An interesting post from Sandy on the “stealth objection”: when a customer, investor, user, employee — anyone — harbors some resistance to what you’re selling them, but doesn’t make it explicit.
My experience here is mostly in getting users to buy or adopt our product. Anytime you’re showing off what you’ve got and selling them on the concept, some objections are out in the open. “It’s too expensive”. “It doesn’t support SSO”. “I can’t integrate with X”. These ones are on the easy end of the spectrum. At least you know where you stand!
But a stealth objection can actually look like like acceptance! You see this particularly when seeking feedback from people on a new thing you’ve built. You ask “what do you think? Could you see this fitting into your workflow?” And you get responses like “That’s cool. I could see some teams needing that for sure.” It masquerades as validation, but might be a simple platitude to be friendly. They may be thinking “This would never work for us. This adds extra steps in our specific process.” If you run too far with platitudes and compliments and don’t dig for the real truth, you might not even stop at indifference. You might take it as validation.
I really like this example from Sandy:
For example, sometimes someone working for the prospect gains from the same sub-par status quo that a startup’s solution fixes - that gain is the stealth objection.
Sometimes the time, money, compliance, or quality-of-life benefits of your solution run against the incentives of stakeholders in the room. Being aware of this possibility helps you keep your hackles up to make sure there isn’t closet resistance you’re up against.
In the wake of Salesforce’s acquisition of Slack, there’s been a flood of analysis on whether it was a sign of Slack’s success or failure to grow as a company. It’s funny that we live in a time when a $27bn acquisition of a 7-year-old company gets interpreted as a failure. I’d consider it validation for their business that a $200bn company like Salesforce makes their largest acquisition ever on you. Broadly, it’s a move to make Salesforce more competitive with Microsoft as an operating system for business productivity writ-large.
One likely driver of selling now vs. later was the ever-expanding threat from Microsoft’s fantastic execution on Teams over the few years. Slack saw Microsoft’s distribution and customer relationship advantage, and that they’d have a beast of a challenge peeling away big MS customers. This sort of “incumbent” position in the enterprise is one of the strongest advantages Microsoft has, and they’ve been savvy in playing their cards to feed off of this position.
As a new entrant to the enterprise software space, Slack’s bottom-up product strategy has been one of their key advantages that fed their hypergrowth since 2014. The relentless focus on product quality drove viral adoption within user groups inside of organizations. Classic land-and-expand: get teams to adopt for themselves, and weave your way from that beachhead into the rest of the organization, with an eventual (often reluctant) official blessing from IT departments. The product-led growth (PLG) model (of which Slack was an early success story) allows new entrants to serve users first and foremost, sliding in under the radar of corporate buy-in inside companies: “shadow IT”, as it’s known.
Within large companies, self-service and a product-led approach can get you a long way, as Slack and many others have demonstrated. But at a certain size you hit friction points with growth inside large accounts. Enterprise customers rarely adopt software with zero engagement from product makers. But Slack and other PLG successes have been able to push deeper than previously thought possible with hands-off, sales-free tactics.
Former founder and now-investor David Sacks wrote a great Twitter thread on this topic (also discussed on the All-In Podcast), reacting to Slack’s lateness to implement a sales organization:
1/ Ok since you asked, here are my reactions to the Slack deal and @levie comments to the effect that “the idea that workers would someday choose all their own tools was always a fantasy... Best product doesn’t always win, you also need the biggest sales force.” My thoughts: https://t.co/ZYdaf9XvaF
There’s no question that product-led is the way to go to get validation, traction, and growth, and that it’s still instrumental to building horizontal customer footprint. Sacks’s point is that Slack didn’t handle the enterprise scaling requirements early enough (they now are).
Bottom-up is great for top-of-funnel customer acquisition (Sacks says “lead gen”), but starts to falter as a growth driver at some scale. The trick in architecting a hybrid product-led vs. sales-led dichotomy is finding where and when in the lifecycle to transition growing customers from one to the other. What the PLG movement has done for SaaS companies is carry customer expansion further into companies than before. The likes of Slack, Atlassian, and Twilio carried themselves to enormous scales on the back of a PLG, self-service strategy.
Why does PLG decelerate?
Why would an enterprise company (or one that’s grown their use of a product to enterprise-scale penetration) not be able to self-serve the larger deployment? Why couldn’t a product company rely on self-service once a company’s usage grows to that point? It seems reasonable that if a customer scaled to a couple hundred users that the continued expansion would be an easy justification; if it’s working, why not keep expanding?
There are a few related reasons why relying on customers to serve themselves slows down at scale:
In large companies, individuals are no longer able to make decisions — champions for a product (that may already be using it in their team) need to build consensus across a diverse group of stakeholders to justify expanding
Too many cats need to be herded to get a deal done — see item 1, often a stunning number of heads need to be convinced, justified to, and won over; corralling the bureaucracy is a whole separate project unrelated to the effectiveness or utility of the product
Rarely no individual “buyer” — user can’t purchase product, purchaser has never used product; incentives for each stakeholder working at cross purposes (one is looking to complete a project, one is looking to cut budget, one is looking to impress the press, etc etc)
If you have a champion, they have a day job — And that job isn’t playing politics with accounting, legal, execs, IT, and others; there’s no time for the customer to play this role for you
I can speak from experience on all dimensions of this. In the early days of a bottom-up product, landing that big logo and watching them grow looks like this — you’re growing seat count and things look to be taking off:
Watching it happen is magical, especially if you’ve got an early product and/or small team. You’re building product you think is useful, and you’re being validated by watching it weave its way up into a company with a household name.
But you eventually discover that true enterprise-scale adoption looks more like this:
The customer you thought you were growing wasn’t truly the whole enterprise, but only a department or division1. In many (most?) national- or international-scale companies, bridging to neighboring departments is effectively selling to a whole new customer. Sure, the story of your product’s impact from adjacent teams’ use cases is helpful, but often the barriers between these columns are enormous.
What you need is some fuel to help jump the gaps.
Enter your sales team
The reason for the sales team is primarily to coordinate and communicate with the stakeholders described above the on behalf of the buyer.
There are unicorn enterprise customers out there where you’ll find a champion willing to saddle this burden of selling your product to themselves — sometimes a particularly aggressive or visionary IT leader, or exec — but this is a rarity. You can’t and shouldn’t rely on this existing in most organizations.
On the surface this thought runs counter to a lot of recently popular ideas on product-led growth. But what Sacks is claiming in his thread doesn’t invalidate product-led, bottom-up as a strategy — in fact he says the opposite.
What it does say is that the go-to-market shouldn’t be a binary methodology: either you’re bottom-up / product-led OR top-down / sales-led. For many B2B SaaS companies, the ideal system design is optimizing for product-led evolving into a sales-led approach when a customer reaches a certain stage of the lifecycle.
Even for teams that understand the dynamics of both methods, the hard part is finding the right place in the cycle for the methodology to flip. If one set of tactics is largely owned by the product, design, and marketing teams (PLG), and the other owned by sales and customer success teams (SLG), then without proper experimentation, management, and cultural behavior reinforcement, it’s possible that one of those teams leans too far beyond the transition point.
Sales too early stunts investments on super-efficient organic growth techniques with PLG; too late means customers may have slowed expansion because you weren't there for the assist in keeping the growth moving upward
This continuum is, of course, not fixed for all time or all companies. And those transition points are a lot more fuzzy in reality than in a chart.
PLG is growing in effectiveness over time, so the optimum transition stage from PLG to SLG is moving rightward for many types of products. A number of factors could cause this phenomenon. There are more and more companies opting for a PLG approach, but I think this is a response to changes in customer behavior more than it’s a modifier of customer behavior (though those effects move both ways). Things like technical comfort, the prevalence of self-service solutions in consumer technology, ease-of-use as a table stakes expectation, a wider competitive market for tools, and the sophistication level of technology expanding tremendously over the last 10 years are all moving parts that contribute to self-service becoming more widespread.
I rediscovered this great piece from Patrick McKenzie, an SEO primer for startups, but actually valid for anyone trying to generate traffic, interest, and business from the internet for anything at all.
The first cut of your SEO strategy will be wrong, just like v1.0 of your product will be non-responsive to the needs of your users. That is OK: after you start you’ll begin collecting insights and data which let you refine it. You want to get something out the door as soon as possible so that you can begin collecting links, other indicia of trust, and data on what is working for you. Many startups wait until launch to put a significant amount of content on their websites. This is almost always a mistake.
SEO has always been a powerful tool for us as we’ve expanded. We’ve used many of the approaches Patrick outlines here over the years to build a nice presence. I’d add my biggest takeaway here in getting impact out of SEO (and content in general) is to make it programmatic — it’s not something you do in spikes, except for things like major product release milestones or equivalent, but that you keep constant pressure on over time to gradually raise the waters. I strongly agree with the quote above, that if you treat content generation like an experimental, “agile” process, the error correction feedback it affords is priceless to be getting your work out there early. Time is your friend with exposure on the internet. The longer you have something up, the more opportunity for discovery.
For a 10 year old article, I can’t find anything in here that’s outdated or been made irrelevant.
A new piece from Andy Matuschak and Michael Nielsen (beautifully illustrated by Maggie Appleton). Can we make reading a more engaging and interactive learning experience? This builds on previous ideas from the authors on spaced repetition.
Interesting take from one of Byrne Hobart’s recent newsletters. Contrasting a typical “full-stack” model of company-building and VC funding to a “sumo” model:
The amount of VC funding has been rising steadily, and returns are skewed by a few positive outliers, so any fund that doesn’t have a specific size mandate is actively looking for companies that can absorb a lot of capital as they grow. The best way to get more capital is to move from a capital-efficient business to a capital-inefficient one, so there’s a strong incentive to pivot in this direction.
The incentive is sometimes too strong. Some companies go beyond the “full-stack” model to what I think of as the “sumo” model: raising an intimidating amount of money just to scare off everyone else. The sumo model does prevent one failure mode for startups: the situation where every time Company A raises a round, it validates the model and lets Company B raise more, which forces Company A to burn through their marketing budget faster and raise an even bigger round, and so on until the entire space is over-capitalized and everyone’s assumptions about long-term unit economics are implausibly optimistic. It’s an easier strategy to try when capital is abundant, but it’s a harder strategy to pull off; the bar for “an absurd amount to invest in a company that just does X” keeps going up.
In the arena of geeky digital marketing, this is a great deconstruction of organic optimization tactics in play at Canva, one of the best out there at enabling discovery through search and backlink traffic. I love how thoughtful and intentional their page architecture is; it enables so much adaptive targeting to sweep up long-tail keyword spaces.
I enjoyed this deep, transparent history from Nat Eliason on how he built up his website over the past several years. He covers basic technology, content, habits, promotion, and monetization.
The precis:
Tech stack doesn’t matter as long as it’s reliable, supports what you want to do, and doesn’t get in your way
Habit-forming is hard; being intentional and setting goals is the primary tactic
Topics and content don’t matter as much as you think in the early days; the best way to work it out is to start and gradually zero in on what you find enjoyable and what others find interesting
Promotion and monetization are waiting games; tempering your expectations and waiting are essential to just keep going
It’s particularly insightful to see the open metrics on passive income he’s been able to generate with various tactics over time. An excellent lesson that being deliberate, habitual, and experimental in your tactics bears fruit. A key ingredient to building organic presence is time. So the key takeaway: start now!
— Patrick OShaughnessy (@patrick_oshag) July 12, 2020
A ton of added work, but clearly an interesting way to add value.
This sort of thing would be an excellent addendum to most podcast shows. For any episode that has detailed references to other works, I always find well-done show notes useful (thinking about EconTalk as an example). What he’s put together here for Investor Field Guide makes me think about other ways of layering different formats for anyone producing content.
Content has a “native” format, a medium it’s best suited for. If a piece of content is a podcast, or a long-form essay, or a tweet storm, to move it to another medium requires a translation step to embrace the strengths of the converted format. Depending on the subject matter, some things suited to a 3-hour conversational podcast just aren’t the same when converted into a text transcript. What Patrick has done here is a good complement to the audio conversation, a companion document that is of highest utility consumed in tandem rather than standalone. It’s partially a transcript plus sketches, images, diagrams as enrichment.
Ben Thompson went the other direction with Stratechery, creating a podcast version of the Daily Update newsletter. In his case it’s not necessarily intended to be additive, but rather an alternative way to consume the written words.
Another thing that Ben did to diversify Stratechery’s content is to create an archive of “Concepts” — essentially an evergreen, expanding knowledge base of topics he covers, outside the regular stream of analysis posts.
One downside of podcasts, specifically, is how much great stuff is locked up in archives that are hard to resurface or rediscover without effort to dredge up old episodes. If a show has an evergreen nature (isn’t topical or news), it’s worth extra effort to layer in other content formats for different audiences. Text makes the content linkable and discoverable. Images and annotation add depth to the material and create a visual component to share across other channels.
I’d love to see more content producers layering in different intertwined streams. It’s a smart strategy both from a content marketing and attention perspective (getting people’s attention regardless of their preferred medium) but also adds richness and context maximizing the strengths of different media.
Time is our most fundamental constraint. If you use an hour for one thing, you can’t use it for anything else. Time passes, whatever we do with it. It seems beneficial then to figure out the means of using it with the lowest possible opportunity costs. One of the simplest ways to do this is to establish how you’d like to be using your time, then track how you’re using it for a week. Many people find a significant discrepancy. Once we see the gulf between the tradeoffs we’re making and the ones we’d rather be making, it’s easier to work on changing that.
The article reminds me of Sowell on economics. Take this and apply to any other life domain:
Economics is the study of the use of scarce resources which have alternative uses.
A timeless one from Paul Graham, 2006. On the advantages of outsiders:
Even in a field with honest tests, there are still advantages to being an outsider. The most obvious is that outsiders have nothing to lose. They can do risky things, and if they fail, so what? Few will even notice.
The eminent, on the other hand, are weighed down by their eminence. Eminence is like a suit: it impresses the wrong people, and it constrains the wearer.
Outsiders should realize the advantage they have here. Being able to take risks is hugely valuable. Everyone values safety too much, both the obscure and the eminent. No one wants to look like a fool. But it’s very useful to be able to. If most of your ideas aren’t stupid, you’re probably being too conservative. You’re not bracketing the problem.
This is an extension of the Amazon mantra of forcing your team to “write the press release” for a product or feature before starting on it. The goal is to concretely visualize the end state as clearly as you can, and get on the same page strategically to outline the why of what you’re building. The PR FAQ is another assistive technique for setting and articulating the goal.
I enjoyed a couple of notes from this interview with Atlassian President Jay Simons. They’ve famously built a business with bottom-up adoption dynamics, allowing them to hit the $1bn revenue milestone without a traditional sales-led model. It’s especially impressive how they’ve been able to do that while also successfully going upmarket to larger and larger customers, who are typically high-touch by default.
My favorite comment:
“We think of the funnel as a product. Potentially when a customer raises their hand, when they actually need to talk to you, that’s a bug.”
Treating the adoption model and process as a product itself is a great way to think about the advantages of SaaS. You’re building a machine that generates recurring revenue, so tuning the machine to be as efficient as possible (after product-market fit) is massive for growth.
This talk from a16z’s Martin Casado covers how the market for B2B SaaS go-to-market is changing from sales-driven to a marketing-driven. We’ve been thinking a lot about this lately in the context of Fulcrum — how the “consumerization of IT” plays into how business users today are finding, evaluating, purchasing, and expanding their usage of software.
As he describes in the talk, consumer business tend toward a marketing-led GTM, and enterprise ones toward a sales-led GTM. A combined sales-plus-marketing approach to customer enablement and growth is super hard to execute on, and under the hood requires an excellent “adoptable” product at the center. You’ve got to enable the customer to try and implement your technical solution through a self-service and self-adoption model.
We’ve had this kind of land-and-expand phenomenon with Fulcrum since 2011 — wherein we attract early adopter types from within a company, get traction with smaller use cases, then watch as the company spreads the usage of Fulcrum horizontally to different teams and use cases. In the beginning we structured our GTM this way by necessity (a tiny team couldn’t do full stack marketing and enterprise sales), but have come to enjoy the fruits of this decision as we’ve scaled. I can sympathize with the challenges described here, though; building the right interplays and feedback loops between sales, marketing, and customer success is unnatural for a lot of people, and hard to execute on. The silver lining is that while you might have growing pains with process, at least you’ve got interest, usage, and revenue happening regardless. The magic is in the optimization of the cycle.
Geoffrey Moore’s Crossing the Chasm is part of the tech company canon. It’s been sitting on my shelf for years unread, but I’ve known the general nature of the problem it illuminates for years. We’ve even experienced some of its highlighted phenomena first hand in our own product development efforts in bringing Geodexy, allinspections, and Fulcrum to market.
In principle, the advice laid out rings very logical, nothing out of left field that goes against any conventional wisdom. It helps to create a concrete framework for thinking about the “psychographic” profile of each customer type, in order from left to right on the curve:
Innovators
Visionaries
Pragmatists
Conservatives
Laggards
It’s primarily addressed to high-tech companies, most of which in the “startup” camp are somewhere left of the chasm. The challenge, as demonstrated in the book, is to figure out what parts of your strategy, product, company org chart, and go-to-market need to change to make the jump across the chasm to expansion into the mainstream on the other side.
There are important differences between each stage in the market cycle. As a product transitions between stages, there are evolutions that need to take place for a company to successfully mature through the lifecycle to capture further depths of the addressable market. Moore’s model, however, distinguishes the gap between steps 2 and 3 as dramatically wider in terms of the driving motivations of customers, and ultimately the disconnect of what a product maker is selling from what the customer believes they are buying.
The danger of the chasm is made more extreme by the fact that many companies, after early traction and successes with innovators and visionaries, are still young and small. A company like that moving into a marketplace of pragmatists will encounter much larger, mature organizations with different motivations.
The primary trait displayed by the visionary as compared to the pragmatist is a willingness to take risk. Where a visionary is willing to make a bet on a new, unproven product, staking some of their own social and political capital on the success of high tech new solutions, the pragmatist wants a solution to be proven before they invest. Things like social proof, case studies, and other forms of evidence that demonstrate ROI in organizations that look like their own. Not only other companies of their rough size, but ones also in their specific industry vertical, doing the same kind of work. In other words, only a narrow field of successes work well as demonstrable examples of value for them.
Knowing about this difference between market phases, how would a creator prepare themselves to capture the pragmatist customer? One is left with a dilemma: how can I demonstrate proof within other pragmatic, peer organizations when they all want said proof before buying in? We have our own product that’s in (from my optic) the early stages of traction right of the chasm, so many of the psychographics the book provides to define the majority market ring very true in interactions with these customers.
Presented with this kind of conundrum in how to proceed, Moore’s strategy for what to do here is, in short, all about beachheads. He uses the example of D-Day and the successful Allied landings on the Normandy beachhead as an analogy for how you can approach this sort of strategy. Even if you have a broadly-applicable product, relevant to dozens of different industries, you have to spend so much time and energy on a hyper-targeted marketing campaign to connect with the pragmatist on the other end that you won’t have enough resources to do this for every market. The beachhead will be successfully taken and held only if you go deep enough into a single vertical example to hold onto that early traction until you can secure additional adjacent customers. Only then can you worry about moving inland and taking more territory.
All in all it was a worthwhile, quick read. Nothing revelatory was uncovered for me that I wasn’t already aware of in broad strokes. However, it is one of those books that’s foundational to anyone building a B2B software product. Understanding the dynamics and motivations of customers and how they evolve with your product’s growth is essential to building the right marketing approach.
If you’re in any line of product management or product development, you’ll be familiar with the argumentation process around defining the product launch. The concept of a “pre-announcement” is something as old as the job of product marketing, with all forms of the process being tried by companies over the years. You have the Apple-like “no announcement til launch day” approach on one extreme, and the “announced before any of it exists” vaporware announcements of which there are hundreds of examples.
In this post, Steven Sinofsky shows how unclear it can be whether the decision to pre-announce is a good idea. There are clearly advantages but also plenty of downsides. He calls out how the pre-announcement always can serve as a forcing function for a company to make something happen – either customer decisions, dev team shipping speed, or to boost PR when a competitor is ahead.
I’m particularly interested in the thoughts on approaches in business SaaS. SaaS models have made the hype-attention-release cycle flatten out from the once-per-year type of release cycles of the box software era. The continuous release cycles of most SaaS companies leave fewer pivotal major releases to pre-announce. But also, in the business software world, the “shininess” factor of big new features isn’t as attractive as it once was. This rings true in my experience, especially as our average customer gets larger:
SaaS totally fixed all of this, or so we think. Today there is almost no upside or downside to pre-announcing when it comes to deals since once you have a customer you have them for what actually works right then and there—customers bought the product for what it does right now and the stability that comes with that. Still the desire for a company to show off this value subjects us all to popups, emails, and overlays alerting us end-users to amazing new capabilities that were all once the domain of launch events and trade coverage.
Today’s reality is that customers are becoming more annoyed with changes to business SaaS products than they feel value and would like to return to a more regularly scheduled delivery cadence with pre-announcements. No one likes a morning surprise of “who moved my cheese” in a product for getting work done. On the other hand, if we think quarterly updates are what customers want, then consider Patch Tuesday. For expanding/growth products frequent updates are fine (product market fit assures us of that). I would say no one has really figured out the right way to deliver either upgrades or launches for SaaS in a customer and purchaser-friendly manner.
