I'm trying to think about like what would screw people up most, and it's probably not having a data warehouse and ETL Yes.
1:13:55
sorts of tooling in place cuz that feeds a lot of this.
1:14:00
Is there anything you want to add there about just like the importance of a data warehouse and how to set that up?
1:14:05
Some of the early stage companies I work with, when they just get started in the very beginning, they don't have data warehouse.
1:14:10
They just basically have uh their their their product and they have some sort of a Google Analytics or Amplitude, and that's it.
1:14:17
It's pretty wild, but it's working, and they they can get to some place from from there.
1:14:25
But as soon as you begin to have data user, it's time to get serious to establish a data warehouse, have some ETL solution.
1:14:33
There are like I think there are the most common best prac- practice best practice ones like AWS and things like that.
1:14:43
There are also some startups that are doing this, and you can utilize as well.
1:14:47
But again, uh as soon as you become a serious business, you should invest in that.
1:14:54
Otherwise like it's pretty wild and it's pretty fragile as well.
1:14:59
And when you say AWS, you mean uh Redshift, I imagine? Yeah. Cool. Awesome. Okay.
1:15:04
Final area that uh we have time for, which is awesome, which is around building your team.
1:15:09
So, maybe just two questions here.
1:15:09
What is What is your advice for starting the initial team investing in PLG?
1:15:14
Like how do you how does that usually look, and what do you think people should do?
1:15:18
And then later, how does that evolve over time?
1:15:21
How I see most companies started is um the founder or the leadership team realize that they need to do PLG, and they build a conviction. Like Yeah.
1:15:29
They want to uh maybe initially there isn't even a dedicated team, but they did something here and there, they decided to invest in this.
1:15:40
And a common place to start is to hire a head of growth, or it can be a lead growth PM, but someone who is relatively ex- has a little bit experience in this area, and then they begin to build this core growth squad as the first growth team.
1:15:57
And I think that's a very common place to start.
1:16:00
The other The other place to start that's less common, but I also seen happening in reality is maybe they will start a cross-functional, almost like a tiger team, because if the initial focus area is let's say they want to do product uh product qualified lead, or like basically add that funnel.
1:16:22
That involves not only product team, that will involve data team because you you you want to know what are the usage pattern that indicate this is better leads.
1:16:33
You also need to bring sales team in because they need to work on those leads to close them.
1:16:37
So, if that's the initial starting area, a cross-functional tiger team is also possible and option.
1:16:44
But the most common way is hire a head of growth, usually a growth PM, and then start a team with engineering, uh design, data to support that that that core growth squad.
1:16:58
And the main difference between these two, one is dedicated, we are going to dedicate full-time people to helping us grow. Yeah.
1:17:06
Like say we talked about earlier, let's say they're going to focus on activation, and that's their whole job.
1:17:11
Versus tiger team is basically they're borrowing resources from other teams, and this is kind of like a side project for them.
1:17:17
Yeah, a little bit for a period of time.
1:17:19
So, it's temporary, right?
1:17:21
It's kind of they they almost need to they want to get into I I would say like usually the cross-functional team, the tiger team is a little bit prayer prior to full commitment.
1:17:31
They're pretty much committed, but they still want to try this out and guide and get a final conviction, and then they begin to dedicate resources.
1:17:41
And you asked about what's the how do they evolve from there?
1:17:45
Before we actually get there, maybe one more quick question.
1:17:46
Uh which would you recommend like when does it Imagine you you recommend a dedicated team if you can do that.
1:17:54
When would it make sense to go the tiger team route? Like in what cases?
1:17:57
One situation I would recommend is that if the initial focus area is like I said, product qualified leads, the sales conversion path.
1:18:08
Because if you think about you have a head of growth or core growth PM, that person usually has a growth PM background and he's in the product organization.
1:18:20
And they're awesome if the initial focus areas are activation, conversion, those those kind of involve a lot of experimentation, Mhm. right?
1:18:30
Uh activation, conversion are relatively confined.
1:18:33
It's something the growth PM and engineer design data they can work on.
1:18:38
If your initial focus area, you feel like my biggest pain is actually do this PQL thing, it is a little bit harder for the growth PM to socialize all those cross-functional resources because he need to get pretty deep into data.
1:18:52
He need to have a counterpart in sales, even in marketing.
1:18:57
So, in that case, I think it is possible that maybe you start a tiger team.
1:19:02
You can combine both, right?
1:19:04
You can have a growth PM dedicated, but have some tiger team to be working with him or her on this PQL project as well. Got it.
1:19:12
And I I like this term tiger team, by the way.
1:19:15
I haven't heard that before.
1:19:16
That's the Sounds like a lot of fun. Very dynamic. Okay, cool.
1:19:20
And then yeah, what happens next after you have this initial team?
1:19:24
Once you have this initial team, it's important to give them the resources they need and give them a initial focus area.
1:19:33
Give them support and a little bit time, allow them to try things out and get some early wins.
1:19:38
And early win is the biggest thing, I would say, for and whenever you start a new growth team, try to look for some opportunity, try to get some early wins in whichever area you choose.
1:19:52
And from there, if you get some of the wins, the team has some momentum, there are more confidence from the organization in PLG, right?
1:20:00
It's time to potentially uh expand and formalize.
1:20:05
So, fundamentally, I think you should should not only think about a PLG team, you should think about a PLG org. Because PLG is a motion.
1:20:16
Uh it's cross-functional by nature.
1:20:19
It's not just a product team or growth team.
1:20:24
Eventually, you need to get to the place basically there is a head of growth product.
1:20:28
That's the center of the PLG org, but there's also need to be a head head of growth marketing.
1:20:34
That's his or her counterpart in marketing organization.
1:20:38
And then, head of product led sales.
1:20:43
That's that's the counterpart in the sales organization.
1:20:45
Exactly how where they sit, how how they sit is different company by company.
1:20:50
The most common way is head of growth product report to product org, head of growth marketing report to marketing, head of product led sales report to sales, but they have some sort of a very strong collaboration because they are working in the same same motion and same funnel.
1:21:05
But that's I think that's the next step, think about this org.
1:21:09
Once you have those counterparts in product, in sales, in marketing, the next step is think about what are the metrics they own to make sure you can manage this funnel, this motion in a data-driven way.
1:21:26
Because the PLG metrics are very different from SLG.
1:21:29
The top of funnel is more about high-quality sign-ups.
1:21:32
You're not just you don't want a lot of traffic, you want free sign-up, free trials, but it it need to meet certain quality bar.
1:21:42
It's not just like anyone, right?
1:21:45
And then, the head of growth product, he or her top KPI is about usage, activation.
1:21:51
Activated teams is a very very very common metric.
1:21:55
And then, maybe number of PQLs.
1:21:59
If that that's another like you want to get those teams to certain usage threshold, basically.
1:22:07
And then, the head of product led sales, he will be focused on converting those PQLs into revenue.
1:22:13
So, he will focus a lot on conversion rate, efficiency, um and maybe revenue, things like that. Got it.
1:22:22
And you're sharing a lot of uh org design uh verbally in the post, which we'll share obviously in the show notes.
1:22:30
You can actually see a diagram of what these look like Mhm.
1:22:32
to help kind of make it super clear.
1:22:36
I have maybe just one more question.
1:22:38
Going back to the initial team, what are the functions you recommend they have on this like MVP PLG team?
1:22:42
The most important one is head of growth PM to be the lead, right?
1:22:48
Head of growth director of growth, lead growth PM.
1:22:50
And then, the growth PM, as you know probably very well, growth PM he's a PM but has a much stronger skill set in analytics, experimentation, very data-driven, think about metrics.
1:23:06
The growth PM's way of working is similar to other product manager, but his KPIs is actually more similar to the sales and marketing org.
1:23:14
He's very focused on the conversion rate, the journey, the funnel versus feature specifically itself.
1:23:20
And then, the other functions you need to have for sure, I I would often say actually a data analyst needs to be the very first hire.
1:23:31
Sometimes even try to find a growth PM uh who can do end-to-end analysis.
1:23:36
If you're really small, right?
1:23:38
You you can't find that type of unicorn person.
1:23:42
Or even before hiring growth PM, hire analyst.
1:23:45
That I would actually go as far as that.
1:23:47
Because without insights, without a lot of foundation, is there's like your experimentation, your effort is really directionless in in in a sense.
1:23:57
So, growth PM, analyst, and from there, definitely you need some dedicated engineer, you need a designer.
1:24:04
Designer can be somewhat not dedicated in early days, but engineer needs to be some sort of a user research support as well.
1:24:12
It doesn't need to be dedicated, but those are the core growth squad.
1:24:17
Okay, real actual last question here.
1:24:19
For the growth PM, in your experience, are they most often coming from within the company already and they kind of shift to this role, or do you recommend they find someone externally?
1:24:30
That's an excellent question. Um I have seen both.
1:24:33
I actually recommend if you can find someone internally, maybe he's a PM, he want to do growth, or he is an analyst who who want to become more like a product role.
1:24:48
Uh I even have a one client, the head of growth I work with used to be a investor relationship like head of investor relationship.
1:24:56
And he reports to the CEO and the founder. He's very analytical.
1:25:03
He hasn't been a PM before, but he can socialize the resource within the company to launch experiments in product, in in marketing, in all of that.
1:25:10
And we I as a advisor come in, guide him in the area he's not familiar with, and we actually drive pretty good results together.
1:25:20
So, I think prefer hiring internally if possible.
1:25:21
If not, if if you really don't have anyone internally with that knowledge or with that interest, you can look outside.
1:25:29
I would say map the initial growth PM hire to your starting point.
1:25:35
Like if we already decided activation, right?
1:25:38
It's the biggest focus area, try to find some PM growth PM with that experience.
1:25:43
And if if like the conversion is is focus area, acquisition focus area, try to find someone with that experience. I love that advice.
1:25:54
We've reached our very exciting lightning round.
1:25:56
I've got actually seven questions for you, the most ever we've had for a lightning round. Are you ready? I'm I'm ready. Okay.
1:26:03
What are two or three books that you recommended most to other people?
1:26:07
This first one is called the the uh uh Almanac of Naval. Oh.
1:26:13
Yeah, I don't know whether you read that one. I really love that one.
1:26:18
That's kind of a life-changing book for me.
1:26:19
Do you have a favorite Do you have a favorite Navalism that comes to mind?
1:26:25
Um I learned finding leverage from him. Mhm.
1:26:28
He talked about there are four type of leverage.
1:26:31
It can be your writing, it can be code, it can be capital, it can be team.
1:26:36
So, the reason why I invest a lot in writing is like I felt like that's my leverage. And I love that.
1:26:43
The The second book is called How Women Rise. Mhm. I really love this one.
1:26:49
I gifted this to a lot of my female team member, and I I really learned a lot from them.
1:26:56
And the third one is my book.
1:26:56
It's called Quick Growth Hacker GG. It's all in Chinese.
1:27:03
If you don't read Chinese, you cannot read it, but I heard my friends told me if you are launching email campaign, if you are doing experiments, have this book by the side will help with conversion rate. Just by its appearance. That's amazing.
1:27:18
Is there an English translation, or is it only in in Chinese right now?
1:27:21
Only in Chinese, so you have work. I see.
1:27:25
All right, there's an advantage there if you can speak Chinese, your email conversion go up. Yeah.
1:27:29
Uh and then, uh just to uh the first book, it was called the Almanac of Naval, right? Is that Yeah. Is that right? Yeah. Yes. Sweet.
1:27:36
And we'll link all these. Okay.
1:27:38
Favorite recent movie or TV show?
1:27:41
I watched a movie, it's a sci-fi movie from China, it's called The Wandering Earth II.
1:27:47
It's by the famous author Cixin Liu.
1:27:50
He's the author of Three Bodies.
1:27:50
I don't know whether you heard of him.
1:27:52
Oh my god, I love that book. is awesome.
1:27:55
It's kind of really cool.
1:27:55
I really highly recommend it.
1:27:58
I have to go check that out. Oh my god.
1:28:00
I heard they're bringing Three-Body Problem to Apple TV or Netflix.
1:28:03
There's like a show coming. Yes.
1:28:05
Yes, I look forward to that as well.
1:28:07
I I watched many versions already kind of filmed.
1:28:10
It's not novels that are good.
1:28:14
That's that's the problem. It's so hard to do well.
1:28:18
Oh man, I'm not optimistic, but I'm excited anyway. Yeah. Yeah.
1:28:21
Favorite interview question that you like to ask?
1:28:23
When I interview like growth PMs or analysts, I will always ask, what is the experiment you launched that has a very unexpected results?
1:28:34
And what did you do after that?
1:28:34
What do you look for in an answer there that makes you feel like they are strong?
1:28:40
So, first of all, they have to be launching a lot of experiments to get very unexpected answer.
1:28:47
So, like if you are only Many Many people remember their success for interview, right?
1:28:52
They prepare that very well.
1:28:54
I don't want to ask like what's your successful experiment.
1:28:57
Secondly, I want to know just like why it's unexpected.
1:29:01
That reveals the deep deep level of their thinking, how deep they are thinking.
1:29:06
If they are they should expect that based on what they described, then they are not thinking deep enough, they are not understanding customer enough.
1:29:13
And what they do afterwards is also awesome.
1:29:16
Like how do you face a failure or unexpected result?
1:29:22
What are the clues you can pursue?
1:29:22
What are the actions you can take?
1:29:25
How do you learn something out of it? I love it.
1:29:29
What's a favorite recent product you've recently discovered that you love?
1:29:31
I would say like similar to everyone, chat DPT, but also Lululemon yoga pants. Amazing. Great.
1:29:44
What's something relatively minor you've changed in your product development process that has had a tremendous impact on a team's ability to execute?
1:29:49
Yeah, I I force I added a basically a section in the in the doc uh in the ticket spec.
1:29:58
Ask the PMs to write the success metric ahead of time, as well as adding which of the growth lever this is helping.
1:30:06
Is this contributing to acquisition, activation, retention, monetization?
1:30:10
And it forced them to sometimes think through deeply, why are we even doing this?
1:30:18
Sometimes they ended up not doing that. By just writing it down. I love that.
1:30:23
Next question, I know you're big on children's books.
1:30:25
Do you have a favorite children's book?
1:30:28
My favorite children's book is called Someday.
1:30:30
And I recommend everyone to check it out and I basically it's talking about how our children uh used to be our baby, become our kids, and when they they are taller and more stronger than us, and they will remember us um Aw. Yeah.
1:30:47
I'm going to I'm going to need to check that out now.
1:30:53
And final question, I know you're big on growth concepts.
1:30:56
You have all these frameworks and concepts, and so what is your favorite growth concept?
1:31:00
I would say North Star metric because I find it's not only valuable to growth, it's valuable to just everything, right?
1:31:08
When I think about what do I want to do with my career, does that fit my own personal North Star metric?
1:31:15
When I think about how I how how I want to raise my kids, I think about what's the North North Star metric for successful education or for my kid because it forced me to think long-term.
1:31:28
It was forced me to think about what's valuable to me, to them, not only by the society standards, ARR revenue, like salary, right?
1:31:38
And also what's my vision for myself and for my kids. I love that.
1:31:44
It reminds me of a recent guest where she always asks, "What are you optimizing for?"
1:31:47
Whether she's talking with her kids or her husband or her team. Yeah. And similar concept.
1:31:54
Hila, this was incredible.
1:31:54
I think we've shared tens of thousands of dollars of value and it will probably lead to millions of dollars of revenue for a lot of companies.
1:32:02
And it's everything I hoped it would be.
1:32:04
Thank you so much for being here and for sharing so much wisdom.
1:32:07
Two final questions, where can folks find you online if they want to reach out and learn more, and how can listeners be useful to you?
1:32:15
Yeah, they can find me on LinkedIn.
1:32:15
Just search Hila Chu, h i l a q u, you can find me.
1:32:20
I have a personal website that's under development, but I contracted to my kid, to my 12-year-old, so he he needs to wait until summer, and hopefully this summer he can finish it.
1:32:32
Yeah, like if you you're a founder, you're looking for a growth advisor, feel free to hit me up.
1:32:36
I'm always happy to just have a free have a call with founders and leaders, get to know more people.
1:32:44
And I'm I'm a growth nerd, so like I always want to growth nerd about growth anyway. Amazing.
1:32:51
Hila, again, thank you so much for being here. Thank you. Bye, everyone. Bye.
1:32:58
Thank you so much for listening.
1:32:58
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1:33:04
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1:33:10
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1:33:18
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