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PODCAST 98: The Importance of Product-Led Growth and Focus For A Startup w/ Blake Bartlett

Product Led Growth Podcast With Blake Bartlett
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This week on the Sales Hacker podcast, we speak with Blake Bartlett, Partner at OpenView.

Blake is a partner at one of the most well known SaaS venture capital firms in the world, OpenView Venture Partners, based in Boston. He spends most of his time trying to advance the product-led growth movement, both through thought leadership and investing at pioneers like Expensify and Calendly. He’s been a VC since 2007, and prior to OpenView was at Battery Ventures, where he invested in companies like Glassdoor, Wayfair and Optimizely.

What You’ll Learn

  • Product-led growth means focusing on the end user
  • VCs differentiate by recognizing that they’re basically auditioning for the board
  • A key mistake of startups is a lack of focus
  • VPs of sales/marketing need to be flexible and willing to reinvent themselves

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Show Agenda and Timestamps

Show Introduction [00:00]

Sam Jacobs: Welcome to the Sales Hacker Podcast. I’m interviewing Blake Bartlett, who is a partner at OpenView and a leader in the discussion around product-led growth. The most recent, great examples of that are Zoom and Datadog. It’s a great conversation in the differences between product-led growth, sales-led growth, and what the differences are. A great conversation.

Now before we get there, we want to thank our sponsors. Our sponsor is Outreach. Outreach triples the productivity of sales teams and empowers them to drive predictable and measurable revenue growth by prioritizing the right activities and scaling customer engagement with intelligent automation. Outreach makes customer-facing teams more effective and improves visibility into what really drives results. Outreach is an incredible platform, they’re doing great stuff.

Now let’s listen to Blake Bartlett on the Sales Hacker Podcast!

About Blake Bartlett & OpenView [1:18]

Sam Jacobs: We are excited today to have Blake Bartlett on the show. Blake is a partner at one of the most well known SaaS venture capital firms in the world, OpenView Venture Partners based in Boston. He spends most of his time trying to advance the product-led growth movement, both through thought leadership and investing at pioneers like Expensify and Calendly. He’s been a VC since 2007, and prior to OpenView was at Battery Ventures, another incredible company and firm, where he invested in companies like Glassdoor, Wayfair and Optimizely, all of which we’ve heard of. Blake, what is it that you feel makes OpenView different, unique and interesting as it relates to a provider of capital to high-growth, early stage companies?

Blake Bartlett: The core thing to think about with OpenView is that it’s all about focus. VCs have this funny tendency to not practice what they preach. So they’d go to board meetings, they talked to their portfolio companies, and they say, “Focus, focus, focus. You can’t be all things to all people,” and then they turn around and leave the board meeting and go operate the firm in a way that completely violates that instruction that they gave. They’re investing in every sector under the sun, every geography you can imagine, every stage from like pre-seed with two guys in a garage, all the way up to pre-IPO, $100 million rounds, and everything in between. At OpenView, we only invest in SaaS or B2B software — SaaS applications, infrastructure, developer tools, stuff that gets sold to business that is software.

We’re also pretty specific about the stage that we get involved. We call it the expansion stage, which is really just a fancy term to refer to post-product market fit. That’s all we do, it’s all we’ve ever done for the last 13 years, and we really try to stay laser focused and practice what we preach.

Sam Jacobs: How did you all land on SaaS as the area where you wanted to specifically focus?

Blake Bartlett: Some of that is personal preference. We just had a personal preference towards B2B and towards SaaS. For me personally, I am oriented towards being able to think rationally about a product that solves that exact problem I have in my business. I bought the thing, it did what it was supposed to do, here’s the ROI, I can measure it, and I’m going to keep using it until it stops working. So I was attracted to B2B for that, and I think it was pretty similar for my other partners as well.

Misconceptions about VCs [08:54]

Sam Jacobs: What do you think some of the biggest misperceptions are about being a great venture investor? What are the key lessons that you’ve learned since you’ve been doing it for so long?

Blake Bartlett: The classic, most basic misconception is that, first, it’s like Shark Tank, and that we just sit in our ivory tower, and entrepreneurs are hungry for our money and we just get to say yes or no. The reality is that we want to invest in the best possible companies on the face of the earth, and so do other venture capital firms. If you’re trying to invest in the next Slack, get in line, right? So they’re not coming to you, you’re going to them. How are you going to differentiate?

Now, you can differentiate with more money but in order to not screw yourself over by excessively investing at ridiculous valuations, you have to pursue and differentiate in other ways. And so you differentiate through how can you help the entrepreneur? Do you actually understand the market? Do you have relevant connections? Can you make intros to candidates? Can you make intros to customers? Can you tell them something about their business that they don’t know?

You’re basically interviewing for and auditioning for being a board member. That audition, and how are you going to help and what’s it going to be like to work with you, is incredibly important. The most discerning entrepreneurs, and the ones that I certainly want to work with, make decisions based off of that, not just based off of who’s going to pay the biggest price and who’s going to write the biggest check.

Product-Led Growth [15:27]

Sam Jacobs: One of the things you’ve talked about is product-led growth. I want to give you an opportunity to just educate the audience on what you mean when you say product-led growth, and why do you think this is such an important time for this go-to market strategy.

Blake Bartlett: How does software get adopted inside businesses today? The prototypical example that we can all point to is something like Slack. You didn’t adopt Slack because the Slack SDR cold called the CIO or something like that. You also didn’t adopt Slack because you randomly stumbled upon the Slack booth at a trade show and said, “What is this thing? Tell me more about it.” You didn’t put an RFP out, and so on and so forth. All of those traditional ways that you typically adopt software is not how it happened.

There’s probably some individual employee or a small group of folks who used it at a previous company or have heard about it from their other friends at other startups. “You got to get on Slack,” and so they create a small team and they start communicating over Slack instead of internal email. And then pretty soon it’s expands to where the entire organization is communicating on Slack, and now you can’t imagine your lives without it.

Software is adopted by individual end users. Best I can tell, we’re in a new era of software. I’ve called it, not terribly creatively, the end user era. Since end users are calling the shots, you have to now build your software company in a way that adapts to and embraces the end user, which affects the types of products that you build. You’re building it with the end user in mind and not with the C-level executive in mind as the first primary persona for the product, and then you also have to distribute to those end users as well. To distribute to end users, you have to make it something that they can adopt on their own, with the starting point of the journey being self-service. The starting point in the journey is the end user and their value and their pain and the self service aspect — it’s not the traditional sales led, MQL to SQL to closed one funnel.

Sam Jacobs: If companies are still employing the model that you just articulated, is there something they need to do? What’s your perspective on the companies that don’t feel like they have the luxury of being end user driven?

Blake Bartlett: You can get away with selling to executives for probably the next five years or so, but it’s going to precipitously drop thereafter. If you aren’t built for the end user, it’s going to be an uphill battle as we move into this new decade of software. We’re seeing this compounding effect of how quickly software evolution happens, so I don’t think it’s going to take two decades for the end user era to displace the exec-oriented SaaS 1.0 era. That’s why I’m saying in the next 5 to 10 years, you are going to hindered in your efforts if you haven’t built for and embraced the end user.

RELATED: Product Led Growth: Turning Salespeople into Pathfinders

The Key Mistakes of Startups [22:38]

Sam Jacobs: When you think about the success and failure of the companies that you’ve invested in or entrepreneurs that you’ve met, what do you think the key differentiators are between those that have succeeded and those that have failed?

Blake Bartlett: For me, a lot of it comes back to why does this company need to exist and why did you start it? If you are looking for a problem to solve versus solving a problem that you innately know yourself, I fundamentally believe that those types of companies, they just don’t have the same kind of passion, they just don’t understand the problem down to a first principles level the way that somebody who is scratching their own itch does. “I am building the thing that needs to exist in the world.” That could be a technological reason why things need to be reinvented, or it could be truly a product end-user experience and business strategy reason why something needs to exist.

You need to have that really compelling, true reason why, and deep knowledge of the market, deep knowledge of the customer, deep knowledge of the product landscape rather than just I’m hunting for an interesting startup because I want to be an entrepreneur.

Sam Jacobs: You’ve made both successful investments and unsuccessful investments, and they both believe that they have product market fit. What are the key mistakes you see?

Blake Bartlett: If you do actually have product market fit, the biggest pitfall you can succumb to is really trying to do too much. Staying laser focused on a particular pain point, on a particular user, on a particular use case, on a particular aspect of your application, and really getting traction with that, and really doubling down on that, versus trying to be all things to all people is best. If you’re going to try to boil the ocean, you’re just going to spread your surface area way too wide and you’re not going to be able to manage that much stuff.

It’s not rocket science, it’s focus, focus, focus. Let the customer and the market pull you and tell you where to go next, and not on an individual basis. You do need to have some sort of longer term vision, so that you’re not just iterating in small incremental units and letting somebody else leapfrog you. You need to keep that North star in mind, but let the customer lead you there and don’t get ahead of them and don’t try to go too wide.

Shrinking Tenures of VP of Sales [32:40]

Sam Jacobs: The audience for Sales Hacker podcast is people that are not the CEO but reporting to the CEO. Meanwhile, I’m not sure if you’re following the trends and employee executive turnover, but the average tenure for a VP of sales or VP of marketing is shrinking. When you think about great VPs of sales, great VPs of marketing, are there commonalities across the people that you think are really top tier when it comes to leading revenue growth and revenue generation for companies?

Blake Bartlett: Is this somebody who has a single playbook and just runs their playbook no matter the market? Or is it somebody with a set of plays that makes sense, and you can pull them out as appropriate given the context? If you just bring that hammer and everything looks like a nail, I have found that to very rarely work, and it only works if the product market fit is doing all of the hard work. It’s not really because of the playbook being the best playbook, it’s just like, well, it was the right pain point in the right market at the right time with the right product, and nobody else was doing it.

Having this flexible mindset to really think about things from a first principle standpoint for this market, for this product, for this team, for this buyer set, for this end user type, and figuring out what you use from your past playbooks, what you leave behind and what you need to invent new for the first time, whether you’re talking about marketing or sales — this is the best leader that I’ve seen work.

Sam Jacobs: There’s a corresponding follow up question because there is a conventional wisdom out there that there are stage appropriate leaders and that there’s a person that will get you from 0 to 10 and maybe 10 to 30. Are you of the opinion that there’s one type of person, and the minute we get to this revenue range we need to swap them out for somebody else? Or are you more open to promoting younger talent because you recognize that adaptability and flexibility are probably just as important as the actual experience?

Blake Bartlett: Having these arbitrary rules of the person that takes you from 1 to 10 is not the person that will take you from 10 to 50, so therefore, we must replace the person, just doesn’t make sense to me. The evidence will speak for itself, and it’s both the evidence of, are they consistently hitting their number and are they able to accurately forecast and deliver on the needs of the business? That’s incredibly important. You do need to think about the leading indicators and the signals, but I think the data and the results tell you what you need to know. Somebody who can show the ability to reinvent themselves is the qualitative side that I look forward to say, “Is this person continuing to scale, even though this might be their first time being the SVP of sales or the CRO or something like that, and they kind of really were grown from within in terms of internal talent?”

To continue the conversation about product-led growth, contact Blake Bartlett on LinkedIn.

RELATED: How to Become a VP of Sales by the Time You’re 30

Sam’s Corner [40:37]

Sam Jacobs: It’s Sam’s Corner, the end of the episode where I give you my thoughts on the interview. There’s a couple of things that I think we need to be mindful of. Product-led growth is extremely important, particularly this mid-market, $10,000-$20,000 a year price point. To drive an effective product-led model, you’re going to need the organization structured in the right way, and you’re going to need to make sure that you can support the sales team that you have based on the price point.

One of the things that we talked about is this average tenure question of 17 months. Blake said that the proof is going to be in the pudding. If you cannot explain the results and if you don’t have a plan, you cannot forecast the results. Your ability to tell the story coherently about the business using data, and your ability to predict and forecast the business, that is one of the key determinants as to whether or not you’re going to be able to scale as an executive.

What We Learned

  • Product-led growth means focusing on the end user
  • VCs differentiate by recognizing that they’re basically auditioning for the board
  • A key mistake of startups is a lack of focus
  • VPs of sales/marketing need to be flexible and willing to reinvent themselves

Don’t miss episode 99 next week!

This has been the Sales Hacker Podcast. We want to thank our sponsor, Outreach. Outreach triples the productivity of sales teams, empowers them to drive predictable, measurable revenue growth.

If you want to reach out to me, you can find me on LinkedIn.

If you want to hear more about Revenue Collective and how we’re helping alter the narrative of a 17-month average life cycle for a VP of sales and marketing, if you want to hear about how we’re helping people increase their career trajectory, accomplish their career goals, and be at their job, in their job, then check us out at Revenue Collective.

Thanks for listening!. I’ll talk to you next time.

This is a sponsored guest post from a Sales Hacker partner.

Sam Jacobs is the Founder of Aqueduct Revenue Advisors and the New York Revenue Collective and regarded as one of the top start-up CROs in the tech community.

He has has over 15 years of experience scaling companies from post-revenue to ~$300M, has helped raise over $400M in institutional capital, and has helped companies of all sizes achieve an average annualized revenue growth rate of 48% over the last 15 years.