MV #001: Nuthin' but a "PLG" Thang
Lessons, stories, observations and analyses on software sales, building companies and delivering customer value.
Read time: 6 min
👋 Hi there, happy Sunday!
Thank you for subscribing. As promised, in my weekly More Value edition, you’ll get a mix of 4 things delivered directly to your inbox.
Curated highlights from thought leaders in B2B software
Lessons on how to become a better value seller
Analyses and observations from the B2B software industry
Unfiltered, personal stories from working in big tech and startups
🤓 Who am I?
My name is Semir Jahic. I’m a self-confessed news junkie, and I’m also a student of startups and obsessed with what it takes to build something of value.
In More Value, I’ll share what I’m reading, learning, and observing to help you create more value.
More value is for go-to-market professionals in Sales, Customer Success, Delivery or anywhere in the software industry. Keep reading.
🥞 Sunday Pancake Recap
It was a busy week on LinkedIn. People are slowly coming back from the summer holidays. I’m pretty happy that we get fewer “Here’s me taking time off. Really important to recharge" type of posts and more stuff that’s actually educational and interesting.
#1 Salesforce vs Snowflake
Kyle Poyar from OpenView picked up my Salesforce earnings Q2 post CRM 0.00%↑. He compared the Salesforce data to Snowflake's Q2 SNOW 0.00%↑ . This comparison is so interesting because Salesforce is a traditional SaaS player. In contrast, Snowflake uses PLG motions with a pay-as-you-go (PAYGO) model. Salesforce is the OG in SaaS and observed a slowdown in its cycles. Buyers are afraid to commit to large deals, and it takes longer to get the commitment. Snowflake is the new kid on the block and relies heavily on PLG. You only pay what you use, and people clearly love using Snowflake.
You can follow our conversation here.
#2 A reminder for B2B sellers that you’re only as good as your prep
A great quote in the comments summarised it well:
“You don’t rise to the occasion… you fall to the level of preparation”.
Prep is critical in all meetings. But it’s essential in sales pitch meetings.
Prep doesn’t just keep stress levels down. It builds confidence at each iteration and gets you from good enough to great.
How do you prepare for a pitch?
Understand the business deeply
Research the people extensively
Tailor your deck appropriately
Dry-run the demo click path precisely
Plan for flexibility to pivot spontaneously
Identify ideal next steps proactively
Align with the internal teams early
💡 90 Second Explainer - PLG? What’s that?
I keep hearing about PLG. I kind of had an idea what it is but not really. So, I did some digging. Turns out super valuable. Here we go:
PLG a.k.a. Product-led growth is a go-to-market (GTM) strategy. Simply put, rather than having salespeople (that’s probably you, my friend) lead growth, PLG relies on the product to drive acquisition, conversion, expansion, and retention. Amazing product experience is the front line.
PLG is a natural evolution for enterprise software as it becomes consumer-like. I remember at Salesforce when I pitched. It would sound like this: your users expect the same experience in your B2B world as they get with Uber and Netflix.
Today enterprise apps look and feel as pretty as consumer apps, but most SaaS still requires long sales cycles, complex implementations and tailored training. PLG changes that, reducing the time to value massively by building the product in an entirely self-serve way. From the sales cycle to when you start getting value.
Mind blown. 🤯
Why PLG matters even more now? (Hint: It’s the macro downturn)
The days of growth above all else are over. Efficiency has to be balanced with growth. Meritech capital calls it out in a recent newsletter.
We've transitioned from a "Capital is cheap, grow at all costs" era to one where every board room is asking "How should we think about top-line growth if we want to conserve cash and prioritize efficiency but still create value?".
Buyers today want to try software before committing. They want to see value before they sign anything.
Buyer journeys evolved too. An average of 8 touchpoints happen with your company before a sale. In 2022, that might just be without you personally with PLG if the software provides a freemium version.
PLG creates customer value faster, unlocks bottom-up expansion, increases net revenue retention (NRR) and most importantly, keeps your customer acquisition cost (CAC) down. Salespeople are expensive, after all.
Who uses PLG today?
The answer is so many! Examples include Zoom, Monday.com, Slack, and Dropbox. Many of them apply Freemium as an entry point. With that, they deliver value first before capturing value from customers.
Once users are in the product, the onboarding experience and customer education drive adoption and expansion.
Not every product or platform is suited equally for PLG. Many companies, especially on a larger scale, create a blend of GTM motions. Many large enterprises will have PLG and a sales-led approach for different segments.
Here’s a graph by Bessemer Ventures with high-performing PLG companies. (Source)
Want to geek out more on PLG? Check out this great article by OpenView.
🗞️ In other news
This article is emblematic of the startup investing mindset in Europe. Here’s an excerpt that hits the nail on the head.
“In the US, they asked: ‘How are you going to become a billion-dollar company?’ They see the bigger picture. In the UK, they asked: ‘How many new customers did you gain in March?’ before saying: ‘If you hit £40k revenue a month, give us a call.’ It all comes down to risk appetite, which is very, very low in the UK.”
Invest Like the Best with Patrick O'Shaughnessy is probably one of the best business and investing podcasts. This episode is with the legendary founder of Vista Equity Partners, Robert Smith.
One takeaway: Robert talks about how we’re just scratching digital transformation's surface. Enterprise software has only done the digitalisation part in the last 20 years. Now, all data is digital. And often in the cloud. But what about transformation? Not so much yet. Learning from data, augmenting processes with insights and applying AI algorithms or automation to business processes has just begun. That will be the next significant chapter in enterprise software.
Swisspreneur by Silvan Krähenbühl is a Swiss-focused entrepreneurship podcast. He interviewed Roy Raanani, founder and CEO of Chorus.ai, which Zoominfo acquired in 2021 for about $575m.
One takeaway: Roy talks about how he took a year off after consulting to think about what his next adventure will be. He did this in Rheinfelden, Switzerland. Roy explored different ideas and technologies like AI and machine learning during that time. In 2015, he realised that conversations might be online today (see above podcast recommendation), but the data in the conversations is one of the most underutilised data sets in business.
That insight was especially true for sales which became Chorus’ focus. There was so much value in understanding what makes sales reps successful, how you can coach underperformers and what insights you can draw from a conversation. Chorus transformed how B2B software sellers work and created the conversation intelligence category.
🙏 That’s it. Thank you for reading.
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Have a great Sunday!