NPLG 2.16.23: How to Crack the Enteprise w/ PLG (Macro)
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NPLG Startup of the Week: Macro
In the past few years, great new products have come out for internal collaboration. And yet, working across organizations is still largely done in email for comms, pdfs for proposals, docx for contracts, pptx for deals, and xlsx for financials. These documents (and the emails they’re attached to) are open standards: that means anybody is free to build compatible apps. Still, we’ve seen little improvement in many years.
Enter Macro. Macro started by building a better document editor. Using AI, it pulls out key terms, sections, equations, and more to make the document interactive and hyperlinked. There are still many problems Macro hopes to solve: managing versions, information chaos, and busywork still plague most workstreams.
Fresh off a $9M seed led by A16Z, Founder & CEO Jacob Beckerman shares with with the NPLG community how Macro is using PLG to go after the enterprise: law, consulting, banking, investing, sales, real estate, insurance, accounting and tax. Traditionally, these have been difficult verticals to crack using a PLG strategy so Macro’s insights can help any PLG startup think about how to successfully land + expand into the enterprise. Enjoy:
PLG to Enterprises
“Conventional startup wisdom is that PMF is like a tornado and you’ll know when you have it. The market will pull the product out of your hands. But what about when you’re selling to multi-national institutions where no individual owns much equity, there are 7 different stakeholder personas, and your champion doesn’t even know how software gets purchased?
Summary
Most startups start by selling to other startups. Sales cycles are shorter and LTVs can be high if your customers “grow with you” and because your customers are flush with venture cash and are not ‘cash businesses’. Startups are a great ICP for many products.
So it makes sense that PLG content is implicitly targeted at B2B SaaS startups that sell software to other startups or SMBs.
At Macro we did the opposite: we started by serving the world’s large, prestigious, and secure organizations. Law firms, banks, investment banks, hedge funds, private equity, university endowments, and multi-nationals.
Does PLG work at large and secure clients?
When selling to enterprises, the honest answer is that PLG is more complicated. It may work for you or it may not, and it depends on the peculiarities of our app. And each sales cycle looks like a mix of PLG and top-down.
You’d be surprised
You’d be surprised just how heterogenous the answer to “can we do PLG here” is. At one investment bank, we had all the associates using Macro. At another, via a similar path in, they said that they couldn’t touch the app until we’d done a security review, contracting, etc. The firms were very similar from the outside and yet the ability to PLG was a total “for sure” at Bank A and “definitely not” at Bank B. And there was no way to know this from any online source.
So what gives? Why was Bank B stringent and Bank A not? I’m not sure for certain but it comes down to some mix of…
Our path in. At Bank A the first person we made contact with was OK with taking a risk with his career and just using the app. Actually, I don’t think he thought he was taking a risk at all — it didn’t occur to him that there was any issue with using our app. At Bank B the person we first talked with was actually a lot more senior than Bank A so you’d think that he would be willing to just use it. But nope, he said we had to talk to IT/Security first and that there was no way he could use it on real work documents until then.
This makes all the difference: instant adoption and buy-in vs. 3 months of conversations followed by a 60 day pilot.
Processes. Of course, there’s also the real internal processes in place at the firm. And these are generally hard to know in advance.
And it only got weirder from here. Some of the largest orgs in the world have bought Macro on a credit card with zero security review, while others have done ~10 months of serious DD. I still can't predict in advance.
Middle-out
Like the famous fictional compression algorithm, the answer is often middle-out. PLG and top-down, at the same time.
I highly recommend turning your first point of contact into a champion. Do NOT try and monetize them via something like a personal credit card. I repeat: do not try and get personal payments. This is obvious to me now but wasn’t when I started Macro. Ask them if they can expense software and, if so, offer two options:
They can expense it via a credit card and they buy a few seats for their team
They can get it for free while you work together in good faith towards an enterprise contract
Both (a) and (b) at the same time
Some other considerations
Want to maximize the chances of PLG working at the most number of firms? Here are a few suggestions…
Platform. Are you building for desktop, mobile, or web? We started by building for the web. The modern Javascript ecosystem is awesome and was filled with recent stories of companies (Figma, Canva, etc.) winning by creating web-native products. So we first shipped Macro in a browser. But unlike Figma and Canva, Macro works with your existing PDF and DOCX files, and didn’t have built-in storage. The browser only has 10MB of built-in storage. So we built an Electron app to work with the local filesystem. This was also good because we can become the user’s default for PDF and DOCX on their Mac/PC. But, it means that you need download permissions. OK, but turns out you DON’T need admin rights to your computer if you make something called a “user-level installer” on Windows. This allows users to install software on their managed devices with IT approval. It took us months to figure this out — big unlock! This gave us offline operation which made end-users comfortable without IT and also great UX (default app for your docs). Mobile, unlike Desktop, is often not locked down, but this is changing fast. We’ve noticed a lot of clients, up until ~2021, their mobile environment was the wild west. Now there’s monitoring software and controls just like the Windows desktops.
The answer to “can we do PLG” or not really does depend on tiny tiny details like this
Give the product away while your champion works with you. This is a great strategy I wish more people would use. It really works and it’s just great for all parties. Tell your champion that you will continue to extend free access to your software (assuming your marginal cost is near zero) while they work with you to convince the organization to purchase a group license. This way, you start getting fast feedback on the app (to make it better for when you do get the enterprise contract) and make them into an ally.
Go downmarket. Smaller companies and smaller “enterprises” i.e. 1000 people not 10,000 generally have less controls in place.
PLG isn’t the only way
You should do whatever makes you the most money and not care about whether it’s in vogue or not. PLG is in vogue, and sales — at least to CS graduates — often seems like something to do with used cars. The software should sell itself, right? PMF means that the market should be pulling the product and and so on. But at enterprises you have to remember that there are a million stakeholders. At the largest regulated banks, go in with the assumption that you’re selling to, like, the United Nations.
Just do it
I used to tend towards optimizing processes too much and thinking there must be away around manual work. But it’s often true: “the right way is the hard way”. Sometimes sales, security review, IT review, vendor onboarding, and contract negotiations are just the way it’s going to be and you can’t get around it.
But you can avoid it
It’s so so tempting to go upmarket and land a big fish. It may be impossible to do PLG at a given account but remember, you an just not sell to that account. In practice this is harder than it sounds and takes a ton of willpower.”
I would love feedback. Please hit me up on twitter @zacharydewitt or email me at zach@wing.vc. If you were forwarded this email and are interested in getting a weekly update on the best PLG companies, please join our growing community by subscribing:
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Seed:
Blip, a bill payment platform intended for fintech companies to enable smooth payment experiences for customers, has raised $2.1M. Intuit, 1 Finance, Susa Ventures, Browder Capital, Dash Fund, Shrug Capital, Wischoff Ventures, Picks and Shovels, Lithic, Austin Rief Ventures funded the round.
Macro, a company that makes tools for PDFs like a fully-fledged, custom PDF editor, has raised $9.3M. The round was led by Andreessen Horowitz, with participation from Craft, BoxGroup and 3kVC.
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Flox, a developer of package manager software intended to make developers more productive across every stage of software development, has raised $16.5M at a $71.5M valuation. The round was led by NEA, with participation from Hetz Ventures and Addition.
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Series C:
Acceldata, the company behind a data observability platform used by multinational enterprises including Oracle and Verisk, has raised $50M. The round was led by March Capital, with participation from Insight Partners, Industry Ventures and Sanabil Investments.
Series D:
Jobber, a company that caters to plumbers, electricians and other home services businesses, has raised $100M. The round was led by General Atlantic, with participation from Summit Partners, Tech Pioneers Fund, Version One Ventures, and OMERS Ventures.
Series E:
InfluxData, an open-source time-series database designed to manage and analyze large volumes of time-stamped data, has raised $81M. The round was led by Citi Ventures and Princeville Capital. Sorenson Capital, Mayfield, Trinity Ventures, Battery Ventures, Sapphire Ventures, Harmony Partners and Norwest Venture Partners also participated in the round.
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Was hoping for more practical tips on Enterprise PLG here but was super light