Three Product-Led Growth Motions to Scale Your Online Business Strategy (w/ Rajan Sheth, Growth Advisor)

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This is a podcast episode titled, Three Product-Led Growth Motions to Scale Your Online Business Strategy (w/ Rajan Sheth, Growth Advisor). The summary for this episode is: <p>Interested in leading a product-led growth strategy at your organization but not sure where to begin? This Growth episode explores three different motions you can use to accelerate growth for your online business. </p><p><br></p><p>Rajan Sheth is a growth advisor, former VP of Growth and Self-Service at JumpCloud, and former Senior Director of Growth, GTM, and Marketing at Heroku. He's taken both a bottoms-up and tops-down approach to product-led growth models and has integrated them with self-service and sales-led motions, too. Needless to say, he's seen it all.</p><p><br></p><p>In this Growth episode, Rajan explains the three motions that make up product-led growth models for online businesses: Self-service, product-qualified lead, and sales-assisted/sales-led. He breaks down what each motion is, how to determine which model is right for your business, the economics behind each motion, and how to structure each motion to generate demand.</p><p><br></p><p>Like this episode? Be sure to leave a ⭐️⭐️⭐️⭐️⭐️⭐️ review and share the pod with your friends! You can connect with Matt and Rajan on Twitter @MattBilotti, @rajan_sheth, and @DriftPodcasts.</p>
How to determine if self-service is right for your business model
03:33 MIN
How do you create a structure that generates demand with PQLs?
03:31 MIN
The financial model & economics of a sales-led or sales-assisted business model
03:06 MIN

Matt Bilotti: Hello, and welcome to another episode of The Growth Podcast. I am your host Matt Bilotti. And today I am super excited to have Rajan Sheth, who is a growth advisor and former VP of growth and self- service at JumpCloud, and former head of growth and self- service and marketing at Heroku. Rajan, thanks so much for joining.

Rajan Sheth: Thank you, Matt, for inviting me in this podcast. Super excited to chat with you and discuss some of the PLG strategies that have worked for me in the past.

Matt Bilotti: Awesome. I am excited to talk through that as well. So today on the podcast, I know in the past we've covered some product led growth type stuff. But this episode, I think, is going to be much more of kind of a dive into how to think about all the aspects of it, how to actually implement these sorts of motions, how to decide which motions to have implemented, which ones are not right for you, and how to think about all the structures that you need to put in place to make that all happen. So Rajan, how about you give a quick intro on yourself and then we'll go ahead and jump on in.

Rajan Sheth: Awesome. Thanks Matt for the intro. I'll quickly give you a few seconds off about me. So my career has been very unusual in a zig- zag way. I started my career as a developer. I moved to product for a while, all B2B SaaS. And then moved on to the bright side of marketing, sales, growth and all the things combined. And I've done both. I've taken companies who started PLG and scaled them, and integrated with their sales led motion. As well as companies that have started top down, I've built their PLG motion, again, integrated with self- service motion or the sales led motion. So I've done both. And there are challenges, and there are amazing things that you can do for both of them. So I'm super excited to discuss that with you today.

Matt Bilotti: Yeah. And I'm super excited to have you as a guest because you've seen the different stages of the business, and you've seen the different angles of running all these motions, which gives you a really good full picture for how to make it all happen. So before we had jumped on to start recording, the way that you were framing this to me was all about PLG for an online business. How do you define online business? And what is that framework that we're going to kind of talk through everything in?

Rajan Sheth: Yeah. Great question. I'll go back a little bit in terms of how I define the online business. So ideally, I'll give you an example of my tenure at Heroku. So at Heroku, when I joined, we were around 50 million ARR. We started primarily bottoms up, targeting developers, DevOps audiences. We had a great inbound. We built a self service business, and then we expanded into more of a sales assisted as well as a sales led motion. The way I think about the online business is, think about growth not as a function, but think about growth as a business. How can you drive your revenue growth depending on the stage of the company that you are at? And what are the components that form that business? And in my career, or in my roles, I've led teams across marketing, product, sales, as well as the entire go to market infrastructure. And what led me to believe that is that as you think about the entire online business, you think of your role as more of a pseudo- GM or a GM, where you are an orchestrator, as well as you are owning some parts of the functions, either whether it's a self- service business, whether it's a growth marketing business, whether it's product growth or whether it's revenue growth. And that's how I think about online business as a combination of different PLG strategies overall to build growth as of business.

Matt Bilotti: That is awesome. So there's a couple verticals there. One is around self- service for running the online business. Another motion is the PQL motion, product qualified lead type motion, and then the third one is, you're talking about sales assisted and sales led. And so I think for this conversation we'll kind of focus on each of those buckets and talk through each individually. So let's start with self- service, let's say someone's listening to this and they're trying to figure out if either they should be implementing a self- service component to their online business, or if they should be doubling down on it and expanding on it. How does somebody know if self-service is right for their business model?

Rajan Sheth: Amazing question again. But I would caveat this as, I wish there was a black and white answer for that. But before I go into, when is it right? I would to define what self service means to me because everyone would have their own version or definition for self service. So number one, the way I think about self service is, you are leveraging the power of automation. You're leveraging the power of your product, you're leveraging the power of your marketing to help your end users understand the value that your platform or product would provide, and start using it without an intervention of an external human or one- to- one salesperson. And that's how I define self service. The other way to define self service is also, who all are paying through a credit card, versus who all are not paying through a credit card? If the customer is paying through a credit card, they are self service. Versus customer who are talking to a salesperson, more of an ACV or an enterprise contract, then they are more of a sales led or a sales assisted motion. So those are two definitions that I've come across. Both of them are right, depending on the business that you are in. So I wouldn't stretch too much on that. But with that definition in mind, when is it right? I think there are a few components that everyone should look to. Number one is, it all starts with the product and your customers. What is your product? Are you targeting users or practitioners in your area? Think about GitHub, they're targeting developers. Think about Heroku, we're also targeting developers. Think about companies like Editable, Notion, Miro, they're all targeting different practitioners within each area and helping them find that initial value of the product or the platform very, very early. And if you're able to do that and convey that through your product, then you have a great momentum on the top of the funnel. And when you do that, then you have really good self service demand that, yes, these users are now starting to use my platform. Now, how can I help them create that aha moment or a habit forming moment that they would continue to use the platform, breadth wise and depth wise, and then they would start paying. So there's one component that I think about in terms of whether the self service business is right for you or not. And it also starts with the demand. You have to have a great product, market fit. You have to have an amazing top of the funnel, whether it's an open source, whether it's community, whether it's word of mouth, and high volume of users signing up. Because at that point, your sales team has so much demand and volume that you want to have them focus on the right side of the right customers. The other thing that I also look for is whether your product is catering more towards startups and SMBs, and mid- market versus more of an enterprise segment. Because as you think about it, the earlier part, whether you're a startup or SMB, you have more practitioners who want to start using the platform sooner without having to talk to salespeople. And on the enterprise side, you create a different side of value. They have more requirements on the compliance, security, trust and the business needs versus an individual needs. And at that point, more of a sales assisted or a sales led motion becomes really more powerful. So that's how I would differentiate when a self service motion is right for you versus when should you start introducing sales teams.

Matt Bilotti: And I think one of the most critical things in your answer here that I want to highlight for listeners is that it has to be a holistic decision and view of your business. You were talking about demand, you were talking about the market, you were talking about all these pieces of it. Whereas, I think a lot of companies get caught up in, oh, these companies we love do self- service, or our competitors have self- service, so we need to do it too. And people kind of slap it on, on top, thinking that it's just going to be this kind of magic thing that drives their business forward.

Rajan Sheth: Yeah. I've seen that. Overall, it's much more difficult when you have a$ 50 million sales led business and slapping on a PLG or a self service motion on top of it. Worse is when you're early enough and you realize that this is a motion that you want to target, and you want to introduce that, always you want to start with this motion.

Matt Bilotti: So one of the things that I think is really powerful for thinking about these types of big introductions of new motions like self- services is thinking about role models or examples of companies that do it really well because they have all those components that you were talking about aligned. What are some companies or business structures that you think do a really good job that people can look at and say, all right, if we're going to model this, we should look at how they do it and consider that?

Rajan Sheth: Yeah, definitely. And there are so many great examples, companies that have started bottoms up. Like Heroku started bottoms up. GitHub started bottoms up. Slack started bottoms up. Twilio started bottoms up. So these are companies who have really nailed down the bottoms up, PLG as well self service businesses. But over a period of time, they have also started introducing and going up market targeting more of PQL, PQA motions, and then sales led motions. So it's a journey. And there are other companies like MongoDB and some of the other open source database companies that have started so traditionally like selling licenses, enterprise software, not even cloud. Now they have moved to cloud. Now they have built their entire self service business, and they're growing really, really fast. So there are companies and examples on both sides. And I think it's about how you execute, how you identify where are the gaps, and what motion you should focus on, versus trying to do everything together.

Matt Bilotti: And I'm actually going to take this moment to plug one of our prior episodes where I had Laura Borghesi, who was the former, I think she's VP of growth at MongoDB. And she helped drive that implementation of the PLG motion. And so, if you're listening to this and you're like, oh, I want to learn more about that. I promise you that is one of the best episodes in the library to go and check out. Okay, back to this conversation. How do you know, let's say, all right, self service is right for us. We want to go down that path. How do you think about the financial model and economics of making it work?

Rajan Sheth: Yeah, I think it's very simple, especially if you are most of the companies that I've seen who would initially start with self service, apart from some examples on the open source side of the world or the database side of the world, where they have started selling licenses and now moving to cloud. But apart from that, I think the economic model is very simple. You want to create some early demand. You want to create a word of mouth, either through community, either through the product itself or tapping into some of the influencers that you know that they're going to use the product. So in terms of economics, getting early demand, getting the word of mouth, getting people starting to use it, those are some of the right channels to focus on. I wouldn't necessarily focus a lot more on paid to get your self service, because in that case, you are much more better off if your product does not have that virality to focus on more of a PQA or a PQL motion along with the sales team, because then they can help them drive value. So in terms of the investment, I would say a lot more investment needs to happen on the product side, as well as a lot more investment needs to happen on the community side to grow that so that the product and the community meets together. That's how I think about the economics on the self service side. The second part of it is the demand and the volume. At Heroku, we had so much demand. When I joined Heroku, that was like seven years ago, we had 10,000 signups a month. And my team's charter was to grow that. And that was the number one challenge that we were doing, or solving. And by the time I left, after six years, we were getting around 150,000 signups a month. And at that at demand, we had so much volume that we had to make sure that we pick the right customers or prospects for our sales team to focus on. And there was no way that how much ever amount of sales reps we get, we are going to have every lead or every sign ups followed up with them. So I think it's also about the demand that you create, and what is the right incentive for the sales team to focus on, and what's valuable for their time overall. So that's how I would think about the economic model, especially if you're starting with self service or growing that.

Matt Bilotti: All right. This has been such a great overview of self- service. I want to move on to PQL motion as the next section of this podcast. Anything else you want to say on self- service before we move? I know there's tons and tons to say, but anything in particular you want to touch on, or are you ready to hop over to PQL motion?

Rajan Sheth: No, I think let's do that. We have so much to cover. And I'm super excited to cover the other parts too.

Matt Bilotti: Cool. All right. Let's start at the top in the same way that we did on the last section, which is, how does somebody listening know whether or not a PQL motion, so product qualified lead motion, is right for their business and it's something that they should implement?

Rajan Sheth: So my answer has changed over a period of time in the last six years for this. Initially, I've seen that a lot of companies, almost a decade ago when I started fumbling into the growth side of the world, there was no term like PQL. We were doing some things, capturing leads, handing it to the sales team, using behavioral data. Now I think that my answer has changed in the sense that every company should have a PQL or a PQA motion, especially if they have a bottoms up motion, or if they have a free trial, or if they offer a freemium offering. The reason for that is, companies are now hiring sales teams earlier than before. For example, Heroku, we had our sales team or started to dabble into sales when we were on 25 million ARR. And I know that GitHub, Slack, around the same time, take 25 to 50 million. Dropbox a little bit later on, like a hundred million. But 25 to 50 million was the time back in the days, like five years ago, six years ago, when everyone would start hopping on a sales team to focus on mid- market and enterprise side of the world. Now every company is starting to hire sales teams earlier. And that's good because we realize that there is an untapped potential. We don't want to lose out on users who need some help. So I would say that every company should have a PQL or a PQA motion, depending on who they're targeting. Ideally, if they're targeting SMB, mid- market, a PQA motion is great in that case because sales teams work on accounts, not leads. So the more you are able to help them think in terms of their accounts, as well as the pipeline generated through PQAs, you would have a much better benefit around using that motion. So my answer has changed. Initially like, yeah, let's wait, let's have a good bottoms up motion, self service business, and then have a sales team, and then build a PQL motion. Now, every company should start that as soon as they hire their first sales rep.

Matt Bilotti: Awesome. And this next question I know is a little trickier because understanding a good PQL motion usually means you need to understand what's happening inside of a business. But are there some examples of companies that you think kind of nail this?

Rajan Sheth: So I think a lot of the companies. As a lot of these self service companies that I talked before have this PQL motion nailed down really well. A couple of the companies that I advise, so I advise two companies, one is Intezer, they're in the cloud security platform. They have a freemium offering, but they're selling to enterprises through their sales team. So we built their entire PQL, PQA motion through marketing, and integrated that with the sales team. The other company that I advise on is Honeycomb, and they're also targeting enterprise users. But we want to build that entire bottoms up developer that motion. And we have started implementing PQAs for the sales team and scaling that versus just MQL. So a lot of companies are doing it right. Everyone is moving towards PQL and PQA. And there are amazing tools and platforms available out there to help you identify those now across your behavioral data, across your third party data, as well as the intent data to get the right PQL definition and the right PQL for your business.

Matt Bilotti: Awesome. I love this podcast because it's giving me good opportunities to plug prior episodes. So two more I'm going to plug real quick. You had mentioned GitHub. So there was an episode. It might have been 15 episodes back where I had two of the growth, it was a growth leader and a marketing leader from GitHub. And they were talking about them implementing their PQL motion. And they were kind of discussing it in real time. So that was a really good one. And then there was another episode where I had one of the growth folks from Airtable, and they talked all about their human in the loop approach to PQL Motion. So that is another really, really great one that I want to plug as well. Back to this. How do you think about the financial model and economics of making a PQL motion work?

Rajan Sheth: And I think, again, similar to self service, I think it's pretty simple in my mind. If you have a sales rep, if you have a product that you're offering a trial, or if you have a product that users can get the value early on, and the first aha moment sooner, you should have a PQL and you should have a PQA motion. I mean, there is no exception, at least now. And I'll give an example around how we did that at Heroku. So at Heroku, our goal was to identify PQLs not just at signup, but we had PQAs as the user started getting more value, whether they are starting to use other parts of the platform after six months, we would trigger those PQAs to our sales team from the self service itself if the customers are paying X dollars per month, if their growth rate is really high month over month, and they are scaling their operations, then we would use that as a PQA motion for the sales team for the expansion side. So the caveat that I would add to PQA motion is that it's not just for net new. You can use your PQAs not just at a point of signup, but also across the customer journey, and as well as through expansion and retention so that either your sales team, your expansion team or your customer success team can benefit from the signals that you're capturing in your data warehouse.

Matt Bilotti: Awesome. And I think my last question on this PQL motion piece is, how do you think about creating structure to generate demand and the channels that work to drive PQLs?

Rajan Sheth: Yeah, I think number one thing for me across this setting, the growth as a business has been defining the right KPIs. And it happens across the customer journey. When I joined back at Heroku, we were all so happy, like, oh, we got X number of signups a week. And I was like," Yeah, that's great. But how many of them actually do something on the platform? And even if they did something on the platform, how many stay for the first 30 days?" And we saw that a lot, about 50% of our customers who signed up never did anything on the platform. And out of the 50% who did something on the platform and activated, 60% of them dropped within 30 days. So quality and the shared metrics along the way go a huge line. And for me, entire growth business is based on shared KPIs and KPI structure. So how do you have the right quality sign up as a metric for the top of the funnel, which is sign ups who are activated or sign ups who are PQL. The second part is also around the PQAs. And how do you define the right PQAs working with your go- to market and the sales team? And a lot of the times, the product teams, the growth teams and the marketing teams and the sales team have very different definition of what success means for the customer. So the number one thing that we did at Heroku was identify key signals across the platform. And what are those key signals, or triggers as we call them, that would allow the sales team to have a meaningful conversation with the prospects? And over a period of time, we refined it. And there was no right answer in the last six years when I was there. We changed it multiple times. We added more signals. We removed some of them that didn't work. But at the end of the day, it's about how you come up for the definition of PQAs is really, really important, and of setting the right metrics so that your go- to- market teams are also focused on driving the same outcome as you are. That was number one. And number two is creating the right handoff systems. A lot of the times, there are different types of sales teams or customer success teams within an organization. And for us, it was also identifying who is the sales team who's more focused on driving PQL or PQA motion, versus who in the sales organization is also driving expansion and retention side of the work? And that was key for us. So creating the right handoff system worked really well for us. And I'll give you an example around it. One was, we had this technical engagement manager concept who would work on self- service customers to grow them. But our goal eventually was to use the self- service as the feeder for our sales team on the enterprise side of the world. So we partnered heavily with our SMB sales leader, global SMB sales leader. And that team was the biggest partner for the self service, the PQL motion because we were targeting a lot more practitioners. If we had gone to the enterprise sales rep, they'd probably be like, I need a Fortune 500 account versus everyone that I can follow up with. So finding the right key partners in the sales organization, creating the right handoff system was really key for us in addition to figuring out what are the KPIs and what are the right triggers for us?

Matt Bilotti: Yeah. And I love those last couple pieces too. And especially your point around how it's kind of ever changing and ever evolving. The handoff process and the partner that you had one and a half years ago looks very different than what you should probably have today, which is going to look very different than that handoff and the variables that make a good PQL a year from now because the market's changing, the customer is changing, your product is changing, your own marketing messaging is changing as well. So that is a super, super key component.

Rajan Sheth: Yeah.

Matt Bilotti: Anything else you want to mention on PQLs before we jump to the last section here?

Rajan Sheth: No, I think one key advice to everyone who's thinking about setting a PQL or PQA motion, I would say don't over gravitate on finding the right PQL or PQA when you're starting off. Start with something, you would get the feedback loop. And if you build that with your sales organization, I think that would be a lot better for you versus trying to over gravitate on that. The second part is help the sales team with the right signals in the place where they are. So don't try to give them spreadsheets. Don't try to give them BI dashboards. If possible, track those in the same CRM system that they work on. You'll get a lot more adoption and feedback from them if you're able to do that. So I think those are the two advice that I would give anyone who's starting to implement the PQL and PQA motions.

Matt Bilotti: Right. Take the PQLs and PQAs and put them in the same place that a sales rep goes and looks at all their other leads that they're going to go over. Makes a lot of sense.

Rajan Sheth: Yes.

Matt Bilotti: All right. Last section of the podcast here, which is talking about the third component or third main motion of building an online business and PLG around an online business, which is sales assisted and sales led motions. So we'll start this the same way we started the other two. How does somebody listening know if sales led or sales assisted is right for their business?

Rajan Sheth: Yeah. And I think for this, I would say a little bit of more financial modeling or economics in terms of, you have a sales team, is your product catering more towards mid- market or enterprise? Or even if your product is catering to practitioner, do you have a decision maker that you sell into? And do they need more around the business use cases like compliance, security, et cetera? Because at that point, the practitioners are probably like, yes, I'm using your product. I don't need to go through all these things. But a business user would want that, an organization would want that. And at that point, I think a sales assisted or a sales led motion makes real sense. And a lot of the times it's driven by the product and the market you're playing into. And also, one thing is that as your self service business grows, you need to have a sales led or sales assisted motion. The way it works is that whether you start bottoms up, whether to start tops down, eventually you'll need the sales assisted and the sales led motion. And if you have started bottoms up, then you should use your self service business as the biggest feeder for the sales team. At Heroku, I remember we started bottoms up. And we had so much volume, we grew from 50 million to 450 million ARR in six years. And 60% of that was actually originated from self service business. Every month we took the cream of the cream customers who are really growing fast and graduated them into more of an enterprise motion in partnership with our sales team. So my team led that entire self service business. Our self service business was around 150 million or 160 million ARR. It stayed pretty much the same because we used that as a feeder for the sales organization. So that's why I think the sales assisted and the sales led motion is so important, because as you go up market and as you find more value in having the decision makers buy your product, as well as if you have the product which sells into the decision makers, you need to have a sales led motion. So I think that's how we define the importance of sales assisted and sales led. And the difference that I would point out in sales assisted and sales led is, sales assisted is like a nurturing mechanism where you help your existing self service customer transition into more of an enterprise world through differentiation. And that would also take place with the growth team. And they would help from data from the usage, driving that PQL and PQA motion for your sales organization. So that's how I define like, yes, you probably need sales assisted, you probably need sales led. It just defines when you started and which direction, whether you started bottoms up or whether you started top down.

Matt Bilotti: Yeah. And maybe one other way that I would add and phrase it. And you tell me if you agree with this phrasing or not for the folks listening is, the more that your product requires change management on the customer side, the more important a sales assisted or sales led motion becomes.

Rajan Sheth: I think that's the right way to put it. Yes, I agree.

Matt Bilotti: Cool. All right. So next question. Are there any specific role models or companies that you think do this really well, or is the answer here kind of like, look at the public market of the top performing SaaS enterprise businesses and just look at what they're doing?

Rajan Sheth: Yeah. I think that's pretty much the answer. I've talked to so many founders, even though they're early stage, they realize the value of this motion. And everyone, even if they're one million to five million ARR, everyone has a sales team, or they have started building a sales team. Because you want some early marquee customers to go after, and you don't want to just create demand and more adoption. But at the same time, I think you want to also scale your revenue initially. So to get that, even before demand, from the investor relationship as well as from other sources, you need the right person or the sales led motion to go after those, whether it's sales assisted, whether it's more of a customer success or even sometimes a CEO doing that. So I think there's no either or, everyone is doing this, even companies who are early stage or even the companies who are public have done this really well.

Matt Bilotti: Cool. So next question is, how do you figure out the financial model and economic structure of making sales led and sales assisted work? Because you talked about this at the start, that the model here is probably more important than the other buckets.

Rajan Sheth: Yeah. Because if you have sales people, then you need to make sure that they're successful and you need to make sure that they have the right comp structure and the incentives to go after and drive the behavior that you want them to drive. And I'll start with an example. At Heroku, our comp structure and our modeling changed over a period of time. For example, initially, the behavior that we wanted to drive was, we had so many customers on self service and we wanted to get them on our new enterprise offering, a new enterprise plan. But the comp model was that if you are able to get them onto an enterprise offering, then you would be paid 100% of the entire ACV. Your comp would be paid based on 100% of the ACV that you create on the enterprise side. For example, if the customer was paying$1, 000 MRR, that means$ 12,000 ARR. And if the sales team converted them to start using enterprise features at 13, 000 ARR or ACV, they would get comped on the entire 13, 000 versus that 1, 000 uplift because that's the behavior we wanted to drive. And we wanted to get more customers hooked on, and create more stickiness on the platform. As we grew and as we found that motion, we changed that because then we wanted to drive only uplift in the ACV. So think about it as now, in the same example, the customer who's paying$ 1, 000 MRR, so$12,000 ARR, if the salesperson converts them into an ACV contract of 13,000, they only get comped on the commission based on the difference of 1, 000. So I think we changed that. And I think we did that purposely. And I believe in this, I follow Charlie Munger's philosophy in there, is like, never, ever think about something else when you should be thinking about the power of incentives. So the incentives you want to drive is how you structure the comp. The other part was also around, how do you comp the technical account manager of a sales assisted motion who would help your existing customers grow MRR without converting into an enterprise side of the world? So the way we did that was, we had more of our technical account managers comped based on the growth rate that they would see in six months period, since the account was assigned to them. And then what was their MRR after six months? And then we removed the natural growth of 2% or 5%, depending on, we know that even if we hadn't assigned it to a technical account manager, the account would've grown anyways, and they would be comped on the difference. Because then it drives the right incentive to help the customers grow organically, versus just trying to convert them into an enterprise customer and having them later churn on, because then that's not what they're looking for. So economics and the sales assisted and the sales led motion matter a lot, especially if you are growing really fast, whether you're scaling really fast overall.

Matt Bilotti: Yeah. Getting those incentives right can be make or break. And whenever you're building those incentives, you got to think about how can a human game this incentive system? Because the reps for sure will try to figure that out to try to walk away with the most money possible.

Rajan Sheth: I mean, look, at the end of the day, I think it's their job to close more deals and it's their job to get things right. And I think partnering with them to understand the philosophy around how customers are closing would actually help a win- win situation versus looking at a rep gamifying the system. So how can we help gamify the system in a way that is incremental to the business? That's how I think about the comp models always.

Matt Bilotti: Yeah. I love that. That's such a good way to think about it. How do you build it so that it can be gamified in the best way possible that drives more revenue and outcome for your business? Yes. How do you think about creating the structures and channels to generate and drive demand that power these types of motions?

Rajan Sheth: Yeah. So every motion would need a different type of demand. For example, if you are starting bottoms up, targeting practitioners, SMB mid- market, in a developer DevOps space or more of a collaboration platform, a lot of it is driven by communities, open source communities, influencers. If you have that motion right, and if you continue to invest in that, either through dev rail or either through advocates within those communities, you would drive a lot more demand than continuing to pay through any paid channels. And that also helps you to invest in the right content, invest in SEO. And that's a long term investment. While you are ramping up on your paid channels initially, that's a huge investment that you have to start thinking about early on, if that's your motion. The other part I will also say is that if you're targeting startups, if you're starting as targeting SMB partner, having a startup program has always helped companies to get and penetrate into their target accounts early on so that they grow with you. And that's the benefit of having them starting to use your platform early on. So these are some of the ways that I have driven demand early on for bottoms up. How do you think about the top down demand? And I think there are two ways to think about it. Number one is, what does a go to market motion look like? For us at Heroku, we had three different work streams to get enterprise customers. Number one, as we talked about, was converting from self service to enterprise with the offerings and what the customer wanted. Number two was partnership. Leveraging the mothership, Salesforce. Salesforce has hundreds of thousands of Salesforce CRM and Sales Cloud, Service Cloud accounts. How do you identify the right accounts within the partners that you have and figure out who are the right personas to go after? Because for Heroku, the persona was completely different. Salesforce was more around admin, Salesforce admin. For us it was an actual developer or a DevOps person. How do you identify the right customer, then go after the right personas within those accounts, and then help them realize the value of, you're using Salesforce, how do you power your applications by using Salesforce data and use Heroku? And using that bridge. So if the right messaging, right partners and the right hook and the right audience allowed us to go outbound, allowed us to go in tops down account. The third way we did was we used more of an ABM approach where we targeted key accounts, cloud native, high growth, SaaS startups. And we just went after them using our outbound ABM marketing, as well as partnering with our BDR and SDR teams to go after them with a more automated way. So that's how I think about creating demand. I think it all starts with the go to market motion that you're focused on. And depending on that, you either focus on communities and grow that depending on whether you are more as a solution on a particular partner or you can do more of a co- marketing there. You can do that. Or you go after a select ICP who would benefit from your product, and then go after them through more of an outbound account based management side of solution.

Matt Bilotti: Awesome. Thank you for talking us through all that. And before I jump towards some final questions here. I'm going to use this as an opportunity to plug one other episode. So recently, I had Holly Chen who is an incredible growth advisor and growth practitioner. And the episode was all about, how do you go from a self- service product led growth motion and introduce a sales led and sales assisted type motion? And that episode is an awesome, awesome walkthrough of that sort of step that you might take as a business. All right. So Rajan, this has been fantastic. We've covered a lot of ground here. Anything else that you want to say to tie everything together, or maybe a note that you didn't get a chance to share before we go ahead and wrap up?

Rajan Sheth: I would just end it up with the same thing that I started with. I think the number one thing that everyone should start thinking about is, how can you think about growth as a business versus a function? And in my career, I have never thought growth as a marketing function or a product function or a sales function. It is a responsibility of you as a growth leader to act as a GM and own a channel and own a function, but make sure that there's a cross- functional organization that you are partnering with and you are accountable for. So think of it in terms of your role more as a GM versus I own growth marketing and activated signups is my KPI. No, your KPI is ARR or MRR, or however you think about it. And whatever you need to get that, partnering with other organizations or start owning some of those KPIs. You should start doing that. I think that's what I learned. And historically, that has allowed me to expand my scope of responsibilities. At Heroku, I started owning from just the top of the funnel metrics to the product metrics on the monthly active user, the monetization, the revenue numbers, as well as expansion, the retention side of the world. So I think that would allow you to expand and have a better impact on your organization's growth.

Matt Bilotti: Amazing. Well, this has been one of the densest episodes in terms of advice and tactical action and all that. So Rajan, thank you again so much for joining here. Really appreciate it.

Rajan Sheth: No, thank you for having me, Matt. It's always wonderful. I've heard your podcast a lot. So glad to be part of it.

Matt Bilotti: Absolutely. And for those of you listening, as I have plugged many times, there are incredible other episodes to check out with amazing growth experts and leaders. Go ahead and thumb through those. Hit the subscribe button if you haven't done so yet. I want to say thank you again for spending your time here. I know there are tons of things you could be working on, listening to, watching, playing, whatever it is, and you're spending here listening to the podcast. So I super appreciate it. Five star review and a written review go a really long way. So I would love that. If you've got any questions or feedback or topic ideas or whatever it is, my email is Matt @ drift. com. Feel free to reach out. And with that, we'll call it a wrap. And I'll catch you on the next episode. Thanks.

DESCRIPTION

Interested in leading a product-led growth strategy at your organization but not sure where to begin? This Growth episode explores three different motions you can use to accelerate growth for your online business.

Rajan Sheth is a growth advisor, former VP of Growth and Self-Service at JumpCloud, and former Senior Director of Growth, GTM, and Marketing at Heroku. He's taken both a bottoms-up and tops-down approach to product-led growth models and has integrated them with self-service and sales-led motions, too. Needless to say, he's seen it all.

In this Growth episode, Rajan explains the three motions that make up product-led growth models for online businesses: Self-service, product-qualified lead, and sales-assisted/sales-led. He breaks down what each motion is, how to determine which model is right for your business, the economics behind each motion, and how to structure each motion to generate demand.

Key Moments:

  • (2:35) How Rajan defines online business
  • (4:56) How to determine if self-service is right for your business model
  • (9:48) Role models for self-service business models
  • (11:25) The financial model & economics of a self-service model
  • (14:20) How to determine if a PQL (product-qualified lead) motion is right for your business model
  • (16:43) Examples of companies who nail the PQL motion
  • (18:35) The financial model & economics of a PQL motion
  • (20:03) How do you create a structure that generates demand with PQLs?
  • (25:42) How to determine if a sales-led or sales-assisted motion is right for your business model
  • (29:23) Role models for sales-led or sales-assisted business models
  • (30:41) The financial model & economics of a sales-led or sales-assisted business model
  • (34:51) How do you create a structure that generates demand with sales-led and sales-assisted motions

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Referenced Growth Episodes:

MongoDB

GitHub

Airtable

ExponentialX

Today's Host

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Matt Bilotti

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Today's Guests

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Rajan Sheth

|VP of Growth and Self-Service Business