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SaaS Interviews with CEOs, Startups, Founders
3 Product-Led Strategies I Used to Generate $1B In Self-Serve Revenue For My Clients, Wes Bush
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You are listening to Conversations with Nathan Latka where I sit down and interview the top SaaS founders like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com We've published thousands of these interviews and if you want to sort through them quickly by revenue or churn CAC valuation or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all these podcast interviews. Check it out right now@getlad.com.
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It's warmer now. So thanks everybody. Today I'm going to be talking about three product led strategies that I use to generate over a billion dollars in self serve revenue for our clients. And so I am going to try and blast through everything. But I want to give you a little hint. Yes. If you know me, I wrote the book on product growth. This is going to involve a little bit of product led growth in order to get that amount of self serve revenue. But here's the thing. Product led growth, it's only half of the story. Which is why I'm here. Because after writing the best selling book on product growth, helping over 400 plus companies implement product led growth, and working with some amazing Fortune 500 companies that I just can't share, I have identified that there's this one big idea that if you embrace this, if you embody this in your business, it's going to make the biggest difference when you try and build a plg. But I want to just share a bit of the backstory of like, how did I find out about this? So over this was about last year, I went through all 324/plus of our customers and I was like, okay, let's look through everybody we've helped. I'll go through their websites, talk to the founders, talk to everybody we worked with and see what separates like the good results from the people who was like, hey, like you tried to implement plg, it just didn't work out. Like what, what, what happened here? And so I realized I was like, okay, 80% were senior product folks. Which is like fantastic. That was our ideal customer profile at that time. And so I was like, okay, that's interesting. Now 20% of them were founders. So I was like, okay, smaller subsection but interesting. And then question for you. Out of all of this like data, so which group do you think like generated 80% of the results? Yes. Now why do you think that would be the case? Because we're just faster at doing Stuff. They're faster at doing stuff, but they experiment a lot more. Anybody else have any other ideas? Yeah, totally. So you're all onto something here. There's something going on about what founders do differently when they're thinking about how do I actually implement PLG into my business. And so we'll get to why. But the main thing here that I realized is that when I started looking at all of the product folks that were implementing plg, they're kind of doing what I call surface level pg. And tell me if this sounds familiar. I'm sure none of you are doing this, but this is what I see a lot whenever it comes to PLG is you're kind of focusing on, like, four things. There's like your model. It's like, is it a free trial? Is it a freemium model? What's our pricing like? Okay, we got to make something transparent here. Our onboarding experience. And then there's like, okay, of course we got to have an offer or something to promise people. And so is any of that sound, like, familiar? Like, yes, I've done that. All right, no worries. This presentation will be insanely valuable as a result. So this is what happens. The product folks forgot everything that supports plg. And so what exactly is that? Well, I call this thinking about PLG as a product thing versus just a company thing, which I totally get, because it's like, what is it called? Product LED growth. The product thing is a big piece of this, right? Yes, but it's more than that. So everything below the surface is what we identified as actually, that's the 80, 20 of this. If you don't actually focus on, like, how does this free thing actually connect with our overarching company level strategy of how we're going to win? Or do we actually have the right team that has the right capabilities to do this, or do we have the right product data to understand, like, what the heck is going on in that product? And so we identified that the companies that actually saw a lot of success with plg, they were actually building everything below the surface, which I call your product led organization. And so the kicker here is if you think about, like, okay, I want to do plg, that top level thing, those first four pieces, your product LED growth motion will only be as strong as your product led organization to the bottom that supports it. And so that's really what I'm going to drive home today. And what we're going to go through today is what I call the product LED system. This is a little preview of the Book I'm working on and little update. Five of you are going to get it for free today. So. Yeah. Before it's even released, which is going to be fun. So I want to share three of the product led strategies out of the nine that are going to be insanely helpful for you to actually build a product led organ. And these are going to be really great questions for you just to think through and really refine your product led strategy. So first question, how clearly are you the obvious choice for customers in your market? Where do you stand on this scale? Are you kind of like in the first part where you're like, yeah, one to two, like, barely noticeable? Anybody? Okay, that's fine. And that's where a lot of people are too. If is. Is it fairly apparent where you're like, I think, I think. I think we're like, okay, maybe obvious choice. Okay. Yeah. And then how many of you are like, damn, like, there's no way a customer could come into this space and be like, we're not the obvious choice. Anybody there? All right, so the rest of people not participating are liars. You're one of them. So just think about what that looks like for you. Because the goal here with the winning strategy is you have to be in the position where you're like, okay, we are the obvious choice in one part of the market. So this I kind of ripped off of the book Essentialism, which, if anybody's read it, fantastic book. You can take a lot away from just the COVID of the book because it is this actually. And a bad strategy is a lot like this one where it's like, okay, we're going to expend energy in all these different directions. A fantastic winning strategy is like this, where it's like you actually direct everybody's energy into one place. So how many people want to be like this one on that, Right? Yeah. Cool. All right, now these five questions will help you do just that. So the first one is, which market do you think you could become the obvious choice in? What does that look like? I believe every one of you in your business, you can become the obvious choice in a market. Not every market, but a given market. You just have to get really, really clear on what that looks like for your business. So that's the first big task. Try and think about what does that look like for your business. Now once you're clear on what you can become the obvious choice in the next piece is where do you actually play in your business? So I'm talking about, like, who is your ideal Customer, what is the problem you solve? What are the marketing channels that you're going to really hone in on dial up? And once you're clear on where you're going to play, the next thing is how the heck are you going to win in this particular case? So I'm talking about how do you build hard to copy moats? And so these are really thinking about like, is it you're going to differentiate, is it operational efficiency, is it user experience? And what we identified, there's like these 15 main modes so you got to really think about in your business. But less is more. What are those top two or maybe three modes that you got to dial in as far as how you're going to win in your business? So that's the third thing. There's two more. The next one is what is the winning picture? So when we think about your business, what does that one year picture look like? If at the end of this year, like what does that look like? And also your quarterly picture, like the next three months, what does that look like? What are your top initiatives? What does that winning look like for your specific business? But more importantly, what is the end game for your business? Does your entire team know or is it just kind of something for you as a founder, you're like, yeah, it's this exit, make all the money. But what does that winning picture look like for your business? And the last thing is what are some of those strategic choices you must make? And back to that first slide where it was like energy diffusing in all these different directions. The really big thing is a lot of times when we feel like friction as a founder, we're like, yeah, we're trying to do so many things. And all this stuff, it's usually a result of we haven't made a strategic choice there. We're trying to do too many things, we're trying to focus on too many different kinds of customers, we have too many kinds of products. And so we just need to bolt it down and make a strategic choice to say, no, actually we can't do everything. We can only do a few things really well. So combined, I call that the bullseye strategy framework that helps you really become the obvious choice in your specific market. So that's one of the product led strategies that you can use for your business. Now I want to share two more. The next one is the most popular when we talk about what the heck do you give away for free for your product LED motion. So I want to go through the model component and so quick Kind of quiz. How intentional do you feel like your free model is? Is it like we just guessed? Anybody? Nobody? Oh, okay. A couple. Is it. You know, it's. I think it's okay. Like, it's. It's kind of working, you know, somewhere in the five to six. Okay. Yeah. A lot more people. And is it like, yes, this is perfectly free. Do not touch it. We've nailed it. Okay. One person. Awesome. We got a chalk. All right. So this is so interesting because when it comes to your free model, a lot of times I encountered myself in this boat too. It's just. I just guessed. My first time I was thinking about what to give away for free. Competitors had a 14 day free trial. We're like, great. Us too. And so I want to give you the Mario analogy as far as how you think about what the heck do you give away for free. So the first kind of like insight here is a great free model is just like playing Mario. So little Mario over here, he picks up the flower, he goes like, much bigger, spews fire, he's really cool, he's badass, all that thing. So, like, that's an amazing free experience. Now, when it comes to, like, what is most common, it's usually something like this where it's like, okay, somebody signs up for your free trial and they're exactly the same. There's like, net, no difference. And anybody have like that trial experience where you're like, ha, ha, yeah, that's. It's not that fun. I mean, you do it and then you're like, okay, but I'm not really gonna come back to that product again and again. So this is the golden standard. This is what we want. We want people to actually pick up that flower and actually level up. They're able to do something that they weren't able to do before. They can actually attribute, like, a meaningful difference in their life between your products, signing up for that free product and actually doing something. Now, if you're like, usually this happens to VC back companies. There's the other alternative where it's like, you go way too far on the spectrum of what you give away for free. You just give them everything. They beat the whole game. They have no reason to upgrade. This was me with Evernote. I was like a freeloader user for eight years before they ever got me. And that's because they just gave me all the features for free. So think about that for your products. What is that fine line of what you need to give away for free? Now I'll share a Quick example with Tetra and when you actually nail this for your business. So with Tetra, one of the things that they initially had was a free trial motion. And so if you don't know what Tetra is, it's like a Wikipedia knowledge based tool kind of like notion in a lot of ways. And so they had a 14 day free trial, you would sign up for it and it's kind of like a Google Doc. It's nice, easy to use all those things. But then if you just play around with it for 14 days, how different is it than like a Google Doc? You don't really get the value of a Wikipedia tool for your company until you actually start sharing it with a new employee onboarding or something like that. And so people couldn't actually get the value out of Tetra. And here's the kicker and the main kind of takeaway when you think about what do I give away for free, is your product's core value needs to shine. In this case, with their free motion, it couldn't shine. It was like I would only see the value of Tetra when I onboard new people and then they start using the product. And so if that's your case in your free product, you're like, you know, our best feature is the coolest thing about our product. Nobody can see that value. Then, okay, we gotta switch things up. So whenever Tetra switched it up, they decided, okay, we need to give a freemium motion for this product. And, and what you can see here is the number of signups for their switch. It started to skyrocket as soon as they made that switch. The number of actually like net new MRR started to grow when you get the right model. And then also when it came to the number of upgrades, those also started going up as well under retention. I don't have that graph here, but that also started to increase. So I wanted to share the example because whenever you pick the right model, you will see more signups, you will see more people upgrading, you will see more upgrades, you'll see less churn at the end of the day when you get it. Now here's how you can actually decide at the end of this, what the heck do you give away for free? So the first thing you gotta do is this is your user the other side and you gotta think about okay for them to get to all the way to this side. What are the levels? I want you to like obsess about this. Get a little like nerdy. Gamify this with me. There's level one, level Two, level three break down like, okay, for that user to ultimately get to success, let's like chunk this down into a few different levels. What does that look like for them? And so once you do that, you kind of say, okay, level one, you were able to do this. If it's Canva, you make your first graphic. If it's like level three for Canva, it's, you know what you're, you're adding the rest of your team on board, you're creating your brand, assets, all that stuff. So you create those levels, then the next thing is you got to identify what are all those challenges that get in their way? What are all those things that prevent them from hitting level one, from hitting level two, from hitting level three, you map out everything, not just product stuff, skill deficiencies, knowledge gaps, all the things that might be missing for them to actually see success in each of those levels. So you map out all those challenges and then what you do is you just try and identify, okay, what are all the solutions? If we think about any potential solution, what are some of the best ones we could give people to really just overcome each of those challenges at that specific level. So once they start level one, it's much easier for them to actually overcome. And then the last thing is just tighten it up, go through. What the heck is this called? Is it a usage based model? Is it a freemium model? All that stuff. Get really specific on what this is so people know what they're signing up for on that end. So that is the second product, that strategy. That is how you decide what to give away for free and what is paid. The last one I want to leave you with real quick is the onboarding component. So this is all about how do you actually get people to value within your product as soon as humanly possible? So quick question. How easy is it to sign up, get the value and upgrade your product? Is it super difficult? Is it extremely smooth, or is it effortless? Just think about that in your head and we'll get through the framework real quick. But first, I want to give you a quick example. So this is my friend's company, snap it.com, they get like 10,000 plus signups per week on their website. And at that time, I was kind of talking to the founder, Chris. I'm like, hey, how many signups? What do they typically do in the product? How many people who sign up actually go into the product? It was like, I don't quite know. So then he went into mixed panels. He tried to, like, rummage through the numbers, he came back to me. He was like, wes, yeah, we have this one step that they have to do before they go into the product. It's the email verification step. And 27% of people don't ever even do this step and go into the product. I was like, interesting. I mean, I've seen this before, but, like, that's a. That's a lot of people you're missing out on. And so we decided on how to actually address this. We said, okay, let's. You still need this step. Okay? In that case, I was trying to convince them not. But they're like, we gotta keep this step, but let's delay it. You know, the first time people log into this product, they don't have to do this the second time. Okay. On that login page, if they haven't verified it yet, they gotta do this step to get in the second time. But, like, let's make it easy for the first time users. So as soon as we did this, anybody want to take a guess at the percentage of their monthly recurring revenue of how much it boosted within the next month of rolling this out? Anybody want to take a guess? 20%. Yes. You got it. 20%. Bang on. You win a prize. Yes, it was 20%. And you kept sending the screenshots like, oh, my God, this is amazing. I'm so excited for you. Because made frictionless onboarding. And that is the goal. When we reduce friction, most times you'll see the similar result. So that's why more users upgraded. We made it frictionless, but how do we actually do this? For your product, there's three things you gotta do, actually. 4. Let's talk about the first one. First one is you see the bowling alley. This part, I forget what we call it. Pins. Yes, pins. When you strike them out, that's called the first strike. Get very clear on, like, what is that first strike for your product? And the next thing is you gotta do is build a straight line. So this is a really fun activity to run with your team, is what I love to do. I get everybody in one team and say, all right, here's the game. You're gonna find the fastest path to get to value. And you have them kind of all go through, jot down every single step. And then what you're supposed to do is just find out, okay, what is the fast path? Or what is the exact minimum number of steps to get to value? And so how you do that is, if it's like a red step, it's something where it's like, hey, that's like, we could kill it. It does not matter. We don't need it. Yellow step, kind of advanced, let's delay that step. But you're just left with the green steps. That's your straight line. Now once you have your straight line, the next thing you gotta do is layer on a product bumper. So anybody seen like those tool tips, little things when you log into a product? Yeah, so. So product bumpers are amazing when you use them. Right. They're terribly annoying when you don't know what you're doing and you just wander around slapping on onboarding tool tips. And yeah, it doesn't drive anybody anywhere. So what you wanna do is you just use product bumpers every single time for one of those straight line onboarding steps so that the first time somebody goes into the product is really easy. And you don't have to use the onboarding tips. You could just make your product easy to use in the first place. But that's what you wanna do is make it really, really simple for people to get to that value. But, but that's still not enough. People will still drop off. The next thing you got to do is build a conversational bumper. And that conversational bumper is, could be emails, could be texts, could be even reaching out to people on LinkedIn. If they signed up, you found them, you're like, hey, I saw you signed up for our products. How can we help you? I noticed you got stuck in the onboarding. Could I set it up for you? And it's just being helpful for that part and guiding them back on to the straight line, wherever they are. And, and so combined that's how you create that frictionless onboarding experience that improves with getting more people to value. So where do we go from here at the end of this? So I want to recap this real quick. So remember, PLG is only half of the story. You need to build a product organization to make this work for your business. How you do that is you got to build a winning strategy for your business. Design an intentional model, and then you also have to craft frictionless onboarding for your business. And how you do that is you can build a product led organization. Now for the last part. These are like the full kind of nine frameworks and product strategies you can utilize. I did say I had a gift for the people who are fastest on this one. So here's a little challenge. The first five people that scan this QR code on the next page, going to get the free product LED playbook. And this is going to be a fun game here because. You ready? This book isn't released yet, so you're going to actually get it tomorrow. You ready? Set, Go. All right. I'm super pumped to share this book with you because I've been working on it for years. As Nathan said, it's release date October 1st, and I haven't shared that anywhere else, so don't tell anybody. But yes, it's coming out. So thank you, everybody, for attending my talk. This was great for bringing your warm body energy, because this room is warm now. Thank you. And I think up next, we got Steven.