Alex Bilmes (Endgame): Product-Led Sales

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This is a podcast episode titled, Alex Bilmes (Endgame): Product-Led Sales. The summary for this episode is: <p>Product-led sales is selling to companies that already use your product. How hard can that be? Very hard, it turns out. PLG companies need to think about sales in a fundamentally different way in order to succeed. Alex has dedicated his career to solving this problem, and he shares his expertise with us.</p><p><br></p><p>To hear this interview and more like it, subscribe on&nbsp;<a href="https://podcasts.apple.com/us/podcast/build-with-blake-bartlett/id1356321172" rel="noopener noreferrer" target="_blank">Apple Podcasts</a>,&nbsp;<a href="https://open.spotify.com/show/0sNdBa0Na1r675cHzhQJPz?si=b33bbdcf2c0744a2" rel="noopener noreferrer" target="_blank">Spotify</a>, our&nbsp;<a href="https://podcast.openviewpartners.com/public/32/OV-%7C-BUILD-21cbd466" rel="noopener noreferrer" target="_blank">website</a>, or search for BUILD with Blake Bartlett in your favorite podcast player.</p><p><br></p><p><strong>Mentioned in this episode:</strong></p><p><a href="https://openviewpartners.com/newsletter/#.YfRAM-rMIuU" rel="noopener noreferrer" target="_blank">Sign up for OpenView's weekly newsletter</a></p><p><a href="https://www.linkedin.com/in/bilmes/" rel="noopener noreferrer" target="_blank">Alex Bilmes, Founder and CEO at Endgame</a></p><p><a href="https://www.endgame.io" rel="noopener noreferrer" target="_blank">Endgame</a></p><p>Follow&nbsp;<a href="https://www.linkedin.com/in/blakebartlett" rel="noopener noreferrer" target="_blank">Blake Bartlett on Linkedin</a>.</p><p>Podcast produced by&nbsp;<a href="https://openviewpartners.com/" rel="noopener noreferrer" target="_blank">OpenView</a>.</p><p>View our&nbsp;<a href="https://openviewpartners.com/blog" rel="noopener noreferrer" target="_blank">blog&nbsp;</a>for more context/inspiration.</p><p><a href="https://www.linkedin.com/company/openview-/" rel="noopener noreferrer" target="_blank">OpenView on Linkedin</a></p><p><a href="https://twitter.com/openviewventure" rel="noopener noreferrer" target="_blank">OpenView on Twitter</a></p><p><a href="https://www.instagram.com/openviewventure/" rel="noopener noreferrer" target="_blank">OpenView on Instagram</a></p><p><a href="https://www.facebook.com/OpenViewVenture/" rel="noopener noreferrer" target="_blank">OpenView on Facebook</a></p>
Episode overview
01:00 MIN
Defining product-led sales, and how Alex's career path makes him well-suited to speak on the topic
02:03 MIN
Thinking about product-led sales for those who've built a self-service product, and how adding a sales team could drive higher velocity
02:53 MIN
Adding sales on top of a product that is incredible enough to attract and retain users, and different roles of sales teams
02:22 MIN
Blending sales and product specialist roles into onboarding specialists who can help customers navigate roadblocks and achieve success
04:07 MIN
Alex discusses differences between product-led sales and classic SaaS sales practices
07:50 MIN
Audiogram — Using data to identify your product's champions
02:30 MIN
Some risks of product-led sales
02:32 MIN
Where does it make sense and where does it not make sense to apply different levels of sales pressure in the customer journey
02:53 MIN
When and where to add product-led sales to a PLG company
07:20 MIN

Alex Bilmes: It's not always going after the virus, really going after the people that use love and are screaming about your product internally and externally as well.

Blake Bartlett: Welcome to BUILD, the podcast from OpenView. I'm your host, Blake Bartlett, and the show features conversations with software founders, leaders, and investors. Each episode unpacks a new key insight on how to build your company and navigate the fast- changing world of software startups. In today's episode, I chat with Alex Bilmes, founder and CEO of Endgame, and we're talking about product- led sales. From Alex's definition, that means selling the companies that are using your product. To me, that brought up a number of natural questions. Why do I need product- led sales if PLG is all about self- service? How is product- led sales different than regular SaaS sales? And what are the risks of product- led sales to watch out for? We unpack these questions and much, much more on this episode of BUILD. So let's dive in with Alex Bilmes. That's what we're talking about today. We're diving into product- led sales. So what makes you uniquely suited to speak about this topic of product- led sales and the problem behind it?

Alex Bilmes: I guess I would say I have approached it from every single way possible. I was a designer. My background, I used to call it building products that don't suck. Then I became a CEO of a startup called Reflect, had to figure out how to build the product and then sell, and realized the product itself was not always enough. Built a number of different internal systems and pissed off our engineers in the process because they had to build it as well as build the product. Was acquired by a company called Puppet, built out a new division there, and the product- led motion, which also incorporated sales. So just having gone through it on a number of different occasions, have learned a little bit in the process.

Blake Bartlett: So what is product- led sales, from your definition? How do you think about it? How do you define it?

Alex Bilmes: Yeah, so I think of it very simply. It's just selling to people that are already using your product. To elaborate on that a little bit, a traditional selling motion might be to go and reach out to somebody over LinkedIn or send them an email or 50 emails or however many it takes to get them on a call. But product- led sales really focuses on who has signed up for your product, what features have they used, how far along the customer journey are they? And then sales teams basically engage with those already active users. We have a joke at Endgame, which is if somebody signs up, they're already a customer, they just haven't paid you yet.

Blake Bartlett: So instead of convincing somebody to use the product, which was original sales, old school sales, they're already using the product and you want them to use more of the product, adopt more features, expand the usage across the organization. So you're selling to those folks that have already adopted, already using it, already getting value. How do we take it to the next level? Is that the idea?

Alex Bilmes: That's exactly right. In some cases, they're already using the products so successfully that all you need to do is ask them for money, and they're happy to give it to you, which is best case scenario, of course. But that does happen more often than you might expect.

Blake Bartlett: So I guess unpacking this a little bit, because obviously, what I talk about a lot and many folks point to is one of the starting points or at least a pillar or a cornerstone of product- led growth is the ability for somebody to start the journey, to get value, to even convert, swipe the credit card, all on a self- service basis. So without needing to talk to a salesperson. So why do I need to think about product- led sales if I've built a self- service product? What's your thought process there?

Alex Bilmes: Yeah, no, it's a great question. And I guess I would say it is not always enough. Maybe a self-service product gets you to five million in revenue, or 10 million or 20 million or 30 million or 50, or in some cases, maybe it's more than that, rarely. So in terms of my experience, at a certain point, you've got a great funnel. You've got great usage. Your ACV might be low. How do you really take it to the next step and go from a 10, 20 million, whatever it is ARR business to a high velocity, go- to- market machine that gives you the ability to become a publicly traded company and continue growth. So the other thing I would say is if you look at public companies such as Zoom and Slack and Datadog and MongoDB, they all have sales teams and the answer is simply that it works better. If you add sales, you typically drive a higher velocity motion and have higher ACVs, and you make more money than if you don't. So I guess, do what works.

Blake Bartlett: Yeah. The way I see it, as somebody who works with startups from the investor side and sees lots of PLG businesses, both through the ones that we invest in as well as just observing all of the public companies that the rest of us do, you see something that plays out, which is once you've gotten to a level of success as a PLG business, the thing that got you there won't necessarily be the thing that gets you to the next level of success, once you're at scale. If I think about it, even if you have the most beautiful self- service product of all time, you get 250 million of ARR, 100 million of ARR, whatever scale means for your business, at some point, credit card swipes aren't going to continue to drive the top line growth that you're looking for. And that's especially the case, I mean, if you fast forward all the way to massive scale of a PLG business, you can look at an Atlassian or a Twilio, or these types of businesses that are now at a billion dollars of ARR to move the needle, to keep driving growth. You need that foundation. That's a really good place to start with the self- service, but you got to start layering other things on top in order to move the needle. And sales is one of them, whether people call it embracing the enterprise and expanding and extending to the enterprise, or if they call it sales or product- led sales, that certainly is one, the proactive effort, along with other channels as well. But, that's what I've seen time and again, and like you said, I mean, look at any large at- scale PLG business that's public today, they all got a large sales team and they don't really look that much different once they're at scale. So it's an inevitability, is that the way to think about it?

Alex Bilmes: Yeah. I mean, very simply put, we talked to so many sales leaders at all these PLG companies that you're probably very familiar with and the typical responses, listen, we tried without sales and then you add sales and the numbers are better. It just works better. No matter how you think about it or how you slice it, you add sales on top of incredible tailwinds that you've built by having a product that's incredible enough to attract and retain users, it is just dynamite. It works incredibly well. The other thing I wanted to call out that's maybe a little bit less obvious, it's a little bit more nuanced, is certain businesses just require more human input or interference. There might be certain business objectives that you have to better align your product to as an example, or you have to sell somebody because the implementation is bigger. Calendly, which I know you're very familiar with, is incredibly easy for somebody, anybody literally on the planet to go and sign up for. And you can immediately get value. You send one email with a Calendly link and it's done. There are certain products that just require a more significant preemptive investment, or at least an understanding that time and effort will need to be invested. I think one of the things that you and I have maybe talked about at some point in the past is say, Webflow. Webflow is great. You can sign up, you can try it out. You can experiment with it as just about anybody on the planet. But unless the marketing team, as an example says, " Hey, we need a new website, it's going to take a little bit more for somebody to go and figure out how to invest the time and resources." In those situations, having a sales team can be really helpful. Similarly, if you look at it in a slightly different way, somebody might sign up for a product, but it could get blocked by a security team or an IT team. So having a seller that's actually able to help build a business case for that champion to go take it to their teams internally can be incredibly helpful. So it really depends on the business. And I maybe am a little bit less of a PLG purist than most, where to me, it's a little bit of mix and match. It just depends on the business. Sometimes sales is really, really great to help untangle one part of the funnel, and sometimes it's acquisition, sometimes it's expansion, sometimes it's retention, even in cases. So I just think it's important to be thoughtful about what it means for your business versus what it means for everyone.

Blake Bartlett: Yeah. So we're highlighting a few different factors here. One is the company- specific, meaning the PLG company- specific dynamic, which is at some point, you're going to get to scale that you need to add other things like sales, like partnerships and channel.

Alex Bilmes: Correct.

Blake Bartlett: Like international, to keep moving the needle at scale. But there are other factors. It's not just once you're a big company, you need to grow up and think about sales. There are other things about the actual product itself, about the customer journey, that it might be more of a considered purchase. And that makes sense to me because you point to Calendly. I could point to other productivity tools and things that you can start using on your own, your own use case, and that's one thing. But when you go from that personal individual use case and that value to then, well, my whole team should be using it, or my whole org should be using it, or my whole company should be using it, that's not going to happen overnight. It's not going to be as frictionless to get from that first point to that next point. And if that becomes a considered purchase, you might need it. Or if like you pointed to, the product is a considered purchase out of the gate, it's going to take consideration. It's going to take help. People are going to have questions. They're going to have how- to questions, how do I do this thing? And they're also going to have capability questions. Do you have this security feature, or whatever it may be. So recognizing that being a purist actually limits yourself, and being more open and having that mindset of, " Well, we all want to get to the same destination, which is more people using this product, more people getting value out of this product, more people having success." We might have that PLG foundation, but how do we maximize on top of that foundation the things that lead to those desired outcomes for us as the company, as well as for the customer that's considering adopting?

Alex Bilmes: That's exactly right. And one other nuanced point is there's this new role that we see develop, which is really solving a lot of those problems that you just mentioned, which is maybe it's not even sales, but it's salesy. We see teams called sales assist teams that have product specialists on those teams and a blend between a salesperson and a customer success person, a proactive support person, and a load of SDR, how sprinkled in there, where you're really trying to unblock the customer from successfully completing and proceeding along their customer journey and therefore becoming very successful. And it's this weird amalgamation of these different skill sets that have been traditionally found in functions, but solved in a different way for a specific customer trying to do specific things within a customer journey, and being able to look at the product information that helps those teams make those customers successful.

Blake Bartlett: I love that you call that out. I am a huge fan of onboarding specialists. It's such a generic title-

Alex Bilmes: Yeah, yeah. Exactly.

Blake Bartlett: But generic in the sense that it can mean anything and it can serve that, whatever your onboarding needs, whatever your customer's need in their journey, the onboarding specialist can be there to provide it. And I do think this is an important distinction back to the self- service piece, if the onboarding specialist is mandatory and nobody can make progress without them, you're probably doing it wrong. If you can make progress without them, but then they're there to help on an optional basis, it's like a choose your own adventure. Oh, you want to go down that path? I'm here to help. Here's how you go down that path. Oh, you're running into this road blocker? Great, I'm here to help. Here's how you get unblocked. And it might entail a sales conversation or getting on the phone and something that's more human effort oriented, but it also might just be, " Look at this area of our help desk, or of our documentation. Look at this area of the FAQs." Those types of things as well, so that onboarding specialist really is a concierge to help the person on their journey.

Alex Bilmes: The optional versus not optional is spot- on. We see a lot of success within our customer base of onboarding specialists, as you described, or product specialists or advocates, we call them technical SDRs. But how do you do even things like send Loom videos uniquely for each customer, based on what they have seen that customer do within the product successfully or unsuccessfully? And those are really tailored and super helpful and very proactive. And there's a ton of engagement for that type of content, because it's optional to your point.

Blake Bartlett: Yeah, yeah. The goal is advancing everybody on the customer journey to the next step, as opposed to just qualifying MQLs, so they become SQLs. So yeah, I'm aligned with it. I guess unpacking this a little bit further, the compare and contrast, if we think about product- led sales, what does it look like in real life and how is it I guess, different than your classic SaaS sales? What are some of the biggest differences that you see?

Alex Bilmes: First off, the asymmetry between the size of the sales team and the size of the funnel or customer base, it's just crazy different. So you might have, I don't know, 10, 20, 30 accounts per AE in a traditional company. Maybe it's more, maybe it's less. It just depends. Now, recent comps, look at Miro as an example, they announced their funding yesterday or the day before, for 30 million users. So how many sales people do you think Miro has, and what is the coverage ratio in terms of how many end users or accounts a rep has to handle? It's insane, because you have this viral, organic, self- service usage that's just expanding. So first off, a rep just has to deal with many, many more accounts, significantly more. So the challenge becomes which one do I focus on, but not just which one do I focus on in general, which one do I focus on today versus say, tomorrow? Because there is so many of them that sequencing and prioritization becomes so incredibly important. So you're looking at what behavioral changes have happened in say, the last 24 hours? Were there 20 people using the product and all of a sudden, nobody's logging in, I should probably follow up? Or was it one person kicking tires, and all of a sudden, there's 30 people that just joined the team today and are doing certain things that we know are indicative of conversion as an example, and the propensity for those is super high, so I want to go and talk to them today while they're experimenting with this particular feature, this particular part of the product, or what have you. So a lot of it is much more timely relevant. You're looking at areas of change and you're looking at what's changed today versus what's changed yesterday versus what's changed this week, because a stateful view is just insufficient given the incredibly large number of users and accounts, and your brain just glazes over if you look at the same thing every day, and you don't really know where to start your day. So I'd say that's a big one. Generally speaking, obviously, the data that you have access to is so much more high- fidelity. You have a lot more color on the customer, not just what white papers they've interacted with, which is fantastic and everything, or what they told you or what you as a sales rep as an example put in into a CRM, which is all fantastic. But the true unlock is what are they doing? Who's doing what? So what are the accounts that are surging, as I mentioned previously, or usage is going down, but also who are the people in those accounts that are the people that you want to be reaching out to? So can you start identifying certain behavioral characteristics that are indicative of a particular user being a champion? One that we see very consistently is say, someone invites a lot of other users to the product. The person who's typically inviting everyone is the champion. They're the ones that are saying, " Hey, you should come check this out. I think this product is great. I think it's awesome. I think it's going to solve our use cases." So how do you identify that individual? How do you see what features as an example have been used, either by that individual... What if say, a buyer persona logs into the product? I'd want to see if I were Figma, say the VP of Design logging in and spending some time, that means they know the product. That means they're interacting with it. That means if I reach out to them, they're not going to think I'm a crazy person coming out of the blue, or just sending them an outbound email. So that behavioral data that is so timely, so temporarily relevant because it changes so quickly, is incredibly valuable and it's a huge unlock. And the last thing on that I'll just say is it makes it such that you can get a path as a salesperson to the right buyer, through the champion, even if they're not a product. So instead of reaching out to somebody cold, you can actually go to the person who loves your product and you can talk to them and you can get a better understanding of who in the organization you should be speaking to. And they might tell you that it's not the person that you thought it was. Maybe it's somebody else, or maybe the person that you thought it was is on paternity or maternity leave, or what have you. And here's somebody that's excited about this opportunity and is the right individual to be in contact with. So building those relationships by really getting close to the people that use the product, some reps have referred to it as going through the janitor. However you want to describe it. It's not always going after the virus, really going after the people that use, love, and are screaming about your product internally and externally as well, possibly.

Blake Bartlett: So there's so much brilliance in that. I want to unpack what you just said, because light bulbs are going off left and right as you're describing this, and as I rewind the tapes, if we just focus first on this coverage ratio piece, and this volume piece, rewind the tapes. Old school enterprise sales, an individual rep might have... I don't know, 10 accounts to really think about when they're all really, really big. And in some cases, I mean, true old school enterprise, you might have one account. It's just like, " I work this account. It's a massive enterprise. It's one of the biggest companies in the world. I walk the halls all day, every day. It's an eight- figure account. We want to get it close to a nine- figure account." I mean, it's like a sales rep could spend their entire career on one account. Maybe that's a little bit of extreme, but I think that one to 10 zone for the old school sales days of enterprise back when you're in the field was pretty relevant. And then you move to SaaS sales and everything's inside and everything's over the phone, and the deal sizes come down. You're selling ACVs to rent the software as opposed to these big CapEx purchases. All right, maybe now I'm owning 100 accounts, or maybe at the outsize, up to 1, 000 accounts and using a customer success tool or something like that, to just understand what's going on within my account base. But then you get to PLG, and you are no longer talking about hundreds or thousands. You're talking about tens of thousands of accounts or perhaps more that you might need to have visibility into. So that just becomes obviously, very unwieldy as you were pointing to. You can't know the names and faces and their birthdays and their favorite bottle of wine for tens of thousands of people, like you could in the old school days. So you have to rely on something else, and you're pointing to the fact that you have to rely on data and obviously lots of people point to data and the value of data, but here, it's specifically... Make sure I get it right, it's behavioral data. What are they actually doing in your product? And then how does that change over time? And if you see great behavior, and if you see it going in the right direction, that we went from five users to 15 users in a week or something like that, or the champion's starting to come into the account, those are the relevant changes in the behaviors that matter most that would indicate, " Okay, this one needle in this huge haystack of tens of thousands of accounts, that's who to call today, and here's why."

Alex Bilmes: That's exactly right. One of our customers calls us a needle finder, actually. So pretty, pretty spot on as a metaphor there. So that's right. The other thing to call out there is, and you touched on it a little bit, but change. You're really looking at inflections and anomalies and things that are different, and that's really where you're focused and where you spend your time and particularly, recent things that have changed a lot. So if you look at things that are changing, that's typically where the interesting things are.

Blake Bartlett: So we've been talking about the need for product- led sales, the benefits of product- led sales, why you should embrace it, all these different factors, what it looks like. I guess, what are some of the downsides, or what are the risks? If somebody's going to embrace this or they already are embracing it, it's not a pure unbridled good. They need to be mindful of some things and do it the right way. What comes to mind there for you?

Alex Bilmes: At the earlier stages in a company's life cycle, sales can be used too aggressively to solve for certain product gaps. Sometimes you just have certain goals that you need to hit, or the board's pushing for more revenue faster, or what have you. And you just try to muscle it. Sometimes, it works. And sometimes, you could go and fill the product gaps at a later point. Sometimes, you lean too heavily on humans and sales to solve some existential product challenges in that can significantly slow growth in later years. The other thing that we see particularly at the later stage is the sales business can start cannibalizing the self- service business. So say you actually had a self- service business that's very healthy and you do want to apply sales. You have to be very careful because sometimes, certain customers will totally convert by themselves and the ACV might not be huge, but it's incredibly high velocity. Doesn't require a salesperson to be involved, which can be nice for many reasons. And sometimes, salespeople will come in and close deals they would've closed on their own and not necessarily at a higher ACV. So if that becomes commonplace, you end up cannibalizing a part of your business, and there's also a number of cultural implications and interesting dynamics within a company that can arise because of that tension between teams. So it's just really important to be very, very thoughtful about the goals of the product- led sales business and not go and again, cannibalize something that's already working.

Blake Bartlett: Yeah, no. So I think that makes so much sense because I do see this oftentimes, which is if you roll out a PLG product and then you don't see the response that you want to see, or if you see people getting stuck at a particular point in the journey or in the funnel, you could put people there, you could put salespeople there to help with that friction. And that might be the right answer if that's where the considered purchase happens, but it also might be that you confuse them, the product flow wasn't very intuitive. And you know, you are actually papering over a product problem with sales folks. And then while it will look like in the numbers that it's working, Hey, there was no people here. We applied people. Now, our conversion rates are up and isn't this great? But if you fast forward again, to when you're at scale, then now, you have to have those people. You have to continue scaling that organization, otherwise your customer acquisition engine is going to fall apart. So it comes back to this idea of our people and our sales resources and sales pressure that you can apply, is it optional or is it mandatory in order for people to make progress on the customer journey?

Alex Bilmes: That, and it also depends dramatically on your deal size on your ACV. So if you're applying a ton of sales pressure to$ 400 a month, or 5K per year accounts, you better have a really, really efficient sales motion if you're applying sales pressure to five- figure, six- figure deals, and those are moving through the funnel pretty quickly, maybe it's okay. So there's again, a little bit more nuance in terms of where does it make sense? Where does it not make sense? And to the earlier question of where can it fall down, if you're applying a lot of human horsepower, particularly if you have really good reps that are pretty expensive and you're going after small deals, your conversion numbers might be fantastic, but at a certain point, it just doesn't really pencil out. You might be paying, I don't know, three, four, $ 500, 000 a year for a sales rep that's really strong. They might have an 80% close rate, but their sales cycle might be two months and the deal is 5K. So there's the mathematical aspect of making sure that it is applied in the right areas where it's also financially feasible, and builds for a long term sustainable business.

Blake Bartlett: Yeah. And that's related to the other point that you mentioned, which is... and I see this all the time in PLG businesses, is that you can add sales and really all you're adding is CAC, you're not actually adding incremental ARR.

Alex Bilmes: So that's the point. That's exactly, that's great. Yeah, that's a really succinct way to describe it.

Blake Bartlett: But there's also, even if you do that, there still is a lens that you could look through, a more myopic lens that tells you you're being successful, which is are the reps coming up ramp? Are they hitting their quota? Okay, great. We can keep adding reps. This is awesome. Our sales engine is working. Meanwhile, if you take the next step zoomed out, okay, true. But we're not actually adding any more ARR. So all we did was give the leads that would've naturally converted on a self- service basis to the sales people to claim credit for, and we're actually not winning at all. We're actually in a worse position because we have all this CAC and we're not getting anything incremental for it. So that's a problem. You should definitely avoid that situation.

Alex Bilmes: What you just described when you said, what is the problem of... or how do you incorrectly apply sales to a product- led business, what you just described is probably the poster child use case of how that could go terribly wrong. So thank you for articulating that beautifully, that's exactly right. I think that's worst case scenario. Actually, there's one scenario that's even worst case, which is you do all of that and it still doesn't convert, but let's just save that for the bucket that we hope figure it out, and that one is really not one that maybe we can help solve, but...

Blake Bartlett: Yeah, I think that's a new product bucket.

Alex Bilmes: That's a new product bucket.

Blake Bartlett: Find a new problem to solve.

Alex Bilmes: Exactly right. Yeah. That's a product market fit problem. Exactly.

Blake Bartlett: All right. So in closing, I'd love to shift gears into just some super hyper tactical practical advice for founders that might be listening right now. So if we have a PLG founder who's listening and wants to take that first step of adding product- led sales to their PLG company, where do they start? Where do they begin?

Alex Bilmes: That's a good question. It depends on the stage. So if you're really early, and I mean, you're a seed stage company, not that seed stage means much anymore, just given the funding dynamics, but say you're early, say you're a few million in revenue, maybe a million in revenue. You have a bottom- up funnel. I think it's incredibly important for founders to just go and sell a few deals on their own, meaning whoever the most go- to- market driven founder is. Typically, I think it should be the CEO wherever possible, but just start going and talking to customers and see what it would take to build a product or put a deal together that would effectively be meaningful, and one that would support a sales motion potentially. So just go and put together a 10K, 20K, 30K, 50, 100K, whatever it is deal, and do a few of those to learn as much as you possibly can about what it looks like. Many times, there are going to be specific product gaps or deficiencies, or maybe you need SOC 2 Type 2, or maybe you need a particular dashboard report for a buyer, and that's what drives that higher ACV. Or maybe you need to fix certain product features that they just specifically ask for. Maybe there's just a gap, that isn't any of those things. It just really depends. So figuring that out I think is really, really important. Now later stage, what we typically see is sometimes, as we talked about earlier, onboarding specialists or customer success teams that are selling, but not really. There's enough momentum, there's enough demand. There's enough usage, there's enough self- service conversion, plus some assist conversion where you can bring in a more structured team with some goals to say, " Hey, we're going to take all these 5K accounts and we're going to go and try to make them into 30 or 40 or 50K accounts," or whatever those numbers are. So you typically start with two reps, probably say, start with two typically instead of one, as common place, I guess I'd say. But build your formative sales team, and figure out what that looks like. Slightly different scenario would be a later stage company that is traditionally sales- led. And you want to build a product- led motion, so that you can do product- led sales, which we actually see very consistently as well. A number of public companies are saying, " Hey, this is where the world is going. Customers want to buy by trying the product, sharing it with their friends, and then they want to come talk to us, or we come talk to them and not before." In those cases, it's difficult because the organization is used to selling in a more traditional way, but we've actually seen some success with companies that basically build out new business units or new startups within a larger company, or a new cloud offering as an example, if it's a more traditional long premise type business, and effectively run that as much like a startup as possible and start getting some people signing up and using the product. And there's a subset of the core go- to- market team that might come over and try to experiment pretty quickly, but listen, the net across all those is experimentation is pretty important and start small. Don't boil the ocean, have a hypothesis is better than coming at it completely. Too open- minded means that your brain can fall out, but having some hypothesis that you're going to go experiment against. And whether that be in the early stages, but just closing some early deals or maybe it's a little bit later, nurturing some accounts with people in a more product specialist assist- y, onboarding- y customer success- y type motion, before you add a few sales reps, to just drive certain types of deals, or if it's even building a net new motion within a more traditional business, start small, have a goal or to experiment pretty quickly. Don't bring too many people in super early on, and then expand once you see inklings of success.

Blake Bartlett: So what I'm hearing there is when you're applying sales pressure for the first time, whether it's founder sales for the first time, or whether it's adding sales to something that's already got a lot of traction, whatever it is, view it as an experimentation, view it as a test, and then have an open mind on a couple of different factors. One, is this going to be something that actually gets people to the next stage of their journey? And is it going to be economical to actually apply the additional CAC here? Is it going to work? But also because we're talking about the product- led world, is there something in the product that I can change to where I actually can solve this problem through a few lines of code, or through a design change as well? And if you always have both of those things in your mind as you're experimenting, and as you're applying sales pressure, it'll point to where do I need to make my product better? And where do I have opportunity to accelerate conversion through sales pressure, but while avoiding the risk of confusing those two things and just applying sales to everything or being too purist and thinking that lines of code will solve all customer- oriented problems.

Alex Bilmes: That's spot- on. Slightly different way of saying it even is product market fit, in this case, it is product market fit, or you're trying to figure out product market fit, because you have two moving targets. You have the product and you have the market. So you can adjust your sales approach. You can adjust the product. Two moving targets is always difficult. You want to reduce as much as possible the number of things that you're experimenting with, at least at a given time, because you have two moving targets and that's two problems running, worse than having one problem, and you don't know exactly if the product solves it better or it's a go- to- market question or a go- to- market process change. So that's spot- on. I'll tell you on the other side, the biggest failing I have seen consistently across many companies that we work with, or many companies that I've interacted with in the past is being too prescriptive and too definitive on what the process should look like, and really getting into the process optimization piece before the learning piece. Examples of that are, " Let's build some crazy Salesforce lead flow. When somebody does this one thing in the product, we're going to kick off 20 workflows and we're going to notify this person and this person and that person. And then there's an email that goes out." So over- indexing on automation and process building too early is by far the biggest just full- stop, issue that we see. So how do you start really, really small? How do you test one thing? How do you do it manually? Until it's working and it's really painful, then you add process and you add automation, then you add systems and rules and not before. And too often, teams try to get really mathematical really early, where conversion modeling and funnel analysis on a data set that's inaudible... It's just not statistically significant. So it's not as obvious, but just having seen it a number of different times, start with the basics. Super simple. When the pain is too great and you're closing, you just have sales capacity issues because it's working so incredibly well, you continue to add process to scale without inaudible.

Blake Bartlett: Well, Alex, thank you so much for sharing your wisdom with us. I think we've covered the high level theoretical and philosophical about product- led sales, all the way down to the very tactical, where do I start? What do I need to be my mindful of as I get going with my experimentation? And everything in between. So this has been incredibly helpful to me. I've learned a ton and I'm sure our listeners have as well. So, thank you again.

Alex Bilmes: Thanks for having me, Blake.

Blake Bartlett: Thanks for checking out BUILD. If you enjoyed the conversation today, make sure to subscribe on your favorite podcast platform, and leave us a review so that others can find the show as well.

DESCRIPTION

Product-led sales is selling to companies that already use your product. How hard can that be? Very hard, it turns out. PLG companies need to think about sales in a fundamentally different way in order to succeed. Alex has dedicated his career to solving this problem, and he shares his expertise with us.

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Alex Bilmes, Founder and CEO at Endgame

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Today's Host

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Blake Bartlett

|Partner at OpenView

Today's Guests

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Alex Bilmes

|Founder and CEO, Endgame