A fireside chat on product-led sales


Author: Jonathan Friedman
Last updated: Published:

A fireside chat on product-led sales

Nick Capozzi:

Alright, we are back. DemoHQ Day here from the Demostack studios and across the world, frankly. Very excited you're here. We have another fantastic session today, one that I'm very excited for. I'm just gonna introduce these gentlemen, and I will step offstage. We are having a fireside chat… Product-led sales/product-led growth is the hottest topic in Sas right now, but some products are too complex to just hand out to anyone for a test drive. A product-led sales, approach helps. You strike the right balance and bring elements of the PLG mindset into your high touch sales motion. So it is a pleasure to first introduce Des Traynor, the Co-Founder, and CSO at Intercom, and Jonathan Friedman, co-founder and CEO of Demostack. Gentlemen, I'll let you kick it off from here.

Jonathan Friedman - CEO at Demostack:

Thank you, Nick. Des, super excited to have you here. I don't know if I’ve told you this, but you are a hero of mine as some of your writings have affected a lot of my journey starting in and looking at products. So a great honor for me to have you today.

Des Traynor - Co-founder at Intercom:

Cool. Yeah, thanks. Thanks for reading it, and I hope it was a positive effect.

Jonathan Friedman - CEO at Demostack:

So I'm definitely not the only one. You've written so much about product an UX right? And you talk a lot about that today. In this discussion, I really want to take you to this other hat you wear as a chief strategy officer as well, which is closer to marketing and sales. And I want to focus a discussion today on talking about where product actually meets the market.

So you build it, and that's very hard, and you have a ton of a ton of stuff going on there. But then, how does it meet the market? And especially, you know, with today's product-led sales and product-led growth. Kind of these buzzwords coming out. I feel like you've talked about this stuff even before it became a thing. So where does product meet sales? And how do you think about product-led sales and maybe product-led growth?

History of PLS at Intercom

Des Traynor - Co-founder at Intercom:

Sure I mean, like we've been on many sides of this approach. We started off as fully self-serve, no sales teams, business. Then we moved to a light sales, towards what we called the sales, assist. We're quite salesy now, and we're actually in the middle of kind of coming back towards being a little bit more PLG/bottoms up commercialization as well the way we think about it.

To the question of where does product meet sales, I think it really does vary on every single type of product. Generally speaking, say with the Atlassian model, where it self-serve sign up, and sales are really there to annualize the contract and make the revenue more predictable for a public company, they don't have to go and do any elaborate rollouts. They have partners who will do that for them, or whatever. The other extreme would be something like Workday where, if you ever want to adopt Workday, you tell them a year in advance, and they get time, on your calendar and over the course of 6 months you'll end up acquiring the product for about a million dollars minimum. In that world, a better question is where does sales actually bump into the product?

And so I think it really varies business to business, and I think marketing is the missing piece in the question here, and that's I think the piece that's changing the most as of late.

If I was to just give a quick rundown of my experience and my history of working in tech, we started Intercom in 2011. And at the time the conventional wisdom was “Cool, you’ve built a nice little toy, give it a whirl. At some point you're gonna need to get real and hire real salespeople and become a real big company moving up market and that means you're gonna throw away all your cutesy product, you should just focus on being a real big sales leader.”

And I think that was the state of the advice in 2011 on the assumptions carried therein. Or, when you're dealing with a market, you're talking to these idiots who don't know anything about what they're buying.

They just read Gartner reports, or Forrester reports, and they buy whatever's in the top right-hand corner, and that's all. But buyers are far more discerning, done the old advice would have them believe the buyers are actually people who care about software when you say we save you revenue, buyers are smart enough to say, “Hmm, how?” And then when you say well, we'll make your agents more productive, they say, “How?” and when you say, “Oh, our inbox has got like Gpt in there,” they'll say, “How?” and eventually you end up having to show them.

So a phrase we use a lot at Intercom these days is what we call product-first product marketing and what we mean by that is we really want to exemplify exactly how we will deliver on our value proposition. It doesn't mean we're not pitching with a value prop. It doesn't mean we aren’t still going out there and saying, “If you use Intercom, your support will be faster, more productive, better experience, cheaper to run,” or whatever, but we don't leave it to a PDF, or call back in 3 weeks to get to get to Powerpoint slides. The next thing you'll see on the screen will be examples of how that manifests in the form of product.

I think I think that's probably the shift.

Shift in marketing

I suspect we're going to see a lot of B2B2C marketing. We're gonna move away from these big, lofty claims, we’ll quadruple your revenue, followed by a row of random logos of companies you've never heard of who will quote some individuals from Malaysia on “4X my revenue” followed by contact sales.

And like you said, you're going hell today for extra revenue. And I think we're gonna see a big migration away from that.

We're gonna see product-first product marketing and then I think that the the downstream effect of that will be the sales folks won't just be saying, here's the feature that you saw on the website in animated form, but they'll be using tools like Demostack to really nail and personalize the actual demo, contextualized for a medicare business or for a B2B software business or an airline, or whatever. I think the standards are raising up and down the funnel. And I think that's why the quality of the demo really matters. That's ultimately why I'm excited about Demostack as well.

How to make you product PLS ready

Jonathan Friedman - CEO at Demostack:

Awesome. That's a great take about the market, and how it would meet sales. You talked about how Intercom was always criticized like, “Hey, at some point you'll need to get rid of your cutesy stuff and get serious. Get someone with a suit, start selling.” Do you think in today's economy… Obviously, it's very hard. And you know it might be the end of some golden age of production. Do you think PLG/PLS is the only answer for it? Should anyone building a company today or thinking where to take their company, should they focus on that? Is there a certain DNA change you need to do? Or can you take a product and transform it to be PLS or PLG? What is your take on that?

Des Traynor - Co-founder at Intercom:

I think PLG isn't forever unless PLS isn't either because I see PLG… that's kinda like being symbiotic. At least the reason I say it's not forever is that there are some types of products where the initial lift is heavy and involves the training or education of a large number of people. And there is no way to experience the value prop in a small pocket or in a small team.

You could argue something like Workday would be something that if the company doesn't adopt it en masse, any system that has a canonical source of record for the business that has to be pretty accurate and widely respected… usually buying such a thing, it's hard to carve off a specific subset.

Now a counterpoint would be something like Slack. But again I'd say Slack does not share a central point of record for everyone. A small team can adopt Slack, and then it can trickle out. It's harder to do that for something like a centralized human resources tool or whatever.

So I think first of all, we should say not everything can be adopted en masse. Sorry, not everything can be broken down to the individual bite size chunks so should an individual can pick it up or small team.

That's the first piece I'd also say you have to think about this… Brian Balfour has a great piece that I'm sure everyone has read and it's this idea that I need product, channel price and market fit.

So you know, if you want to charge a million dollars for your product and that's your starting price, self-serve is kind of irrelevant. If your opening ACV target is one million dollars you're gonna be flying out to these people with lstripey suits and hair gel and all sorts of shit and you'll be going for dinner and bring in charts and stuff right? That's the high ACV route

So you have to work out, where is your price point? Then what's your install look like?

So if your product itself involves “Well, the first thing we need to do is get root access to your database. We need to scan customer data. And we need to be able to update your website river…”

Yeah, no random engineer is going to get the freedom to click yes to all those permissions, so you have to think of that as well.

The people who love it most are early stage startups where they've been like, “Hey, we've got a really nice way to run IT tests in the specific branch,” or whatever, that type of product.

That's where I think it's an obvious no-brainer and when I say product, channel, price, market fit, and that whole idea, that's where it really works to be like number one on Product Hunt.

Because we all got a product on them today. Basically, what new software is here? Oh, this thing looks cool, you cick to the website. Now, the website has to show you the product. And that's the product-first product marketing. Then, you say sounds good, try it now, and then you go to your sign up flow and the pricing has to make sense.

No random person is gonna drop more than like a couple of dollars, or like 20 bucks a month when they go through a sign up flow. That flow has to get them to a point of value within the product.

No one's excited about logging in to do 11 layers of configuration of a customer support strategy, you have to get them to something that's full and valuable so that they can really experience your differentiated outcome that you're building your brand on. And so, if you can do all of those things, then you're a perfect model for product-led growth.

And that product-led sales is ultimately that PQL Motion where it's like, “Hey, this person's playing around in our tool and the address ends in @apple.com. I think they might have budget. So I think you have to make sure before you run all in on PLG, that it's actually an option.

And also just separately, make sure you're not falling back on it because you're scared of doing the other type of marketing, which is, as I said, like it can be anything from the stripey suits to Gartner and Forrester. You have to basically make sure that you're not doing it as a way of chickening out of trying to do sales - sometimes sales is the exact right option.

And I think a lot of people in my experience, can be very scared of the idea of picking up the phone.

I mean, “Hey, I'm gonna pour my heart out and sell it to this phone call in hopes that's gonna persuade you that what I've spent the best years of my career on is worth it. I'd love to hear your take…”

“No, thanks.”


The literal amazing superpower that sales people have… the thing that blows me away about them is the amount of times they can get pushed back, knocked back here… no. And it's like, let's go again. That resilience is so damn important.

And I think when founders don't have it, I find them immediately going, “Well, you know, you know it's a costing experience I have all the time.”

It’s some version of, “Hey, Des come on my podcast and I'm gonna ask you a question, how did Intercom get its first 100 customers?”

And I say, “I spent about 6-8 weeks emailing people, jumping on calls, Skype, demos trying to get 100 people using Intercom.”

And they say, “Huh, is there any quicker way you could have those?”

I say no, then they're like, “Oh, well, why didn’t you automate the emails?”

And I say, “Because it's better if you do it one by one.”

Because, actually, you're trying to sell, I was putting my heart on the line here, and I think if you're excited about PLG or even PLS, because everything else is scary, even if you know, in your heart sales is the right thing to do, that's a bad sign. I'll stop there.

What does an SE show if the customer has used the product?

Jonathan Friedman - CEO at Demostack:

You covered a lot of ground here. I mean, I have a million follow-up questions. You talked about salespeople. We have a lot of sellers, and we also have a lot of SEs in this call and looking here to learn more. Let’s leave that PLG alone for a second and focus on product-led sales. How does it impact the role of an AE, and then also, how does it affect the sales engineer? And how do they play together in light of a product-led sales motion in a company? How does that work?

Des Traynor - Co-founder at Intercom:

I can't say I have the authority to answer here, but I can tell you exactly what I think has changed and how you react.

Mostly like there’s two big shifts.

One is that you don't get to control the entire world of your customer because they pretty much have unlimited access to your best features. If you limit it, your strategy is to give the shittiest experience possible to your primary sales channel. So you have to actually really roll that direct conferencing like, “Hey, this is the best version of you know, ACME.com or Demostack or Intercom or whatever. You're putting them on a pretty powerful plan to let them play around and really experience their value. Now there is a role here that I think will become more dominant for whoever owns, say, new product onboarding and the new user experience. Because oftentimes there will be molds or modes you can put people in.

As a simple example, Intercom only makes sense when it's customers and agents, and otherwise, how do you have a conversation right?

So what we do is we put you in fake mode in our PLG sign up path so that you can experience what it's like to do customer support inside Intercom without actually having to put us live on your website.

So the reason this matters with the AEs role is, you have to assume that somebody's already in your product. You have to assume they've already clicked around. They've some awareness of all the features, and they might have already started using your product. If you're a project monitoring tool, they might have set up a project and invited their teammates. They might have mixed up tasks, and to-do’s and not realize one's supposed to be the order they might have created some projects when they sort of should have created a task, or something. They might actually be broken in a sense, and your job is to basically inherit all that context which wouldn't have existed in the previous world because they'd be staring at it, waiting for their salesperson to call. The AE’s job is to understand the current state of this customer.

So this is where you need a tool. It can be an Intercom or it could be a Gainsight, or whatever.

So one of the tools helps me understand what state a customer is in or you get authentication from within your own company to sign in as them and see what they've done so far. But you need to understand where they're at, and then you need to guide them to a point of maximal real value, not simulated value.

If the AEs are good users of their product, it actually involves asking questions and turning those questions into a configuration of the project, or the sales flow or whatever it is the tool controls. And in that sense, you're trying to make sure they actually have a real good experience of your product, and don't drown in the complexity that you might otherwise have.

Some of my portfolio companies I've angel invested in, people don't track this concept of what I call active revenue. Yes, they're paying for 10 seats. How many seats are they using? Yes, they're paying for the salesforce integration. How much data flows through? And I think there's definitely a role for whoever's in charge of the initial attacking setup to make sure that all of these things are plugged in and wired, so that the customer is using the majority of what’s in their contract, and I think this is a connection there between the PLG motion to PLS to the AE on what actual contracts they ink. For example, with upselling you 100 seats, or I'm selling you 10 seats with an option to add 90 at the same price, or whatever way you structure those things, whether it's like rumps or clawbox, you have to think about that.

And then think about what's the sales and success engineers’ job?

Because they have to make sure that revenue is flowing through all of these.

Our version of this is when you have a macroeconomic shock like COVID or like we're going through right now. Everyone's looking at their bills. Everyone's looking at the receipts, and everyone's saying, “Hmm. 11 seats. Beauty of 7 designers. Let's kill the other 4. Hmm, I don't really need Asana and Base Camp. Let's kill one.”

I think the people who struggle most are those that have what I would call zombie revenue that's effectively dead and it'll die in a second as soon as someone notices they are paying for it.

All of those things have become, in my opinion, the job of the success team to sales team and sales engineer set them up well, monitor them, make sure it’s a smooth transition, so your AM knows that they're getting a warm, well-activated contract. So in a year's time when they're responsible for sticking 10 or 20% on top for an ARR expansion, they know they're not working off zero. I’ll stop there and see where you want to go next.

Jonathan Friedman - CEO at Demostack:

You said so many interesting things, and zombie revenue stuck with me. That's a really good one. I think you said with product-led sales, so people are using it. But oh, this is a big spectrum of what using means. Is there someone in there? Is he playing around? Is he kicking tires? Is their project really being led? And then, even if all that is happening, there's still usage and connectors and the wiring of it. So there's a huge difference around what using means you can kind of define our range.

And then, obviously the role of sales and sales engineering is very crucial, and it sounds like it doesn't eliminate any of that at all, but maybe even heightens it, and actually requires more.

So specific work out of them. So that's very, very interesting.

Des Traynor - Co-founder at Intercom:

Yeah, I think another reason for that is that this dissolving started in 2007 with the migration to SaaS, the idea that people can cancel any time even on our annual contracts. You know people are only gonna pay for stuff they use, and they'll cancel the first time they notice, and they can.

So then, that's what's changing. We're now showing all the product and we're giving interactive product demos on websites, and we're doing all of those types of changes to the phone call as well.

So what happens in the middle is that you're receiving somebody who knows roughly what the product is is, does, and has already played around with it. So they're not talking to you because they have yet to see the product the way they used to, and they’re gonna quit the very second they stop getting value, or they find that they're paying for shit they're not using. So the the job of the combined team of AE and SE is to actually take a semi-educated customer, and turn them to a point of recurring differentiated value.

It won't be like it has to be differentiated, because if you're just using the stuff they could get off any project management tool, then you're gonna be commoditized and priced like a commodity, so it'll be like, “Oh, well I’m gonna churn from you guys to such and such because they're charging 9 bucks a month and you’re charging 900 bucks a month.”

The team on a large account of the AE or AM or Sales Engineer etc, their job is to receive a semi-educated customer who's poked around, and transform them into a fully ramped, onboarded customer, annualized in contract, and they’re receiving recurring differentiated value from your product.

How SEs can show value on a product demo call

Jonathan Friedman - CEO at Demostack:

Very interesting. And what tools do AEs have to show return on investment and what best practice product usage can be? Do you have to train them, or do they need certain tools? Is there a certain framework? How should they think about that?

Des Traynor - Co-founder at Intercom:

It really can be everything across the board from good, real, believable case studies that reference customers to more cookie cutter ROI calculators and things like that. The thing I like to do is if you can mock up… let's say we have some very successful customers. We have a food delivery company that has a thousand agents in Intercom, and they use this because we can automate the majority of their queries. So I tell them the story of their world pre Intercom and post Intercom, and then I log them into a simulated version of what is effectively their install. So I can say, here's the sort of automation they did here. So they set up resolution. But here's how to use predictors to get customers configured properly, in the first place. I walked through all of the examples, but I start with the end with the business impact, and then I walk back to how that was distilled from various feature, adoption, and so on. That's how I would demonstrate ROI to an end user.

First of all, start off with the actual value you're gonna see in your business, and then just make it as few hops in credibility as possible for them to see how it’s possible. Somebody linked it earlier in the chat that we launched GPT features in the inbox on Tuesday, and one of Intercom ideas is to make your agents as productive as possible, because you want to have as much capacity within your support team as possible.

So we've removed all the undifferentiated typing that support people have to do with this feature. The idea is, you can make it incredibly understandable how faster support teams mean less cost on support and that's it. So you're constantly just trying to draw that line between what the product is, what the business gets, what the users get, what the business results are. And as long as you can connect that as an AE, you're doing pretty well.

Jonathan Friedman - CEO at Demostack:

Something you said there that really got me thinking, you said simulating the product, which is essentially, what a good demo eventually is. You can have a superpower to take people forward in time, back in time, show them different vantage views from the top, the side… essentially, you can take that “Imagine if…” away in taking down the cognitive load and people find themselves in your product. And I think that helps the sale and sounds like you're doing a lot of that. And I love the GIF from the new release. I actually checked it out. It was so cool because you really showed what it would mean. You didn't say, 50% faster or something. You show the GIF of what it would look like, and I think that's so overlooked.

So I love how you take your product and and show it and use it in many different touch points. I think that's a huge piece that you've done well over the years.

What is product-first product marketing?

Des Traynor - Co-founder at Intercom:

Yeah that’s what we call product-first product marketing. It's like, start with the idea that the product should explain itself first.

Jonathan Friedman - CEO at Demostack:

There's a quick question from the audience, if I may. People buy from people. So do you think, product-led sales could have a detrimental impact on that?

Des Traynor - Co-founder at Intercom:

How can’t it? The most obvious recurring problem I see is people turn on sign up and walk away, thinking that they're a product-led sales company. What that means is they have not talked about their onboarding during user experience.

Another one is like they don't acknowledge or admit how complicated their actual product is. So again they end up putting a lot of people in very broken installs, and an AE’s job is to actually repair the setup before they can even begin to sail. That's a mess as well, and the idea that people buy from people, I think that's generally true.

But I think what it changes is just the nature of commitment.

I will have a play with your product. But when I want to adopt your solution company-wide, and I want to introduce you to my CFO and my CTO, and all that, that's more than when you're into the “meet the parents” stage of the purchase. That's when I think the salesperson is still delivering all the value they ever did.

But yeah, don't get me wrong. If people just think that, you know switching to a PLS or PLG motion involves taking away your blockers, and just letting everyone into the product, that's a really bad way to do it.

Nick Capozzi:

Great answer to a great question, and this was another great session. It's a great day here at Demo HQ Day. Gentlemen, I want to thank you very much for your time.

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