Omer (00:10.000)
Welcome to another episode of the SaaS Podcast.
I'm your host Omer Khan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
In this episode I took to Wes Bush, Founder of Product Led Institute and author of the book Product Led how to Build a Product that Sells Itself.
Product Led growth is a term coined by the VC firm OpenView Venture Partners and is a growth model that relies on the product as the main vehicle to acquire, activate and retain customers.
In this interview, you'll learn about the three tidal waves or trends that are forcing more and more SaaS companies to to focus on product led growth as the main growth driver.
You'll learn the differences between a sales led approach and a product led approach and will help you understand which one is right for your SaaS company.
We talk about the pros and cons of using free trials versus a freemium model and you'll learn how to pick the right one for your go to market strategy and we'll teach you the Moat Framework which will help you figure out the right marketing strategy, understand if you're in a red or blue ocean business, determine if a top down or a bottom up acquisition strategy is right for you and how you can help showcase value to new users and customers as fast as possible.
You'll also learn about the Bowling Alley Framework and how it can help you improve your onboarding process.
We cover a lot of content in this episode and I think you'll get some value and insights from this episode no matter what stage your SaaS business is currently at.
So I hope you enjoy it.
Wes, welcome to the show.
Wes Bush (02:01.370)
Thanks for having me.
Omer (02:03.290)
So why don't we start by you just kind of giving us a quick overview of Product Led Institute.
What do you guys do there?
Who are you focused on serving and what's the big problem that you're helping to solve?
Wes Bush (02:17.690)
No, absolutely.
So I created a Product Led Institute to really help people learn about how they could create a product led business.
Kind of hence the name Product Led.
But what that really means is okay, there's the more traditional sales lead way we're all kind of familiar with.
You go to a website, you have that nice demo, you go through a nice sales process to buy a piece of software, but then the product led ways, you might experience it with a free trial, a Freeman bottle, or just get your hands touching that product, seeing its value.
And so I really noticed there's this difference between companies who are just Trying to tell people, like, here's what our product is about.
And then on the other hand, you have these product led companies, which is just, let's show people, let's get them to experience the value proposition.
I actually fell into the world of products when I was in demand at Vidyard and we had launched freemium products and it got to like 100,000 users very quickly.
And I just kind of changed my complete way of looking at the product.
It wasn't just something you sell.
It's actually this powerful growth engine for your business.
And so that got me super excited about the world of products and just how I think a lot of people, even to this day, they.
They just don't quite realize the power of leading with your product and what that really has for your business.
Omer (03:37.470)
Yeah.
And you're primarily focused on B2B SaaS companies, right?
Wes Bush (03:43.470)
Yep, you got it.
Omer (03:45.230)
So maybe just kind of set some context here.
Like, can you just sort of share a little bit about your journey?
Like, I think you sort of touched on it.
But in terms of like, what were you doing before you started Productly Institute and how did you sort of get this business started?
Wes Bush (04:00.860)
Yeah, so it did start at Vidyard.
This is a little over five years ago when I was in demand.
And so I was doing demand just like a lot of other sales side companies where you're just trying to get a bunch of leads that are good, obviously, and send them over to your sales team to hopefully get closed.
And.
And so it wasn't until we launched that premium product where I just had my eyes wide open because we were getting a huge number of signups of people using our product and seeing the value of the product and they're upgrading.
And so to me, that was just a completely different sales process.
Instead of just kind of making people jump through hoops, whether it be through our forms or through our demo request, and then the qualification call, then the actual sales call.
So there was a lot of friction in that whole process.
And so the beauty of really kind of giving your product to someone was just the fact that the time to value is so quick.
You can actually see for yourself really quickly, like, what is this product?
How is it valuable?
How is it going to help me?
And you figure that out on your own.
And whenever we did that at Vidyard, it really just changed the way I saw products.
And then I started kind of venturing into consulting to see, hey, like the process I was using to convert users into paying customers.
It worked at Vidyard, but I Wanted to see if it would work at other companies.
And so sure enough, I started to develop a process over the time to really figure out what it takes to take someone from not even hearing about your product to they're pulling out their credit card on their own, sometimes without even talking to anyone in sales and making a buying decision.
And so that's really what I have honed in on, is just how to turn those users into happy paying customers.
Omer (05:52.140)
And is this sort of that experience through consulting what led you to end up writing the book, which is also called product led growth?
Wes Bush (05:59.500)
Yeah, so that was the main kind of impetus behind it because I was really doing a lot of this consulting, but I felt like there was a lot more to it.
I wanted to really solidify, like, what is this process?
How can I really become the best at doing this?
And so the book for me was really consider it like a project where you just want to do a deep dive on a topic, but at the same time, you also want to make it valuable for yourself.
When you're writing a book, I think there's a couple reasons why you'd actually consider going through.
It's a painful process.
It takes a long time.
And so the main one for me was I wanted to create this process and system that I could use on my own clients, and they would find it helpful.
And so that's really the first piece of why I wrote the book.
But it's been an exciting journey and it's definitely, you gotta have this stupid perseverance.
Omer (06:57.110)
Had you written a book before?
Wes Bush (06:59.510)
No, I haven't.
Omer (07:00.510)
So it was the first time.
One of the things that I noticed about it was that you've got some great testimonials and people from a whole bunch of places.
And I was like, for me, there was like, yeah, there's the book and probably the work you did that.
But there's also, for me was like, that's really interesting how you.
You almost kind of did some influencer marketing of your own to try and get a lot of people to pay attention to what you were doing here.
Wes Bush (07:28.130)
Yeah.
And part of it too, was not this master plan at all, this influencer strategy.
No, I didn't go into it like that.
I did a ton of interviews and firsthand experience talking to really successful people in products and SaaS.
And I just wanted to, you know, contribute their thoughts and obviously give them credit.
I don't want to be like, wes is the only one in the world who knows product led growth.
It's like, absolutely not true.
There's a lot of people here who have been doing product led growth, but they just didn't know it was called that.
Omer (08:01.300)
Right?
Yeah.
So the term product led growth was actually coined by the guys at openview and you give credit to them at the start of the book.
So why don't we just start by kind of giving people a sort of the cleanest definition we can in case people are still wondering what we're talking about.
Wes Bush (08:18.050)
Yeah, absolutely.
So I consider product growth the main, like when you use the product is the main vehicle for your acquisition, activation and retention.
And so like if you even just look at acquisition, typically you'll find product companies that they have that free trial or freemium model or maybe it's some hybrid mix of all that to really get people into the product as soon as possible so that you can showcase the value and you can activate them.
And then when it comes to retention, like you can upsell your product too.
It's not the first time.
Do you have to do all of them?
Not necessarily, but it is really powerful if you as an entire organization are thinking about, hey, like, how could we use our product to hit our goals better?
Omer (09:02.400)
Yeah.
And just as kind of a plug, I've had Kyle Poya from Openview on the show where we talked about SaaS and pricing mistakes.
So if people are interested in listening to that, they can just go to SaaS Club io210 which takes you to episode 210.
So you talk about like three tidal waves in terms of why product led growth is becoming more important.
Number one was like, you know, it's getting more expensive to acquire customers.
Buyers are increasingly choosing to self educate themselves about products rather than having a sales rep come in and kind of, you know, give them a demo and how important the product experience is, is becoming, is sort of part of the, the buying process.
So for people who are sort of like, I think just, I think there are two things here.
Like number one is like if you don't have a salesforce, if you have a SaaS business today and you don't have a sales team or you're not doing demos and selling the product, people are coming to your site, signing up based on the onboarding and product experience they're they're choosing to buy, you're probably already doing product led growth.
It's a question of, you know, how can you do that better?
If you have a salesforce or, you know, you as the founder are selling and doing demos, et cetera, then you're probably more of sort of a Sales led business.
So why don't we just sort of kind of explain the two or maybe start with kind of helping people understand.
You know, let's talk about maybe the pros and cons of sort of sales led versus product led.
Wes Bush (10:39.920)
Absolutely.
So sales led, I'll give it due credit because it is a great model for your business in a very few circumstances.
So like for the starters, one of the first ones I mentioned in the book is really just you can get these high lifetime value customers.
So if you're primarily focused on enterprise like a sales led, go to market strategy can be really powerful for your business.
And that might actually be the best option as well as if, let's say you have a really niche solution where there's only maybe 100 or a thousand companies could ever purchase your solution.
Well, it's also like a perfect instance like sales that is going to make sense.
Whereas if you went, let's say with a freemium model in a case where there's only a hundred companies could buy potential software, it's like, well, you might actually give it away for free to the very few who could potentially buy it.
And it's also like if you are in a, let's say a blue ocean for those that might not know it, essentially like a new kind of market that's in its early stages, people don't understand what your software does and how it relates to what they're doing.
And so a sales side approach can be really good in that instance.
So those are like the pros for it.
And it really comes down to just your market.
That is one of the biggest factors that I always encourage people to look at is like, what are people doing in your market?
And really start from there.
So I think I'll.
I've touched on some of the pros, but did you want me to go into some of the cons?
Omer (12:12.750)
Yeah, I mean, first of all, I think it's important for us to probably clarify that you're not saying product led growth is the only way to do things.
And taking a sales led approach makes sense for certain companies in certain, you know, industries and, you know, so on.
But why?
Why?
I think maybe talking about the product led sort of benefits maybe leads into talking about the cons of sales led.
So like, why would someone choose a product led approach instead of of sales?
Wes Bush (12:44.480)
Definitely.
So there's really two main reasons you would want to consider product led growth or product led model.
The first one is because you really do have this dominant growth engine as a business when you have a Freemium or a free trial model, even just the call to action on the website.
In my research, I've found that it just will always outperform the demo requests.
People just want to try, they want to get started and see it for their self.
So you basically start off with a wider top of funnel.
Instead of people going to demo requests, they're going to actually start their buying journey with potentially a free experience on your product.
And if it's good, they might just end the evaluation period of their buying cycle right there.
So the other piece too is you have this really cool ability to scale globally very quickly.
So if your competitors, for instance, are all sales led, they're going to, yes, they could still sell across the world over Zoom or any of these products, but as soon as it comes to opening an office and really moving more of their salesforce over there, it just takes a lot of time.
Whereas if you just had a simple onboarding experience, you could scale so much more rapidly.
But the other one I find a lot of founders salivating over when it comes to product led growth is just that it has a significantly lower customer acquisition costs.
Because one of the big cons for sales led growth is the fact that while there's expensive salespeople, like good salespeople, really good ones, they're not cheap.
And so what that ends up happening is because you're paying a lot for your sales team and potentially even getting those leads in the front door, you, your product now has to be sold at a premium.
And that premium isn't necessarily because Your product is 10 times more valuable than an alternative.
No, it's because it's expensive to sell.
And so a lot of people are starting to realize that and they're saying, hey, why am I paying a premium for this software product?
And in the overall global market of SaaS, it's never been easier to create a software solution.
It's never been cheaper.
So there's tons of competitors in every single market.
So right now the switching costs are really low.
And so if you do have a better price, people are starting to realize like, hey, why am I paying this premium price?
And so that is one of the really big benefits for a product led go to market strategy.
You really do have that lower customer acquisition costs and, and then that dominant growth engine where you do attract more people into your funnel, that could get at least a taste test of what your product is all about.
Omer (15:33.000)
Okay, great.
So one of the things you talk about in the book is the moat framework.
And I want to sort of dig into that.
But before we do that, can you just sort of give us in a nutshell, like, what is that framework about?
Why would somebody use that?
How could it help them?
Wes Bush (15:54.320)
Yeah, so the MO framework was really developed to help you.
I call it choose your weapon.
Whether it's free trial, freemium, demo, it's really how you sell.
And it really looks at four main factors.
So M stands for your market strategy.
So, like, what's going on in your market?
How do you want to tackle it?
And then the ocean is just looking at, okay, like what, what is the overall market trend?
Is this totally new business, new category that you're developing where people need a lot more educating to understand it, or is it super competitive?
And then the other part is the audience.
So how are you selling?
Is it.
You're just going after the C level execs?
There might be a mismatch in the model that you have.
And so the last one is just time to value.
Can people experience the value of your product very quickly?
So I've found that those four indicators can really tell you a lot about which model will make the most sense for your business.
Omer (16:55.000)
Got it.
Great.
So let's dig into those.
So the first one you talked about was marketing strategy.
And there are sort of three main types of strategies here that you cover dominant, disruptive, or differentiated.
And from what I understand, this is an idea that actually came from a guy called Tony Ulwich.
Right.
He wrote an article some years ago about this.
So can you just explain to us what is this strategy or this matrix that he sort of came up with?
Wes Bush (17:30.960)
Yeah, absolutely.
It's brilliant strategy, which really just kind of boils down the main growth strategies you could use to obviously grow your business.
And so if you.
I know for the listeners here, I'll try and describe the graph for you.
So on one axis, there's like, you can get the job done way better than the competition.
And on the X axis there's like, well, how much is this?
Is it very expensive or is it very cheap or affordable?
Which is the better way of saying that?
And so there's the three main ones.
So the first one is differentiated.
And so this is essentially where you're going to get the job done a lot better than your competition.
But the benefit is you can charge a lot more because it's really niche.
And so if you think of HubSpot, if you're going to poke a hole in HubSpot and really try and tackle the same market, it's hard because, I mean, right now they're a really big player in that space.
So it's like, okay, let's go after people who want real estate CRMs.
The real estate agents component isn't that well serviced, you assume.
So then you go into that space, create a better solution, but you can charge a bit more for the real estate agents because you service that much better.
So in that particular strategy, I found that if you have like a free trial or a demo model, that can work really well in that particular instance.
Whereas if you're looking at more of a dominant strategy, the only way you're going to absolutely dominate a market is you have to be able to get the job done a lot better than the competition and charge less.
So think of Blockbuster versus Netflix, which maybe you don't know of Blockbuster, but it was a big competitor of Netflix at one point, but they approached it very differently.
And so one, obviously Netflix, the one that won, could do the job way better.
We didn't actually have to go in our cars and go to the movie theater or not the movie theater, but Blockbuster, pick out a movie and then we get dinged with all these rental fees if we are late to bring it back, which is really annoying.
And so it was a much better experience.
We got more selection.
And then the other part was they actually charged us less for a better experience.
And so if you're thinking of, okay, I want to be the dominant player, that is really what you have to do.
If you look at hundreds of businesses, if they're really dominating that position, that's what they're often doing.
Not always the case, but often.
And so if you're going to be dominant, one thing you have to think about is, well, how much are your customer acquisition costs?
Because if you're going to charge less, you have to have a very efficient business model.
And so you're often going to find people with a free trial or freemium model in the dominant category.
That doesn't mean they will never have demo requests.
It's just that they're leading with a model that can service the masses for very affordable rates.
And then the last one is disruptive.
So this one, a lot of founders think it's a terrible strategy to go for your business because it often involves doing a worse job than the competition and charging less.
So I'll give you one of my favorite examples.
So there's Photoshop.
If you really want to edit the crap out of your photos and do amazing things that even if you went to the school and took training on Photoshop, you couldn't even Scratch like maybe even 50% of what you could do with that tool.
It's just very powerful.
So Canva came in and said, you know what, we're noticing that with the rise of social media, there is a lot of, you know, just we're doing the same thing.
There's just dimensions of social media.
We want to make it easy for people to make social media graphics.
Now, it didn't always, they didn't always have that vision at the very beginning, but that's what they are really great at doing.
It makes it so easy, easy, but it's nowhere near as powerful as Photoshop.
So they created what you might call a worst product that actually was able to do incredible things.
And so they charged less for it as well.
And so in a disruptive strategy, you're often going to find a freemium model.
And you can even look at Google Docs versus Microsoft Office Word.
One's clunky.
I'll let you figure out which one that is.
One's really easy to use, not as powerful, but yet they're doing an incredible job.
Right now you're looking at a Google Doc right now.
So it's just like really powerful stuff.
And so those are really what comes down to the three main market strategies that you can pick for your business.
And it really depends on whether you're going to choose a freemium free trial or even just some demo model.
Omer (22:19.410)
Yeah, that's great.
Yeah.
I have a slight issue with the term worse than your competitors.
And I know it's not your framework, so.
But it's like, it's almost misleading, isn't it?
It's not like saying worse in terms of building a crappier product.
It's like, it's just you're focusing on maybe a subset of features that your competitors have, or you're trying to do something in a simpler way and saying, you know, this is good enough.
And so somebody may look at that and say, yeah, okay, you know, that's not really a great product, but it can still be a great product even though it's in the worst category.
And I think that Canva is actually a great example of that.
Okay, great.
So summarize that.
If your differentiated product is really about building a product that's better than maybe the incumbents by you focusing on a subset of features or a specific market and serving that niche really well, and as a result, you're often able to charge more for that product.
The dominant approach is about being better and less expensive.
And in the book, I think you give Examples in addition to Netflix, like Uber and Shopify as well, where it's just really about going after the mass market and disruptive, as we just talked about, is saying, you know, worse in sort of air quotes and often less expensive.
And you know, I think Canva is a great example versus Photoshop.
So really sort of thinking about your product and sort of your growth strategy, where do you fit into those or where does it make the most sense for your business?
Is kind of what you're already saying there, right?
Wes Bush (24:06.860)
Yeah, absolutely.
Omer (24:08.300)
So earlier you also mentioned blue ocean.
So let's talk about oceans because that's the O in moat and so people can be in sort of either a blue or a red ocean.
Can you kind of just walk us through like, you know, what does that actually mean?
Wes Bush (24:22.990)
Yeah, so blue ocean essentially means you're creating net new demand, whereas a red ocean is your harvesting demand.
And an example of that is let's say marketing automation platforms.
Right now, it's an established space.
There's really we, we know the market, it's existing.
The goal here is really like let's exploit the existing demand.
Whereas a blue ocean, you're creating your own demands and your goal is really to make the competition irrelevant because you're creating something new.
And so that's really the, the main differences and why it's so important is to bring it back to, to make a decision on whether you should be product led or even sales led is because if, let's say you're in a blue ocean right now where you're trying to create new demands, I often find that having that sales led go to market strategy can be really powerful because you're putting boots on the ground, understanding your customers and talking with them regularly to really see like, okay, what are the main problems, you're educating them as you're making the sale.
And so you can learn a lot in that phase.
And whereas when you have a red OS strategy, I would argue the only distribution model that really makes sense is product led.
Because if your goal right now is to compete in existing markets with established, let's say standards like the value metric of who we charge per contact, people understand this, even the pricing conversation becomes redundant.
Why are we having this conversation if we know how we're selling it?
It's based on contacts, a lot of those things.
In an established market you can really, you don't have to educate people on how you're selling.
There's no value based pricing in this kind of model.
And so your goal here is really just let's exploit the existing demands and create the biggest, best product in this category, let's go with the dominant strategy or the disruptive strategy.
And that often means, like, let's have that free trial or a freemium model so that we can go into that market, service that market at a better price, and capture the largest amount of that market.
So that's really why I feel like understanding what ocean you're playing in has such a big impact on what strategy will make the best sense for your particular situation.
Omer (26:49.150)
Okay, so, so Red Ocean is about, like, as you said, harvesting demand.
Blue Ocean is about creating that demand.
And so, you know, I think it's about looking at your product and the market you're in and, you know, where are you actually going with this?
Is there already an existing demand that you can serve or is this something new that you kind of need to figure out how to sort of, sort of create.
Create demand?
I guess, like you were doing it vidyat, right?
Wes Bush (27:16.020)
Yeah.
Omer (27:16.580)
So could you take a product LED approach in either of those or is is one more of a benefit for.
For product LED and one is better for sales led?
Wes Bush (27:27.880)
Like, yeah, it's good question too, because if you're looking at like a Red Ocean strategy, there is.
It really does make sense to have that product LED model.
But Blue Ocean, I've actually seen people still make it work with a product LED model.
You really just have to get past that product market fit.
If you don't have product market fit, I found it's really hard to make that model work because then you're fiddling around with your onboarding, but you're not talking to customers and you just trying to go with this touchless experience, which if you understand your market and your customer very well, kudos to you.
It could really work.
But if you're stuck in that product market fit, it is really difficult and challenging.
I've seen people jump the gun on the product LED motion in a blue Ocean too quickly without that product market fit.
And it hasn't worked out.
So that's really why I recommend understanding getting past that hurdle first.
Now, the other thing that a lot of people don't necessarily think about is there's different layers to every market.
I'll give you an example.
So a lot of people kind of like broad stroke, like, okay, let's look at the business intelligence market right now.
Let's say it's.
We just call it Red Ocean Complete Red Ocean.
No, like there's different segments of that market that could be in a Blue Ocean and others that are in a red ocean.
I'll give you an example.
So one of my clients was like a business dashboard tool.
And so they looked at the enterprise level.
If you're selling a lot of these like complex business intelligence solutions, there was so much competition, it was a complete red ocean.
And they then started to look at the SMB market.
So they had a very easy to use tool.
They said, okay, let's actually start here.
It's more of a blue ocean.
Let's, let's start making our moat around these SMBs, let's service them, let's help them out.
And so that's one thing I would challenge you to think about is just like what is the overall market you're going in within that and the segments?
Because it's easy to kind of broad stroke it and just say it's a complete red ocean, when in reality there's certain sections of that that might not be.
Omer (29:43.540)
Now this concept of blue or red ocean, if people aren't familiar, I guess comes from that book, right?
The, the blue ocean strategy.
Although I think what we're saying here is, or what I'm hearing from you is that actually in most cases a red ocean is kind of a good fit for product led growth.
Blue ocean, you could potentially make it work depending on certain factors.
Whereas I guess if you go and read the book, they'll probably try and make a good case in terms of why blue ocean is a better way to go, which is a different topic.
Right.
So I don't want to kind of confuse things there too much.
Okay, so we've got the O, we've got the M and the O.
And then the A is about acquisition.
And the question that you ask in the book is do you have a top down or a bottoms up selling strategy?
So what does that mean?
Wes Bush (30:37.360)
Yep.
So it really comes down to how you approach it.
So the sales LED go to market strategy, nine times out of ten you're trying to reach the people at the top and then work your way down to make the sale.
And so it's pretty traditional.
You want to find that decision maker.
We're all kind of taught that if you're taking a sales course.
But the difference with a product LED model is oftentimes you're starting at the bottom.
And we refer to this as the user, the end user.
And so if you think of how slack, since we're probably all familiar with it or at least have heard of it, this is a good example.
There's the first person who starts to use Slack it might be.
Maybe it's a manager, a front level manager or someone just on the.
Usually when I was talking to their team, it's the development team that might start with it.
And it starts from one person to the next person.
Maybe one team adopts it and then another team adopts it and it kind of has this viral growth from the bottom and eventually the person in management actually does pay for it and then it works its way up to really get to the rest of the business.
And so there's that interesting way that product led companies, they really do start with the user.
And so the best way to summarize this is, or the question to ask yourself to think about how you sell is, are you selling to a buyer or a user?
And yes, they can be the same person, but oftentimes with a user that's going to be the person, as the name sounds like, is using the product.
Whereas a buyer, sometimes they could make a big decision say for like a CRM or I don't know, salesforce installation.
But they might not actually be the ones using it day in, day out.
They're just looking at reports.
So that's the main distinction between the two.
If you're sales led, you're traditionally going top down.
Product led, it's mostly bottom up.
Omer (32:26.540)
Okay, great.
So just to kind of recap what I heard, so top down selling is probably a better fit for, for sales led, you're targeting, you know, execs and decision makers in the company.
And typically you have a large deal value or you know, average contract size there, which kind of makes more sense.
And, and it's really about a product that it requires some sort of decision maker and then it can be kind of, you know, deployed or rolled out to an organization.
Whereas the bottoms up selling is kind of probably a better fit for product LED growth.
And here you're really sort of really focused on, as you said, the user and kind of making it easy for them to sign up to use and to buy the product.
And you know, I think here sort of as you mentioned, like free trials or freemiums are a good way to do that.
And I think there are really, you know, great examples of that.
Whether it's sort of slack or you know, I'm trying to think of like there's a whole bunch of like sales tools out there as well that sort of had a lot of success with this where you know, one salesperson wants to have some sort of tool for like doing email follow up and they sort of look and find something and they can get a free trial and before they know it, they're using it.
And then, you know, their colleagues find out about it and they use it.
Then their, you know, the sales manager finds out about it and rolls it out to the team.
And that's kind of basically what it means, right?
It's kind of going up for one user and then it's kind of getting exposed to management or more senior people who then sort of take, take sort of the lead in sort of rolling it out kind of across the organization.
Wes Bush (34:07.080)
Yeah, absolutely.
Omer (34:08.440)
Okay, great.
So that's the A covered and then finally the T in moat.
And so you describe that as like time to value or how fast you can showcase your value.
So tell us about that.
Wes Bush (34:23.680)
Yeah, so time to value is actually one of the most important indicators whenever I look at a product that might have a potential to eventually go down this product model, especially if they're a sales lead currently.
And so what I really mean by time to value and how you could break it down is just how fast can you really showcase value in your product?
Now if you have like a very enterprise y product, it could take months for people to actually see the value of your product.
And if you have a product that's in that sort of situation, it can be really tricky for you to make it work.
Let's say you have a product where it takes that three months to really see value, but you have a 14 day free trial.
There's going to be this big mix match where, you know, people might actually still purchase the product, but then they're still in this testing phase and they might churn out in a month or two when they figure out like if this is a good fit for them or not.
But on the other hand, if, let's say you had a very quick time to value, I'm thinking of like a lot of B2C consumer products right now.
They mastered this product that grow to them is nothing new.
They've been doing this for a really long time.
And if you look at even Netflix or Spotify, I'm talking mostly content products right now, since they do have a very quick time to value.
But we could really see the value fast.
And that means that once someone has experienced the value, the whole beauty of it is your product's doing the majority of the selling.
When people see that value, they start to trust your products more.
If it's a good experience, that is, if it's not a good experience, it could actually work against you.
And so time to value is such a beautiful thing to monitor in your products.
Because if you do have a quicker one, then it could be really interesting for you to try out a product LED model and see if you can get people to that point in your product on their own when they make that decision and say, hey, this really helped me.
This was insanely valuable.
I am actually going to pull up my credit card now and upgrade because this is very valuable.
So that's the thing.
If you have a very long time to value, you might want to consider more of a sales led go to market strategy, whereas if you have a very quick one like a product LED model can make a ton of sense.
But this is one of those ones where even after writing the book it's still I feel like there's no clear cut answer to even how to answer this one.
Because I've seen the other side of it too.
Now with freemium products, initially I was like a very quick time to value makes perfect sense for freemium.
But over the years my thoughts have actually changed to be a little bit more complicated around it.
Because if you look at even just like a wiki tool for instance, or let's say SEO AB testing tool, these are both instances where the time to value is actually pretty long.
For the wiki example, you might open up a wiki and it just looks like a Google Doc, but it doesn't actually become valuable until you get more team members using it and getting embedded in it, having it really become useful and that might take months.
And so the time to value is really important to think about, even if it's freemium where you don't force people to have that time limit or freemium.
But if it's really kind of clunky and complicated and someone has to actually contact you to use the product, then it's most likely going to be sales led.
But I just wanted to bring up those other kind of use cases of the longer time to value because like anything, it's never going to be clear cut or dry.
But it does have a big impact on if someone could get to that value on their own.
Omer (38:08.490)
Oh yeah, no, I totally agree with that.
And one of the points that Armaan B made in the book was the difference between perceived value and experience value.
And sort of my takeaway from that was, you know, perceived value is really about what the customer what's the promise that your marketing is making that they think that they're going to get from your product?
And then experience value is what actually happens and then how big of a gap is there between the Two, right.
That's, that's where the problems kind of occur.
And the B2C example I think is really good because that's one extreme where, you know, if you've never used Netflix before and you go there and it's like, oh, Netflix, I can stream movies is basically the promise.
And if all I have to do is complete a form to sign up, put in my credit card information and then I get a page with a whole bunch of, you know, movie art and I click on anyone and play a movie.
Wes Bush (39:06.080)
Wow.
Omer (39:06.360)
That was it.
Right?
I mean, how quick was that to get to value?
Wes Bush (39:08.560)
Right?
Omer (39:09.520)
Whereas you gave some examples and there was one that I sort of came to mind Talking to a SaaS founder recently was, you know, they had a product around sort of focus on a sort of HR and it was about sort of helping with, deal with, you know, employees, you know, coaching employees and employee morale and stuff like that.
And so even if you kind of had a freemium model there and all of that stuff and the product was great, you're still going to have a lot of time involved in getting this set up, having to get the, the employee to use it, to schedule actual time, to have a coaching conversation with the employee to do a follow up to make sure did the conversation actually result in something meaningful for them.
Wes Bush (39:54.480)
Right.
Omer (39:55.040)
And that is probably the other extreme, that it's like no matter what you do, there's going to be a whole bunch of challenges for you to get that type of customer to see value.
Wes Bush (40:05.310)
I absolutely agree.
Omer (40:07.150)
Okay, great.
So that's the moat framework.
So marketing strategy, is it about dominant, disruptive or differentiated?
The O is about ocean conditions.
You know, are you going into a red or a blue ocean acquisition?
Is it about a top down or bottoms up strategy?
And then the T is time to value, like how fast you can showcase your value.
So let's not pick the extremes of time to value the Netflix or the example I just gave.
Let's talk about, you know, sort of more normal businesses.
What can founders of SaaS, SaaS businesses be doing to get to showcase their, the value of their product faster?
Wes Bush (40:53.290)
Yeah, and so I feel like it really comes down to the conversation of like, is it free trial, freemium or, or some hybrid of this model?
Because where I see actually the most founders making a mistake is they just think it's just freemium or free trial.
And that's not true.
There's a lot of different areas within that I can't mention the company.
But here's an example.
So the product was like geared towards product folks.
And in order to get any value out of the product, they had to essentially give a piece of code to development teams so they could do things in the product to guide people.
And so in that particular use case, the thing was, if you gave them a 14 day free trial or even a 30 day free trial, it wasn't in their control.
They had to go through the development team and then jump some hoops to get the code into the product before they could even get to value.
And so they had a free trial for the longest time, but then they started to realize, like, people are still buying, but then they're churning out at like month two or month three.
And they really started to talk to the more of these people to figure out, like, why is this, we have a good product here, but why are they buying in the first place?
And for them, it really came down to they were still in the evaluation phase.
They wanted to see what the product was capable of.
But their development development team, especially in some of these bigger enterprises they were selling to, it took a long time for them to get that code into the product.
And so they just outright buy it for a few months to see how it worked.
And so in that case, they actually decided, like, let's go with more of a hybrid model where we'll give people a free version of the product for a certain number of users, so you can kind of cap your costs on the back end of this all.
And so that's what they did.
They had this unlimited kind of free trial, which was it was capped by the usage of the product, but people could take as long as they wanted to really see the value tested out on a bunch of users, to see how it really interacted and could feel for it.
So the one recommendation for any founder or listening is just don't put yourself in a box of free trial versus freemium, because you can slice and dice it in different ways.
The other thing I would definitely challenge, especially bootstrap founders, to think a lot about is what cost are you willing to put aside for free users?
Because free users, although it's free for them to sign up, there's often a cost associated on your end.
So if you cap it, like in that instance with the hybrid approach, where you give people the unlimited time to do it, but then there's a certain number of users they get to potentially show this to, then there's other ways of controlling costs on your end as well.
So definitely make sure you protect your downside to you before you run this very Unprofitable business because we're not nonprofits.
Omer (43:54.840)
Totally.
Okay, so in terms of getting us to showcase your value or the time to value that you talked about, I think in many ways.
Well, I think first of all, I think the prerequisite is you got to make sure you have a good product.
Right.
A lot of this stuff doesn't work if your product is crappy.
So fix that stuff first.
But then beyond that, I think it's about having a great onboarding experience.
And in your book you talk about something called the bowling alley framework.
So I want to kind of COVID that because we often talk about have a great onboarding experience.
And.
Okay, what does that exactly mean?
And is there a more helpful way that founders or SaaS companies can think about how to improve their onboarding?
So tell us a little bit about what the bowling alley framework is.
Wes Bush (44:45.670)
Yeah, absolutely.
And it really starts, I mean, if you think of bowling, the goal is, let's get a strike.
Let's knock down as many pins as possible.
Now, whenever someone signs up for your product, they have the same mindset.
They want to get a strike, they want to experience the full value of your product.
That's what they came for.
But what a lot of founders miss is that it's actually pretty hard to do that.
Even if you're okay at bowling, are you going to get strikes every single time?
I know I don't, and I don't know about you unless you're some sort of bowling master, but it's hard to get to that.
I wish, definitely.
And so if you think of bullying, it's a great analogy because there's.
You could have the option of putting up bumpers.
And if you think about, okay, the main goal of someone signing up for our product is let's get them to strike out.
How do we get more people to do that?
Well, it's, it starts with how do we make that easier?
Do we have a straight line of knowing, like exactly what steps does someone actually need to do to get to value?
And then we basically, if there is a step that could be eliminated, we eliminate it.
If there's a step that could be delayed, that's currently, maybe it's an advanced step, let's delay it so that we just have this straight line of mission critical steps that it takes for someone to experience the value.
And then what you can start to do it at that point is layer on the bumpers.
And the first one I recommend is called a product bumper.
So this could be done in.
It doesn't matter what tool you're using.
It's essentially just how can we guide people in our product to go through those mission critical steps and to strike out in the product which is essentially the value moment, the wow moment, the aha moment.
SaaS folks, we have way too many names for the same moment.
And so that's what the goal is.
How could we really handhold and walk these people through the steps they need to do in order to experience the value?
And then the last piece of the bowling alley framework is the conversational bumper.
So where are people dropping off in this current process?
I'll give you an example.
So I was using Soapbox by Wistia and one thing I think they did really well is I recorded my first video in Chrome, which for those that don't know what Soapbox is, it's like a really simple Chrome extension where you can record your face and screen and do that.
But I didn't share that video with anyone.
And if you know like what Wistia does, they do video analytics.
And so by actually sending me this prompt and said, hey, you forgot to share the video with someone.
They caught me where I was in my journey and they made it easy for me to get back onto that straight line path and eventually strike out and really see the full value of the product.
And so by having these three elements together, one which is understanding, like what is that straight line?
What are those steps that someone needs to do to see value in your products?
And then layering on the product bumper first and guiding people through those steps and then also having that conversational bumper on the other end to catch people where they drop off.
You really create this system that is so focused on getting people to value in your product and eventually giving them such a good experience where they love the value, they love the product, that it becomes really a no brainer for them to become a happy paying customer.
Omer (48:15.310)
That's a great example.
Although I'm a little surprised you were using Soapbox instead of Vidyard.
Wes Bush (48:21.470)
Yeah, we didn't have that update yet.
I give them credit.
Omer (48:26.589)
Yeah, I mean actually just on a separate subject, it's like I think that there's been such a growth in these types of products that allow you to record video, sort of personal videos in just with the Chrome extension.
Like there's Vidyard go right and Loom and Cloud app and Soapbox and the list goes on.
I'm curious what is going on there?
Like what's the, what's the end game there?
Is it about, you know, it's sort of like, is that another sort of a freemium model?
And ultimately it's about getting people to go for more premium services like video hosting in Wistia's case, or more advanced features with loom or whatever.
But it just seems to be incredibly popular at the moment.
Wes Bush (49:22.030)
Oh, absolutely.
And so I think there's the Megatrend, which is people just prefer to communicate through video.
It's much faster if you consider like writing an email versus sending quick video, a little bit contextual, a little more personal.
So there's a lot of things going for it.
But back at Vidyard, one of the reasons behind like, even why we consider creating this free product was because time to value for our main product, which was more geared towards marketers, was actually there was a big time to value.
There was a big ask whenever we had a free trial model, because we were actually asking people like, hey, upload your video.
We assume you have them created and then put it on your website and then you can see your analytics.
So most people, even if we have this seamless free trial experience where people could upload their video, most people just didn't have that video.
They didn't know what to put up on their site, unless maybe they had already been creating a bunch of videos and content.
So the goal was if we launch this, someone could create a video, the first one in less than five minutes, right from the beginning of the journey.
And so we could just put that into the marketing product.
They could get analytics.
So there's a lot of trends for like video analytics and video hosting companies where it makes complete sense from a time to value perspective for them to have that.
But I definitely, like, give credit to Loom too.
I think they're really pushing the envelope on just like how we could help more teams communicate as well.
Because especially everything going on.
It makes a lot of sense.
Omer (50:53.630)
Yeah.
And I think you're right.
There's definitely more video, sort of personal video, sort of being used as sort of a more effective communication tool.
I get more of those, but I think for me it's like it's solving a problem, but it's also creating a problem because you can.
Yes, it's faster to record a video and send it to somebody, but it's.
You can waste a lot of time listening or watching that video where someone's talking for 10 minutes and they're not getting to the point.
Whereas if they just send an email, you could just scan through the text and got to got the gist of where they're going.
So I think that's going to be the next problem to solve there.
Yeah, we can maybe talk about that another day.
Wes Bush (51:36.520)
Two times speed or three times speed.
So important.
Omer (51:41.880)
Great.
Okay.
Awesome.
Wes, that has been awesome.
Thank you so much for walking us through that and kind of giving some, some really valuable, you know, insights and ideas and some of the frameworks that you talked about here.
If people want to kind of check out the book yourself, you can just grab a copy from Amazon.
It's called Product Led Growth by Wes Bush and if people want to check out Product Led Institute they can go to productled.com and if folks want to get in touch with you, what's the best way for them to do that?
Wes Bush (52:09.780)
Yeah, you can always reach out to me on LinkedIn.
Just type in Wes Bush and I should pop up there.
Omer (52:15.110)
Awesome Wes, thank you for joining me and wish you all the best.
Wes Bush (52:18.790)
Likewise.
Thanks for having me.
Omer (52:20.390)
Cheers.
