Kyle Poyar (OpenView): Top of Funnel for PLG
Blake Bartlett: Coming up on today's episode of BUILD.
Kyle Poyar: The problems might not feel like they relate to ROI, or they might not be the biggest things that you can build, but there's a lot of people out there that have that problem and that are actually able to bring your product into their organization.
Blake Bartlett: Today on BUILD, we're bringing back my partner, Kyle Poyar from OpenView to talk about the starting point of all, go to market strategies, top of funnel. In traditional SaaS, the top of funnel playbook was pretty straightforward, maximize MQLs through a ton of blog posts, a bunch of lead nurture email, and scanning as many badges as you possibly can at in- person events. And when that needs more juice, just add outbound SDRs to do prospecting into your ICP. But in PLG, top of funnel is way more challenging because you're going after a different persona, the end user first, and not necessarily the executive buyer first who controls the budget. And going after enterprise end users is much more like going after consumers, so many of these traditional buyer focused top of funnel channels don't translate to this new PLG context. So what channels do work and how do you get those channels to perform in a PLG model? This is the exact problem that Kyle has been leaning all the way into recently in order to help PLG founders and growth leaders develop the new top of funnel playbook. So grab a notebook and get ready for pro tips on things like how SEO is different in PLG versus traditional SAS, how to identify non- obvious viral loops in your product, and since everyone's talking about it today, community driven top of funnel and how to make that work for you from a lead gen standpoint. All that and more on today's episode of BUILD, so let's dive right in with Kyle Poyar. Maybe as a starting point, Kyle, what is the problem that PLG companies face when it comes to top of funnel?
Kyle Poyar: Well, as a starting point, scaling a PLG company, especially in the early days is extremely challenging. And we see products at those companies actually grow slower than their peers to that first million ARR or first couple million ARR. And the challenge is the funnel. You're having to attract a lot of users. A subset of those might sign up for your product, a subset of those, normally in the single digit percentages, convert to paying customers. And those folks normally convert initially at small deal sizes. Calendly as an example, which is a portfolio company of ours, you can buy Calendly for as little as$8 a month. So it just takes a lot of users getting to your website and then going through that journey and you can't spend a lot to acquire that traffic. And so if you don't have a whole lot of brand awareness, if people don't even know about your solution, maybe you're in a new category, kickstarting that PLG flywheel can feel extremely daunting for a founder. The other thing that I would share is what we're used to in terms of marketing for a software company, what PLG companies run into is that just doesn't work nearly as well for those businesses. So we might think about highly curated account based marketing to our ideal customer profile, or trying to find ways to reach an executive buyer within a large company. Well, in a PLG world, there might be thousands of people within an enterprise who could sign up and try out your product, and there's a great blessing or opportunity in that, but also a challenge in that it's hard to target those folks and a lot of what you might have done in the past, for instance, outbound calling just can't make the math work for a variety of reasons, and so that's something that I think we're going to start seeing the rise of product- led marketing or people really rethinking how they market to generate growth.
Blake Bartlett: It's a chicken and egg issue. And I know talking to early stage PLG founders, I hear this a lot as well, which is all the advice that I'm hearing and reading online about PLG presumes that the flywheel is already spinning to a degree. Currently I have a great product and the flywheel is not spinning, so how do I get it started? And a lot of times it's get lucky, have a great product hunt launch, hit the right vein at the right time and boom, you go viral, but trying to get lucky is not a strategy. So I guess with that what do you see as being the core pillars for how folks should think about breaking down this problem and approaching it from the right way, if the traditional means don't really work, what's the mindset to have here?
Kyle Poyar: The two steps that we see most effective is just really think about building for the end user, and I'll unpack that, and then building to be discovered. So on the building for the end user piece, this is actually solving for end user specific pain points, so things that your end users experience that pain so viscerally that they're going out and seeking solutions to their problems. And that allows you to be found by a lot more people and for those folks to really drive adoption from the bottom up, because they've raised their hand to try out the product and then they become that evangelist internally, but it turns out end user pain looks really different from executive or buyer pain. If you talk to a sales leader, for example, they care about managing their pipeline or managing rep productivity, getting more reps to hit their quota. The rep just cares about the pain of the back and forth of scheduling meetings or how annoying it is to have to update their notes and put them in Salesforce at the end of every weekend, and that might take hours out of their week, hours away from being productive, and so the dynamic is that end users go out seeking solutions to these everyday problems. And the problems might not feel like they relate to ROI, or they might not be the biggest things that you can build, but there's a lot of people out there that have that problem and that are actually able to bring your product into their organization. So if you start with that end user mindset, that actually opens up a lot of opportunities to go to market and get users to find your product. So that gets to this point around building to be discovered. And when we think about building to be discovered, people discover products through Google, going out searching for solutions or from word of mouth, hearing it from colleagues or people that they trust. And when we're thinking about Google, you really need to put yourself in that user shoes, what are they searching for when they experience a problem? They probably don't search for the solution or your software category. They might not even know that software exists to solve for it. A great example that I really like is Zapier, which is an app to app integration platform. You can use Zapier to connect all kinds of workflows and there's great enterprise stories for Zapier, but their user probably isn't searching I'm looking for an app to app integration platform, software company. They're probably thinking more tactically of, Hey, I've got a contact in Typeform and I want to send inaudible so I can market to these people, how do I do that? And so you're going to go search for that in Google. And Zapier actually will get found because they built out landing pages for every app to app connection that they support, as well as the specific nitty gritty workflows that individual users have in mind. And so you can read about that workflow and then just start trying it out to solve your problem just straight from the landing page. It's super simple, super easy, and it allows Zapier to get discovered and then earns the permission from the user to go deeper to solve more problem.
Blake Bartlett: What I'm hearing through clearly in how you're describing it, it comes to me as it's really the full empathy. It's not just appreciating who the person is and who their problem is or what their problem is, but it's also how do they find solutions to their problem and continue a journey from there. And so that's what I'm hearing coming through, but if you don't start in that right point, if you're solving for the wrong person, or if you understand their pain or their discovery process wrong, you're not going to show up and you're not going to be discovered and you're not going to be founded, and so this is all super important foundational stuff out of the gates.
Kyle Poyar: Exactly. And I think what's great is that it starts to connect marketing with the product itself, because you're thinking from the customer's perspective about what are they trying to do and your product or really tools are superpowers, but the customers are coming to you for the tools, they're coming to you to solve the solution or what they're trying to do. And I think I used an example of Zapier. It's a product that a lot of folks in the tech world use and love, and what's fascinating for me is seeing these kinds of product- led marketing examples pop up outside of traditional industries, because it doesn't just work when you're selling to a highly sophisticated tech audience. And one example is SafetyCulture, which is an Australian company that sells primarily to blue collar industries. So construction, transportation, manufacturing, you name it. And the solution is, as you might expect with the name SafetyCulture, a set of safety inspection, checklists, and other tools to make sure people are compliant and doing the right things on the job. And they've realized their buyer isn't necessarily just out searching for safety checklist software, but they've got an everyday job to be done, they've got a food safety inspection that they have to do because they operate a restaurant, or a light vehicle safety inspection because they operate a transportation business. And SafetyCulture actually has a library of almost 100,000 different checklists from really commonplace ones, like a first response incident, to really highly specific ones. And the fascinating thing is you can learn where you see the best traction and rebuild for these audiences. So if you see a lot of appetite from folks using these free products and then having high conversion rates or having high retention rates, you can really double down on these opportunities and you can also take your successful customers who found you and really understand what they're using your product for, and then build templates around that or recipes around that to find more customers like that first customer that you found. And so it's both a great way to find more folks, but then use your existing customers to pattern match.
Blake Bartlett: With the Zapier example and the SafetyCulture example, we're getting into some of the specifics on that second pillar you mentioned, which was building to be discovered because end users tend to discover products as opposed to go through a traditional evaluation process or procurement process to get a product. And so unpacking that a little bit more, what do you see for product- led growth businesses? How do you get discovered? We translate it into specific channels or specific strategies. What are the things folks should focus on that they can bring into their own business?
Kyle Poyar: Great question. SEO or organic search is far and away that top lead source for the average PLG company. This isn't paid search. You're not advertising, you're not spending money on a cost per click basis, but you're getting discovered when people are going into Google. When we look at standout PLG companies, about 40% of their new user comes through organic or SEO, and then the next set of channels or areas to be discovered, it's a longer tail and they're really productive for some companies and less productive for others, but you're looking at things like product virality, community led growth, especially amplifying word of mouth and referral dynamics, and then partnerships and marketplaces to be discovered in the context of an existing workflow. So if your customer is that Shopify merchant, odds are they spend a lot of time in the Shopify app store and the Shopify community, and so you can get discovered in that context rather than creating a new workflow for your customer to discover.
Blake Bartlett: So breaking each of those down, SEO, we talked about Zapier and the Zapier user journey experience, but if we take that or if we take other examples, what are the SEO best practices that PLG companies should consider?
Kyle Poyar: I think the first thing is really focus on those longer tail searches rather than just the most common traffic drivers. So you want to be discovered based on what your user is trying to do, and it also turns out for PLG companies that's a wide variety of things, rather than just one thing specifically. The campaigns that I like, so templates work really well, or essentially recipes you can think of these as building landing pages for each of these jobs that your user is trying to hire your product to do, and so Zapier and SafetyCulture are great examples of those. But then when you're thinking about content, product education or how to content tends to work really well. And so in a developer context, that's often your documentation and your docs can be a much more powerful source of discovery in your product than you can expect. I still see some companies that hide their docs or don't make them accessible via SEO, and so there's so much that you're missing out on in terms of organic traffic by distributing there, but you can also look at products like inaudible, where it's a tool to essentially do better SEO, which is it's extremely meta, and build, write content about how to do keyword research or how to optimize your SEO. And they do it essentially walking you through how to use their product to get this job done that you're trying to accomplish. So it's extremely tactical how to and dog foods the product in the context of their marketing. And so that I think is a great way of connecting both what your user is trying to do with how your product provides a great way to do that.
Blake Bartlett: So what I'm hearing there is, first and foremost, across all those examples, focus on and embrace specificity. And so this idea of specificity plus actionability really seems to be the key to this product- led growth SEO strategy.
Kyle Poyar: Yeah, I would absolutely agree. And I'd encourage folks who might not even be thinking of themselves as PLG that there's actually opportunities here for you too. So one really tactical example is have you built the RFP template for your product category? Because a lot of times people are going out and searching for an RFP template for category X, and so you can actually teach them what they should be looking for when they're evaluating different products. Of course, you would highlight things that you're strong at and maybe competitors are weak at, and you might find that folks, especially individual users, are going out and using these and sending them back to you and then your best position, because they're already aware of your brand and they're looking for the kind of product that you've trained them to look for.
Blake Bartlett: So a whole different way to write the RFP. It's like literally here's the RFP you should use and that is a good way to front run writing it, so that's great. So going into some of the other top funnel tactics here, you mentioned virality, which gets a lot of attention in product- led growth, but I think it's sometimes certainly easier said than done, and there's a lot of what does virality actually mean, how do you do it, what does a viral loop in my product look like? What are some best practices or thoughts there on virality?
Kyle Poyar: It's a great question. And a lot of folks, immediately when they hear virality, think about products that can only be used collaboratively. So Calendly would be a pretty boring product if you were just scheduling a meeting with yourself, probably done it before, but those kinds of products are just inherently viral and they're inherently meant to be used in multiplayer mode externally. But a lot of products have opportunities for virality they might be missing out on, even if they don't see themselves as an inherently viral product. And so a Figma, for example, has realized that design is a process that there is a designer and they're a power user for a product, but design is inherently collaborative, you want to get feedback from product managers, from marketers, from potentially customers from sales and wouldn't it be great to have all of that feedback and that iteration live within a product rather than offline? And so Figma drives a lot of virality and growth within an account through collaboration features and commenting, editing feedback and so on. And you could also even think about word of mouth or folks showing off your product to other people, because they're so excited about it, as forms of virality. And so when I think about virality or if I were in a founder's shoes, I would think about virality as a set of two factors that ultimately ladder up to your K factor, which is how many additional users does one existing user bring in. And that is made up of two things, of invites or social exposure, so how many people does your existing user expose to your product and then how much of that can you convert into new users for your product? And then if you think from that vantage point, there's actually a lot that you can do that you might be missing out on. And so the steps that I like to think about are start by adding and promoting social features in your product, so creating a reason for people to want to bring other folks along, and this can be through, for example, highlighting milestones or events when someone has gotten success. So if you've gotten to a point where you've set up the product, you're starting to get insights back, you might want to share those insights back with your team, and you might want to push that out via Slack, for instance, so everyone in your organization can see those same insights and see that milestone. That's an example of a social feature that is part of just about any software product. You also want to think about removing friction that stops your existing users from being social, so for some companies you see that they have a self- serve product that can only be used in single player mode, you have to upgrade if you want to add more than one user, that's an example of friction point. Loom is I think one of my favorite examples here. Loom is a great PLG company in the video recording and async workspace. And so Loom, they used to have this notion of you were either a creator, which was paid, you could create video, or you were a viewer user, which was free and you could consume content, but that blocked that viral loop from happening because in order to actually start using the product as that new exposed viewer, you had to immediately pay for it. So they've introduced a new pricing tier called their creator light tier, and so their creator have access to actually invite people in their team to not only view content, but then start creating a little bit for free before they have to upgrade and pay for it. And so I think that you can unlock more virality than you expect just by removing some of those everyday friction points that stop your user from doing it. And the final thing I'd encourage folks to think about is adding social elements outside of your product. So TikTok, for example, it's a viral product through word of mouth and growth, but one of the ways TikTok goes viral is that people share TikTok videos outside of the TikTok app, and those all have that nice TikTok watermark, that ending video so that you know it was originated on TikTok and you go," What's this? Maybe I'll download this app." And so I've watched TikToks on Instagram. I am that kind of millennial, not quite gen Z, but I'm very aware of TikTok and constantly tempted to download it. And I think for a lot of software products, you have ways to add that kind of social exposure. You can have a watermark on your product so that your brand gets in front of other people. Bonus points if that watermark is URL enabled, so people can click on it and find you. But some of these things are small changes that you're going to make that ladder up to really big results over time.
Blake Bartlett: Well, I think that all of that certainly helps because I know a lot of questions that I hear will be, well, my product isn't Calendly, my product isn't Zoom and my product isn't Slack, so virality must not apply to me. But I think what you're showing is that there are certainly the obvious inherent viral loops like those types of companies and products, but even outside of that there are many, many viral loops that different folks can leverage within their product and within existing teams, as well as externally. So really great to add a few more arrows to folks quiver when it comes to virality. I guess moving to the next one, and you started to touch on it a little bit there with some of this external virality and social word of mouth, which starts to really edge into community. And so how do you see community playing a role in top of funnel for PLG businesses?
Kyle Poyar: Well, community's almost like a buzzword at this point. Everyone's thinking about it, talking about it, but you don't actually see a whole lot of companies successful with it just yet. The way I think about community is it's really virality that lives outside of your product by leveraging your product users to really hang out with other users, meet them either in person or online, provide support for those users, show off their work, teach people how to be successful, and if you're able to tap into that community, you can actually have your existing users as the face of your brand. It's fascinating to think about, we used to think about B2B brands as tightly controlled, these were things that were we wanted to have a really consistent message and story, and I'll be speaking from the same language, but in a PLG company, your users actually become the brand and they can become your best marketing asset. And so the goal is to find pockets of where that's happening and be able to amplify it. And so I think the best community strategies happen from the bottom up and the brand isn't necessarily trying to force fit community out of their product, but they're trying to partner with these users to give them a platform and give them a bigger voice.
Blake Bartlett: Definitely agree with the concept that community is a buzzword that everybody's talking about, but nobody actually knows what it is, and few people are seeing results with it, but there still is tremendous potential. So I think your idea that your users become your brand or become the face of the brand and you need to embrace it being decentralized and embrace it being both your team and your team's efforts, as well as everything the users are going to do, and that creates this distributed idea of brand through the community. And for more on community, there's a recent episode, we had Martin Gontovnikas, aka Gonto, going really, really deep on community and how to do it in practice, and so for folks that want to double click into that into even more detail, highly recommend you go check out Gonto's episode. And then, Kyle, last thing here on these pillars and these strategies that you mentioned. Around the idea of building to be discovered, one of the most obvious opportunities to me seems to be the idea of app stores and marketplaces, which you talk about as being partnerships and channels that you can leverage, so what does this look like in practice for folks?
Kyle Poyar: Well, a great part of building for that end user is meeting that user where they work and being essentially accessible within their context, rather than forcing them to have another tool to go to or practically seek out. And so it used to be like if you were a sales rep, you had to go seek out Salesforce, or if you were an HR, you went to Workday, but now with PLG products, you see products like Grammarly, which is a writing assistant, that just goes with you anywhere you write. If you write in an email, if you write in Google Docs or Microsoft Word, PowerPoint, it really follows you, and the great thing about treating your product as something that actually is super embedded in a customer's workflow and embedded in other tools is that you're able to distribute through those broader platforms where you live. So if you distribute, for example, as a Chrome extension, because your user wants to use your product on their browser, you can actually partner with Google and the Chrome extension marketplace as a great way to get your product found by other folks. If you find that your users often want to use your product on the go on a mobile device, for example, the app store is a really untapped opportunity for B2B products that not a lot of folks take advantage of. And we see these kinds of platform opportunities popping up not just with Google or the Apple App Store, but you could also think of it as the Salesforce app store, Slack, Atlassian, whatever broader platform your customer or your target user is adopting that really fits with the workflow of your product I think that you can find some really effective distribution plays by partnering with that broader platform.
Blake Bartlett: It also increases dramatically the chance of being discovered and you're covering all of your bases, so that makes a lot of sense to me. Last question for you here, Kyle. If we go back to where we started, which is PLG founders who want to get the flywheel spinning in the first place, where should folks start? If there's one obvious place to start that has the highest probability of helping to get that flywheel starting to spin, where should people begin?
Kyle Poyar: Well, all of these great ideas tend to fall apart if you haven't really built for that end user and you haven't been empathetic around who is that right end user, what is their specific pain point, what job are they hiring your product to do, and what does their life look like? What is their workflow? Where do they discover products? And so I would encourage folks to spend additional time on that user discovery. And if you've really nailed it, you'll see the results come through in all of these other steps. And if you haven't nailed it, then as great as you want to be around SEO for discoverability, it'll just fall flat because you're going after things that aren't really that important to that person you're trying to reach. One final thing that I'll leave folks with is that if you're thinking about how to measure the effectiveness of these things that you're doing, or hey, is this organic search campaign that I'm trying to build out, is this working? Don't measure how many people sign up for your product, measure activated sign up, so how many people sign up and actually do something of value? That's going to be much, much better for finding that right target user that is motivated enough to try out your product and see success with it, and it'll just get that flywheel spinning so much faster.
Blake Bartlett: Well, Kyle, this has been great. This common problem that PLG companies face, which is how to generate the top of funnel that you need in order to build a business that really at the end of the day is going to create a ton of value, which is not easy to do when you have folks that are oftentimes just paying a little bit and only a small conversion rate, and so how do you generate that top of funnel and then how do you ultimately make sure that it continues to scale over time and wrangle it once you do generate the top of funnel and route people into your product, get them set up for success and continuing on in their customer journey. So a lot of really great pro tips and strategic ideas for folks to consider here. Thank you so much for coming back onto the BUILD podcast and sharing a lot of your great PLG wisdom.
Kyle Poyar: Thanks for having me on.
PLG breaks traditional SaaS top of funnel. Why? Trusty channels like content marketing, email nurture and in-person events don’t translate to PLG. Kyle has identified what works for PLG leaders like Zapier, Figma and Calendly, and shares a new top of funnel playbook built for the PLG era.