8.31.21 Notorious PLG
Weekly update on the most important product-led growth (PLG) companies
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Notorious PLG Startup of the Week:
Tango is a workflow intelligence platform founded by a trio of HBS dropouts. Every year, companies adopt more and more SaaS apps and it is becoming increasingly complex to get up to speed on how to use every tool. To solve this, Tango is a modern, easy-to-use application that streamlines the process of creating workflow documentation. Using the Tango browser plugin, a seasoned rep can hit “capture” and then go about completing the task at hand, like helping a customer process a return. When finished, she stops Tango and Tango automagically documents every step, creating a digestible tutorial complete with screenshots, URLs, and transcribed steps. Tango runs in the background to build a dynamic and intelligent learning repository.
For this edition of Notorious PLG, former Uber employee and CEO + Co-founder Ken Babcock shared some thoughts about Tango’s PLG approach:
“Tango is the simplest way to create crystal clear how-to guides, in seconds. Our primary buyers, in support and sales, communicated a desire to reduce the burden of creating documentation (Workflows in the Tango-verse) as their organizations scale. One member of a recent pilot - a Quality and Knowledge Analyst for a support team split across multiple time zones - shared that using Tango reduces 40 hours worth of internal/external knowledge article creation down to 4 hours. That tangible, measurable value was abundantly clear to her. We realized that frontline employees on these teams would be our primary advocates and serve as a node within a company.
Employing a product-led growth strategy centered on an end-user focus. Team leaders in our pilots didn’t feel the pain we were solving directly, and were often disconnected from their team’s day-to-day work. The difference in feature requests and problem definition between these two employee groups pushed us towards a product-led growth strategy. As we emerge from private betas, our tactical approach to revving our product-led engine will involve:
Community-driven marketing. Slack and Discord workspaces, newsletter distributions, and relevant industry publications are great ways to tap into passionate, career-driven professionals. Early engagement with groups like RevOps Co-Op and BuggerOAF have driven our waitlist well into the 1,000s. Having a viewpoint that resonates with an end-user and a written voice/tone that speaks directly to them has paid dividends.
Referrals. Our product is highly conducive to a strong referral loop. When a creator shares a Workflow within their organization, that presents an opportunity to communicate value to a new user and push them to start using Tango. Building robust export integrations with LMS/wiki providers gives us more visibility and touchpoints to meet customers where they consume content.
Self-serve download, activation, and pricing. Building in this manner places emphasis on designing a sign-up flow that removes friction, educates the user, and incentivizes early engagement. We’ve strengthened our UX muscles to prioritize onboarding and first-time Workflow creation. Our internal team is constantly tracking the “time to magical moment,” whether it’s first Workflow creation, first share, or first referral. Shortening those times helps users see the value in Tango earlier.
To match this strategy, our current team composition and hiring plans reflect a need for user experience, product delivery, customer support, and brand. Instead of investing in sales and implementation, we’re extending conversations with existing users that showcase a familiarity and bias towards the problems they want to solve. A positive side-effect is that our team builds empathy and responds to customers rather than contracts.
Sign up for our waitlist today and save time creating documentation!”
*Note: Wing VC is an investor in Tango.
Please email any Notorious PLG of the Week suggestions to me at zach@wing.vc
PLG Tweet(s) of the Week:
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Recent PLG Financings (Private Companies):
Fig: a re-imagined command line terminal raised $2.2M seed round led by General Catalyst. Fig has a compelling value preposition out of the box: “Powerful autocompletion for hundreds of CLI tools and zero configuration required.”
Playbook: visual storage platform that aims to be the ‘Dropbox for designers’ raised $4M seed round led by Founders Fund. Read more about Playbook on their recent Product Hunt launch.
Tango: application to easily document and share workflows raised $5.7M seed round led by Wing VC (more above). Like many great PLG companies, Tango has an open repository of documented workflows that they curate to demonstrate product value. Read more about the investment here.
Cribl: pure play observability platform raised $200M Series C led by Greylock and Redpoint at $1.5B post-money valuation. Cribl is developing an “open ecosystem of data” and is quickly becoming one of the fastest-growing data companies.
Grafana: provider of an open and composable monitoring and observability stack raised $250M Series C led by Sequoia and Coatue at a $3B post-money valuation.
Recent PLG Performance (Public Companies):
Financial data as of Friday market close.
Biggest Stock Gainers (1 week):
Bill.com: 36%
Social Sprout: 18%
Eventbrite: 13%
Biggest Stock Gainers (1 month):
Monday.com: 61%
Social Sprout: 39%
Bill.com: 37%
Enterprise Value / TTM Revenue:
Top quartile: 40.6x
Median: 20.6x
Lower quartile: 10.7x
Enterprise Value / NTM Revenue:
Top quartile: 29.5x
Median: 15.2x
Lower quartile: 8.2x
Rule of 40 (TTM Revenue Growth % + FCF Margin %):
Top quartile: 50%
Median: 36%
Lower quartile: 26%
Median % of Sales:
S&M: 45%
R&D: 31%
G&A: 19%
Net Revenue Retention:
Top quartile: 130%
Median: 123%
Lower quartile: 115%
GM-Adjusted CAC Payback Period (Months):
Top quartile: 16
Median: 21
Lower quartile: 28
15 Highest EV / NTM Multiples:
Notorious PLG Dataset (click to zoom):
Note: TTM = Trailing Twelve Months; NTM = Next Twelve Months. Rule of 40 = TTM Revenue Growth % + FCF Margin %. GM-Adjusted CAC Payback = Change in Quarterly Revenue / (Gross Margin % * Prior Quarter Sales & Marketing Expense) * 12.
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