Product Is King 👑
Hello there. Scale Together is a monthly newsletter from Together. Our aim is to help entrepreneurs and founders realize their potential.
What can we promise you from this newsletter?
It will be fun and smart.
It will not take too much of your time. We know you have a lot to do.
Product Led Growth Is The Future 📈
Last month, Together announced its investment in Toplyne with our friends at Sequoia Capital. Apart from the three founders, what attracted us to the company was the approach to solving the problem. Toplyne wants to help companies find customers from their funnel, the most likely to convert. Their clients: product-led companies.
PLG is how some high growth SaaS companies across the globe have evolved. Zoom, Slack, Fastly, Pagerduty, Elastic, Surveymonkey in the US to Freshworks, Postman, Invideo from India, are all large companies, which have product at their heart. They capture customers’ attention through a free version and then persuade them to spend on a recurring subscription. Big businesses prefer this model because it makes entrepreneurs evolve their solutions to niche business needs while also creating a solution that can attract a large number of customers. Product value proposition helps companies keep customer acquisition costs low and increase revenue. Slack has been, hands down, the biggest SaaS success story of this year, especially after Salesforce acquired the company for over $27 billion.
But Slack or Canva are answers to a question. How does a founder strategize to build a platform that can stand the test of time and competition? To understand this deeper, we spoke to people in our network. We first talked to Cristina Cordova. Cristina is unique. She has worked for LinkedIn, Notion, and Stripe, leading partnerships, and growth. Now, she advises startups and invests in them occasionally. We also spoke to Gaurav Sharma from SaaS Labs. Gaurav has built and sold multiple businesses. He has bootstrapped his way to $5 million ARR. And after being resistant to capital, he relented and raised $17 million from a few very interesting VCs.
We asked them both to help us lay down the skeleton of how founders could weaponize product-led growth.
“Always create FOMO in your product.” Gaurav Sharma, founder, and CEO, SaaS Labs
The foundation 🏛
Cristina insisted that founders need to do a lot of homework. Founders need to talk to as many people as they can about their businesses, understand the business needs and where the pain points lie. Take all this knowledge and store it in the mind palace.
Once you know what you’re building, start adding questions to your template. This helps you ask more profound questions about the business and understand the problem.
Now, there should be an alpha version of the product in your mind.
Gaurav says at this stage; he made a checklist of questions.
Is this a new product that I will build in a growing market?
Is my product too niche? If so, it may become a services business.
This is when you start building. Keep talking to your potential customers, and understand their needs as you evolve.
Build, and they will come 🛠
Gaurav believes SEO and content marketing are the fastest way to capture customers’ attention, especially when you’re building a product with bottoms-up adoption (strong product-market pull)
The hardest part in customer acquisition is getting access to the first dollar. Once you acquire the customer, making them pay more is easier.
Spend time on the pricing page
This, Gaurav says, is important. People tend not to spend enough time on pricing (people tend to spend 6 months on building the product but don’t even spend 6 hours on the pricing page 🤯 ). Gaurav has found ingenious pricing to be a game-changer to get product adoption.
Every line item must have a drop-down built into it. So there is always a way of getting your customer to pay more.
The fastest way to get customers is to build partnerships
Speak to your customers, says Cristina. They will tell you the products they use. Collaborate with these companies and see how your product can complement theirs.
Leverage large existing platforms, so you keep getting inbound leads without spending too much.
These partnerships will also help create habits, so customer churn is lower.
Now that you have them…⏳
Everything matters, from the time you onboard the customer to the time they spend on your platform.
A trick Gaurav uses is sending the welcome email about 10-18 minutes after the customer signs up.
The email looks like it was written by a person a few minutes ago, not by an automated system.
This makes the customer feel important.
Spend time playing back on the onboarding process. Try to iron out the places which cause hiccups and speed bumps.
The key to keeping your customers loyal is to build stickability. How do you do it? Analyze customer behavior. When do these customers drop?
Gaurav explains that this is when founders need to leverage the India Edge & double down on exceptional customer support experience.
Let’s say customers drop three months after they first use the product. Put your customer success team into action for the first three months. Try to identify what are the reasons customers drop and fix it.
Create FOMO. Customers should feel they are missing something by not being around.
What Together has been up to
A few things we’d like to share with you.
Looking for an angel: Early-stage founders don’t think deeply enough about their relationship with their angel investors. My colleague Avinash spoke to a few founders and wrote an interesting article about picking the right angel investor.
PLG motion: You’ve read the newsletter. Now, read our deep dive into product-led growth. We have also added a reading list as an additional resource. You can deep dive here.
Pitch-deck Teardowns: One of the most intimidating tasks for a first-time founder is to make a great pitch deck. We at Together have hence started doing weekly #PitchDeckTeardown, where we analyze in depth the decks used by top saas companies in their earliest days. Here are a few:
A little social media popcorn 🍿
That’s it from us for the month. If you believe you’ve got an idea that we need to hear, write to us at email@example.com.
We’ve got an exciting guest lined up for next time. Until then, stay safe, and let’s build Together.