Nichole Mace, VP, Product Growth at Pendo chats about organizational best practices for PLG, helping sales overcome uncertainty when introducing a free product, the reality of North Stars, why PLG is a company unifier, and starting PLG initiatives with data-heavy products.
Nichole Mace is a product leader focused on SaaS and product-led growth businesses. She loves to develop and transform products into self-serve, "no-touch" offerings. Nichole lives for usability testing and customer interviews and finds the intersection of qualitative and quantitative data magical. She believes iterative development incorporating customer feedback along the way produces the best products.
Nichole currently runs Product Growth at Pendo. Previously, she ran PLG and End User Experience for LastPass, product management and UX/UI at BevSpot, Quilt, and Zipcar.
What should org charts look like at PLG companies?
There are many different models of how to manage a growth team. Sometimes growth comes out of marketing, but more often than not it comes out of product. It really requires massive collaboration. Your best friends are the marketing folks, the data scientists, and you need an engineering team.
The way that we manage it at Pendo is really cross-functional. The organization sits in Product. The most important part is that we have team members that are a hundred percent dedicated to product-led growth. What that means is you have people across the organization, and their number one thing that they think about is achieving the goals of PLG every day.
They think about second week retention in the shower. They think about conversion. They might be a data scientist, they might be your growth marketer, they might be your engineer, but you have a cross-functional team that's a hundred percent dedicated to PLG.
I run the group at Pendo, but we don't have a reporting structure where everybody reports up to me. It’s more that everyone is focused on the same goal and we align together on those goals. I like it that way. Everyone has their home of expertise. A marketer really wants to learn from the marketer above them and be part of the marketing team. Same thing with data science, design, et cetera. As long as you can have everyone focused on the same goals for PLG and have that alignment there, then everyone can report up to their respective departments.
Where you run into issues when starting a PLG motion is when you don't have a hundred percent dedication. Then the folks that you're really counting on are very split. They may have other obligations within their marketing group or data science group. At a critical time when you might need all of their time, they just can't give it. It's really about that alignment across the organization. The one hundred percent dedication isn’t timebound, these roles are hired specifically for that purpose.
A lot of people are learning and growing, so a lot of times people are moved into these roles within the company. These are the people that are open to doing something new, they like to move quickly, they like to iterate, and are really driven by metrics. Those who are oriented that way are often drawn to product-led growth. Even if they don’t have the experience, they’re open-minded and want to join in.
How to combat the fear, uncertainty, and doubt of free products with sales?
There are so many pieces to that answer, but it’s so important. First, I'll give you a little history. Three years ago, Pendo came out with their free product. Initially Sales said, “Oh my gosh, you're giving it away for free. No one's going to buy it.” Over time “free” became what it's meant to be, this flywheel. The free product drives product qualified leads right into sales’s inbox, directly into Salesforce. Sales began to really count on PLG. That was sort of the very first motion but there was a lot of fear around that in the beginning. Even now, the sales folks talk about remembering when the free product came out. They were so nervous about that.
Now we’re in a state where we just released self-serve pay. We're sort of going down a similar path as when we released the free product. Except now, some of the sales folks that have been around for a long time have said to the rest of sales, “Don't worry, this will help us eventually. Here's how it's going to play out.”
PLG is really effectively a land and expand motion. We have lots of data. Three out of four enterprise buyers actually wanna try it out themselves, so it’s not always just the small guys. We've been tracking who comes through free. They may be very large customers. They might be someone interested in this product at 8:00 PM on Friday night and there might not be anyone to talk talk to them, So they just sign up for free to check it out. So this is amotion, a way that software is just being sold.
If you are selling software, you want a way to be able to engage with users at different times of the day all over the world. Sales begins to see the value when they start to see an enterprise sale that came through the free product offering. We track those and we really do focus on the expanded motion of PLG. If you track these folks over time, a whole set of them are really growing pretty quickly. Even the ones that start off small. A whole set of them are growing to be very profitable and large.
What internal success stories do you share with the rest of the organization?
As the head of PLG, I always try to communicate to the rest of the organization about the progress that we made and the successes. We actually do a biweekly meeting. While it’s geared toward the C Suite, it’s open to pretty much anyone in the company. We go over the sales that happened and talk about some of the bigger accounts that came through. That way, we communicate the progress that PLG made to the entire company. It’s better to share with the entire company because it's not just about sales, it's about everyone.
Even when you go outside of your little bubble of your people who are dedicated to focus on PLG cross-functionally, you actually need everybody to be on board. Sometimes you really need the CFO to step in. Sometimes you need the head of sales who doesn’t think about PLG that often and is focused on enterprise sales to drop in and help you move something along. Part of PLG is communicating the value to the entire company.
Tell the rest of the company what's happening, and what's coming through free. Tell them the opportunity that we have. People get really excited about it. It's really fun when you’re using your product to sell, you've created a great experience customers want to engage with. North Stars
Is there a North Star at Pendo?
(Nichole) I spent a lot of time in my life trying to get to the North Star. It's really hard to get it right. You can make a decision that ‘this is our North Star,’ but really you want it to be very data driven. It’s really hard to get that right. What I found to be successful at both LastPass and Pendo, is to have about four metrics you really care about. Then you have input metrics that you believe influence those four metrics. It’s more tangible. You can say that you’re going to focus on one metric during a quarter. We do this often because all of our experiments are going to be all around getting people back the second week, or all of our experiments are going to be around virality.
I’m not ready to go down the North Star. We're not mature enough yet to nail a North Star. We really tried to nail one down at LastPass, we made a decision. If you don't have the right North Star, then you find yourself making bad decisions to support the false North Star. Some companies have probably really nailed their North Stars, but it's hard to get that right.
(Francis) It can be tricky because the North Star is easier to talk about in hindsight. You can tell that story in podcasts, on stage and things like that where everything aligns and you're kind of telling the story through the lens of that North Star. From experience, that isn't always the case while building. You realize that in hindsight that you have to change the story just a tiny little bit to make sure that all the pieces align nicely. That’s one of the reasons why we started this podcast and why I'm happy that you're being honest about not having a North Star. It's this super compounded metric that takes these four input metrics and everyone is super excited and driven by them and saying no, There's four core things or metrics that we're tracking and we're going focus on some more than others during specific moments.
You had a really interesting story from LastPass on how putting everything into one single milestone in the journey could actually be detrimental to the overall experience.
(Nichole) For those who don't know, LastPass is a password manager tool. You share passwords, it automatically populates passwords on your mobile and on the web, it can generate passwords. Probably only about 10% of last pass users generate a password, at least when I was there. Those folks who do generate a password are very sticky. They're very likely to buy, they're going to stay with you for a very long time. A small percent of people want to use that functionality. A lot of people want the fill your password function. We thought that that must be it, that’s our “aha.” We need to focus on getting the password filled for everyone as soon as humanly possible. We did it, and it's great. Everybody wants that functionality, but it's not the stickiest thing. It's not the thing that will keep them forever and make them a promoter of your product.
Generating passwords wasn’t the end all, be all. It only really covers a small percent. That's where I found that that one metric just wasn't working. We were trying to shoehorn ourselves into a North Star and we just didn't have it.
How should people think about starting a PLG initiative when their product is potentially data heavy?
There are a few different routes. Your job in PLG is to use the product to be your go to market to sell the product. There are ways that you can have a sandbox option. At BevSpot, for instance, we needed the inventory data. We actually needed multiple inventories to see how things changed over time. So, we built a sandbox. We have a sandbox app at Pendo as well. That allows someone to come in and see a fully populated account that they can play around with for free. It's easy to get someone right into that sandbox.
I also am a big fan of the sidecar concept. You want to give something of value for free. You're trying to engage that user, so they're wowed by your product at some level. It does not have to be exactly what your fully featured everything is, but you need to capture their attention so that you can move them along. With the sidecar concept, you take some piece of your business and offer it for free. At Bev Spot we had a recipe calculator. You could calculate out how much it would cost you to make a certain drink with just five inputs. People loved that. It was a great launching point to expose them to other things at BevSpot. You could then let them know that you can order these things they input through BevSpot, or you could do your inventory through BevSpot.
You could also use sales, fake a trial, provision some accounts and offer new accounts for a period of seven days and manually shut them down. You can use a product like Pendo to overlay an onboarding that just sits on top of their experience that a product manager can do.