Notorious PLG 6.8.22: Speed to Initial Evidence (SpIE)
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NPLG Startup of the Week: UserEvidence
You would think it is easy to put together case studies talking about how great your product is, right? Well, it’s far from it. Careful not to annoy a customer, it can be difficult to coordinate across product, marketing and sales teams who is best positioned to reach out for quotes and feedback to feature in case study. Once you get to the right person from your customer, she may be restricted by her legal team to go on the record with a marketable quote about your product. If you can track down a quote and even some data proof points on the ROI from your product, you have to get your marketing team to put together content. What a headache! Enter UserEvidence. UserEvidence is a SaaS platform that unlocks stories from happy customers, and automatically creates a library of beautiful content assets. In a PLG world, customer love and testimonials are critical to build a passionate community and UserEvidence can unlock customer reviews.
For this edition of NPLG, co-founder and CEO Evan Huck shared with me a new framework and metric for PLG companies to track: Speed to Initial Evidence. This is a powerful concept and a fun read from Evan:
“It’s been thoroughly discussed recently that PLG does not mean “no sales team” - for most companies, PLG can build a self-serve revenue stream of course, but the bigger prize is the super spicy product-qualified “leads” that are generated from PLG users within larger businesses that be upsold to larger paid/team and eventually enterprise contracts. A slew of businesses like Pocus, Correlated, Groundswell, and Endgame have popped up recently to let sales teams know to when to reach out to start a larger sales conversation - but there’s not much guidance/tech out there on what to reach out with - ie what kind of content/evidence are you going to show to convince a buyer to upgrade to an enterprise license?
Let’s introduce a missing metric in PLG - Speed to Initial Evidence (SpIE). You can’t sell a bigger/enterprise license unless you can prove your case to a more senior decision maker that the current users in her organization are getting strong value from the product. The strength of that case matters. How quickly you can put together that case matters. The difference between upsell in 1 month vs upsell in 5 months for many PLG startup CEOs is the difference between a big series A/B from Sequoia or applying for a product manager role at Google.
Currently the ways sales/marketing teams put together a case/story on the value current users are getting are - A) showing some aggregated/obfuscated “usage” data - e.g. “you have 19 users across these teams, broadly using the product for these use-cases, and they seem to like it”, B) (If a sales/success team has the ability to directly communicate with users) asking for happy users to be “advocates” internally, who can assist with intros and act as references in a bigger enterprise sales effort, or C) Doing a more formal case study - going through legal/pr approvals, design etc, to get a traditional PDF case study that could be used to cross-sell into other business units at a large account (e.g. GE, IBM, Verizon)
Usage data (A above) is an important piece of evidence in the effort to prove that early users are getting value and seeing success, but it only tells part of the story. Explicit feedback and success stories directly from those users/advocates (B+C) is the other critical piece.
This should be a fairly obvious statement – but if I’m an enterprise seller in a PLG company, if I have some great soundbites and stories from existing users in an account, it will be a lot easier to sell an enterprise license or cross-sell in that account. Let’s call these soundbites and stories intra-account evidence. It follows that if you had good intra-account evidence earlier rather than later (ie a faster SpIE), it would allow you to cross-sell and up-sell faster after the initial PLG engagement.
But for how obvious of a benefit to sellers it would be to have more/better intra-account evidence faster, companies often don’t have an organized effort around this motion of quickly getting intra-account evidence from existing users in an account - leading to a slow SpIE. Why?
1) Marketing (product, customer, or marcomm) is typically leading this effort, and they are more focused on the big brand case studies and stories that look good on the website. They aren’t focused on this sort of quick, specific PLG sales/upsell enablement. 2) The traditional case study is way too big/slow - it’s designed for external consumption (ie on the website, etc) - not within the account (ie intra-accont) - so the approvals/design etc all takes months - much slower than we need for quick conversion of initial success into larger enterprise license.
What can PLG companies do about this? We need to reduce the friction to create some sort of proof point/success narrative. We need to reduce the manual lift required from the marketing team and the initial users in the customer account.
Here are some tactical tips I used when I ran enterprise sales at SurveyMonkey (now Momentive), and we’ve now productized at my current startup, UserEvidence.
1. Don’t ask for a “case study” - this implies a big long effort w/ a lot of work and scares people off. Position the ask more as quick feedback. Use existing channels/paradigms like Net Promoter Score (NPS) and feedback surveys that are commonplace with SaaS apps to also ask questions to extract marketable soundbites (e.g. “what kind of value have you seen from using the tool?”)
2. Give users/respondents the option to remain anonymous - some users are more comfortable sharing feedback w/o their name attached. Here’s an example of a testimonial we used from an anonymous user in a subsidiary to quickly upsell an enterprise license to the parent company.
3. Collect feedback from multiple users/personas - one positive data point is a good start, but you paint a much more compelling picture of success/value within an account to a decision maker if you can demonstrate widespread success and adoption across many and different types/levels of users.
4. Collect feedback at opportune moments in the customer journey. Don’t just ask for feedback once a year, or at the end of a trial. User happiness ebbs and flows, and users also join and leave companies. Use triggers, in-app pop-ups, and customer support/success interactions to deliver requests for positive feedback immediately after you’ve delivered a valuable interaction.
5. Control the presentation of the story. Cherry-pick the positive soundbites to present a rosier picture of account health.”
I would love to hear your feedback. Please email me at zach@wing.vc
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Recent PLG Financings (Private Companies):
Seed:
CloseFactor, a developer of enterprise software and machine learning applications intended to offer automated sales research and contextual insights, has raised $4.5M. The round was led by Sequoia Capital.
Constrafor, a SaaS construction procurement platform with embedded financing, has raised $106M in Seed and credit financing. CoVenture led the credit facility while FinTech Collective led the equity portion, with participation from Village Global, Clocktower Technology Ventures and Commerce Ventures.
Mintlify, a documentation platform designed to maintain quality documentation as per users scale, has raised $2.8M. The round was led by Bain Capital Ventures, with participation from TwentyTwo Ventures.
Series A:
Felt, a collaborative mapping tool designed to provide a way to make maps on the internet, has raised $15M at a $60M valuation. The round was led by Footwork, with participation from Designer Fund, Bain Capital Ventures, Shakti and Moxxie Ventures.
Gigasheet, a developer of big data spreadsheet software designed to make data science accessible to people without a coding background, has raised $7M. Accomplice, Argon, Founder Collective, and REV all participated in the round.
Railway, a startup building a software deployment platform tailored for engineers, has raised $20M. The round was led by Redpoint Ventures, Guillermo Rauch and Tom Preston-Werner.
Series B:
Vendia, a blockchain-based platform that makes it easier for businesses to share their code and data with partners across applications, platforms and clouds, has raised $30M. The round was led by NewView Capital, with participation from Neotribe Ventures, Canvas Ventures, Sorenson Capital, Aspenwood Ventures and BMW iVentures.
WorkOS, a platform that lets developers add enterprise features like single sign-on (SSO) and directory sync to apps, has raised $80M at a $525M valuation. The round was led by Greenoaks, with participation from Lachy Groom, Lightspeed Ventures and Abstract Ventures.
Series C:
JupiterOne, a Morrisville, N.C.-based cyber asset attack surface management platform provider, has raised $70M at a $1B valuation. Tribe Capital led the round, with Alpha Square Group, Sapphire and Bain Capital Ventures participating.
Series D:
Coralogix, a data observability platform, has raised a $142M. The round was co-led by Advent International and Brighton Park Capital, with participation from Revaia Ventures, Greenfield Partners and Red Dot Capital Partners.
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