This course will give you the growth skills, knowledge, processes, and frameworks to confidently build and grow a product-led business.
In just six weeks, you'll be able to:
Wes Bush:
Someone who's used a particular product that's very similar like email or Gmail or something like that, so, they've had familiar tools that they've used in the past. But when you've got to retrain someone, I think that's really to me such a hard challenge to overcome when it comes to onboarding. And so, I think for whenever Abraham and I went through and did this onboarding tear down on it, it really just came to me. I'm like, "Wow, they're really educating you as you're going through that onboarding experience."
Wes Bush:
And so, I think for myself, that was one of the reasons why I kind of stood out to me, and I'm curious too we're going to go through this for another minute. But I see from everyone here, there's the Slack, the Miro. Yes, I mean a lot of you probably haven't used Miro before. But you're using it now because of the program. It's been hopefully pretty seamless to get in there.
Wes Bush:
Now, if anyone wants to jump in just unmute themselves and kind of share what is their favorite product business, and why feel, free to do so. If not, that's totally fine. We can always go through, and I'll go through some of the post-it notes. But [inaudible 00:01:17] feel free if you want to jump in right now too. This is your time to take the floor.
Ali:
Hey, I'll jump in. It's Ali [inaudible 00:01:25] here.
Wes Bush:
Yeah. Nice to meet you.
Ali:
Likewise. I too put Miro on here. And simply the reason being is because they seem to very cleverly remove barriers to entry. This is a product that requires multiple users to come in. And, like you said, many people probably have not used Miro before being part of this cohort here yet we seem to be clicking around and using it very easily. And it's actually quite a sophisticated product at the end of the day. So, kudos to them for whatever secret sauce they figured out to make it totally seamless to be successful with it.
Wes Bush:
Absolutely. Thanks for jumping in, Ali. Anyone else want to share what their favorite, the Predictive Index? There's a lot of folks from Predictive Index here that's awesome. Anyone else want to jump in and share what their favorite product-led business is?
Michael:
I got one that I would say it was really impressive because it's not an area you expect to find. It's intact which recently got acquired by Sage. So, you take an accounting application which is about as mundane as you can get, and it actually made it exciting and quick to turn up a chart of accounts, and I was experimenting with it, and I got to the end. And I built an entire company accounting practice, and they said, "Do you want to buy now?" I thought that was amazing because unlike Intuit and others is this heavy loading and the onboarding was seamless. It was fast, 20 minutes to turn it up. And by the time you finished, you did want to push the button and say, "Okay. I'll buy it."
Wes Bush:
Yeah. Awesome. Thanks for jumping in there, Michael. And so, I don't know if you can hear some of the similarities between what Ali and Michael were both mentioning when it comes to some of their favorite products. It's fast. It's easy to use. You can really experience the value of the product very quickly. And so, that's really when it comes down to a lot of these product-led businesses that are doing a fantastic job. There's a lot of commonalities there as far as what they can do and how they're getting you to use the product.
Wes Bush:
But one of the things that is often overlooked is what kind of product-led model were they using in the first place. Was it a free trial? Was it a freemium model? How much did they give away for free for you to use that product? And so, that's really one of the big things we're going to be covering today, is just what does? What is that product-led model for your business? And so, before we dig into that I'm just going to pass the baton to Ramli to go through a couple of things that we can dig into for today's class. So, Ramli, take it away.
Ramli John:
Yeah. Let me just share a little bit on this. Let me share my screen.
Wes Bush:
Oh, I actually have it highlighted on you, Ramli. So, you should okay.
Ramli John:
Oh, okay. Perfect. All right. So, thank you. So, a few things here. I know for some folks that the Miro was new. If you ever get lost with Miro, feel free to click on Wes's image when he's talking or my image on the upper right. So, right now, Wes is highlighting me so that if I move around, he can actually see me move my image or Miro.
Ramli John:
The other thing is I know some folks, the people's courses can be annoying. So, you can click here. There's an [inaudible 00:04:40] thing on the upper left. So, with that today, one of the things we're going to be talking about is getting confident with your product-led model. So, I'm just going to launch a quick poll here. On a scale from one to 10, how confident are you with your product-led model? So, I've launched a poll with Zoom, one being super, you're not very confident, and 10 being, yeah, I know what I'm doing Ramli and Wes. Just shut the heck up. You don't have to teach us this.
Ramli John:
But just show on that poll right now how confident are you with your product-led model. And even if you already have a free trial or freemium, you might have someone explore other things. And I see people are voting in. We have 63 people who have voted in the poll, and I'm just going to take a screenshot, 93, 94, all right. It's going up. So far, I can see the median is at seven. So, that's really interesting. Lots of sevens, and a couple ones, a couple fours. Awesome. All right.
Ramli John:
We'll keep that in mind because we're going to ask the exact same question after we're done with this workshop just to see if you've gained some confidence with your product-led model. So, moving on, I mean, like I said, our objective for today is really to gain clarity on the best product-led model for your business so that users have an opportunity to experience the full value of a product.
Ramli John:
Really, at the end of the day, if you're looking to go product-led, guiding your users to that value is one of the most critical things we can do. As Wes will talk in a bit, choosing the right model is critical for this. Just as a roadmap to where we are right now, we are in week two. we are designing a product-led model. Last week, we did a program, Kickoff. Next week, we're going to be talking about defining your end-user success which we'll talk about at the end of this.
Ramli John:
But one quote I want to share with you to kind of frame what we're going to be talking about today, not just talk about what you're going to be discussing as well as working through in this workshop. It's not really at the end of the day the... There is no perfect product-led model. When I was in business school, my strategy professor kept saying this over and over again, "Strategy is about making choices, and it's about trade-offs."
Ramli John:
If you choose freemium, you have to realize that there's trade-offs that you're making with that or free trial. There's trade-offs that you're making with that. It's about deliberately choosing what you want to be, but as well as what you don't want to be. That's a critical part of what we're going to be talking about today.
Ramli John:
So, just our agenda, we did a welcome. The next part, Wes will briefly go through the top six product-led models, and these are new stuff that we want to share with you, the top six product-led models. And then, we're going to go through pros, cons, and risk of the top six product-led models. And then, I know today's going to be a 90-minute workshop. So, if we have time, we'll take a break.
Ramli John:
And then, the fifth thing is we're going to do a mastermind discussion on best product-led models for your business. And then, we'll do just a little recap. I just want to pause here to make sure everybody, if you have any question, raise your hands up. If not, go on the reaction tab on Zoom and just do thumbs-up, or if a heart, whatever it is, give me some kind of reaction to make sure that we are on the same page that you're already, and you're pumped, and you're super ready to go. So, I'm seeing a bunch of thumbs-up-
Wes Bush:
Even getting some hearts.
Ramli John:
Ali, yup. Okay So, Andrea Chandler, thank you. Christina, thank you for that thumbs-up. Cody, the exposure and thing. So, I think people are ready to go. If not, let me know in the comments, and I will answer any questions you might have. I'm going to pass it off to Wes and to just talk about the top six product-led models and why it's so important to choose the right one for you.
Wes Bush:
Awesome. So, this is going to be the only kind of me talking and going through a specific stuff. The rest of this is all going to be peer-to-peer learning. We're going to get you in these breakout rooms, and you're going to be going through some of these activities. We're going to just facilitate that for you. So, it's not going to be a long time. But what I wanted to start off with here is actually more of a story. So, this company is called Tetra. And so, we have kind of chatted with the founder over the years.
Wes Bush:
And one of the things that they had initially, it's a company, Wiki. If you've never heard of tetra. So, if you've ever used a Wikipedia kind of tool for your company, you know the time to value for these products is actually pretty long because you have to go in, set up a bunch of documents and processes for HR, for your banking, for finance, you name it.
Wes Bush:
There's so many different things that you have to set up. And so, initially, in Tetra's early days, they had a free trial, and I believe it was even as high as 30 days, and they had experiments over there. They've gone from 14 days to 30 days.
Wes Bush:
And what they realized is that, wait a minute, there was a longer time for people to really use that product. And so, what they noticed is, wait, a lot of people were still upgrading going from that free trial to a paid plan. But when they started looking at their short-term churn, they realized it was actually quite high. And so, they started scratching their heads and wondering, "You know what? Maybe the model's off. Maybe there's something here that's we're not just helping people the best way we could potentially do it."
Wes Bush:
And so, they had to go to their investors and build a case around, "You know what? We want to experiment and go down this freemium path." And so, Tetra eventually made that jump. And along the way, there was a lot of risks that they were worried about. There was the risk of support costs. That's often one of the big things.
Wes Bush:
When you go freemium, you realize, "Oh, my goodness. There's hopefully a lot of people using this product." But that can also mean you do have a lot more forecast. So, they were worried about that. They're also worried about, wait, if there's no time limit of free trials and freemium, I mean freemium model you get specific features and a certain amount of features for free endlessly.
Wes Bush:
And so, that was also a worry for them. They were thinking, "Wait. Is it going to take people six months? Is it going to take them 12 months in order to upgrade. And so, they had a lot of these risks that they were evaluating. But to kind of save you the longer part of the story, they did go down this path. And what they realized within the first three months is that when they had the right product-led model for their business, they started realizing that their short-term churn went down.
Wes Bush:
They actually are pretty close to net negative churn right now which is fantastic for any business, and they also started looking at how long does it take for people to upgrade, and it actually wasn't as long as they thought. They were predicting four to five months. But it was actually closer to around two months. And so, it's really, really debunking some of those things. And so, whenever they had the right product-led model, they have now been able to scale much, much faster than they have been in the past.
Wes Bush:
And I just wanted to share that quick story because of the importance. Now, some of you right now, you are already product-led. You already have what you believe is the right product-led model. So, if that's you, I encourage you to go through the activities we're going to go through today within open minds. Don't try and just close it off and say, "You know what? This is it. This is what we've been doing for the last six years since, of course, it's going to work." No, just use an open mind as you go through this.
Wes Bush:
And those of you that have no product-led model whatsoever, I mean you're going to just be now aware of all the different options that you now have, and which one might be the best fit for your business. So, that's really our main objective today, get you confidence and clarity on deciding what that product-led model will look like for your business.
Ramli John:
So, just a question, Wes. [Granjan 00:13:10] had a question in the comments saying, "What is the cost of changing your product-led model? Let's say with Tetra, they went from free trial to freemium. I mean can you recall exactly what kind of costs or maybe, yeah, is changing that model?
Wes Bush:
Yeah. So, there is definitely a cost that they did associated to that transition. One of them was definitely on the support side. So, they did actually get a lot more tickets. They were thinking there's going to be 10X the number of tickets, but it was closer to about two or 3X the number of tickets. So, they did actually have to level up a bit more on the support side. But there is ways you can do that if you don't hop on a call every single time you get a ticket. Obviously, you're not doing that right now.
Wes Bush:
But there is ways to do more, low touch support to help out with that volume that you might associate. But I did want to mention too if you want to dig more into that specific story, if you go to week two on your April [inaudible 00:14:11], maybe, Ramli, if you want to share that link. We do actually have that interview. It's about an hour long, goes through their whole story of free trial to freemium. So, that's you, if you're in that bucket or you just want to learn more about it, I encourage you to go through that bonus content.
Wes Bush:
So, yeah. I just wanted to go through the six main product-led models. There is more to be honest. But these are going to be the 80/20 version of it. So, I'll start with the freemium model. Now, a lot of us are familiar with them. Whenever we were talking about whether it's Miro, I think what was the other one we went through at the beginning? Interact, you were mentioning for the accounting applications.
Wes Bush:
And so, a lot of them are freemium models. They are easy to use, easy to set up, and they're really, really powerful for your business. It's one of the most powerful customer acquisition models out of all of these product-led models if you do go freemium. With that said, there is a big risk which is, like I mentioned before, there's the higher support cost, maybe even higher server costs too of how do you support all of these for users if they're using a bunch of data on your end too?
Wes Bush:
So, it's the highest reward, highest risk kind of option out of all these. Then, there is something like more a new product, and I typically recommend something like this if you are a bigger company, let's say, over at least 10 million in our current revenue. When you're in this particular spot, you typically will have one or two products already that are working really, really well for your business. And you might say to yourself, "You know what? We do want to go down this product-led path." But we assume right now, if we do this on our main products, it might be too risky for us to go down this path.
Wes Bush:
And so, if you just create or spin off a smaller free product, that's a really great way to build that muscle internally as a business and see if it'll work for your business. And then, you can expand it out to the main products. And then, right here, we have the sandbox. So, amplitude uses this right now, and it's really an interesting option. It's definitely not the strongest custom acquisition model because when you think about the value exchange, it's not absolutely mind-blowingly crazy. You're usually looking at dummy data or something like that.
Wes Bush:
So, the value to the end user isn't super impactful. But it is a step in the right direction of being more product-led, is people can now go into the product and see what it's all about. And I would typically recommend this option if and only if you have this super crazy long time to value.
Wes Bush:
So, for instance, amplitude, they had a couple of strikes against them. One, product people were signing up for their products, and they needed the developer buy-in to get people and set up the product analytics. So, there was one big hurdle they had to do. And the second was, okay, even if you did get the event tracking set up, sometimes, you have to wait months depending on how much traffic you have, how many users you have to just start seeing meaningful results.
Wes Bush:
So, if that's you, that might actually be an option that you should look at. And then, we have two different free trials here. And I was initially thinking like, "Okay. Let's just share one of them." But they're actually so different. I wanted to break them down. So, an opt-out free trial is really when you think of, "Hey, I need to sign up with my credit card." You will typically see these on content sites.
Wes Bush:
And when you sign up for them, yes, you have that seven or 14 days. And if you want to get out of it, out of that free trial agreement, then you'll have to opt out. Hence, the name there. And so, typically, you're going to use something like this. if you have really, let's say, a ton, a ton of traffic, you want to really limit the number of people that sign up for your products. That's one way to do it.
Wes Bush:
There's also if you realize there's a lot of security risks or something in your product, it is a way to reduce the number of people in your funnel. But I will mention one thing is the difference in performance over the long term is typically speaking your opt-in free trial that doesn't require the credit card will outperform your opt-out free trial.
Wes Bush:
So, this is usually if you're just wanting to whittle down your funnel and talk to high quality people, this could be a really great way to do it, whereas an opt-in free trial without the credit card is typically going to be the longest best performing one at the end of the day.
Wes Bush:
And the last one I'll touch on here is what I call a usage-based free trial. And so, a little bit context behind this story too, so, Appcues initially had just a straight on opt-in free trial. [inaudible 00:18:54] is anywhere from 14 to 30 days. And so, it was working okay for them. But they started to realize that there was some symptoms that they had the wrong model.
Wes Bush:
So, one of those symptoms was they had high short-term churn. And so, when they started asking people, "You know what? Why are you churning out? Seriously, why? We have a good product. We're curious about this." And so, they started compiling these responses. And after a while, they realized like, "Oh, shoot. People are buying our product. These big enterprises are just buying our products to continue the evaluation phase."
Wes Bush:
And so, that was super interesting because they realize, "Oh, wait. It's kind of the same problem that amplitude had where product people were signing up for this product." And then, they had to get buy-in from the engineering team to really get this out into their product. And the bigger the enterprise was, the longer it took for them to eventually get this out. And so, oftentimes, people would be using Appcues for three months, and they still hadn't got the code onto the application and be able to actually test it out.
Wes Bush:
And so, they were just upgrading for the free trial at the end of it. And so, what they came up with was a usage-based free trial. So, you could use Appcues for a certain number of users for that particular customer, or prospect, or user whatever you want to call them. And so, it was really smart because it really gave them a limited amount of that product that they could use. And it wasn't time-bound.
Wes Bush:
So, kind of similar to the Freemium, but typically freemium products. When you look at them, it is really just like you typically will get unlimited views or some sort of cap on what you could do whereas usage-based free trial could be as similar as like you can only launch this to, let's say, a thousand users. And at the end, it's cut off. That's all you have access to. So, I hope that answers that question. [inaudible 00:20:56]. Awesome. So, we have covered the six main product-led models. What we're going to do now is Ramli's going to take you-
Ramli John:
[crosstalk 00:21:04] question. There's just a question here-
Wes Bush:
Yeah. Go for it.
Ramli John:
...around hybrids. So, from Sarah and a few other folks, they're talking about do product-led companies usually start off or when should they think about hybrid approach or should that combining a few of these together or is that something that you would not suggest in the beginning?
Wes Bush:
Yes. So, in the beginning, you definitely want to keep this as simple as possible. I'll mention another example too of a hybrid, not to get this complicated, but just to share that you can mix and match these. So, for instance, HubSpot has a free CRM. So, you can upload as many contacts as you want. So, they're utilizing a freemium approach as part of their customer acquisition model.
Wes Bush:
But since it's a multi-product company, there's a lot you can do within that particular product. It would be kind of crazy to think about, "Okay. You can just now explore everything in this 14 days. That'd be pretty hard." Maybe your powerhouse users would be okay with that. But the average person is going to be like, "I'm overwhelmed. I haven't even set up my marketing stuff. And now, I got to set up my sales stuff. And now, I got to set up my support of stuff." This is a lot I could do in this product.
Wes Bush:
And so, what they've done is they mixed it. They have the freemium model they start with. And then, if you want to explore, let's say, the marketing side of the product, boom, you can now have that free trial and get started with that particular part of the product.
Wes Bush:
So, that's just to share an example. It's typically, for most of us here who have a bit more of a simpler business without that many products, that won't apply. But just want to share it in case you're thinking about what that might look for your business. So, hope that answered the question.
Ramli John:
Yeah. I just have another question from Angie.
Wes Bush:
Go for it. These are good questions.
Ramli John:
Yeah. How about this model for you to users paid for business? Example, Pinterest, Yelp and LinkedIn. If it doesn't clear, Angie, you might have to-
Angie:
No, no. I think I'm seeing that that's really a freemium model where it's free for users. But to upgrade, it's because you have business needs, and that makes it freemium.
Wes Bush:
Yeah, and that's absolutely what Canva is doing. So, you have a really powerful freemium model. You can create as many graphics as you want. But if you want the business style guide, for instance, it's like, okay, you want to have the same branding and the same colors on a lot of these assets you're creating.
Wes Bush:
Then, you'll just upgrade towards that for the team. Now, with that said, there is once again for Canva 2 not to try and complicate it. But they do have different upgrade paths, for instance, if you want specific graphics like, okay, great. You okay paying a dollar for this? Most people are. So, there's different ways you can monetize it outside of just they're on this monthly subscription. Awesome.
Wes Bush:
And Ramli, did you want to go through the next activity? This is going to be fun.
Ramli John:
Yeah. So, I know there's a few other questions here. I know Bruce asked about the best option. We're going to go through that with this activity here, and what we're going to do here is we're going to group you into... Oh, can you click on my image?
Wes Bush:
Oh yeah.
Ramli John:
Yes, thanks.
Wes Bush:
There you go.
Ramli John:
Yeah. So, we're going to group you into groups of four to five. And then, in that small group, just introduce yourself first, what your business is. And we're going to ask you to go through each of the six models we have so far. And I know there's a lot of conversations around hybrid models which we'll get into after. We're trying to get into the basics first. Here are the basic building blocks to build those hybrid models. What are the pros, cons, and risk for each one? And we'd like for you to go through each of the model on the right here.
Ramli John:
There's some boards here, freemium. There's pros, cons. You're going to use Sticky Notes. In that groups of four to five, you're going to make sure to go through each one, and that's why I ask you if you can assign a timekeeper. So, after you've introduced yourself, figure out who your timekeeper is, the person who likes to keep the time. And aim to have three to four minutes per model. It's going to be super quick, and that we did it on purpose so that you can... Just a very top level have the pros, cons, and risk for each one.
Ramli John:
And then, we'll go through this together after. I would also suggest you select one person to be responsible or writing down everybody's ideas in Post-It Notes or you can do it a free fall. But what I find is if everybody's free fall. There's no discussion that's happening. So, that's really the point of this, is for ideas and more stuff to really collide with each other through this.
Ramli John:
I mean I open up to anybody before we kick you off to your groups. Well, what kind of questions might you have about the instruction? Is it clear? If it's clear, give me a thumbs up. If it's not, unmute yourself and just let me know. Let Wes and I know so that when we send you to your group, you can make sure to follow along.
Speaker 6:
Can I ask one quick question, Wes? Thinking about the Sandbox versus the usage-based free trial because amplitude or [inaudible 00:26:21] these ones have a usage-based free trial. They flip you once you go events or users. So, the Sandbox's key characteristic is the fact that you have a dependency on developers or in someone else to actually go to real data. Is that the critical [inaudible 00:26:42] difference?
Wes Bush:
Yup, you got it. So, most Sandbox environments, there's no kind of setting up of integrations and all that stuff is just like, "Hey, we've filled this with some sort of data." So, you can get a feel for what is this product going to look like. And for instance, for amplitude, if you select your own product and you're interested in onboarding, they might show you a dashboard with here's what your typical user onboarding journey could look like.
Wes Bush:
So, it is super applicable to them. It's just they didn't have to do the months of work in order to get there. You can just quickly see it.
Speaker 6:
It's almost like a fake freemium almost. You can use it forever. But because it doesn't have your data, it has actually no real value [crosstalk 00:27:25].
Wes Bush:
Yeah. It's definitely quicker to start off or spin up a Sandbox. There is actually quite a few tools that are popping up to serve this problem right now with product-led growth. But, yeah. Definitely, if you can, I want to eventually move to another model that will be able to get someone using their own data because it's just a totally different experience when you're like, "Oh, great. I see data." I also look at white papers. It's not the same kind of experience at the end of the day.
Speaker 6:
Yeah. That's good. Thank you.
Wes Bush:
Great question. All right. Ramli, ready to go?
Ramli John:
All right. Chan, I apologize if I mispronounce your name. [inaudible 00:28:09] ask if we can get the summary of each model. We'll get that to everybody so that you can get to that. Just everybody give a thumbs up if you're ready to go. I just want to make sure that you're still with us. This is not a one-sided conversation. I've been active on a message. Okay. Adam gave a thumbs-up. Alan, Andrea, Angie, [inaudible 00:28:33]. I'm seeing a bunch of thumbs up. If f have any questions, just send us a message. We're both on Slack as well or in the message here. But I think we are ready to kick this off. Let me just find this.
Wes Bush:
Awesome. So, this part is going to really when you go through this activity, it's going to help you build that decision making framework where you understand each of these models pretty instantly. [inaudible 00:28:58] understands the pros and the cons and the risks of each. So, it's just going to make you that much more effective whenever it comes to deciding what is the model that will have the best fit for us. So, if you do have lots of products for your specific business for the purposes of this, just try and hone in on one, one particular product for it. Don't try and be like, "Okay. For this one, I could be this. For this one, that could be that." It's just going to be a lot more valuable if you stick with just that one product in your mind.
Ramli John:
All right. I'm about to launch everybody to space in groups. You're going to see a pop-up on your screen right now. You can just click join.
Wes Bush:
Awesome. I see where people are joining. Welcome back. Awesome. So, I hope everyone had fun going through some of those pros, cons of the six product-led models. That's one of those things where I feel like had I done that earlier on my early days of helping companies identify what product they'd model would be the best fit, it would have saved so much time of just figuring out, you know what, what is the benefits of some of these models because, a lot of times, you might look at a opt-out free trial and just say, "You know what? There's no reason why you'd want to have a credit card or something like that."
Wes Bush:
But as I can see going through some of the Sticky Notes, there definitely is a lot of reasons why you might want to have that particular way for your particular business. And so, what we're going to do now is we're going to take a quick, very quick, five-minute break, and there's two things I want you to do. So, the first thing is if you can take a minute, just go through share what are your takeaways from that last activity.
Wes Bush:
I'd be super curious to see what did you learn? Did you now have a lot different perspective on some particular models than you did in the past? And then, during this break, if you are, let's say, more introverted, you want some time to think about what you're going to cover in this next breakout room, what I am suggesting you to do is write down out of all the options that we've just covered. Even if you want to create your own hybrid model, that's fine too.
Wes Bush:
But trying to identify what does that product-led model look like for your business and try and bring those three big reasons why you believe that's the case for your business. And then, what you're going to do during that next session together is you're going to challenge each other. Really, why is that? And really dig deep on those specific reasons.
Wes Bush:
So, we're going to start the break now. Ramli's going to play some fun music. If you do have to grab a drink, go to the bathroom, go ahead. This is your time, and I'm just going to turn off the video for now. And we're going to be back at five minutes from now. So, I'll see you soon. Bye for now.
Wes Bush:
So, without further ado, we're going to go into the next mastermind discussion. And so, this one's going to be one of the most impactful pieces of it all. It's going to be really getting you to challenge each other on what is that model that you believe is the best fit. And why we do this activity is because you're going to have to do the same thing to your team. But now, you are all trained. You know a bit about every single model so you can challenge each other and really help each other learn what is the best way to do it. So, this is your first take trying to make a convincing case and challenge each other. So, Ramli, want to walk us through?
Ramli John:
Yup. If you just click on my image from the upper-
Wes Bush:
Go for it.
Ramli John:
Yeah. So, for this one, we are going to group you into smaller groups so that we can go and spend five minutes each. So, for about five minutes, one person's going to be on the hot seat. You're going to introduce yourself. And then, you're going to share a little bit about your business and share what is the best fit product-led model for your business, and why? And consider once again going back to the quote, what are the trade-offs that you're making based on that choice? Once again, there is no perfect product-led model. It's about making the trade-offs with your choice there.
Ramli John:
And for the rest of the group members, you can ask follow-up questions. And really the point of this is to challenge... the tips in the bottom is to challenge each other's ideas. I would also assign someone to do team timekeeper so that we get through this in five minutes. It might be new for some people. So, we're going to just briefly roleplay through this. I'm going to roleplay this with Wes.
Ramli John:
So, for example, I'm on the hot seat. Hey, my name is Ramli John. I'm a product-led, and we believe that freemium is the best because we have a free certificate, and we have a paid program.
Wes Bush:
And why do you think that is really? I know there's the freemium and the free certificate. But why not have something like a free trial?
Ramli John:
I mean it's a challenge right now because we're trying to figure out our experience. And with a free trial, we need to hire a full-time designer with that. So, that's an option that we'll have probably in the future to have a free trial.
Wes Bush:
Okay. So, just start with freemium. And then, eventually emerge to something more like a free trial.
Ramli John:
Yeah. So, as you can see here, we probably could have gone on, and then, Wes going to push me a little bit.
Wes Bush:
[crosstalk 00:34:28] time sake.
Ramli John:
Yeah. It [inaudible 00:34:30] a little bit more mean. So, I mean that's the point of this, is to really just challenge each other with the folks here. And before we get off like we always do, we want to make sure that we ask our interview questions. Does anybody have questions before we launch you off into your particular rooms? If not, can-
Wes Bush:
Yeah. You go.
Ramli John:
Give me the thumbs-up. You're already doing it. People are already giving thumbs-up without me telling them. I'm seeing 19 people thumbs up, Angie, Chandler. All right. So, we'll kick you off and send you to your particular rooms. Yeah. That's great. [inaudible 00:35:16] rooms. There it is. So, just click on that button on the screen and join the room.
Wes Bush:
Awesome. And have a fantastic discussion. Hello. How did you find the last activity, if you don't mind, Sharon? [inaudible 00:35:38]
Sharon:
Yeah. We had good conversations. There were only four of us. So, we kind of buzzed through it and then came back when we saw the note. But I think [crosstalk 00:35:46] were pretty confident in what we're already doing and everybody was kind of like, "Yeah, sounds good."
Wes Bush:
Awesome.
Ali:
I appreciate the different perspective that I got from Keith during our conversation. It's something we've been debating internally. But it was good for him to chime in and just sort of validate a little bit of what I've been thinking.
Wes Bush:
Awesome. Yeah. Sometimes, it's weird. It's not even the new perspective. It's like, "Great." I'm not the only crazy one [crosstalk 00:36:15].
Ali:
I think that's been a recurring theme for the last two weeks actually out of any of these. Yes.
Wes Bush:
Good. Awesome. For your group, any still hesitations or things you're still thinking about where you're like, "You know what? I'm not 100% sure about how to approach this or what to do?"
Ali:
Because I'm on the product marketing side, my product management peers are a part of this as well. So, I'm very curious to hear from them whether they are thinking what I am thinking with respect to maybe there's actually a different approach we could take here that we need to consider.
Wes Bush:
Okay. Awesome. And I will add that. So, for everyone who just joined, I was just talking with Ali, and he's mentioning like, "You know what? I'm having this thought. I'm pretty confident like what I'm thinking for this particular product-led model." But it'd be great to see what your colleagues are already thinking.
Wes Bush:
And so, this is, Ramli's going to touch on a bit at the end too, one of the big homework assignments that we're going to get to do is really just chat with your team ahead of time, go through even a similar activity that we did, and try and see if you're still on the same page and everything else. So, I want to make sure I'm conscious of everyone's time and just recap the last piece of it. So, we have gone through the pros, cons, and risks of each of these product-led models.
Wes Bush:
And by now, you should have at least a better understanding of, you know what, what is that ideal product-led model for my business. And so, what I want you to do is if you can, in this section right here where it says identify your product-led model, if you can just put your name and model or even your company and just put it right over here whichever box you fit into just to see where do you fit on the spectrum. It will be really interesting to see if there's a lot more people that are leaning towards freemium or even the Sandbox, that would be fantastic.
Wes Bush:
And this will also be fascinating for you. If you took this as a team and you start realizing like, "You know what? Why are they thinking this like?" And you can go through and, after this class, kind of chat with them more about what that will be for your business why they have those different thoughts. What kind of insights they got about it?
Wes Bush:
So, I see there's a lot more people coming in adding that which is awesome to see. And we're going to continue to do that for about another minute. And while we're doing that, feel free to put in your name and company for the product-led model that best suits your business. And in the meantime, Ramli's going to set up the poll to see how your confidence has changed as it relates to naming. What is that product-led model for your business?
Ramli John:
All right. I just launched that poll. Let me know if it's changed last time our median was seven, and we just want to know if your confidence has slightly improved now that you realize the trade-offs, the pros, the cons, and the risk associated to your product-led model.
Wes Bush:
Awesome. I see a lot of polls coming in. Looks like we've got 70 people out of 105 so far. So, if you haven't voted yet, please add to it. Looks like there's a lot more eights and nines than last time. That's for sure which is good to see.
Angie:
While we're doing that, I have a question for you.
Wes Bush:
Go for it.
Angie:
After this class, I think what we have is a new product-led model, not freemium. But I noticed no one else is voting for new product for us, and what it is we built a new standalone product that is kind of a dumbed down version that delivers a little less value and hides a lot of the complexity, and it is free. And you can upgrade to other things at some point in the future. But for the most part, you can have full use of the product as it is that we build.
Wes Bush:
Okay. So, yeah you're thinking like, "Okay. It's new product. But it's also more a freemium model." Is that what I understand?
Angie:
We built a free version of our current paid product. It's completely standalone, and it has a smaller feature set.
Wes Bush:
Okay. Awesome. Yeah. And I've seen that happen many times before too. And so, I just put your kind of boxes like, yes, this is a new product. But it's also leveraging that freemium model. So, maybe it's even more a hybrid model in that particular case if you want to put it somewhere down here too because there is that combination is a new product. But it also has that freemium model that it's leveraging. So, awesome. Thank you for asking that, Angie.
Wes Bush:
And looks like the poll has come through. Great to see there's a ton more eights and nines versus the last one. And if you're still kind of hesitant or you don't quite have complete clarity on what that model is for your business, we're going to have time at the end if you just want to ask questions specifically about your business. But I just want to, Rami, if you want to wrap up for the last part and share somebody the action items, and what is next.
Ramli John:
Yeah. For sure. I mean that's all, folks. Action item wise, I would suggest you go with your team. Just have a discussion there's this worksheet that I've linked here. This was also in the on-demand class, productled.com/plg-model-worksheet. You can walk through what we just talked about, go through the pros and cons and risk with your team, and really figure out what are the trade-offs. Once again, going back to that quote from Michael Porter, if you're choosing that model, really think through what are we choosing to not do versus what we're doing based on that.
Ramli John:
Have your team presented on their own findings and agree on a model to go forward and run through that worksheet question together again. Next week, we're going to cover understanding your users better, and we have a guest instructor, Katelyn Bourgoin. She's the CEO of Customer Camp, and she is going to be talking about how to get more insights from your users. It's so critical when you're trying to be more product-led is to really get to know your users better.
Ramli John:
And also, we're also doing a free workshop on intro to PLG session next Friday, May 7 at 12:00 PM Eastern Time. So, invite your whole team, please. This is the purpose, and this is one of the reasons why we did this, is you can go to... There's a link right there /intro-plg. It should be linkable, and I'll share out this Miro board after a little bit. So, I think that's all for today. If you have any questions, Wes and and I are going to stick around for the next half hour or whatever long it takes to answer any of your questions. If you have a call, you want to eat lunch, you want to eat dinner, wherever you're calling in from today. This is our sign off, and thank you so much for joining us. But for anybody else who wants to stick around to ask your question, we'll be here.
Wes Bush:
Yes, and thanks again for everyone bringing your energy in those calls. I know today was a lot of chatting with each other. So, I'm excited to see. I got a lot of comments. People are enjoying that session, and we're going to do a lot more of this connection in the future. So, thank you so much for coming, and I'm going to start going right into the questions.
Wes Bush:
So, if you do have to jump, like Ramli said, that's totally fine. It's great having you here. One of the first questions I'm going to ask was from Janelle. So, yes. Actually, no, there was one more. I think it was specifically talking about Sandbox. So, if you're doing, yes, a Sandbox, and you want to connect with others, make sure to reach out to Janelle.
Wes Bush:
One other thing I was thinking about on that topic too is if you've identified, you're like, "Hey, I'm pretty confident. We're going to do this freemium model or the Sandbox model, just put it in the product-led growth PLG Spring certification channel in Slack. Just raise a hand, be like, "Hey, I'm confident I'm going to do this particular way." If anyone else is in the same boat, I want to connect with you because you're going to have someone else who's going through that same challenge with you, and it's going to be so valuable to have someone else that you can just whether it's vents about like, "Hey, there's these problems with Sandbox environments," or just go through certain challenges that they're facing and have a sounding board who's going through the same stuff as you.
Wes Bush:
It's going to be super valuable. So, make sure to take advantage of that as that is going to be so helpful for you. And yes, continue to do that connection. And as well, if you have any more questions, don't hesitate to put them in the Slack group as we'll get back to you on that too. Awesome.
Wes Bush:
And Jeff, I saw you asked a question. So, what are the KPIs for validating your model? Sales and revenue, of course. But how else can success be demonstrated? Great question. I love this one, and I think I touched a little bit about it earlier. Sometimes, it's not so much they keep you guys of what we're looking for the new rev. That's great and everything else that can show you that you're going in the right direction.
Wes Bush:
But sometimes, it's what's also happening that's not a good indicator. So, short-churn term. That's one of the most common ones that I see. If you don't have the right product-led model, you'll typically find in that first 90 days, people are either just not coming back to the product or you just have a really high churn rate. And so, that might mean, "Hey, people are upgrading because they aren't able to access the full value of the product. They don't fully understand it." And so, they're just buying your product to test it out.
Wes Bush:
So, that's one of, I guess, big KPIs that I would look for whenever you're seeing like is this successful or not. So, if that answered your question, Jeff, let me know. If not, feel free to unmute yourself, and let me know if there's something else you'd like to dig in towards that.
Jeff:
Yeah. I don't want to take up the entire time here. But I think that was a great start. I think what we're seeing on our side is we're continuing to add more of these models to find out what's going to work, and it's becoming a little bit of a burden on our engineering team. So, we want to make sure that whatever it is that we're doing is going to get us to the silver bullet fastest which I know isn't exactly a good marketing mantra.
Jeff:
But if there's anything else from the group or any other considerations that we should be looking at, I'm more than happy to talk about it too on the Slack channel. But thanks, Wes, for your time.
Wes Bush:
Okay. All right. Thanks for jumping in there, Jeff. I appreciate it. Awesome. Okay. So, Allison, what about testing strategy for the model selected? Yeah. So, this is really good because you could start really big to make a big splash and see immediately, like, "Hey, did this work for us or not?" It could be a pretty depressing quarter if you go all in, and you're like, "Oh, my goodness. It wasn't the right model." Now, we know.
Wes Bush:
So, one of the best ways I've seen a company roll this out is super simple but effective. So, they used AB testing tool. It was just Google optimized, nothing fancy. It's free, and they just decided, "Okay. So, we're going to show a free trial call-to-action to just 1% of people who come to our website, just 1%." And so, at that time, they had one person dedicated towards onboarding these people and walking them through the product since there was actually no automated free trial experience one bit. It was all manual. They're kind of figuring out as they once.
Wes Bush:
And so, they started off with that, and it was really cool because they started small. And then, they just started raising that percentage. They went from 1% of website visitors would see the free trial. Then, they got 2%. And when they started seeing the success signals, like, "Hey, people are finding a lot of value. They are upgrading. They are really rating fans of this product." Then, they just started increasing that percentage until now. It's the main call-to-action on their website. So, yeah, Allison. If you do have those success metrics in mind and you can write them down ahead of time so you can look out for them as far as like, "Okay, was this a success or not," that's just going to make it that much easier for you to prove to your team we're seeing these positive signals. Yes, we need to move more in that particular direction. So, did that answer your question, Allison?
Allison:
Yeah. That's helpful. And then, for the folks that didn't see the free trial, they just had a paid entry into the product?
Wes Bush:
In that case, it was just a demo request call-to-action.
Allison:
Okay. Got it. Now, that helps. Thank you. Thank you.
Wes Bush:
All right. Awesome. And I'm seeing a lot of plus ones for Abdullah's question. Okay. Ramli, do you see that one at the top?
Ramli John:
Yeah. It looks like it's about can you tell me more about the new product model, use case in the market right now? I believe that's the right question. Yeah.
Wes Bush:
Tell me more about the new product model use cases in the market.
Ramli John:
Yeah. Is there any other ones that you can think of? I mean the one that I recently could think of was the HubSpot [inaudible 00:49:46]. But an example of a current, they release a new product instead of catalyzing their own.
Wes Bush:
Yeah. Typically, you're going to use the new product if you have an existing product that's working really, really well for your business. So, you don't want to really disrupt the cash cow product the thing that's working for your business. That's when you're typically going to see it. There was another example too. They recently just got acquired. They're called RD Station in Brazil. They're kind of the HubSpot for Brazil. And so, that's exactly what they did. I think it was kind of similar to what Allison was mentioning with the new product too where they created this dumbed-down free version of the product. It was a lot easier to use.
Wes Bush:
Salesforce has done this too with their light product. And so, it's a really easy way to really without kind of disrupting your main product, you can start with something a bit smaller, a bit easier test the waters out. And then, when you start seeing those positive signals, then, you can start making that potentially your main product or in some cases too, it's even better if it's a complimentary product.
Wes Bush:
So, I'll give an example. At Vidyard, it was a video hosting platform. So, you would upload your video to the main platform. And then, you would put that video to your website. And then, you're able to see who's watching the video, how long are they watching the video, and track all those analytics. So, when we first had a free trial, it was pretty hard to get people to do that. They had to basically come to the website, sign up for the free trial and then upload that video to their website.
Wes Bush:
So, there's actually quite a few steps if you think about it that someone would have to do. And if they were going to get any meaningful sort of traffic in that free trial time, they would probably have to have a pretty good video and a website with a lot of traffic. So, there was a big criteria of what they needed to do for them to be actually a successful free trial user.
Wes Bush:
And so, the other new product that we introduced was this Chrome extension, and it was really simple. It really just made it easy for you to record your screen and record video and send it to someone. And so, this product was complementary. You would create these videos in seconds. And then, it would populate into the main platform where you can then see the analytics behind these videos.
Wes Bush:
And so, oftentimes, when you're thinking about these new products and how could we launch it, don't just think of like, "Let's launch something random." Ideally, it's complimentary. I'll give you another example. So, ConvertKit, they're an email marketing platform, and they make it easy for you to send emails to your list. So, they started identifying and looking at the main job to be done like, "What does someone need to do to build their list?"
Wes Bush:
So, again, send more emails out. And so, what they really did is they created a free landing page tool that would give people the templates and the resources to easily make landing pages so they could capture more people. So, I hope those examples get you to think about there is many, many ways you could do this to take that step in the right direction of building that product-led arm. But ideally, it's starting small, and it is a complimentary product for it to work. So, I hope that answers your question, Abdullah.
Abdullah:
Yeah, thank you so much.
Wes Bush:
All right. All right. So, Louis, it seems the only two models discussed that are mutually exclusive are opt-in free trial and opt-out free trial. Obviously, we should keep things simple. But why do we really need to choose between the five versus a hybrid model? Okay. So, the main thinking behind it is what are you going to lead with? And thinking about each of the really good advantages and disadvantages of each model, yes, you can totally mix and match them.
Wes Bush:
But when you understand them on their own, that was part of the reason we did that activity that way so you can understand like, "Okay. A usage-based free trial is pretty similar to a freemium model." But there is a distinct difference about what that might look like for some businesses and how that might work for your particular product if, let's say, it's really expensive for you to roll it out to someone. You might want to go more with a usage-based free trial than something that's just like, and you get unlimited access to it for the freemium model or something like that, that would be harder to maintain.
Wes Bush:
So, did that answer your question, Louis, or was there something else you wanted to dig into?
Louis:
No. I think it does. We play with a couple of these models at [inaudible 00:54:36]. And so, I was taking the exercise to wonder should we simplify? Are we taking too many on? I think you're right. Each different model has an advantage to a particular aspect of our business which is why we stumbled on a hybrid. But that may not mean that someone else would have the same hybrid kind of thing.
Wes Bush:
Yeah. Definitely. And when you get mixing and matching them too, there can be some really interesting combinations. I'll give you one too where it starts off with a fully premium free trial. This was a sales serum. But then, they created this Chrome extension which lived in your Gmail was just kind of surface data about your contacts. You can learn more about them. You can see their Twitter feed and all that stuff.
Wes Bush:
So, whenever you reach out, it can be more contextual. So, that was something whereas they realized, "Hey, let's give them the free trial first." But on the back end, we're going to give them that Chrome extension completely free. It's going to be a freemium model, and it serves a good purpose. It's valuable for the user. But at the same time, they were harvesting all of their data. So, there was an actual good reason for that business to offer completely for free where they didn't have to monetize that. It actually helped them build a better serum.
Wes Bush:
So, depending on your particular industry and how you structure it, there can be really great combinations in the mix. Awesome. All right. So, let's see, Trisha, Kyle Poyar from OpenView recently mentioned that it's normal to have 50% of trial users to be tire kickers and not the right audience. Yes.
Wes Bush:
So, that info made frictionless signup [inaudible 00:56:16] more, yes, palatable. So, that is something where even in our experience too, what we found is that from a first-time user experience, it's pretty typical to lose about 40% to 60% of your users in that first-time experience. They will never come back a second time, and that's kind of what actually got me into product-led growth because I was so concerned about that.
Wes Bush:
I was looking at some company's data and realizing, "You know what? That's a ton of people." That's almost half or sometimes, in a lot of cases, it's over half of the people who just don't come back. And so, it is good to know that as far as that goes. But there is a lot of things in week five with the straight line onboarding experience that we'll cover that'll actually help you reduce that amount. Awesome. Now, I don't see any more questions in the chat. But there is. Yes.
Deepa:
Hi. This is Deepa. So, I did post a question. I think you might have skipped past that. I just wanted to understand the hybrid model specific use case of free trial and freemium. And if there are any guidelines that you would suggest to keep in mind for the hybrid model to work well.
Wes Bush:
Yeah. I want you to give me a bit more context of your product.
Deepa:
We are a B2B SaaS company called PagerDuty. So, it's a monitoring software, and we had free trial, and it was opt-in. And then, we recently also introduced freemium sometime during pandemic. And we're seeing a little bit of difference in terms of how different segments are converting. And I don't think the conversions are happening at the same rate that we expected.
Deepa:
So, I was just curious to know. And, of course, we're still in our experimentation phase. So, this would be the right time to adjust anything. So, I was just curious to know if you have any guidelines to suggest or any experience to share.
Wes Bush:
Okay. Yeah. And so, right now, is your model purely freemium? Is there any combination?
Deepa:
It's a combination. So, we do have a freemium product. And then, we have a free trial as well.
Wes Bush:
Okay. So, how do they work together? Is it completely free, and then they can access part of the free trial?
Deepa:
There are about three users that can access freemium, and if you need to add more, then they have to buy one of the plans. And in the plans too, they get to try 15 days free.
Wes Bush:
Interesting. Okay. So, they can start as a free user. And then, if, let's say, they have 10-plus people in that team, then, they can start a team trial. Do I understand?
Deepa:
Yup.
Wes Bush:
Yeah. No. I've seen that work really well with the folks at Lucidcharts, and they use that exactly same model. It's free. For the first person, you can create a certain number of charts and create a certain number of elements. And then, if you do want to add more of your team, there is that team trial. And so, I think that's definitely a really smart way of going about it because what you're really doing at the end of the day is it's just really reducing that burden enough friction for someone to really say, "You know what? Am I okay adding my team to this?" Seven day or whatever the number of days is that makes it easier for people to go through it. And is that an opt-out free trial?
Deepa:
It's actually opt-in. So, I'm curious to know whether given that we have freemium, we should technically make it opt-out because that makes more sense to me.
Wes Bush:
Yeah. So, in most cases, nine times out of 10, I've always seen the opt-out free trial when you start with freemium. And then, you have that other option for a free trial upgrade within there. There is companies that do the other way too. But I think it is one of those things when you think about you've got people in the door with the freemium, and it's just going to be easier. They're already going to upgrade at that time or they were thinking about it.
Wes Bush:
But you just made it a bit easier for them to get through. So, it would be interesting. At the end of the day, these things all come down to testing. I could be totally wrong I'm telling you some advice. So, it depends on your audience. But I would recommend trying it both ways and just have a specific time limit of how long you're going to run this test, and what that will look. What are the KPIs of success for both an opt-out and opt-in free trial as far as that goes? But I love the way you're thinking about it. That's awesome.
Deepa:
Thanks.
Wes Bush:
All right.
Sam:
Hey, Wes.
Wes Bush:
Yes. Hey, Sam.
Sam:
I had a question, a more detailed question, on the usage-based model that you're talking around, and it's all to do with the metric that you pick. So, what rules do you think it makes sense in terms of when it comes to Amplitude right now. I'm on a free trial with them where I'm allowed to send 10 million events for free. And then, once I send my 10 million from first, I pay. And you mentioned the MailChimp example of 2000 contacts a month. So, what do you think of good properties for the metric you pick to have and how do you then pick your threshold on that?
Wes Bush:
Good question. We are actually going to cover that in the monetization week. So, we will dive deeper. But I can give you a bit more context too. Give me an example for your company. What's your product? What are you typically charging based off of right now?
Sam:
So, we're a people development platform. So, we help managers run and facilitate the development of their team. So, anything from tracking performance goals and so on. But then also particularly for sales people, we can assess their performance and recommend whether they should improve on negotiation or prospecting and so on.
Sam:
So, the way I think for us is our uses metric might actually be per person because you've got a manager who will use it for each team member rather than something arbitrary like number of goals set. So, I'm trying to work out what our uses metric could be basically.
Wes Bush:
Okay. Yeah. No. It sounds like you have a pretty good idea of what it could be in that particular case. I think the main problem, I see a lot of companies run into whenever they're thinking about that pricing and packaging and what that might look like is they start doing it just based off of features, and it's like, "Oh, you're going to get access to this feature for free. But not this one." No, not that one.
Wes Bush:
And the problem with that especially if you have a freemium model, for instance, is you're going to be using that product or that particular feature. And then, you see all these other shiny objects, they're like, "Oh, cool. There's other stuff. But I never have been able to see what it's able to do." And right now, actually in Lucidcharts, I've been building out our org chart, and there's this one thing where it's a comment, and I see I need to upgrade to another pro plan which I'm already on one of their plans, and I'm like, "I don't even know what this looks like."
Wes Bush:
And so, I have no reason to do it. I'm just going to use a note feature whenever I'm going through this. So, there is certain limitations on how you do that. But if you can think about, if it's users and it's something that's really simple, there's a couple of ways you could validate that, that we'll go through in that particular module just asking people like if you give them three or four options, what way would be the easiest way for you to start and get your account set up? And if you do ask and you validate it that it is users, that's going to be the right step in the right direction. But, yeah, glad you're already thinking about that because that's an important part of that upgrade experience which if you don't have that value metric, and what that looks like, it can be pretty hard for people to understand how much do I owe you? How much do I pay for your product when you don't have that metric? So, love it. Good question, Sam.
Sam:
I appreciate that.
Wes Bush:
All right. Anyone else want to jump in here while we have some time?
Louis:
I had a question about the opt-in sign up model. So, we have a free trial people can sign up from our website from. And over time, we've seen more abusive users. And now, we're in a race to kind of fight fraudulent signups and going through the game of domain blocking and things like that. And curious about that friction. What's the right amount of friction to add there, and what are other people's doing to combat that?
Wes Bush:
Good question. I love this one. So, I'll give you an example or another story about company who had something similar. They were kind of a stock photo site specifically for Instagram. And so, they realized same thing. They're like, "Oh, my goodness." They had so many robots signing off for their site and just swiping. They had, I think, it was a free trial. And you could get free access to 10 or 20 images or something like that, and they would have all the rights within that free trial to use them however they wanted.
Wes Bush:
So, these people were setting up these robots to just create as many accounts as possible and just take all these images off their site. And so, it was really a big problem for them. And one of the ways they decided in the short term to deal with it was, let's just create an opt-out free trial.
Wes Bush:
So, they had a bunch of traffic. They decided, "Hey, let's put that credit card up, and that's going to create a bit more friction for people to get to that part at least, that way, if they have a credit card, chances are it's a real human." And if they're creating these bots although there's ways around it, it will be harder for them to create these hundreds of thousands of accounts that we're signing up for their products.
Wes Bush:
So, that's one way to do it. But I would kind of encourage you to try and keep that as a last resort. Is there other ways that you could get people to really validate that this isn't a fraudulent account or anything like that. There's captcha which is just super easy. I'm sure you probably have something like that already potentially. But it could be if they don't activate their email, here's another way you could do this.
Wes Bush:
I was working with a company called snappa.com. And so, they initially had an email activation step as soon. As you would sign up for the product, you wouldn't go into the product. It was like you had to go into your email and then click yes, I'm a real human, I'm going to go in the product. So, I wouldn't recommend that right off the bat. But what they did is they would kind of delay that step.
Wes Bush:
So, for instance, the first time you sign up for your products, people can go in just like they're doing right now. But the second time, if they haven't activated their email yet, then they just go to the login page, and they can't access the product until they activate it. And so, whenever they did that, they realized it didn't impact their monthly recurring revenue. They actually saw a big spike in their monthly recurring revenue and is one way to do it where you really vet the people signing up for that product. Cool. Good question. And anyone else have anything else you'd like to dig into today?
Cody:
Hi, Wes. Cody here.
Wes Bush:
Hi, Cody.
Cody:
Hey, there.
Wes Bush:
Nice to see you.
Cody:
Nice to see you. Hey, Ramli. Quick question regarding existing customer bases. Much of our conversations have been about new customer acquisitions, freemiums and trials, as it applies to that movement of people into try before you buy. What about when you've got a large established user base? We've got a decade of businesses using our products, and we find ourselves as we add additional features or we overlay entire new products onto them that we're always conflicted with what to give and what to now charge for, right?
Cody:
No one wants to be nickel and dime rolled out this whole brand new product. You've got all this capital cost into it, and it's valuable. But why do I need to pay more because I already have this? So, a perfect example, Figma, they just relaunched FigJam this past week which is a Miro-esque product.
Cody:
And here, they're giving it away free for a year. So, they've given basically us as existing Figma users a year to try it. And we've been kind of flirting with, wow, how do we not give away everything? And where do we look at freemium as it relates to products to existing customers? I understand the complexity and solution on new customer acquisition. But how do you, guys coach people with existing customer issues and freemiums to people that are long-time users?
Wes Bush:
Yeah. I mean that's such an interesting one too when you do have that large established base. You mentioned one potential solution that you've witnessed at Figma where you're going ahead and giving people a free year of what that might look like for your product. It doesn't have to be that long. It could even be a month or two. It could be even three months. Just because they're a customer, they can see how it is.
Wes Bush:
That's probably honestly going to be pretty valuable for you as a team to really see at scale, at a bigger scale, how do people use this product because I'm sure you're doing some sort of user testing and stuff like that before launching these new products. But as you get more and more customers using it, is it getting used the way you thought it would be?
Wes Bush:
So, I think there's inherent value that might not show up as revenue whenever you're giving away something like that. I'm sure Figma is learning a ton about their new products because they're now leveraging it, giving it away for free for their customers. And so, there's different ways of, I guess, putting a dollar amount or a value amount to whatever that launch sequence looks like? As far as getting those people to upgrade, it could also just be if it is, for instance, an add-on, you could do some sort of in-app announcements. I've seen that work really, really well, super successfully where you just start targeting a small segment of, let's say, your most actively engaged users.
Wes Bush:
And you just start testing out like, "Okay. Where is the willingness to pay for this particular new product? What does that look like for this product?" And it could just be whenever someone's using your product. It doesn't have to be a forceful pop-up or anything. But it just lets them know like, "Hey, we have this new product. Would you to try it?" It could even be a trial, for instance too, when you think about, okay, here is seven days for free. Just go ahead. Try it out.
Wes Bush:
We want to reward you and give you access to this since we already have your details. There's no credit card or anything. Just start using it because we think it could help you solve this problem that you might be facing. And then, you're left with seeing, "Okay. How many of our current customers are actually, I guess, struggling with this particular problem?"
Cody:
Yeah. And we certainly assess along those lines. I think the pain factor is now you've let someone have it for an extended amount of time, let's say. And now, you're taking it away. So, that, I think, is what we're trying to judiciously assess, and where it becomes a feature of good, better, best, and that, "Oh, well that's in better." So, we're always at this conflict of upgrade, upgrade, upgrade, and we end up just giving it to them, quite frankly, because it's both easy and the lowest amount of friction and writing it off as retention as a practical matter. So, I don't know. The struggle is real.
Wes Bush:
Okay. And I mean I'm sure there's a lot of other people in the program that have thoughts on that too. So, if you want to share that in the Slack group. I'm sure you get some really interesting thoughts on just, okay, for existing products, when you are launching something new, what is the best ways to go about that and get some more ideas on how to potentially structure that?
Cody:
Yeah. Well, it often conflicts with the new customer acquisition side because the trial in that particular instance could be two weeks. But meanwhile, you're giving everyone else and on the inside for a year. So, there's definitely some conflict in that. Anyway, thanks for your thoughts.
Wes Bush:
All right. And I guess for each of the product launches too, I don't know. Do you have some sort of definition of what does success look for at this launch? For instance, I was thinking you were mentioning in the past, it's always been about retention. That's a big part that you'd write it off as retention, and you give it away for free. If that's the goal of the product, fantastic. It's been working.
Wes Bush:
But I think what you might be thinking is, "Hey, maybe, there's something beyond that." There's that complementary product or something like that that maybe this one's supposed to just be completely free. But it's supposed to drive net new users and customers to our products is kind of a magnet for people to find out about us.
Wes Bush:
So, I think the more crystal clear you get on that, you will be able to figure out because it's not just like, I know, it's hard to give non-generalization kind of feedback just with a little I know about your company. But when you have that specific success KPI, it will be easy to see like is this something we start with as part of the beginning of the customer journey or is this something that we'll just use as an advanced feature to retain people.
Cody:
Absolutely, and that's where we've circled the win. I mean that's always the win and established that. So, we've tried to go to more metered based or consumption based use to monetize. But we find ourselves building greater and greater features and products and relying on that.
Cody:
So, I think that our challenge is to what to give away, if you will, and what to charge for, and that's the balance of where applying premium tactic to existing. So, nonetheless, yeah, I'll expand upon it perhaps in the other and do that. But that's the nature of our problem.
Wes Bush:
Yeah. I know Samir, he had a plus one for your question too. So, if you two want to connect after or on Slack too, I think that'd be helpful as far as having someone else who's going through the same challenge.
Cody:
Yeah. For sure. Thank you.
Wes Bush:
No worries. Cool. Anyone else have a specific question you wanted to go through?
Louis:
Any stats on what percentage of each product company take each kind of model?
Wes Bush:
Oh, as far as the conversion rate?
Louis:
No, more like out of all product-led growth companies, 20% go with the opt-in free trial. 40% go for Sandbox. What's the distribution of what people are doing out there?
Wes Bush:
That is a great question that I don't have a good answer to. But I think problem with answering that question to be honest is going to be most people bucket as there's free trial and then there's freemium. It's an oversimplification because it's like, "Well, there could be freemium then free trial, free trial then freemium. It could be opt-in, free trial, opt-out free trial." So, it's like any data for someone who doesn't break it down that is going to be kind of like, "Well, I don't understand what is the full break down there." So, sorry, I can't be of more help. I'm curious though. We should run the [crosstalk 01:16:09].
Louis:
We have the right audience for that question. You can ask us at the end of the course and maybe get a breakdown or something.
Wes Bush:
Yeah. I'm writing that down. So, really if I forget [crosstalk 01:16:21].
Ramli John:
You can even maybe talk to OpenView and see if we can do a partner [crosstalk 01:16:26] study, yeah, a research study on that question because it's a great question. Yeah.
Wes Bush:
Breakdown of models. Cool. Anyone else have a question they wanted to go through? Okay. Well, if not, that's totally fine. We also have access or you have access to, if you have a specific question about your business, if you go to the dashboard on productled.com, there's the direct consulting line. So, Ram and I, I book a time every Friday to kind of go through just how you could deal with that. So, that's one place.
Wes Bush:
If it is confidential, you have that space. But generally speaking, we recommend just use the Slack channel to go through and share those challenges as you're going to get a lot more variety of responses which, in my opinion, can be more valuable than just one specific response. Awesome. So, thank you so much for staying over 36 minutes at the end. This has been great. I'm glad we're able to go through all your questions, and I wish you the best of day and have an amazing weekend, hub. Bye for now.
Sam:
Catch you later. See you guys later. [crosstalk 01:17:33].
Wes Bush:
Cheers.
