Notorious PLG 12.7.21
Weekly update email on the most important product-led growth ("PLG") companies and strategies
Current subscribers: 1,375
Notorious PLG Startup of the Week: Skiff
In 2020, Google Suite announced that it had reached 2B+ active users. In the same year, as the world moved remote, privacy has become increasingly important to ensure that our ideas, work and documents are properly encrypted and protected. Some of the stats around data breaches are mind-blowing. For example: on average, only 5% of companies’ data is properly protected while data breaches exposed 36 billion records in the first half of 2020 (source). Businesses and consumers have started to demand end-to-end encrypted products. This is evidenced by the meteoric rise of Signal and Telegram.
Enter Skiff. Skiff is a privacy-first, end-to-end encrypted, and decentralized workspace for writing, sharing, and communicating. Founded on April 1st, 2020, Skiff has enabled thousands of individuals and hundreds of teams and companies to collaborate and communicate more creatively, securely, and effectively. Skiff makes it easy to stay in control of your files with end-to-end encrypted expiring links and password protection. One of the first things that jumped out to me when I visited Skiff’s website is that I can connect my Metamask wallet. The Skiff team is clever to empower web3 use cases as the crypto user base places a premium on privacy and data control.
For this edition of Notorious PLG, Andrew Milich (CEO + Co-founder) shared his thoughts on PLG with me:
“Skiff’s user base generally fits into two personas: “crypto-informed” users and “privacy-informed” users. This group presents a particularly interesting context for product-led growth. While the most privacy-conscious internet users can (unsurprisingly) be difficult to find, there are active privacy communities on Twitter and Reddit. Crypto-informed users are quite active on Twitter and many congregate in Discord and Telegram. Trust and community building is essential in both communities and can be an enormous driver of product-led growth. In both privacy and crypto communites, technically savvy users often do deep diligence on the quality and reliability of new products. We spend a significant amount of time on trust-building - highlighting our technical whitepaper, strong team of advisers, open source contributions, and more. These efforts compound significantly as media, teams, and individuals spread the word about Skiff.
Both privacy-informed and crypto-informed users are generally quite interested in testing new products. Privacy-focused users frequently share new products on subreddits (such as r/privacyToolsIO), and crypto-informed users actively discuss and share new projects on Twitter. Interestingly, both user groups also like pseudonyms; their frequent use of pseudonyms on Twitter or and Reddit frees them up to speak honestly and share valuable feedback over DMs.
To jumpstart initial growth and brand recognition, we started contacting, messaging, and interviewing prospective users from various personal and Reddit communities related to Web3, privacy, and decentralized or privacy-first developer tools. This led to some inbound interest, feedback, and posts - such as this first thread on Skiff in April. When Skiff first announced our private beta in May 2021, additional posts built traction and grew our waitlist. We are definitely still early in reaching these large online communities.
A collaboration platform like Skiff also represents an incredibly rich grounds for PLG-minded feature development. For example, building the right systems for users to import and upload previously created content can be a critical driver of retention and helps users reduce switching costs from other platforms. Consumer expectations in collaboration are also high, with broad demands in feature set, usability, design, performance, and interoperability. With hundreds of collaboration, notetaking, and communication platforms in use today, we’ve seen quite a wide spread of user expectations and existing behaviors (such as those regarding date formatting, internationalization, and editor behavior). Given this, user research and interviews without a predetermined design question can be unfocused (it is easy for users to whimsically suggest spreadsheets, forms, and other features to add!). Yet, for Skiff’s designers and engineers, this process is incredibly engaging as we test the limits of privacy-respecting features.
We’ve also learned that small tweaks in the way sharing, referrals, and notifications work can yield enormous gains in product-led growth. Many of these changes and experiments are visible in the Skiff product today, from clearer and more obvious indicators for public link sharing, to encouraging users to create display names (used when sharing) during the onboarding process.”
The past two years have been an inflection point in privacy and decentralization. The change to WhatsApp’s privacy policy in January 2021 proved to be a massive catalyst for the migration of users to E2EE messengers, like Signal and Telegram. As we see adoption in this sector and an explosion in Web3, privacy-first platforms, like Skiff, are primed for widespread adoption.”
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):
Series A
Frontegg, a modern user management platform, has raised $25M led by Insight Partners, with participation from existing investors Pitango First and Global Founders Capital.
Raycast, a developer-focused productivity tool, has raised $15M led by Accel and Coatue, with participation from Johnny Boufarhat, Jeff Weinstein, Jason Warner, and Ott Kaukver. Congrats to Raycast, a previously featured Notorious PLG company!
Series B
CertiK, a developer of a formal verification technology designed to deliver end-to-end security services, has raised $80M at a valuation of $1B. The round was led by Sequoia Capital China, with participation from existing investors Wing VC, Tiger Global, Coatue Management and GL Ventures.
Cycode, a startup that helps businesses secure their DevOps pipelines and software supply chains, has raised $56M led by Insight Partners, with participation from YL Ventures.
Upbound, an open source Crossplane multi-cloud management tool, has raised $60M led by Altimeter Capital, with participation from GV, Intel Capital, and Telstra Ventures.
Series D
Vercel, a cloud-based workflow platform intended to optimize the entire development and deployment experience for frontend teams, has raised $150M led by GGV Capital at a $2.5B valuation. Accel, Bedrock Capital, CRV, Geodesic Capital, Greenoaks Capital, GV, 8VC, Flex Capital, Latacora, Salesforce Ventures and Tiger Global, along with new investor SV Angel also participated in the round.
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.