Notorious PLG 11.16.21
Notorious PLG 11.16.21
Weekly update email on the most important product-led growth ("PLG") companies
Current subscribers: 1,330
Notorious PLG will take a short break next week during the holidays, but I will pick back up in December. I hope you have a wonderful Thanksgiving holiday as there is a lot to be grateful for this year.
Notorious PLG Startup of the Week: Text Blaze
How much of your day is spent typing the same email over and over? For me, a lot. I spend half my day emailing and am always looking for ways to be more efficient while making my outbound emails more thoughtful and personalized. Enter Text Blaze.
Text Blaze is a powerful application that arms users with easy-to-use templates with endless customizability and powerful automation. I have been a Text Blaze user for months now and use it daily. I downloaded the browser plugin and set up a few email templates, like for when I reach out to a startup founder. When I am in my email, I just type /founder and my pre-populated email template is magically pasted in and personalized for the founder I am reaching out to. One of the tenants of PLG is to be able to deliver magical value out of the box and I must say that Text Blaze is a 10 out of 10 in terms of magical, immediate value. I even used Text Blaze to reach out to the Text Blaze CEO to invite him to be featured in Notorious PLG (Dan doesn’t know this until now).
The company is already powering 1B+ character per month and saving power users ~28 hours per month, or $10K in annual savings. Text Blaze has tremendous value in single player mode and the team is investing more and more into team modes which I am excited about — think sales teams sharing templates that result in high response rates. The best PLG companies can parlay single player mode value to team mode value and Text Blaze has this potential.
For this edition of Notorious PLG, Dan Barak (CEO + Co-founder) shared his thoughts on PLG with me:
“Diego works as a Customer Support rep for a large payment processor in the US. Diego’s department runs an “emails per hour” contest every few months. The average is 21 emails per hour yet Diego sends almost 80 and wins the competition every time.
How? Simple. Diego uses Text Blaze.
Text Blaze helps users boost productivity and quality. We start where many of us spend most of our time - typing. With Text Blaze, users eliminate repetitiveness by inserting text with keyboard shortcuts, saving hours of typing in seconds. We then provide users the building blocks to go beyond plain text, gradually automate larger portions of their workflows and effectively build no-/low-code mini productivity apps for themselves.
The no-/low-code proficiency curve
Here is something that may surprise you. Remember Diego? It turns out that the colleagues he beat in competitions are all Text Blaze users as well; Diego is simply a power-user and knows how to maximize the value he gets from Text Blaze.
Using Text Blaze, like other no-/low-code apps, is comparable to using spreadsheets in that it has a proficiency curve. In spreadsheets, you begin by creating simple tables and, over time, create additional value by using formulas, functions, and even macros. Similarly, Text Blaze is very easy to start using, demonstrating immediate value and continues to create benefits for users as they become more proficient and adopt more of the capabilities Text Blaze has to offer.
Product-Led Growth with a proficiency curve - Show loops vs. tell loops.
Our main source of user growth is word of mouth. This loop is built on one core element – users simply love Text Blaze. This is a huge part of our culture and is baked into everything we create. From an intuitive product that works seamlessly everywhere (more challenging than it seems), to ensuring that every single user touchpoint is a pleasant one that exceeds expectations, even when they cancel their subscription.
Word of mouth is a ‘tell loop’; users tell others about the value of Text Blaze and new users learn through trial and error how to best use it for their needs (“cold start”).
The other growth loop is collaboration and sharing. Text Blaze allows users to collaborate on shared content. Teams and companies use this to align on shared, consistent language and workflows, helping new employees to hit the ground running. Teams collaborating on shared snippets save more time using Text Blaze and are significantly more likely to upgrade to the Business plan.
We encourage users to collaborate through in-app and email prompts (“{{content}} saved you x hours of typing this week. Share it with your colleagues and be their hero!”). In some instances, we present the company’s top users to help users discover each other and start collaborating.
From a user acquisition perspective, sharing is a ‘show loop’; existing users generate content and new users can experience Text Blaze in action in a way that’s tailored to their needs. They are catapulted up the proficiency curve, which, in turn, drives up engagement and retention.
A show loop is better than a tell loop in most cases, but it does have risks.
If the first thing new users see is Diego’s content, they are more likely to be overwhelmed than excited about Text Blaze. In a best-case scenario, they will simply use the content without understanding it. In the worst-case situation, they’ll run for the hills! Imagine trying to get your grandmother to see the value of spreadsheets by sharing your most complex model with her…
Best of both worlds - company-generated, curated content
Company-generated content is a way to help users hit the ground running while mediating the risk of user-generated content. The source is still user-generated content, so it’s specific, relevant, and carries social proof. However, we edit and curate it to be suitable for new users to help them gradually unlock the value of Text Blaze without overwhelming them.
Company-generated content has the added benefit of also encouraging users to share their content with the broader community, setting guidelines for doing so in the process.”
Please email any Notorious PLG of the Week suggestions to me at zach@wing.vc
PLG Tweet(s) of the Week:
Grateful for the shoutout of helpful PLG resources:
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Recent PLG Financings (Private Companies):
Seed
Cascade, a no-code data automation tool, raised $5.3M led by First Round Capital. Redpoint Ventures and Susa Ventures participated.
Series A
Datafold, a data observability platform, raised $20M led by NEA and Amplify.
Knak, a no-code campaign creation platform, raised $25M from Insight Partners
Swimm, a continuous documentation startup, raised $27.6M led by Insight Partners and Dawn Capital. TAU Ventures by Tel Aviv University and Pitango Venture Capital also participated.
Calixa, a tool specifically tuned for a product-led sales cycle, raised $12M led by Kleiner Perkins. Salesforce Ventures and Twilio also participated. Congrats to Calixa, a previously featured Notorious PLG company!
Series B
Daily, a startup that enables developers to add video and audio features to any product, raised $40M led by Renegade Partners. Slack Fund, Cendana Capital, Tiger Global Management, Heritage Group, and Root Ventures also participated, among others.
Lusha, a crowdsourced data platform for B2B sales, raised $205M at $1.5B post led by Providence Strategic Growth. Ion Asset Management also participated.
Reprise, a PLG platform for modern demos, raised $62M led by ICONIQ Growth with participation from existing investors Bain Capital Ventures, Accomplice VC, and Glasswing Ventures. Congrats to Reprise, a previously featured Notorious PLG company!
Recent PLG Performance (Public Companies):
Financial data as of Friday market close.
15 Biggest Stock Gainers (1 month):
Best-in-Class PLG Benchmarking:
15 Highest EV / NTM Multiples:
Complete 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.