Product-Led Growth - Ashley Smith - Mind the Product

Ashley Smith has a long career in helping early-stage startups scale into successful organisations. In this rebroadcasted episode, Ashley talks to our hosts about product-led growth, and how everyone can and should do it.

Listen to more episodes…

---

Featured Links: Follow Ashley on LinkedIn and Twitter | OpenView Partners Product-Led Growth Index

---

Episode transcript

Lily Smith: 0:00

Hey, Randy, it’s holiday season time of year. And that means we get to revisit some of our favourite episodes.

Randy Silver: 0:07

We’ve chosen this great chat with Ashley Smith, full of inspiration on my product lead growth should be part of your strategy, and how do we achieve it?

Lily Smith: 0:16

I love this episode with Ashley, she talks about what product lead growth is, how it fits with your other marketing, some key principles to make it work and who’s doing it well.

Randy Silver: 0:27

And on that note, really, you know, does product lead growth really well, Santa Claus, he just keeps giving away those lovely presents. I’m not 100% sure what exactly his business model is. But it’s an amazing growth strategy. Okay.

Lily Smith: 0:48

And just before you listen on, we wanted to quickly thank you all for listening and supporting our podcast this year. You are the best

Randy Silver: 0:56

you definitely are. Thank you for everything, and we’re looking forward to catching up with you next year.

Lily Smith: 1:08

The product experience is brought to you by mind the product.

Randy Silver: 1:11

Every week, we talk to the best product people from around the globe about how we can improve our practice and build products that

Lily Smith: 1:17

people love. Because they mind the product.com to catch up on past episodes and to discover an extensive library of great content and videos.

Randy Silver: 1:27

Browse for free, or become a mind the product member to unlock premium articles, unseen videos, AMA’s roundtables, discounts to our conferences around the world training opportunities.

Lily Smith: 1:39

My new product also offers free product tank meetups in more than 200 cities, and there’s probably one Hello, welcome back to the product experience. How’s things with you, Randy?

Randy Silver: 1:53

Great. I’ve been rapidly prototyping all week, thanks to last week’s guest.

Lily Smith: 1:59

Oh, but how are you gonna make sure your business grows fast and maximise its value? Or worry? I’ve got you covered with today’s guest.

Randy Silver: 2:10

Ah, thank you. That’s right. We’re talking to Ashley Smith today about product lead growth. I’m excited. She’s our first guest to properly use a y’all.

Lily Smith: 2:21

That is right. But that’s not why we’re talking to her. Ashley as venture partner at OpenView. And previously led marketing and growth operation at GitLab, GitHub, and Twilio amongst others.

Randy Silver: 2:33

That sounds nice. Why don’t we just get started?

Lily Smith: 2:41

Hi, Ashley Smith. Welcome to the product experience podcast. It’s really great to have you.

Ashley Smith: 2:46

Yeah, it’s super awesome to be here. Thank you for having me.

Lily Smith: 2:48

So you’ll venture partner at OpenView. Tell us a bit about how you ended up in this role and kind of what it’s all about. Yeah, I

Ashley Smith: 2:57

don’t actually come from a venture background as it’s happening a lot individual world operators and executives and founders are kind of moving into the investment space, which is exactly what I’ve done. So yeah, so it’s not my background, but I’m doing it now. I’ve been doing venture for about four months now. And I absolutely love it.

Lily Smith: 3:15

So tell us a bit about your background and how you ended up in the role that you’re in? Yeah,

Ashley Smith: 3:19

sure. So by degree I’m an engineer, found out that I don’t like being the person building the thing. I prefer to be the person on the on the go to market side. So the one getting the excitement for the products, the one going and talking to customers all the time. I’m naturally introvert, but I do like talking to customers, which works. Because now I like talking to founders. So Twilio is a company I joined in 2000 I believe 10. They were about 20 people at the time, obviously doing super well have IPO their their valuation was huge. Like they’ve just done an incredible company. And it was built a great way. But I was basically hired there to do the things no one else wanted to do. And so the phones figure out how to do marketing emails, let’s figure out you know, what are these leads? And where are they going? Let’s launch a product via email. What are all these things that you do when you’re thinking about go to market? I had no idea what I was doing. However, we were all smart people and we kind of figured it out, right? Like there were nights I would spend up writing website copy for launch. So just really anything. Anything that needed to get done that entire team that early was was the type of people to just get things done, which was awesome. turned that into about two years later, went and became head of marketing at a company called parse. Parse, we were about 10 people we were a mobile app platform that Facebook actually acquired and then subsequently killed. There are there’s a lot of content about that conversation on the Internet somewhere. But yeah, so there I was leading all go to market. We were very small team. Developers love this and they loved us because we work so hard to make a really great product. really listened to our community and took a lot of product feedback and, and lots of really cool stuff. And I was a Facebook for a bit in the platform team. So working on parse did that for I think, a year and a half or so long enough to realise I don’t like working in big companies. I’m definitely a startup person after that. So Git lab, Ilya sukar, who’s the CEO of parse, invested in GitLab, early on, and introduced me to sit the CEO there, I came in as CMO at GitLab. When they’re about 10, people, and scale the company in team to 150. Obviously, Git lab is doing super well, like they probably sent me an idea next year, I’m very excited about that journey. They’re just doing product really well, like we would you know, every, every single month or 20 seconds, you ship something, and you ship something really good. So for a product perspective, I love that cadence. parlayed that into, I was planning on actually going into venture when I left there. And in doing that, I introduced to the GitHub founder and joined there as the head of marketing. I was one of the five executives leading the company 18 months into that Microsoft acquisition that happened, I guess, now almost a year ago. So that’s been my journey, did some angel investing was finding about 20 companies and decided, you know, I love the team of imbued like, just some of the best people you can work with. And just super smart that I wanted to go learn how to do venture from them. I like their style of the way they work. So long winded answer. But that’s my journey.

Lily Smith: 6:30

So what was attracting you about the angel investment side of things and moving into venture?

Ashley Smith: 6:36

Yeah, so I thought it was like a really good way to test the waters. If you’ve been an operator for a very long time, it can be hard to let go. Because with your founders, you can’t say, Hey, we’re going to do this thing, you should do it. And now I’m going to help you like that’s not what happens, you have to just know how to influence versus tell someone to do something. And so that’s a very different model from when you’re being an operator, right? When you’re an operator, you could build a team, you could build a strategy, go execute. But if your founders don’t want to do that, if they don’t want to do the thing you think they should do, then you just can’t make it happen. And so I wanted to see if I liked the dynamic of being like, Okay, here’s some money, I’m going to try and give you advice, I’m going to try to introduce you to people that can help you. But at the end of the day, it’s your decision. Like I’m not in the company doing the work. But that was the first piece. And I also wanted to see if I could split my mind between 20 companies versus just being fully focused on one. Because as you know, when you’re in a startup, all you’re thinking about is like your customers your product, like are we launching is this happening is that happening? Versus when you’re in venture or you’re investing or advising, you’ve got so many different companies that you’re thinking about at one time, and you have to prioritise your time across a bunch of companies, which is just a whole different way of working.

Randy Silver: 7:54

So it sounds like you’ve got a thru line to the way that you invest, though in the way you look at companies, and that you’re after product lead growth. Can you talk a little bit about what that is? And why that’s so important?

Ashley Smith: 8:05

Yeah. So I love I love products, I love product that makes the consumer, the developer, that user, whatever you want to call it, so excited to use that product that they tell their friends about it, or they share it in some way. It’s just it’s a different way of creating, you know, a network effect, frankly. And it’s just something I’ve always been lucky to have like Twilio people loved our product. I think everyone has a Twilio t shirt from that era. Parse look, we got so lucky that like people that were building apps on top of pars loved us so much that they would go tell all their friends about it, they tweet about it, they go on Hacker News, it was just it just grew itself. And I at my core deeply believe and I had this conversation yesterday with someone else who’s building an incredible product. And if you build a really good product, and you create something that people can tell you love what you’re working on, and you listen to your customers, and you take feedback really well from the people using your product that your product will grow, right? It’s not magic, it really comes down to listen to your customers, and figure out what they want. And then build that thing and build it really, really well. Like, think about product experience. Think about the features they need. And it really makes it easier to grow your company when you have all these advocates using your your product.

Randy Silver: 9:23

Is there a secret about how you listen to them?

Ashley Smith: 9:25

Yeah, so I’m actually writing a giant blog post about this right now. So there’s two ways to go about it. Right? When you’re younger and a smaller company, you’re going to be like three founders and maybe like two engineers, every single person should be talking to customers. I mean, there’s probably some version of a sales call that will happen amongst these people. Don’t be afraid to talk to customers. And you have to make it feel safe enough that they can give you negative feedback. You don’t ever want to hear like oh your product is terrible. But you need to make it okay for someone to say that to you because otherwise you don’t get better. So I think the first version of this is when you’re asking small team, like make sure that everyone is doing support. Everyone’s talking to customers, everyone’s joining customer calls here and there and sales calls just to really hear what the customer is talking about. And keep an open conversation with your community. When you’re a much larger company, it becomes harder to get that product feedback, all from sales and maybe developer experience in engineering and Twitter. And like, all these places, you’re seeing product feedback come in funnelled directly into the product team. So you have to build a process. Some people hate process. I’m not a huge process fan. But in this case, there needs to be someone whose job it is to think about, hey, how does product feedback get back into the product and our development cycle? You always want to make sure if someone let’s say someone on Hacker News, comments like, oh, yeah, this is a great product. And if they had this thing, it’d be way better. And like 70 people upvote that thing, you want to always be agile enough that someone can say, Okay, we’re gonna work on that, build it and launch it, and then comment back in and say, Hey, we did that thing. It’s the best feeling. And so even for big companies just just have a process and a person in place who owns developer product feedback, or whatever the product is, make sure it actually makes it into the development cycles. And then when you do that thing, make sure you’re announcing it in all the right places.

Lily Smith: 11:16

And say this concept of product lead growth, does it replace other kinds of growth? Or, you know, are we talking about eliminating salespeople and just aiming to grow the product? Through kind of this product lead strategy?

Ashley Smith: 11:33

Yeah, so there’s definitely schools of thought where you know, you’re building a product so good that it sells itself. I’m kind of more realist on this stuff, where I think salespeople are super, super valuable to a company. But I like to think of them more as like customer success. So they Yeah, sure. They’re, they’re taking meetings with people and talking about the customer’s needs and the things that they want to purchase. But it’s less about, hey, tell us what you want, we’ll build it and then we’ll sell it to you. It’s more, hey, this product is great. Everyone in your company is using it, we want to make sure that y’all are able to have analytics on the work or I don’t know, make sure that your admin access roles are correct, like the things you need when you’re a bigger team on top of great products. And so I think about salespeople as being the person who just makes it easier for large organisations to use a product that everyone loves using. So it’s also for always going to be important when it comes to building a great product and company. So I don’t see it as a replacement, I just see it as something that makes their jobs so much easier. And you ask any salesperson, if you ask the sales woman, hey, what makes it easier to sell? Is it that this product is so great, everyone wants to use it? Or is it easier to go in and try to sell something no one wants? Like, it’s a pretty, pretty obvious. So yeah, it’s all people are extremely important. The customer success for the expansion side of it is is even more important. Equally as important. So when you’re thinking about this model, just just realise that there’s like the initial person taking the deal, then there’s the people who are doing the expansion work, and sometimes the same person. And sometimes as you get larger, it splits out.

Randy Silver: 13:07

Who’s doing this well today, who should we be looking to as a as a good model?

Ashley Smith: 13:12

Yeah, I mean, just looking at like, you know, markets right now, zoom. Okay, so zoom is is beautiful product, they replaced a bunch of other products, which were doing an okay job, but everyone knew that there needed to be a better video solution for conferencing. And to use Zoom, you have to invite friends. Like, that’s what that you’re not going to zoom by yourself, right. And so I think zoom isn’t a great job of creating a product that sells itself. Lauren, large organisations need to use it. So there there’s influencers wanting to use Zoom within the company. But you also have the buyer who’s like writing the check, which is who the salesperson will interact with. And they take product feedback really well, you’ll see people tweet about something wrong with Zoom, and their CEO will jump in, right. I’m not saying all CEOs should be on Twitter answering, you know, support questions. But the fact that that person cares that much is such huge. And so, you know, that’s a very, very large example of a company, but it’s a good one, because it’s purely product led growth. They’ve got a setup that, you know, everyone’s trying to replicate now, where you know, like Slack, for example, Slack is something that you don’t want to use Slack by yourself, you want to, you know, it’s a great product. You also want to like have friends with your colleagues with you using Slack. So it grows itself based on the way the product, the nature of the product is. And same way, if you give product feedback for slack, like hey, I wish there was a new way to do this emoji. They’ll build that thing, right? They listened to their community, and that’s super important.

Lily Smith: 14:39

Um, what about if you have a product, which is it, you know, it doesn’t kind of naturally have a networking element to it, or that kind of network element to it. And it’s, you know, I don’t know, like an accounting tool or something like that is would you still encourage people to think network?

Ashley Smith: 14:57

Yeah, you know, I always encourage anyone building anything to think product first, accountants talk to each other. There are places accountants hang out online, I’m sure to share, you know, facts and things. I’m not an accountant. So I don’t know where they are. But you want to you don’t want your accountants to be using technology that just is terrible to use. And so you’re seeing a lot of disruption in this space, also, where there’s things coming out that makes jobs like accounting, or you know, what other back office roles easier and simpler to use, and is a better product. So absolutely, you can so put product first when thinking through that. And it’s let’s say, here’s an example, there’s an accountant at a company, they love using your product as a small company, they leave the company go elsewhere, misusing that product, they’re going to word of mouth, say, Hey, we should all start using this thing. So there’s still some sort of network effect that happens, because the product is so good.

Lily Smith: 15:52

And just thinking about the terminology with product, like growth versus growth hacking, is there a difference there? What if there is? What is the difference?

Ashley Smith: 16:00

Yeah, so I don’t want to be the one to define anything, but the way I see it, and I’m sure other people see it differently. To me growth hacking is very specific to, okay, we have this many people signing up. And if we move this button to the left, we have 10 times more people signing up, it’s much more tactical, it’s much more like oh, this, if we in our dashboard underneath roles button, if you see that you can change roles from admin to user, but you have to pay it up fee, and then you could charge money for that. Like, to me that’s growth hacking product, lead growth, to me is much more about just creating a beautiful and good product experience for your end user. Therefore, they want to use your product that paired with a really good growth hacking strategy are a really good growth strategy is just extremely important.

Lily Smith: 16:52

And you’ve talked about some of the kind of key principles of being product lead. But I know you went through a list in your talk at sastra. It’d be great if you could kind of talk through some of those prints, or give us your kind of shortlist or principles for other businesses kind of product people to latch on to.

Ashley Smith: 17:09

Yeah, great question. So it’s interesting, I keep talking about making a beautiful product. But a lot of the times when I say beautiful, I’m actually excited about usability and making your product really easy to use for the end user. And also easy to get started is something that, you know, you have no idea how many times I’ve seen people try to start using your product and not be able to figure out and then never come back to the website. So that’s, that’s big. For product load growth strategy, the simple to get started piece is just, I don’t want to have to talk to seven people, I don’t want to have to have had to have a consultant come on site, you don’t want to have to give a credit card in some cases, just like make it dead simple to get started using your product. And I’ve seen a lot of cases lately, where a product needs to have data, for example, coming in from your data warehouses to be useful, that’s fine, they’re not going to get started that way, create some sort of dashboard environment for the new users to see the power of what can actually be using this product and then get them to do that the giant data lock and pace, freemium to pay, I’ve heard a lot of back and forth on freemium lately, I still think there’s value and giving a free tier as an on ramp to your paid solution. As long as you understand that some of your free users will never pay you ever, but they will be your influencers and their influence your paid users in some ways with it from within a company or either social media or Stack Overflow, whatever it might be, to check your product out and then those users might convert to paid. Another one I think was it was talking about focusing on the user first, if everyone’s ever worked out a big company, you get software kind of just put in front of you and you don’t have a choice to use it or not. And that’s kind of changing because users are rebelling in a great way. And so you really have to think about your user like you really have to understand like this, this user enjoy using this piece of software that’s been purchased for them or procured for them buy it? And if the answer is no, then your products gonna be replaced by someone who has really thought about the end user. A great example of this is Expensify. Expense Reports are my least favourite thing to do. But Expensify his made it such that I just take a photo and uploads it does some magic in the background. And then bam, my expense report is done. And it’s pretty UI, the users are happy accounting is happy. And it’s replacing all the older legacy solutions for expense reporting. And so it really is important to focus on your user. And then I actually just wrote a blog post and launched it today about the network effects. Think about how you can create network effects within your product, whether it’s a Slack style or like you don’t want to be on slack by yourself. Is it whenever you’re signing up, you have the option to invite your team. Is it like Calendly, which, you know, when you actually send a Calendly link, everyone’s like, Oh, Aha, I don’t have to do that weird back and forth thing with calendars, you know, it’s actually a way to show the value as a user to everyone else you’re sending it to. But really think about from a strategy standpoint, what is your way of creating a network effect for your product? And to get that exponential growth going?

Lily Smith: 20:24

And do you think there’s any exceptions with businesses that shouldn’t be or can’t be product LED?

Ashley Smith: 20:31

Oh, man, of course, there’s always exceptions to every rule, right? I’m trying to think of some stuff off my head, and I can’t, but I mean, I’m sure there’s some sort of software that is, you know, deep in some procurement process, that just has to be the way that it is. And I’m sure it’ll change at some point. But right now, there’s always going to be something that can’t be product led, I guess, that the world is moving towards creating great products easy to use, focusing on the user. So while right now there may not be it may not be the perfect fit for everyone, I think over the next 10 years, we’ll start to see that most products are created so that the user enjoys using them.

Randy Silver: 21:10

The danger for some companies is going to be taking this advice and saying, right, if the user said it, the user wants it, and we have to do it. But there’s a lot of different users and a lot of different cases, and being able to prioritise what is actually valuable feedback from the user versus stuff that might get in the way and compete with your strategy. How do you distinguish between those two things?

Ashley Smith: 21:35

Yeah, absolutely. I see this all the time. It’s interesting that you need to have a, you don’t want your product strategy driven solely by your users, you don’t want to just be like, you know, what our strategy is, we’re going to put a Reddit style board on the internet, everyone’s going to put what they want next, and then we’re going to build it. I mean, that’ll work for a while. But at some point, you have to have a much bigger strategy of like, what is this company? What’s our goal for the next year? What’s our goal for the next five years? What’s our goal for the next 10 years? Like, what do we want to be, and then you can categorise the feedback into this directly aligns with our vision, this might align with our vision, if we sort of go a different way, or expand our view a little bit, and this will never ever, you know, be within our vision. And I think it’s okay to say that, like, I think it’s okay to tell users like I hear what you want. But this isn’t something that actually feeds to our core product and our greater audience, you know, customers, users community, they value openness. And so it’s okay, just to say, hey, this doesn’t make sense for where we’re going.

Lily Smith: 22:40

So aside from having just generally a better product, what are the other side effects of having a successfully product led business? Yeah, so

Ashley Smith: 22:51

So OpenView does a product love growth index, I think yearly or quarterly, we’re always updating that to kind of answer from a numeric standpoint, what we think happens to these companies that are following a product lead growth strategy. And so for contacts, that’s like Atlassian, Shopify, Dropbox, DocuSign, Twilio, a lot of companies we’ve all heard of, and then we know their products are good. And what we’re seeing is they’re growing at about, you know, they’re higher multiples of enterprise value to revenue. So about 10x, versus with just SAS without a product lead growth strategy is about 7.7x. And again, that’s enterprise value to revenue. And then we’re seeing that they’re making on average per dollar 5224. Over the SAS index mean, we’ve we’ve kind of put down as 2304, which just makes the value of the company if we were going to, you know, not get acquired or sell it or IPO or whatever it looks like to be about two times more valuable, because they’re growing more efficiently. And if you want to learn more about the product, lead growth index in the way we think about the numbers and the multiples and the values, you can just really go to Google and search for open new product lead growth index, and we have an entire page and workshop and everything that pulls everything up. So the thought the thesis is that if you build a better product, and your users love using your product, your network effects are much stronger. It’s driving acquisition, retention and expansion. It’s also increasing the value of your company.

Randy Silver: 24:21

You’re talking mostly about startups and SAS businesses. Does this apply also to enterprise and legacy businesses? Can you transform from where you are to taking advantage of this product? Strategy?

Ashley Smith: 24:34

Yeah, so a lot of these obviously, like you said, are startups that have grown into being giant enterprise businesses. Most of them are actually I think all of them on these. This is our public companies. I do think there’s a world in which the legacy solution and legacy businesses start to realise this is happening and I think it’s already happening, where they try to make their solution and their in their product much more easier to use and start listening to their users. Do I think it’s gonna work? As well as this is when you’re starting from scratch? I’m not sure I do think there will be improvement. Every day I talk to a startup and they’re going against some legacy solution, you know, whatever it might be. And their main selling point is our product is better. And like she Yes, your product is better. But what if they get a really strong engineering product, go to market team and there and recreate you know, that magic and make a good product. It’s possible, you just don’t see it very often, big businesses move slowly, in a lot of cases and businesses that have been around for 20 or 30 years moving more slowly. So even if they’re able to turn the ship around, we wouldn’t see the innovation for quite a while. And by then someone else has already liked, you know, eating their lunch. And

Lily Smith: 25:48

kind of on that point of how businesses can be more successful make a difference. You’ve obviously worked with a lot of great companies and kind of up and coming businesses. What is it that you see in these businesses that makes them great besides product like growth strategies? Is there other things that you look for in a business?

Ashley Smith: 26:06

Yeah, I’ll tell you what I look for when I’m talking to founders of small companies. I love getting to know founders and getting to know what drives them. That’s been something that time over time, I’ve been able to see Oh, I see. I see what this person wants to build a business. So founder, founders are big for me. And I also am curious, like, is there a market here? Are we are we trying to create something that no one wants? Like, that’s always important, like, is there a market for this? I love companies are creating a category versus just trying to come in replace some old thing like I mean, Zoom obviously does a great job of replacing an old thing. And extremely impressed with what they’ve done. But I do like the idea of creating a category. Twilio was creating a category right parse was creating a category. So it’s just something that is close to my heart. And I think the other thing that’s extremely important is when you’re talking to founders, or you’re talking to people who work at these companies, do they understand how valuable their their community is, and helping them to grow as a as a product and as a company. And so a deep love for customers is so, so important. And I’ve always been fortunate to work at companies where the customer is like, we care so deeply about making their lives easier in some way. And so I really look for companies and founders that do the same.

Lily Smith: 27:21

Awesome, Ashley, thank you so much. That was a great point. And it feels like a great kind of ending point for the podcast. So but yeah, it’s been really good having you. Thank you. Yes, awesome.

Ashley Smith: 27:31

So good to be here. Thank you so much.

Lily Smith: 27:42

Our hosts are me, Lily Smith and me Randy silver. Emily Tate is our producer. And Luke Smith is our editor.

Randy Silver: 27:51

Our theme music is from humbard baseband power that’s pa you thanks to Ana Kibler, who runs product tank and MTP engage in Hamburg. And please based in the band’s for letting us use their music. Connect with your local product community via product tag or regular free meetups in over 200 cities worldwide.

Lily Smith: 28:10

If there’s no one near you, you can consider starting one yourself. To find out more go to mind the product.com forward slash product tank.

Randy Silver: 28:20

Product Tech is a global community of meetups during buy in for product people. We offer expert talks group discussion and a safe environment for product people to come together and share greetings and tips.