Building a Startups Program (w/ Brianne Kimmel, Founder & Manager Partner of Worklife Ventures)
Building a Startups Program (w/ Brianne Kimmel, Founder & Manager Partner of Worklife Ventures)
Startup programs are becoming more and more popular in SaaS, but they aren't always thought of from the perspective of a growth strategy, and because of that, they're not always used and measured to their maximum potential. Brianne Kimmel built out the startups program at Zendesk before founding Worklife Ventures. In this episode, she and Matt Bilotti, who manages Drift's startup program, debunk the myths surrounding the programs, discuss what makes a good startup program good, and how you should align your program to take the weight OFF of your sales team. Whether your company has an existing startup program, or is thinking of starting one, this episode is a must listen.
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Matt Bilotti: Hello, and welcome to another episode of The Growth Podcast. I'm your host Matt Bilotti. I'm so excited today to have Brianne Kimmel, who is the founder of Worklife Ventures. Brianne, thanks so much for joining.
Brianne Kimmel: Thanks so much for having me.
Matt Bilotti: Absolutely. So, today we are going to talk about a growth channel strategy tactic that we haven't covered before in the podcast, which is something that I work on day- to- day over at Drift and Brianne built over at Zendesk, which is for startups program. So offering a discounted program and kind of operating as your own P& L statement within a company to drive early customers and their life cycle startups that are just getting started, that maybe can't afford a bigger, more expensive version of the product. So we're going to talk about how that fits into the business, like why it's a good growth strategy, what Brianne did over at Zendesk to build it out. I think we'll go ahead and jump in. So Brianne, why don't you give us a quick rundown of what the startup program at Zendesk look like and then we can start to talk through how you built it, things that work things that didn't.
Brianne Kimmel: Yeah. That sounds great. I'm looking forward to this topic. I feel like that's the one that hasn't really been covered yet. So it's really cool that we're going to have this conversation. So when I was at Zendesk, the startups program, it achieved a few goals. Firstly, as we were moving up market and thinking about transitioning from a single product to a multi- product company that ultimately turned into a bundle, realistically for startups as a company starts to move up- market, their pricing changes. It becomes more expensive for us. This was a way for us to offer a solution for startups that was within their budget and something that they could access the full benefit of all of the new products without necessarily spending too much. The other thing for us is we leverage the startups program as a way to launch into new markets. If you look at the types of companies that are most likely to use software, if you're expanding into emerging markets, that would be high growth startups that are interested in using the same tools that may have some brand awareness, or in some cases there may be a local player. And so you want to go in, in a more friendly way that's not head- to- head competition as far as saying like, we're the big guys coming into a new market. And so I found that the startups program was a great way to give back to new ecosystems and to build close relationships with incubators, accelerators, and VCs and other markets.
Matt Bilotti: And the startup program it's become more and more popular over the past decade. I know HubSpot is one that comes to mind that has built a pretty comprehensive program. What are some others that you've seen that are out there that seem to work well?
Brianne Kimmel: Yeah, it's interesting. I mean, when I think about startups programs, the closer you can get to core infrastructure and really tools that startups need to use every day, the better position you're going to be in. AWS comes to mind as being one where if you talk to startups, they're all using AWS and they all take full advantage of the free credits. I think one of the criticisms that that program has is sometimes it's hard to know exactly where you're at and in the life cycle of those free credits and it can become really expensive quickly, but for startups that are getting their business off the ground, AWS is the obvious decision. And so their ability to offer free credits and programs and education has become a very valuable asset to their business.
Matt Bilotti: Yeah. And for us here at Drift, our core thing is we have moved more and more up- market. We started off serving SMBs, VSBs, very small businesses, and over time have built more and more enterprise feature sets. And for us, similar to what you were saying before about the product mix changing, we've been building more and more towards a platform that is a very high- cost entry point, but we want to have some protection towards the bottom of the market. And so that's how we think about it.
Brianne Kimmel: Yeah. That makes a ton of sense. That's something that we saw at Zendesk as well. It's like, the first question that you'll need to ask when you're building one of these programs is what is our definition of a startup. And for a lot of software companies, especially if you're starting with more bottom- up adoption, Zendesk has done incredibly well with small businesses, solo founders, smaller e- commerce companies, maybe they're built on top of Shopify. The challenge there is that if they're not the type of startup that's going to experience some level of hyper growth mode, then it doesn't necessarily become a startup account that will ultimately convert to a paying customer. And so I oftentimes encourage startups to ensure that there are guardrails in place. Oftentimes it's a 12- month program, or maybe it's some sort of credit system where you make sure there is a path to converting this free user to a paid user. Yeah. So I would love for this episode, let's get into some tactics here so that people can listen and say, we want to start one, how should we think about it? So what you said is it's important to make sure that you're clearly defining what a successful startup looks like and what the fit is, how did you approach it and how would you recommend somebody also approach it? Is it like dig into your numbers and look at who has grown? Is it look at the existing market and who is down playing at that price point? What's the approach?
Matt Bilotti: I'll explain it in two ways because I think it's an important context. If you're a company that has product market fit that maybe started as more of a bottom- up SaaS company and you're starting to move up- market, the startups program there, and a lot of ways is the defensibility play, it's a way to continue to be relevant with early- stage companies and to make sure that you are partnering with companies that are likely to scale into really large accounts. I have this saying that once a software company is 10 years old, they are ripe for disruption. I think even in this environment there are so many new companies that are getting started. And at the seed stage, I see this a lot where many companies, good ideas come in bunches. And so you'll see a handful of companies that are largely solving the same problem with a relatively similar solution. And so I find that the startups program can be helpful for the category creator or the market leader to really stay relevant with early stage companies and make sure they don't miss out on the next big Uber, Airbnb. You want to capture those companies when they're really small because if you have great retention, which that's what all of us aspire to have in SaaS, then you want to make sure that you're getting them when they're a handful of seats or a really small account, and they can grow into something much bigger. For startups that I'm seeing today. I mean, I'm seeing startups programs from even seed and series A stage companies. And so I think this has become sort of the new normal for software companies. For those companies in particular, something that I see that's really awesome is the fact that because you are going to market as more of a peer, the nice thing there is that you can build out a lot of life cycle programs and education for your users that are more pure levels. So a great example of this is I've helped Notion get their startups program off the ground. What's awesome about their program is that the ability for Notion to share how they use notion internally is actually a really compelling value prop. I think there's a lot of mystery around the company and a lot of other software companies would love to learn how they think about design, how they think about documentation internally, how they think about a lot of different aspects of the business. And so if each team open- sources or shares their documentation on Notion, that's a huge value add to the ecosystem and startups are likely to adopt that product because they received so much education upfront. So Let's talk a bit about goals and the mission of a startup program. So off the top of my head there's a few core benefits that you can get out of it. One is amazing net retention numbers because you'll get expansion from that. It could be a pure revenue play, just drive more business at the bottom market. It could be a defensibility play. It could be a brand awareness play. It could be a lead generation for mid- market type play. How do you think about if somebody is spinning up a program? It's easy to get lost. I know in the early days we were kind of lost and like, what's our goal? Oh, it's kind of all of them. They're all good things that we get as a benefit. How would you think about prioritizing that and getting a company to think about we should approach it in this order and here's why. It's a great point and it's something that comes up consistently with companies as they're thinking about the zero to one for a startup program. It's interesting in the early days when we were looking at Zendesk and all of the existing content and resources and things that we had already that were pretty much already tailored for startups. For us, it was maybe less of a brand awareness play and more of measuring program adoption. I think at the end of the day, if you're building a SaaS company there's always this tension between sales and marketing, and that's very natural. And so I find on the sales side of things we opted to have SDRs and a pretty lean scalable way of closing startups accounts, just because they are going to be higher velocity, and you do want to have metrics in place where we wanted to look at what percentage of startups that were signing up for the program were venture backed startups. That gave us a nice qualification model, where we had more conviction that these companies would scale into larger accounts. And so I think many of these startups accounts can be treated differently. Some may come through just pure play self- serve funnel, other may need their own life cycle programs, or even we would do weekly, monthly webinars to get a group of startups that were in a similar stage or similar category onboarded at the same time. And so I think the key thing with the startups programs is making sure that a lot of the things that you're doing are programmatic in a lot of ways. That way you're not too reliant on the sales team, because at the end of the day they are typically starting out with a discount or free for awhile. And so I've found that if you can measure adoption of the program, if you can measure account expansion over time, which sometimes those metrics can take a little while. And so it does tend to be a little bit more of a lead gen motion if there may be growth stage startups or just pure play startups that are going through the self- serve funnel at the very beginning. So we're starting to lean into some things that work well and best practices. Can you talk through maybe one or two things that you did at the program that were like, this was a big win. It worked really well for us building this out.
Brianne Kimmel: Yeah. I would say if the objective of the company, this is part of the growth team and this is meant to be something that's scalable and that's tied into growing revenue of the business, I think then the program is built in a very different way. I've talked to startups where it's purely a brand awareness play. I think one of my concerns there is that it's less measured. We've all worked with startups before and they need a lot of help. And so it's one of these things where if it's more of a brand awareness play, it can be a little bit harder to measure exactly what are the inputs and outputs of this program? Are we creating too much content? Are we speaking at too many events? I think this is very similar to, in a lot of ways how developer tools go to market, where I talk to large companies. If you look at the Microsofts of the world, they're developer evangelists, speak at a lot of conferences, they do a lot of webinars, they're doing a lot of more brand- building activities because the business is in a really good place. I feel like startups don't really have the luxury of doing those sort of things. If anything, they'll have to really map out, what does the startup user journey look like? And in a lot of ways, one mistake that I see a lot of startups make is you have to make sure that there aren't any leaky buckets with a startup program. You need to make sure that you're tagging these accounts accordingly. You want to measure exactly how many human touch points are attached to each of these accounts. Because if anything, you want to make sure that this is a program that adds a lot of value. It doesn't necessarily complicate your go- to- market or become something where it's more of a line item and more of a cost as opposed to being something that's generating new revenue.
Matt Bilotti: Yeah. So I would love to get your take around resourcing and the approach to putting team behind it. So, when we first launched the startup program at Drift, it was like a thing that we did mainly for brand awareness. We did it in 2018 and then it just sort of existed in the background of our company for a while. There wasn't anybody thinking about it day- to- day. I think it seems to happen with some startups or companies that get excited about a startup program. They go launch it and then it just sort of exists. How do you think about resourcing in ways that make it successful? Maybe what was the team behind the big Zendesk? How did that team build over time?
Brianne Kimmel: Yeah. It's a really great question, and it really depends on the size and stage of your company. I will say that the first iteration of Zendesk for startups was an experiment that was born out of our growth team. And it was primarily a landing page experiment with coupon code. And so we had this promo code and it was this program that was quietly running in the background. However, we reached this inflection point when we started thinking about competition and we were seeing things like, Freshworks was doing really well in India. We saw programs like Front and even inaudible to an extent. We're starting to take some market share. And so there was a company wide decision where startups need to be a priority for the company again. I think when you're just getting started, startups have the benefit of selling to other startups. Historically that's just been based on close proximity. The Bay Area startups like to try each other's companies, same goes for Boston, same goes for New York. I think now that we're in a fully distributed world, I think there's even more pressure to have a startups program. And so that's something that I think a lot about where, if you want to start with a very scalable V1, it may just be a landing page experiment where you're starting to test more startups, specific messaging, you're including relevant startup logos and figuring out ways to accelerate startups through... Even at the start, it could just be through your self- serve funnel. And so that's one way to think about it. The decision to have more of a GM structure, which would be like a head of startups, which can be a lot of things to different people. Oftentimes it's someone that's more of like a revenue- minded business focused person. They're going to be coordinating with marketing and sales. In our case, there was a lot of international components as well. And so we were plugged into our field marketing reps as well, and also partnering with GMs and new markets to make sure that they had the adequate resourcing translation, even in- person programming to ensure that startups in their regions were all using Zendesk. And so I think there's a lot of ways that you can think about structuring it. It typically depends on the resources that you have. But I would say, I mean, specifically when you think about SAS in particular, I think from a product led growth standpoint it's great to have either a growth engineer, a growth marketer or someone that's really helping you map out each step of the funnel, just to make sure that you're not necessarily cannibalizing growth for mid- market and enterprise, at what point is a startup no longer a startup, and really figuring out is there repeatability in the model? Especially if you're thinking about international, I think translation is something that comes up a lot when I talk to teams that are building startups programs. And so I think it's also being very clear and intentional on when you plan to expand into new markets, because now we're starting to see Silicon Valley isn't the only place where people are starting SAS companies. And so I think there's this pressure to go as international as quickly as possible, but I think keeping in mind, how do you do that in an intentional way where you're not necessarily going out with something that doesn't meet your quality bar in your home country. When you think about all these things that it can impact, international expansion, there's marketing component, it may touch a high velocity sales type component. How do you think about reporting structure of who owns the startups program? Have you seen a best case is under marketing, or a best case is under sales. How do you think about that?
Matt Bilotti: Yeah, it's a great question. It depends on the structure of the company. I find for more bottom- up SAS companies sitting within product can actually work well as well. If you already have a growth team's net that's established, you may have a growth PM that's dedicated to the startups program. And that scenario you'd likely want to have a content marketer, maybe this is a dotted line and it's someone that technically sits in either product marketing or in marketing, someone that really builds out a lot of their life cycle programs and make sure that startups are receiving the right education at the right time, that's going to make sure that you have strong engagement and strong retention, and that's something that's important for startups. I also find that this a little bit harder to execute. I find that with customer success, CSMs like to hit a very specific number, however, having a dedicated CSM, that things more programmatically that wants to take on a large volume of accounts That was really critical in the Zendesk case, because as we were transitioning from a single product to multiple products, a lot of startups were aware of Zendesk as the ticketing software, but they were less familiar with the new products. And so, at least having the ability to set up a 15- minute call, we're using all the tools, we're Calendly, where we're automating as much as possible to make sure that startups did have access to a CSM. However, it wasn't the same level of support that you would get with a mid- market or enterprise account.
Brianne Kimmel: Yeah, makes a lot of sense. In terms of pricing and packaging, how often should the pricing and packaging change, or what is the approach to... Over the past couple of years, in the startups program, we've changed the pricing and packaging three times, and it was kind of a function of how is the rest of the business and product shifting and how do we continually realign with that? Is that how you would approach it like, watch the rest of the company and realign, or is it like do pricing and packaging in your own microcosm? Yeah, it's interesting. I go back and forth on this. I think for the startups accounts because they're growing very quickly, oftentimes if you start with a free trial or if you start with something that enables as many people to use the product inside the company, that's helpful. You see some of the network effects that are starting to happen, starting with an individual user who maybe they've discovered through a friend, maybe they've discovered it from another startup that's tweeted about it. There's so many ways that people discover new tools today. What's interesting is if there are ways for you to find the right initial entry point and then have an initial trial or some program in place where as many people are using it as possible, you can start to actually measure and track how your software specifically spreads team by team. And so I think that can be a really compelling thing. One thing that I encourage a lot of startups to think about is find moments in the product where there is a lot of friction. And in a lot of ways for self- serve products today, like you'll see a lot of SAS companies are using a lot of templates. They're actually baking in suggested templates, even in the onboarding flow. And the reason for that is if you can identify which teams are most likely to use your software, you'll be in a really great position for opening up the full breadth of your product in a short amount of time and get as many users as possible within the company to try it. And so I think it's a question of how do you think about growing each account from the beginning, if you're going more horizontal and you're starting more bottoms- up. I will say there's a misconception that startups aren't able to pay for software. I think if we look at the startup environment today, companies are raising bigger and bigger rounds and they're raising funding rounds faster than ever before. And so a growth stage company is very well- capitalized. And if anything, this is where it creates tension internally because for the sales team they would love to convert these accounts to paying customers as quickly as possible because they're at that inflection point where, I'll use Hopin as an example. I'm an investor in a company called Hopin, and they have been around for two years and they already have 820 employees. And so if you're a SAS company that's trying to sell to a company that's in hyper growth, the sales team is going to want it to convert that to a paying account really quickly, because it doesn't matter how long they've been around. What matters is there's a lot of seats at stake. And so that's something to keep in mind as well as there may be some scenarios or some outliers where, whether it's you set a maximum number of seats or a maximum amount of time that you can be on the startup program. Having those guardrails in place are important because once you have pricing and packaging in one place, it's hard to charge more. And so that's something where I think it's helpful to do some willingness to pay tests, even for startups, just to get a sense for what tools are they using already, what's their overall software spend, and then you can sort of map, like how many employees do they have today? And even asking them, where do they plan to be in the next 12 months to get a really strong sense on per startup basis how fast they're going to grow. You touched on something really thorny in there, which is around the relationship with the sales team relationship to the startup program. I've talked to some companies that have very successful startup programs and chatted with a couple of their reps and they're like," I hate the startup program. It always gets in the way of my deals." What are some things that you would say are tips or advice for maintaining a good relationship with sales over time? Yeah. It's so funny, Matt. I hear this all the time. I think oftentimes the startups that I'm talking to, they're just shy of hiring a go- to- market leader. And so oftentimes the startups program is build out of a sense that when you're building a startup you know a lot of other startups. And so you're creating a lot of content that are helping peers, that are helping your early customers. Naturally as the company starts to scale, you start to layer in more of the go- to- market org. What's interesting is I hear this a lot because oftentimes when startups are thinking about building a startup program, it's pre go- to- market market leader. So they'll end up building a program, maybe you've created customer stories or you've built out email nurture programs, you've done all of the things in a really good place. Oftentimes the first thing that a go- to- market leader wants to come in and rethink or evolve and build on is pricing and packaging, because oftentimes you are leaving money on the table, and a lot of startups come out the gate being really helpful and being really nice. Oftentimes when I talk to teams, it's not built on necessarily insecurity, but I think oftentimes when you're just getting a business off the ground, you want to be as helpful as possible and you treat each startup or each account that you close as one that you can't lose. Like, at the very early days, even small startups can be your whales. And so as you start to scale, what's interesting is when go- to- market leaders come in, oftentimes the first question is what are we going to do with this startups program? I think this is where we've started to see, I mean, at Zendesk, we saw this as we started to roll out our bundle and as we started to change our pricing, there were increasingly restrictions that were put on the program, not necessarily ones that would cannibalize growth, but ones that would optimize for expansion. I think that's important, where you still want to have some sort of free trial or some sort of free program to get startups, at least trying your product. And then from there, having the right team structure in place where you do have CSMs in place that are able to really mine each account and figure out how to expand it over time.
Matt Bilotti: Yeah. And for me, the way that I think about... we still have a long way to go to continue growing the program at Drift. To me it feels like the best way that we can stay aligned with sales is to prove to them that these are going to be good accounts that will expand, that will get put in your name as they grow, and they will basically show up as free expansion revenue for you over time.
Brianne Kimmel: Yeah. Absolutely. There's a few interesting anecdotes here as well. One thing that we saw at Zendesk was by having large penetration of startups, by having mind share with early stage companies, this was actually really helpful for us in mid- market and enterprise. If you look at many, I'll use e- commerce as an example, if you look at large retailers, they're looking to direct consumer brands to reimagine the customer experience, to think about brand- building and how they interact with our customers. And so there was an interesting moment where we realized actually that the startups program isn't cannibalizing mid- market or enterprise necessarily. As long as you have the guardrails in place, what we're seeing is that those accounts, it's low cost acquisition. We're not acquiring them through paid ads. We're not acquiring them through expensive field marketing events. We're acquiring them in a really efficient self- serve way. We're converting them to paying customers. And then we're turning those startup customer stories into basically stories that we can share to mid- market and enterprise knowing that they look to early stage companies for innovation. Yeah. I love that. You helped with the program at Zendesk, and now you've advised a bunch of other companies on how they can spin up a startups program. Are there any key things that you say now like, if I were to start it over again, I'm going to make sure to know about this thing or look out for this, or put this in place early. Yeah, I would say the biggest thing is these sort of programs have compounding advantages. And so when it comes to creating customer stories, hosting webinars, I feel like in a lot of ways, startups or companies that are building startups programs are already sitting on a lot of information, on a lot of assets. And so I will say that a lot of the education and emails and things that we use to get the startups program off the ground were not necessarily brand new. A lot of it was just slightly changing the copy to being relevant for startups. It was leveraging existing stories and programs that we already had in place. And it was really packaging it up in a way where we could take it to startups directly through our self- serve funnel or strengthening our relationships with the YCS of the world to make sure that we were at least present in any of the directories where incubators, accelerators, VCs are offering free startup promo codes and that sort of thing.
Matt Bilotti: Anything else that you haven't had a chance to touch on that you want to make sure that we share before we wrap up?
Brianne Kimmel: Yeah. I think the international piece is really interesting. I'm very much a remote work nerd, and so I get really excited when I see companies that are innovating in new markets. One thing that I've seen that's worked really well is these startups programs can be a really relevant way to break into a new market. It's an easy way to, like using VCs and accelerators to identify what are high growth startups in new markets, how do we close some of the highest fastest growing startups in different countries and how do we use that as a way to really build brand awareness and to build credibility in a new part of the world? I think that's a really interesting piece and something that I've seen a lot of startups do really well. One thing that I will encourage teams to think about is try to do this as efficiently as possible rather than hosting a big event or putting a lot of physical resources behind it. Oftentimes one customer story from a really high growth startup in the right market is enough to get started. I find that with a lot of these things. Historically it seems like a lot of startups programs have been more of a mix of maybe field marketing plus business development plus, plus, plus. That's why I mentioned, having this start as more of a growth experiment and then scale into something that's more product led I find to be more beneficial, it's highly efficient, it's scalable. I find with startups you really only need a handful of the best logos to really prove that you're able to not only partner with startups, but scale with them over the long- term. And so that's something that I think about a lot as well, is like, how do you do this in the most product- led and capital efficient way, especially if you're an early stage startup getting this program off the ground.
Matt Bilotti: Good stuff. Brianne, thanks so much for talking through all this. This has been great.
Brianne Kimmel: Yeah. This has been a ton of fun.
Matt Bilotti: Yeah. I want to make sure you get a chance. You're working on Worklife Ventures these days. Do you want maybe just give the audience a quick rundown of what that is?
Brianne Kimmel: Yeah. Sure, of course. Yeah. So I started Worklife Ventures back in September of 2019. SAS focus funds. I was an early investor in Webflow as an angel investor. Worklife is invested in Hopin and public and clubhouse. And so we're really thinking about how do you make work as creative and flexible and more human as possible. And so we invest in a lot of bottom- up SAS companies, and it's been really fun. I think building the startups program was honestly one of the inflection points that made me realize that I wanted to start investing. It's kind of a non- obvious way to get into venture, but as I was building the startups program, meeting with VCs. I had the opportunity to work with STATION F in Paris and got to spend more time in regional startup ecosystems. And so I feel like it's one of these things, once you catch the startups bug, you either start advising or in my case, I started angel investing and then I raised a fund, but it's been a ton of fun helping companies with early go to market. I love building self- serve companies. And so it was great to catch up with you. I mean, Drift is a company that I've admired for a very long time. I think you've done an amazing job on brand- building and really re- imagining how do you think beyond traditional B2B marketing? I think in a lot of ways, I rarely see lead gen forms anymore or the old school way of doing things, and I think Drift has really written the playbook in a lot of ways.
Matt Bilotti: Awesome. Very much appreciate it. Thank you again for joining. It's always a pleasure to talk to you and I appreciate you spending your time here.
Brianne Kimmel: Yeah, this is great. Thanks again, Matt.
Matt Bilotti: Absolutely. And for all of you listening, thank you so much for tuning in. If you like this episode, hit the subscribe button and check out the other episodes that we've got in the library. There's tons of good stuff in there. Leave a review if you're a fan. And as always, thank you for spending your time here listening. I know there's tons of other things you could be working on, doing, watching, whatever it might be and you're spending here listening to this podcast. Well, I super appreciate it. My email's matt @drift. com. You get any feedback, topic, ideas, guest ideas, whatever it might be. Thank you, and I'll catch you on the next episode. Bye.