Podcast Summary
Insights On Product-Led Growth and Leading a Startup From Slack's Former Head of Growth: Merci Grace shares key insights on mistakes companies make when going product-led, signs to watch for when transitioning, and tips on hiring a head of growth. Storytelling and strong leadership are crucial for success.
Merci Grace, founder and former head of growth at Slack, discusses her experiences in helping the company grow and innovate product-led growth.She also shares her insights on common mistakes companies make when going product-led, signs for when to go product-led, and tips for hiring a head of growth.Grace's career journey, which started in game design and venture capital, taught her the importance of storytelling and owning the room when it comes to being a successful leader in startups.Additionally, the episode also features sponsors for Dovetail and Mixpanel, which offer user research and self-serve product analytics, respectively.
Importance of Founder's Personal Qualities in Venture Capital Investment: Personal qualities and interpersonal dynamics of a founder play a significant role in securing venture capital investments. A unique insight and strong storytelling narrative starting from the middle of the action can grab investors' attention. Employee satisfaction and culture-building skills are a crucial element in the success of any startup.
In venture capital, the founder's personal qualities and interpersonal dynamics play a larger role in deals happening or not happening than objective factors such as market shifts or research divisions.As a founder, it's important to present yourself as someone investors respect and want to invest in by having a strong storytelling narrative.Starting with a unique insight and the middle of the action in a pitch can grab investors' attention and make them interested in the company.In regards to Slack, one thing most people may not know is how much the company's success was due to founder Stewart Butterfield's culture-building skills and prioritization of employee satisfaction.
The Uncertainty of Slack's Social Aspect After Acquisition: Although Slack was originally created for work communities, the rise of the creator economy has seen people use it as a social tool as well. However, the future focus of Slack on this social aspect is uncertain after being acquired by Salesforce.
Slack was initially perceived as a social platform, but its early founding team quickly established that it was meant for work.Blocking on Slack was a hot topic internally, where some argued for its inclusion to ensure safety and privacy.However, it was argued that blocking could also be used to exclude someone from important meetings, causing harm to their work performance.While Slack's original use case was for work communities, the rise of the creator economy has seen people use it as a social tool as well.The future focus of Slack on this social aspect is uncertain, given it was acquired by Salesforce.
Slack's User-Centric Design Approach to Achieving Product-Market Fit: Slack's early focus on the user experience and experimentation allowed them to achieve product-market fit. Their success highlights the importance of user-focused design and experimentation in achieving product-led growth.
Slack may have some haters, but it's actually an amazing tool for many people's needs.Its tie to professional identity and easy reengagement with communities makes it unbeatable for Merci Grace and Lenny.Grace emphasizes Slack's early focus on the user experience and onboarding, which helped them achieve product-market fit.Instead of starting with a set of baseline metrics, Slack approached growth with curiosity and a willingness to experiment.Grace notes that other companies have attempted to copy Slack's design without understanding why certain features work or don't work.Overall, Slack's success highlights the importance of user-focused design and experimentation in achieving product-led growth.
How Slack Achieved Success Through User Research: Slack discovered that a low activation metric of three real human beings and 50 real messages was crucial for team success. They also found that targeting social users and ideal customer profiles were key strategies for future products.
Slack started out trying to replace email, but through experimentation and user research, they discovered that getting people into their new Slack team at the same time was what moved the needle for them.They found that having a low activation metric of three real human beings and 50 real messages was crucial.They also learned that there are people who are more social and more likely to invite others to the product, making it easier to get those people to share the product with bigger groups of folks.These lessons can be applied to future products and it's important to pick the right persona or ideal customer profile.
Inviting Users Early and Often for Social Product Growth: Invite users to a social-oriented product multiple times, making the invites optional so that people who don't want to share the product can skip. Onboarding experience design is crucial for optimizing growth and retention.
Have multiple opportunities to invite users into a social-oriented product, even if it may seem counterintuitive.Providing early and often invites catches the attention of social people who want to share the product with their friends.It's important to keep the invites optional so that people who would never participate in sharing the product can ignore or skip it.Additionally, designing the onboarding experience from the start is crucial for optimizing growth and retention of users.Introducing the product step-by-step and framing it in a way that highlights its value to the user can make a big difference.
The Importance of a Thoughtful Onboarding Experience: Onboarding is a crucial part of the product experience that should not be overlooked. Customized onboarding experiences that teach users through the product itself are best. Companies should stay connected to customer feedback and avoid overcomplicating the process.
Onboarding should not be an afterthought, as it is a crucial aspect of the product experience.Plug and play frameworks for onboarding may not be suitable as what works for one product may not work for another.The best onboarding experiences are those that are deeply intertwined with the product itself and teach users through the product experience.Companies should also stay in touch with the real human experience of onboarding by talking to customers and hearing their feedback.When considering product-led growth, startups often make the mistake of overcomplicating onboarding, identifying too many crucial product details for users to learn.
Simplify Onboarding to Increase User Understanding: Users don't have the attention span to read through all features, so simplify and test onboarding with prototypes. Decide whether your product will be sales-led or product-led before coding.
People have limited attention and don't care about your product the way that you do.It's important to understand that users won't always read through all your onboarding features, even if it's something that an executive is invested in.If you feel like you're oversimplifying or dumbing it down, it's probably just right.Carousels can work well for some products, like Tinder, where it matches the user experience of the core product.But for most apps, carousels at the beginning are built to be dismissed quickly.To test whether your onboarding features are effective, try building paper prototypes or prototypes in Figma or ProtoPie, and compare different alternatives to see what users understand better.Ideally, you should decide whether your product will be sales-led or product-led before you even start coding.
The Importance of Product-Led Growth and Bottoms-Up Adoption: For successful product-led growth, tools must offer immediate value to users without needing additional resources. By adopting these frameworks, businesses can improve retention, expand usage, and benefit all levels.
Product-led growth is when anyone can get value out of a tool immediately without the need for augmentation like webinars or conversations.Bottoms-up refers to tools that can be adopted by anyone at any level within the organization.To be product-led, there needs to be day zero value in the tool to ensure retention and continued usage.Companies can use product-led growth frameworks or tools to expand their usage, drive up retention or expand the number of departments that use the tool.Ultimately, it's important to find value immediately to increase retention and keep people using the product.
When to Hire Your First Salesperson: Founders should always be the first salesperson but should hire when they cannot meet demand or when customers prefer to speak with a salesperson. Don't wait too long or else you risk losing sales opportunities.
When should a company bring in their first salesperson? According to Merci Grace, founder of Slack, the founder should always be the first salesperson.However, the point to hire a salesperson comes when the founder absolutely cannot meet the demand even though they are working long hours and building their investing deck on the weekends.The other time to hire is when companies expect to meet with a salesperson.The preference of some customers is to actually talk to a salesperson before they can buy anything.Hence, companies should wait until they just can't do sales as a founder and/or until the companies they're selling to are expecting a sales team to support them.
Evaluating Candidates Beyond the Résumé: To find the perfect fit, look beyond qualifications and interview responses. Asking candidates to work on a project for free can reveal their problem-solving skills, communication, and quality of solutions. Candidates who are able to tell a compelling story often stand out.
When it comes to hiring, it's important to find the right fit for the company culture and product market, as well as someone with traits like curiosity and great communication skills.But to really get a sense of a candidate's abilities, it can be useful to ask them to work on a project for free.This can help reveal insights into their problem-solving skills, how they communicate and think, and the quality of their solutions.At Slack, a company that values storytelling and narrative, candidates who were able to create a compelling story often stood out.Ultimately, finding the right fit for a team means looking beyond just a candidate's resume or interview responses.
Building a Winning CRM and Diverse Product Org: A successful CRM requires a focus on growth with a team member who understands your customers. Seek out diverse candidates for product management roles to create a more open and welcoming organization.
The best CRM wins in business.It's important to start working on growth when you feel like you have product-market fit, even if it's not perfect.Hire a team member who loves and understands your customer as your first PM to touch growth or engineer or PMM to work on.To have a more diverse product management org, seek out diverse candidates and go interview a lot of women.Having a diverse team can be a self-reinforcing mechanism for your organization, making it more open and friendly for people of all races and genders.
The Importance of Diversity in Startup Teams: Prioritizing diversity in your startup team can make a significant impact on team dynamics and improve overall business success. Building a diverse pipeline of candidates, including more women and people of color, can lead to a more comfortable work environment and better treatment of all team members.
Diversity is essential for startups to succeed.When creating a team, ensure that you prioritize diversity and spend time on building a diverse pipeline of candidates.Hiring more women and people of color will not only increase diversity but also make these individuals feel more comfortable, leading to referrals of others.The tone of a team also changes when there's more than one woman or person of color, as people start treating each other better.It's better for everyone to be in a diverse group as the baseline for how people treat each other goes up.Visit panobi.com to learn more about product-led growth.
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