S1E6 – Go To Market: Importance & Best Practices
Launching a new SaaS product onto the market is obviously the next step after development. The go-to-market strategy is essential for introducing a good product or service to new clients and establishing a competitive edge. It includes specialized techniques for pricing products and services, sales and marketing channels, customer journeys, introducing new goods and services, and rebranding in a foreign market. Today’s topic features Andrew Davies as we discuss the ideal go-to-market strategy for your B2B SaaS.
Show Notes
Why you need to listen to today’s guest, Andrew – He has immense experience in marketing strategies, having started as co-founder at Lidio, acquired by Optimizely, and is now the CMO of Paddle. Next to this, he has advised and coached many B2B SaaS businesses along the way.
What is a go-to-market strategy – Andrew defines it as the strategy that consolidates all of a company’s marketing strategies in order to reach, engage, and successfully convert your target customer.
What needs to be in place before going to market – Andrew opposes the idea that some things need to be in place before going to market. He argues that all you need is the belief that your new product or service will be successful in the market. However, he adds that you should only accept the temptation of going to the market once you have achieved market fit, i.e., you are meeting value so that your customers will hate to have the product taken away from the market.
Mistakes companies often make with go-to-market -First, go-to-market is often an afterthought rather than being part of the strategy from the product development stage. Secondly, first-time founders often want to invent everything from scratch instead of leveraging tried and tested techniques already available. Thirdly, Andrew argues that most B2B Saas businesses launch their product in a saturated market without considering the actual cost of a good market.
Strategies and processes for B2B SaaS business for go-to-market strategy – The primary element of an excellent go-to-market strategy is a thorough understanding of the customer and needs. Most SaaS companies are now running ideal customer profile tests to figure out the right target audience for their new product. The customer discovery process now involves customers from the word go and using their feedback to develop the product. Striking a balance between short-term and long-term investments will ensure you get it right with your go-to-market strategy. It would be best if you prioritized learning over revenue in the early days of a SaaS company.
The role of Accounts-based marketing (ABM) – ABM is a great strategy to get feedback even when they have lower annual contract values to acquire helpful feedback from the potential customer. With ABM you can target different companies to figure out what will be your best Ideal Customer Profile.
Differences between bootstrap and funded companies in implementing go-to-market – The main difference is the amount of capital. More financial resources at hand allow for greater experimentation of the go-to-market strategies.
Challenges in go-to-market strategies – He faced the challenge of finding the ideal customer for which his AI technology market could build a product. With another company, they faced the challenge of telling a coherent product story that unified the experimentation and functional capabilities of the product. Also, another product-led growth company faced the challenge of overspending on research and development again after failing to spend time identifying best-fit customers.
Different channels in your go-to-market strategy – It is necessary to employ different channels for the go-to-market strategy in a unified manner to optimize the strategy. It is often a blend of sales-led and product-led strategies.
Affiliate marketing in go-to-market strategy – Affiliate marketing allows for experimentation which is crucial whenever you hit the ceiling in your go-to-market strategy. It helps to grow your brand awareness to a broader audience and capture more demand outside the scope of your sales team.
Advice to beginner companies with 10k revenue on go-to-market strategy – Put much effort into acquiring a handful of happy customers to build a solid capital base to stabilize the business.
Advice to established companies with 1 million in ARR – Make sure you listen and learn from the customers and build customized products or services for a specific target audience. Also, seek valuable data that will help you scale your company further.
Key Timecodes
- (0:40) Introduction to today’s topic and guest expert
- (1:38) Why you need to listen to today’s guest Andrew
- (3:17) What is a go-to-market strategy (3:52) What needs to be in place before going to market
- (5:52) Mistakes companies often make with go-to-market
- (7:23) Strategies and processes for B2B SaaS business for go-to-market strategy
- (10:12) The role of Accounts-based marketing (ABM)
- (12:45) Differences between bootstrap and funded companies in implementing go-to-market
- (15:25) Challenges in go-to-market strategies
- (19:52) Different channels in your go-to-market strategy
- (23:09) Current go-to-market at his company, Paddle
- (25:49) “Balloon in space” payment system in space
- (27:13) Affiliate marketing in go-to-market strategy
- (28:40) Advice to beginner companies with 10k revenue on go-to-market strategy
- (30:02) Advice to established companies with 1 million revenue
- (31:54) Andrew’s contact information
Transcription
00:30 – Joran Hofman
Welcome back to another episode of Grow your B2B SaaS. We discuss all topics on how to grow your B2b SaaS. No matter in which state you’re in, when you’ve developed a product, you will have to bring it to the market, meaning your target. Customers need to learn about your product and see the value it can bring to them. To do this successfully, you will need to have a go-to-market strategy.
Today we’ll be diving into what makes a great go-to-market strategy, including the key components that every successful plan should have, avoiding the common pitfalls, and the difference between being bootstrapped versus funded. We are going to do this today with Andrew Davis. He is somebody who has seen every side of the SaaS world. As a co-founder at Idio, he raised 30 million in several rounds, scaled the business. Then in 2019 they were acquired by the private equity firm Inside Partners to be part of Episerver, which then became Optimizely.
01:23 – Joran Hofman
He’s now investing and advising startups himself, next to being the Chief Marketing Officer at Paddle, the tool we use at Reditus as well to manage our payment infrastructure. Welcome to the show, Andrew.
01:34 – Andrew Davies
Hey, thanks for having me, appreciate it.
01:37 – Joran Hofman
I always like to start with this question why should people, listen to you today? Can you give your own perspective?
Intro by Andrew Davies
01:42 – Andrew Davies
Well, I don’t think I’m the best person to verbalize that. I’m someone who listens to anybody who’s got an interesting perspective to share whatever stage they’re at. I guess that’s probably the most important reason we can all learn from each other. Yeah, I mean went as a co-founder and CMO from zero revenue prelaunch pre product through to about 60 staff and a successful acquisition, and then suddenly was in a business that was about 400 people where I was running brand demand and digital and that scaled to 1200 people in two years. Saw the early stages as well as some of the later stages. Through that were bootstrapped, were angel-backed, were venture-backed, private equity-backed, and now CMO paddle as you mentioned, and have gone through another acquisition recently. Along that journey I’ve had the privilege of getting alongside, coaching, and advising a whole bunch of B2B SaaS businesses when they go to market.
Probably 15 or 16 businesses over the last few years. That’s the range of experience and very much I’m still learning.
02:33 – Joran Hofman
Yeah, and I think that’s always a great topic. You mentioned you’re still learning. Even though you’ve probably seen all the aspects of B2B SaaS. You’re still learning. I think that’s definitely key to what we do, I guess.
02:45 – Andrew Davies
Yeah, absolutely. I think the joy I have and the privilege I have of helping other companies paddle customers as well as just people I know in the industry is I get a view into their challenges and their perspectives and their opportunities. I find that a great learning experience to see the pattern recognition build as I see the same kind of problems reoccurs, but often different solutions to those problems in different contexts.
What does Go-To-Market Strategy mean?
03:10 – Joran Hofman
Today we’re going to turn things around. Instead of you learning, you’re going to teach us, I guess, things about going to market really back to basic or two basics. What does go-to-market strategy mean for you?
03:21 – Andrew Davies
Yeah, for me, go-to-market strategy is the strategy that unifies all of your go-to-market functions. Customer success and your revenue teams, your sales teams and your marketing teams, you might have solutions, architects, and other teams in there. If you’re going to market with a product-led motion, you’ll have a very important product function within that go-to-market strategy. It’s the unification of all of those different teams in order to reach, engage and convert and make successful your target customer. It’s the range of different strategies that you can think about in a holistic sense so you can grow your business.
03:51 – Joran Hofman
You mentioned quite a few aspects already, having the teams in place, and things like that. What do you think has to be in place before you can really think about going to market?
04:01 – Andrew Davies
Actually, I don’t think anything has to be in place. There’s a real rise at the moment of founders who are building distribution before they even build products. That can be risky because if your product doesn’t work and if your product thesis is wrong or if you can’t iterate your way out into a product thesis that really resonates with the market, then perhaps your distribution is in vain. We see many people starting up newsletters or building their Twitter accounts or doing other things to build an audience even before they’ve launched their product.
Actually, I don’t think much needs to be in place at all, perhaps apart from the confidence that your product is going to resonate with that market. Traditionally, especially if you’re raising money and you’re going to go and build the go-to-market function around a product where you’ve already got some minimum viable product, then yes, you need some confidence that the product is meeting a customer need.
04:48 – Andrew Davies
I really don’t advise spending much money on building out go-to-market. A go-to-market strategy, until you’ve got that real resonance, you’ve reached that point where people would hate if your product was taken away. You’ve reached that point of actually breaking through and pleasing some customers.
05:04 – Joran Hofman
Exactly. I think the reason why people hate your product being taken away is when they get enough value out of that.
05:11 – Andrew Davies
Right.
05:11 – Joran Hofman
That is always the key thing, I guess, with every product. Make sure you give your clients value.
Listen also to the importance of Customer Success within B2B SaaS.
05:16 – Andrew Davies
Yeah, absolutely. Often we call that product market fit. It’s interesting to think about the various definitions of product market fit, but certainly, I’ve been in the challenge of trying to scale go to market before there was product market fit. I’ve worked alongside a lot of other people who have had that same challenge of wanting to get on with the journey of growth, but without having the discipline of a strong product market fit, you’ve iterated towards first.
Getting to that proof point where, as you say, you’re delivering value, people are telling you about that value, they’d hate it if that value disappeared. Those are all good indicators that you’ve met that point of product market fit. You now can put some money into scaling.
Common mistakes when implementing Go-To-Market Strategy
05:50 – Joran Hofman
Exactly. I think maybe that’s already going into the next question. Maybe a common mistake companies make. Do you see any other mistakes companies making when talking about go to market?
06:00 – Andrew Davies
Yeah, I think with very product-focused founders or engineering-focused founders, I think there sometimes can be a perspective of build it, they will come and therefore go to market is an afterthought. It’s only after not seeing several months or several quarters of people magically growing in their usage of the product and sharing of their product that go to market is seen as something that should be invested in. I think another common challenge, particularly with first time founders, is trying to invent everything from scratch.
This has been done tens of thousands of times before in similar situations and therefore there’s lots of good frameworks and benchmarks that you can learn from rather than inventing everything from scratch. The third challenge, I think, is that in a very saturated market and most products are launching into reasonably saturated markets with a strong list of competitors, or if not, then if they provide value, they soon will have lots of competitors.
06:49 – Andrew Davies
There’s often a common challenge of not counting the true cost of going to market. As you scale a SaaS business, that becomes often your primary cost base in your business, your sales and marketing functions, and your go-to market functions. It’s very easy to see that as something you can just make a very small investment in and things will still grow, but it usually becomes the dominant investment area for the entire business.
07:09 – Joran Hofman
I think that’s a really good one because it’s easy to keep adding money on top of it, of course, to go to market. In the end, you have to make sure that you keep your customer acquisition costs in line. Calculated costs, whatever it takes, I guess.
07:21 – Andrew Davies
Yeah, absolutely.
Strategies & Processes for Go To Market Strategy
07:22 – Joran Hofman
I think that’s already going into the next question. Can you share some strategies, processes? SaaS companies can use to set up the go-to marketing strategy?
07:30 – Andrew Davies
Yeah. The very first piece of go to market is a deep understanding of who the customer is and what they want and what they need, what are their hopes, their aspirations, what are their challenges, and how do you play into that mix. In terms of processes that I’m seeing being used increasingly, one of them that I find really interesting is account based marketing as ideal customer profile identification. We talk about ICP, the ideal customer profile, and you want to get that as focused as possible.
Many products launching onto the market have a guess or an estimate of what their ICP might be, but they don’t have any proof over it. One process I see as part of their launch that many SaaS businesses now adopt is running ABM campaigns, account-based marketing campaigns, into different segments with different ideal customer profiles so they can test which one of those resonates most.
08:15 – Andrew Davies
That’s a really interesting trend I’m seeing. Secondly, there’s that process of customer discovery. We talked about how important customer insight is. This is not just about having a list of names you’re going to go after. This is about having conversations with them from day one. Involving them in your product development, involving in them in every new feature release, making sure you’re hearing back from them how they’re working and how they’re not working, whether they’re actually paying customers or free customers or not customers at all.
Constantly making sure you’re close to the market. The third thing that I think is a really important balance is making sure you are balancing long and short-term investments. We can come to the marketing side of the house whenever we get to it in this conversation. There are some marketing tactics that have some very quick results. Pay per click.
08:57 – Andrew Davies
As an example. If you’re bidding on terms that matter to you, then you’re going to get a very quick yes or no. When those people see that proposition on your site and go through a conversion funnel, it might not be positive, but you’re going to get a very quick feedback loop. There’s other things perhaps like SEO and partnerships that take a lot longer to pay off. Any brand investment takes longer to solidify. You also need to think about that balance of long and term investments when it comes to your go to market strategy.
09:21 – Joran Hofman
Yeah, and I think that’s real good because if you only focus on the long term, you’re not going to get the results you want right now. If you only focus on the short term, you will have a lot of costs just because you’re running these ads or you’re not thinking about the long term. I think this podcast is a good example. We’re pretty early stage, but we now run the spot cost as a long term investment. Like, I’m not expecting any clients to come out of it anytime soon, but in the end, this is building the brand we want to be. Yeah.
09:46 – Andrew Davies
I think in the early stage, it’s really important to prioritize learning over revenue. It’s very easy to try and get those first few dollars, but if you’re not learning why people are paying you those dollars and why they might stay with you and why they might pay you more in the future, then really that’s just of cash to help you fund your business. But it’s not building a sustainable advantage. I do think that prioritizing how you learn that feedback loop in the early days of the SaaS company is really important.
How to use ABM to identify your ICP
10:12 – Joran Hofman
To come back to what you said before, you mentioned ABM as ICP identification. Do you see there’s like an average contract value for companies doing that? Or could you also do it when your contract value is a lot or on the lower side? Yeah.
10:27 – Andrew Davies
Account-based marketing as a play, as a strategy, usually only works in the higher deal value, the higher Acv, say 2030, $40,000 plus. In the early stage, again, if we’re prioritizing learning, then that might well be a worthwhile investment to identify specific customers and go after them with a prioritized and coordinated set of messages to different decision makers. Because again, what you’re going after in that early stage is feedback. ABM is a great way of getting feedback because people respond to that message or not, and they have specific people where you can get a specific yes, no or maybe. I think one of the reasons people use ABM in the early stage, even if they have lower annual contract values, is to get that quick market response from different segments.
11:11 – Joran Hofman
I think the big misconception is that ABM costs a lot of money, as in the end, you could do it with a small budget as well.
11:18 – Andrew Davies
Absolutely. This could be as simple as you writing some LinkedIn email messages to a bunch of people and seeing what the response is. ABM often gets this bad rap as being very expensive with technology, et cetera. If I go back to the very early days of video, and this was before kind of ABM was a thing, I remember when we had the kernel of a product, I identified twelve people in London that I thought could buy what we’re building and I wrote a blog post for each one of them. Now, that was free, it was just my time, but were pretty young back then and had no experience at all. By writing a blog post for each of these individual companies and the people I wanted to get a meeting with, I then made sure that it got across to them. Maybe I passed it to them on Twitter or found someone who was connected and who shared it with them.
12:01 – Andrew Davies
When I reached out for a meeting, every one of them knew of me in some way as someone who’d written something vaguely intelligent about their context, their situation, their latest earnings report or whatever it might be. I walked in the room as someone who had an interesting point of view and we could have a conversation together rather than this 18-year-old kid that didn’t know what he was talking about. That was ABM in my very first instance. Right. Which cost absolutely nothing and yielded some great results for us, but made sure that we got to the right people and got a yes no or maybe got some learning off them.
Implementing go-to-market strategy: Bootstrapped vs Funding
12:32 – Joran Hofman
Yeah, exactly. It doesn’t have to cost money, it will cost time, but in the end you will get the feedback you’re looking for and build that community because he discussed as well with your customer discovery. Nice. I think it goes really well into the next question because this is the bootstrap way, right? Do you see any big differences between bootstrapped and funded companies when implementing a go to market strategy?
12:56 – Andrew Davies
I think firstly, if at all possible, you should try not to raise money until you’ve got some semblance of a product with some semblance of a market reaction. It is so risky to raise money at the early stages when you have many hypotheses that are not proven and you’re never going to get to high degrees of proof in the early stage. The further you get along that journey with more proof and more people who are interested in responding positively to your product proposition, the better valuation you’ll be able to raise and therefore better planning you can put in place for the longevity of the business. Firstly, I think you should go as long as possible bootstrapped. I know that’s not possible with everybody, but there are lots of ways of launching pretty cheaply at the moment, given the audience-building mechanisms we just spoke about.
13:38 – Andrew Davies
It takes time, it doesn’t take money. I do think there are differences once you get going. If we talk about a few of those obvious ones, one of them would be the capital that gets put into the business. Clearly, if you’re raising funding, then you’ve got some money to spend in order to kind of break through some of the initial hurdles and that becomes a forcing function. I’ve been in the situation of not having any capital and I’ve been in the situation of having capital and there are pros and cons of both. Certainly if you’ve got capital, then you’ve got the ability to do more experiments and therefore learn faster and therefore have more proof points in your hypotheses to go and grow. So capital does change a few things. One of the things that changes is time frame. Often, if you’ve got capital burning a hole in your pocket.
14:19 – Andrew Davies
You’ve therefore got investors who are expecting some form of time frame, and you’re probably spending more than you’re earning. Therefore, you’ve got a runway by which you’ve got to actually make sure you’ve turned to break even or have reached some proof points that you can raise more funding. Funding. Capital can be fantastic, but it brings time frames into focus, and you’ve got to really make sure you’re executing fast. And also, it brings much higher expectations. There’s some really interesting narrative in the market right now. Christopher Yann’s wrote up a few really interesting points on this that there are a huge number of uninvestable but high-potential SaaS businesses. Now, because so many SaaS businesses can raise a significant amount of money thinking that they’ve got a billion-dollar market, but actually, given the competition in the market, they can make a very successful living off, 100 grand, 200 grand, 500 grand, a few million in revenue.
15:05 – Andrew Davies
I think it’s really important to recognize that the capital brings expectations, it brings time frames that are much shorter. You have to balance all of those up when you’re thinking about funding.
Challenges experienced when going to market
15:14 – Joran Hofman
Exactly. Yeah. It’s not just a bag of money. It will bring other things as well to the table. When we talk about challenges, obstacles, have you faced I mean, of course you faced them, because everybody faced them. When going to market, can you maybe give us some examples of challenges and obstacles you face when going to market?
15:31 – Andrew Davies
Yeah, I’ve faced loads of obstacles. Let’s take three from three different businesses that I’ve worked with. So, Idio, the business we co founded, it was a personalization business that used AI natural language processing in order to understand the content that people were reading, in order to personalize the next best bit of content for them. Our big problem was that we had some very clever tech, but we had a solution that was in search of a problem for several years. Our challenge was finding that ideal customer, finding that focus so that we could build a goto market around it. Because until we understood whether were serving very big technology businesses or middle-sized financial services, business or small trade publishers, all of those would indicate you have a different kind of go-to-market strategy and also a different funding mechanism to go and get them. With Ideo, that big obstacle was having a solution in search of a problem, needing to identify who we could really focus on as our ideal customer, and then building the go to market.
16:25 – Andrew Davies
We overcame that by really I can remember where went away as a leadership team, and we looked at all of the different markets were selling into and the different propositions we had for them. We walked out of that room after two days focusing on one type of company, selling one aspect, and use cases of our product, and we bet the house on that. We really chose our focus and said no to a bunch of opportunities if we think about Optimizing. That was a business formed by the acquisition of our business Idio, as well as five or six other businesses put together by Inside Venture Partners. The challenge there was having a coherent product story, a coherent vision, because you had all these different businesses that had different ideal customers and different go-to-market motions and products that were complementary. We had to bring those all together and tell a new story that unified everybody together, unified the experimentation capabilities from Optimizing It, with the content capabilities, from Epicerver, from the personalization capabilities, from Ideo, and so on and so forth.
17:20 – Andrew Davies
That was a challenge there that was important to invest time and money in, so we could tell a coherent story and then a paddle. Let’s talk about another challenge that we’ve been working to overcome. A paddle, as a business, serves self serve software companies that go to market with a product Led motion and have a checkout as part of their product experience. One of our challenges a year or so ago was that we hadn’t spent enough time identifying the perfect Fit customers, and therefore we had a demand generation engine, but were putting bad Fit accounts in the top of it, and therefore were wasting money, and the whole thing was less efficient than it could be. We spent tashan, who’s on our team and our RevOps team, spent about six months going and doing a whole bunch of research and coming back with a new set of target accounts that not only helped widen our universe, but also made sure that the accounts went after and put into our demand engine and distributed as territories out to our field teams that they were accepted and that they were valued and that they were businesses.
18:16 – Andrew Davies
Not just that we could close, but that we could make successful over many years. There’s three challenges from three very different circumstances.
18:23 – Joran Hofman
Yeah. I think with Idio and Paddle, you kind of have the same thing, right? Where at Idio, you have to really choose your focus, really pick the clients you’re interested in. Same now with Paddle. Like, with Paddle, you can’t sign up self serve. Right? Like you do some vetting, I think was that the exact same thing with Idio as well, where you didn’t allow people to sign up and you had to vet them before they even start using the product? Yeah.
18:44 – Andrew Davies
They have very different go-to-market motions and very different target kind of customer segments that we could go after, very different sizes of the addressable universe. If we take a paddle so you can self serve with paddle, but it does take a couple of risk checks. We need to do some KYC, and Kyb checks. We got that down to a few days now where people can self serve, but the majority of our business does come through our sales team. At Ideo it was all sales assisted. This was a sales team going outbound and selling. We were winning customers like IBM and Salesforce and intel by an account based strategy. Our sales teams and our marketing teams working together to find the buyers within those businesses and go through a four to six month sales cycle to persuade them that we could really deliver value for them.
19:23 – Andrew Davies
The other difference though, as I said, was that idiot a very small target list. Were a smaller business selling into a smaller segment and we got down to about 200 target accounts. We were going after all, massive global enterprises with a high acv that we could charge them but a small number of accounts. Whereas Paddle serves many thousands of different software companies that are a lot smaller. We’ve got a much wider problem that we’ve got to go and identify and work through these specific Identifiers of those companies to see if they’re going to be a good fit.
Going to market as a multi-product company
19:52 – Joran Hofman
And one question regarding Optimizely. All those products came together, you mentioned like we needed to create a coherent product story. I am curious though because I can imagine that not every client is waiting for all the products Optimizedly offered, right? Because first of all they had these separate products and then suddenly it became of course a beautiful kohen product story. I can imagine that they didn’t want the full package, they just wanted to have a certain product. You still have different channels, I guess, within the go to markets or I don’t know how you call it.
20:20 – Andrew Davies
Yeah, absolutely did. They became more and more unified as went past each acquisition. To your point, firstly, there is a very wide capability set at Optimizely now. Content and commerce and personalization and feature flagging and web experimentation and B to B commerce and all these different things as well as now kind of content marketing platforms where your marketers go in and build their plans and execute their content build. There’s a wide range of capabilities and there will only be a few big customers that have bought everything increasingly, but only a few have bought everything. What we’ve then found was for different markets, we had to create different bundles of those different products in order to match the market need. That was the first challenge, was bringing together different products into groups that we called solutions. The second thing, as you said, is that each of those individual products pre acquisition had a different go to market motion and strategy and targets.
21:14 – Andrew Davies
We had to unify all of those into a single demand team, into a single sales team. Most of it is sales assisted in terms of the core products that we see in the North America market. Those are very strong partner channel, particularly out of Europe that we’re now building over in the US market. That’s a really important part of it. There’s also a small bit of self serve revenue. We step right back and think about go to market strategies, they really can be bundled into are we sales assisted? Are we going outbound and whale hunting? Or are we building something that’s product Led that has a self serve component where we’re doing marketing, but there’s no sales person in the conversation. They’re coming and buying from us. The third one partner Led channel are we having? Are we building relationships with other third parties? In Optimize Lee’s case, big marketing services agencies that do the implementation and configuration and design and strategy where they are selling on our behalf.
22:01 – Andrew Davies
You Optimizely has all three of those to quite a strong degree, which.
22:06 – Joran Hofman
Comes back into a lot of podcasts. You are conscious or you don’t often pick one channel, sales-led. Product-led, you will always have a combination because in the end, you have to start with sales Led by people you need to sell yourself first as a founder. You go into maybe different stages, but it will be a combination.
22:20 – Andrew Davies
Yeah, I mean, the two common starting points are sales lead or product Led. There are very few people who start exclusively with a partner Led strategy because often partners need proof points before they get going. There are a whole bunch of businesses starting product Led and then building sales on top. To your point, whether you start product Led or whether you start sales lead, almost always if you’re product Led, you will add sales on top at some point in time. In fact, some of the research says that if you’re a product-led business that historically has been growing through a freemium or free trial or pay trial kind of model, then by the time you hit about 100 staff, 150 staff. You’re probably hiring salespeople per head faster than someone who’s been sales led. Because now you’re catching up with buildings that go to market motion on top.
23:00 – Andrew Davies
That is outbound working off the usage signals in your product Led motion so that you can sell bigger deals to bigger customers. Almost always if your product is Led, you’ll end up adding sales afterward.
Go-to-market strategy at Paddle
23:09 – Joran Hofman
Yeah, let’s see if that all ends here. If that’s also the case with pedal, because pedal if crunch basis correct, 293,000,000 in funding or around 3000 clients using the products. Can you explain, I guess, what is the current go to market within paddle?
23:25 – Andrew Davies
Yeah, sure. We actually bought another company ProfitWell last year, which has a couple of more products, three more products. If we think about our go to market, let’s first go back to what products we have. We have the billing platform, which you’re. Very familiar with you’re, a customer of which takes care of subscriptions and tax compliance and your billing and checkout experience and optimizes that globally. We’ve got about 3000 customers using that. To your point. Then we’ve also through the profitable acquisition, we’ve got a free SaaS metrics platform which has got about 30,000 customers, but they’re all free. We’ve got a retention product called Retain that helps you reduce your churn, that’s a paper performance billing model. We’ve got Price Intelligently, which are the industry’s leading pricing strategy consulting firm. We’ve got those four different parts of the business, four different products, and we’ve got several customers that are using all of them, an increasing number that are using all of them.
24:15 – Andrew Davies
We then have on top of that, as you said, we’ve got a Self Serve Motion, a Sales Assistant Motion, and a very Nascent partner Motion. Self Serve is for the metrics product where people can come in and use that for free. Just by going and signing up and filling out the form the paddle product, you can come in, self serve, and we have hundreds of customers every quarter who come in and transact with us without us ever speaking to them, but go through all of our risk checks. Of course, we’ve got the Sales assisted Motion on Paddle, the billing platform, as well as on Price Intelligently as well as on Retain. There’s a real blend there of self serving sales assisted. We are now building up our partner channel, making sure that if you are an advisor on finances or funding on an accelerator or a VC or another ecosystem player that you are able to refer in paddle.
24:59 – Andrew Davies
As part of your proposition or in order to help your customers and therefore get some kind of benefit as a result of doing that. Those are our different top level go to market motions. Of course, what we’re trying to do is balancing those two-time frames that we talked about at the beginning, long and short-term investments. We’re trying to make sure we build our awareness that people understand who we are, the value we bring, and that whatever stage you are as a SaaS founder, then we have something to add. And our vision there is that we want to help SaaS founders achieve their vision by helping them run and operate their companies automatically, their software companies automatically. Of course, we’ve got the demand engine making sure that we are building a demand system which is field events and email and advertising and webinars and all of those good things orchestrated against our target market to make sure that we can give them a proposition that they can buy into, we can open opportunities and we can close business.
25:47 – Andrew Davies
That’s a brief look at what we’re building up Paddle.
25:50 – Joran Hofman
Yeah, and it also includes bringing a balloon to space to have the first payment in space. Right.
25:56 – Andrew Davies
That’s a great example of something that has awareness as well as demand kind of within a single campaign. Yes, a couple of weeks ago we released a video of how we sent a balloon with a toy rocket underneath it into space and we filmed it with 4K cameras and we processed a payment in space and we showed the checkout of that payment that brought it back to earth again. Really what were saying there is we’ve solved tax compliance and we’ve solved all of the localization and currency issues and payment acceptance issues on the earth. Now we’re going to prove we can do it in space as well. It was a very brand and awareness play but embedded within it we had an ABM campaign. Were sending custom videos of each company’s different checkouts to all of our biggest prospects. We also had some swag that were dropping to prospects and people who were sharing it online.
26:43 – Andrew Davies
We have a webinar with Forester Research where we’re talking about the complexities of internationalization and billing. We’ve already opened opportunities, sales opportunities as a result of that. That’s a good combination of some brand and some awareness as well as some demand capture and fun as well.
26:58 – Joran Hofman
If you haven’t seen the video yet, go definitely watch it because it’s well recorded, right, as well edited. It’s a real nice video to watch in my opinion.
27:06 – Andrew Davies
I’m glad you think so. Yes, feel free to link to it in the show notes so we can share with the listeners we’ll do.
27:12 – Joran Hofman
You already mentioned it a couple of times, partner, that you did it optimizely. You’re now doing a Paddle. As we’re ready for an affiliate management platform. How do you see affiliate marketing fitting into a go-to-market strategy?
27:27 – Andrew Davies
Go-to-market strategy is a process of experimentation. If you’re not trying new things that are additive to your go to market mix, then you’re probably missing a trick. Because when you think about the process of scaling your go to market, what you find particularly on the marketing side of things is you constantly hit new ceilings. On the sales side you hopefully build some form of linear model where you add a sales rep or a Bdr and what that’s going to do. As long as you’ve got a big enough market and a compelling proposition in marketing, you’re constantly balancing this variable customer acquisition costs by channel and tactic and so you’ve got to constantly be trying the next thing to break you through the next ceiling. Affiliate marketing is just one of those things that every go to market leader should be considering as part of that wider mix.
28:07 – Andrew Davies
For B2C businesses, it’s often seen as something people try quite early. Within B2B it’s more nascent and so companies like yours are bringing that to B2B SaaS. I’d absolutely see it as one of those paper performance channels that has some ability to scale beyond some of your early ceilings to make sure that your brand is out there and your proposition is out there to a wider audience, and you’re capturing as much demand as you can in the market outside of your own website and your own sales teams.
Go-to-market strategy advice for founders growing to 10k MRR
28:34 – Joran Hofman
We’re definitely going to use this in our marketing good introduction to it. When we zoom out again, I always like to ask these two questions at the end, as in when we talk about going to market, what kind of advice would you give a certain SaaS company in a different state? We’re going to start with somebody who’s just starting out and trying to grow to ten k. Mrr, do you have any advice you would give them? I think you mentioned already learning our revenue, building a sustainable advantage, and low-cost ABM. Are there any other things you would recommend them?
29:04 – Andrew Davies
Fundamentally at that stage, it’s about getting that first handful of happy customers, five customers, ten customers, however many it means for you to build that initial base of revenue so you can start stabilizing the business and investing in the future. You need to do things that don’t scale at that stage. You might be traveling around the country meeting people you might be going and knocking on doors. I can remember one of the businesses I started was a web design agency at University and we would be walking across the fields for our university to knock on the door of schools and accounting firms and architecture firms to try and get those first happy customers. At the very beginning it’s a case of doing whatever it takes, however unscalable it is, in order to get that first handful of happy customers that then tell you about where your product should be going and also can refer you to future prospects.
Go-to-market strategy advice for founders growing to 1M ARR
29:49 – Joran Hofman
Yes. And then that’s always a good thing. Like if you have a happy customer, happy user, even though they might not be paying, always ask them would somebody who can also benefit from our tool. It’s a really simple question, but it can really help you to get those next clients in. When we go further down the line, what kind of advice would you give to somebody who’s growing to 1 million arr?
30:10 – Andrew Davies
I think the advice here really changes based on the type of business. There are some businesses that can get to a million arr off one or two contracts if they’re selling something quite complicated into very large enterprises. The advice would be very different there than it would be for perhaps a product led founder with a price point around $1,000 a month or $100 a month, who’s clearly got a lot of customers by the time they get to a million arr. For that first segment of the business, segment of businesses who have got something that’s expensive, were in that case with Idio, so our Acv was 200. Then we could upsell from there. We had some clients that were 7800K by the time we exit it. If you’re growing towards a million arr and you’ve got a couple of initial customers, then really it’s about making sure that, yes, you’re listening to everything those customers are saying, but that you’re building for the market segment you want to go after, rather than bespoke building for those two or three customers.
31:01 – Andrew Davies
It’s always about listening and learning, but you as a founder have got to make the decision on whether you are building some customized kind of thing, this customized monster, this Frankenstack, for that specific customer and their needs, or whether you’re keeping an eye on what the bigger market opportunity is. If you are at a lower Acv and therefore a million arr takes many tens of customers, hundreds of customers, maybe even thousands of customers, then really at that point you’ve got a proper business. What you need to be doing now is thinking about instrumentation and scale and optimization and making sure you’ve got the right data coming into your stack so you can make smarter decisions as you scale going forwards.
31:37 – Joran Hofman
Yeah, that’s really nice. I mean, it always starts with data and that’s what ProfitWell does really well, right? As in, I think you already mentioned SelfServe, you can sign up for free. You can get your metrics in order so it doesn’t have to cost that much to get your data in order. They’re all going to be tools like profit well, where you can just connect things and get them out there.
31:55 – Andrew Davies
Totally.
31:56 – Joran Hofman
We covered a lot already. There anything I guess we haven’t shared or haven’t talked about today which you would like to share?
32:02 – Andrew Davies
We’ve talked through a lot. If you’ve got any other questions, people can reach out. I’m very happy to chat through this stuff on LinkedIn or on Twitter. I think as part of what we’re doing, a paddle, we’re going to be launching a bunch of education courses, content around gotomarket and around thinking about product Led versus sales Led versus partner Led. There are other people in the market like Gtm partners have got great content here. Also if you’re interested in getting just some free advice on anything that we can help with, whether it’s pricing or retention or billing and internationalization, then we just love to chat. We’re very happy to make some time and jump on a call with you. Just reach out and we’ll book that up.
How to contact Andrew Davies
32:36 – Joran Hofman
How should people reach out to you?
32:38 – Andrew Davies
The best way is probably LinkedIn. I’m Andrew Davies, Paddle at LinkedIn or Andrew Davies on Twitter and any of those networks and I’ll respond fast.
32:46 – Joran Hofman
Nice. Thank you very much, Andrew, for making the time today and coming on to the show, and sharing your knowledge today.
32:52 – Andrew Davies
Total pleasure. Thanks so much.
32:54 – Joran Hofman
Cheers. Have a good one.
32:56 – Andrew Davies
Cheers.
Learn about affiliate links and how they work in the world of affiliate marketing with our beginner’s guide. Discover how affiliate links can help you expand your reach and make money online.
Looking for the best affiliate marketing network? Look no further, see a list of the best affiliate marketing networks out there.