Founder and COO of Notejoy
Finding Product-Channel Fit to Drive Growth
Ada Chen Rekhi: So some quick background. First on my personal background with growth and sort of the perspectives that I'm speaking from these days. I'm the founder and CEO of a company called note joy, which is a collaborative notes app for your team. The prior to note joy. Um, I've held a number of marketing and growth roles and really sort of deeply invested in SAS and technologies. So prior to founding, no choice, I was the SVP of marketing at survey monkey. So I led all of the global marketing efforts throughout the company, across both the consumer as well as the B2B business lines and really thought a lot about how do we acquire customers as well as grow profitably. And then prior to survey monkey, um, I held a number of marketing and growth roles at LinkedIn. So I led LinkedIn's growth marketing from a hundred million to 200 million members.
Ada Chen Rekhi: And then I also spent a whole bunch of time basically working on a LinkedIn's premium subscription, specifically the sales navigator product and you know, growing LinkedIn's revenue through premium steps. And so, you know, as a marketer, often one of the key questions that I get when I talk to businesses is, you know, what channels should I actually be using? You know, channels are a path to market for your product. And everyone kind of has this sense that if you can find the right channel, it's this extraordinarily magical thing that can propel the growth of your company and really make or break your business. And so, you know, often that actually ends up looking like a silver bullet, right? A set of different marketing tactics or channels that are paired with your product. And together they represent a huge amount of the growth that's driven in your company.
Ada Chen Rekhi: And you know, we have lots of great examples of that in common press. So you know, you have Dropbox. Dropbox is really well known as an example of referral marketing for their early growth. So they had sort of a natural growth mechanic of if you want more free storage, invite someone else, they'll get free storage too. And it was a way for them to spread virally that was extraordinarily effective. And one of their, um, strong early growth drivers. You have slack. Here's this great tweet from Mark Andreessen where he was just talking about how for enterprise software, slack had this extraordinary growth curve and it was all through word of mouth. They weren't actually doing a lot of different marketing tactics at that point, but with a combination of the internal viralocity within the company as well as getting companies to talk about all of those different trends, they were able to grow very rapidly.
Ada Chen Rekhi: Hubspot is another common example. Hubspot is really sort of owned this term of inbound marketing and you know, popularized it, put a whole bunch of their content marketing engine against it and gotten it to the point where they run this amazing inbound conference once a year and it looks like event and content marketing is one of their strongest growth drivers. And so, you know, it naturally follows then that your assumption is you can build a product and then try to go iterate and find what the most natural channel is for you. And so a common approach that people think through is, I've sorta got these wiggles, the product market fit. You know, I've identified my product, I built it, and now I need to go through this exercise of finding the right channel by which to distribute it. And so a common approaches, you know, take all the channels, figure out what resources it would take to go execute against them, figure out how well it actually fits your market stack, rank them, et Cetera, et Cetera, et cetera. And you know, the outcome ideally after you test all the channels and optimize and iterate them is that you have your product, which is, you know, a Unicorn to disguise and you've strapped a distribution channel onto it and it just goes up into the right, right.Speaker 1: Whoops. Ada Chen Rekhi: So you know, as you kind of think about this approach, this may actually not work for the fact that you just took a photo of this slide, but I actually fundamentally disagree with this. I think actually it's a really terrible approach and the challenge with this approach as the marketer, which you know ironically you know I do as a founder is that it's too much of a waterfall method. It is too much of a waterfall method where you've essentially said I've got product market fit and now I'm going to go work on my channel and my distribution and you know essentially instead of instead of sort of building those two things together you're just saying I have my product as it stands and I'm just going to strap a bunch of distribution channels onto it and collectively they will actually do better.
Ada Chen Rekhi: An argument that I have here is actually that you need to go even further. Like really when you think about product development, product ideation, it is a core part of early product development to think much earlier about how do you get to product channel fit. Ideally as you're thinking about product market fit. And Brian Balfour who has reforged says it really well where he has this quote, I love it. Products are built to fit with channels, channels do not mold the products. And so your channel is the static element. Channels have specific characteristics. And if you're trying to build the ideal product to take advantage of a channel, it's very difficult in an after the fact state to retrofit your product to try to go fit that channel. And so to give you a really specific example, let's take by reality for instance, which has sort of the example that I had earlier from Dropbox.
Ada Chen Rekhi: In order for a product to really viral, ideally it has, you know, a whole bunch of characteristics to truly take advantage of the channel. There should be a large number of customers that can take advantage of it. Um, there should be sort of a natural motion in this case, sending files that gives people sort of the motivation to go share and to, you know, share it back and forth as opposed to if you have accounting software with internal data and you're trying to get accountants to share with other accountants, doesn't feel super supernatural. Um, and then, uh, broadly applicable value proposition. Right? So if I share with you, chances are hopefully that you are also interested in the product that I just shared with you as opposed to it falling flat. And in order for you to have viral products to be ideal, ideally, you know, as more people join, um, the benefit to all of the users that have joined increases over time.
Ada Chen Rekhi: You may not have all of these factors, but if you were to really think about a product that truly takes advantage of viral, ideally it would have a whole bunch of these factors right incorporated into it. And so when you look in the looking glass as you're building your product, you know, it's important to kind of think about as you're doing your user research and your customer development, what are the characteristics of your product and what are some of the top channels that they might be really well suited for? So for instance, in the market that you're going after, are they, is it a large market? Is it a small market? Is that interconnected? How much do they talk? How frequent is the use of your product? How are people actually using your product? And you may not be able to get all of it, but what I would suspect is you should be able to look at those factors and think about all of the different channels and identify easily, right?
Ada Chen Rekhi: A whole host of channels that probably aren't great for your product. And maybe narrow it down to one or two that might be really great and could be sort of the launching pad for your product to be successful if you can build against that channel. And so if you think about it, that means you want to bake your growth channel directly into your products. It leads to kind of unintuitive product decisions sometimes. So I'm going to walk you guys through three examples just to make the point. And you know the key, the key takeaway as they walk you through these is that you can see as I walked through these examples, how difficult it would have been in retrospect after you'd already built the product to readapt it for these channels if you hadn't made these decisions. So the first example I have is LinkedIn Sales Navigator.
Ada Chen Rekhi: Back in 2013, I was on the team developing the brand new sales navigator product. And LinkedIn at the time really had, um, identified quite an opportunity with the sales professionals that identified that there were a large number of sales professionals on LinkedIn. They were super engaged, very active, and they were already buying the premium sales subscription, but they wanted to make a standalone product that would actually really appeal to sales and enabled LinkedIn to sell directly to the sales organizations. So not just a couple of reps within a sales org, but in fact to be able to go to the VP of sales and say, your entire organization should wholesale the adopting LinkedIn. And you know, one of the core decisions that we had as we're doing customer development with LinkedIn was, um, how should we build the product? And this was not a particularly easy decision because actually there was already 50 million plus a year being made from sales professionals with the premium subscription.
Ada Chen Rekhi: And there was sort of this risk of what happens with retention and churn. And you know there's this healthy growing business line and now you're going to go build a 2.0 product on it. The core debate that was very firstname.lastname@example.org where you have a separate login brand new interface and the sales rep works there or do you keep it as it is, which is the LinkedIn premium subscription with a whole bunch of sales features built in that the rep can take advantage of as they're using their native linkedin.com experience and in the case we were doing standalone, it was actually, there are a whole bunch of reasons not to do it. One extraordinarily expensive. You're basically talking about take the LinkedIn code base and experience fork the experience, replicate all of the features and functionality and wait as linkedin.com updates. You're actually updating the standalone experience with the design and feature parity over time.
Ada Chen Rekhi: So it's a big dig from an engineering standpoint. We also thought that it was probably like a bad idea for the existing sales navigator revenue line. You have, you know, 50 million plus in revenue is sales professionals that are already using LinkedIn and now you're telling them they have to learn a brand new experience, go off to this other website and learn all these flows and we knew that it would probably increase churn. It would probably hurt retention because it's this fully unfamiliar experience that might hurt the thing that's already working. But as we sort of dug into this experience, because we started out with the sales channel in mind, we knew that for LinkedIn sales navigator to be successful, it needed to be sold through a sales channel to VPs of sales and sales leaders and what did those guys actually want? They wanted a product with a high perceived value.
Ada Chen Rekhi: An add on that looks like it's as part of linkedin.com looks like it should be benchmarked against the consumer subscription. It's not that different. A standalone product that has the ability to really show off net new future functionality and great new flows oriented. Does sales professional. It looks far more compelling for an enterprise sale to be able to convince someone to put their whole sales team on it and to spend millions of dollars on a contract. Likewise, um, there's a real concern about corporate data ownership. If you're a VP of sales and you have thousands of reps and those reps are having InMails and different LinkedIn messages and it's happening in their personal LinkedIn email accounts, who owns the data on the other side? Does the company own the Rolodex of the customers or does the rep own the Rolodex for the customers? By creating a standalone experience, we were able to tell the companies, look, you own this experience overall.
Ada Chen Rekhi: You own the data that's associated with it and look at all the value that you get. And because it was going through a sales channel, we can train them and educate them and everything else. And so we built this as a overall standalone LinkedIn Sales Navigator experience. And then to take advantage of the online channel, we also launched with differentiation. There's this product called team link where if you're sitting on a team and you're trying to find the best path into a prospect, you not only take advantage of your shared connections, but the shared connections of the team that you're signed up on the account with. By building that differentiation in day one, we were able to enable both a sales motion as well as a consumer motion and really think about how do we actually grow the business on both fronts. Can you imagine how difficult it would have been for us to walk this decision back if we'd launch the product and then said, oh, let's drop a sales channel onto it.
Ada Chen Rekhi: We would've had to rewrite the whole code base or deal with a very suboptimal product. Can you imagine if we wanted to sell this product online, we would not have built it this way because of the complexity and the scale and the difficulty of onboarding customers if they're coming in through a self serve channel. And so this was the case where thinking about the channel, the market and the product all the way up front yielded a very un-intuitive product design decision. Likewise at survey monkey. So I spent a bunch of time at survey monkey. Um, you know, there's sort of this temptation when you think about survey monkey's growth story of, you know, how does the product work? You super simple create surveys, send the surveys, collect answers. There's inherently a very viral component to SurveyMonkey. And so normally you'd kind of think about virality as a channel.
Ada Chen Rekhi: Going back to these characteristics that I shared before and say large target audience because just about anyone will send a survey, right? Students, nonprofits, small businesses, all the way up to your enterprise scenarios. Um, the natural invitation to invite and share, right? You're sending surveys, that's great, super viral, uh, but where it really kind of fails and it breaks down is actually on this idea of like a broadly applicable value proposition for like true referral-based by reality. If I were to take all of you guys in a room and said, I created a survey. So how about you create a survey to the chances that you would this specific point in time need to create a survey fairly low. The chances that you over the next six months need to create a survey much higher. And so rather than going for a direct one to one referral loop, we're serving monkey really excels and one of their superpower growth channels is direct traffic and word of mouth awareness is a really flow viral loop.
Ada Chen Rekhi: And um, they do it in a couple different ways. So you really want to make sure that the person who's receiving the survey as aware that it's a survey monkey account. And so after you create your survey, you go through the creation flow, you end up in a state where you can collect, the team has actually spent a huge amount of time and investment creating all of these different collector types, right? There's like eight different ways that you could actually share surveys. It's not just a web link, but front and center is the web link. And when you click on it, it basically gives you a URL to share it with a survey monkey link. You know how many of you guys have seen gotten a survey monkey link at some point and like you know the domain, everyone raised their hand. The domain is so notable.
Ada Chen Rekhi: It's a really memorable name. The survey monkey name kind of describes what it actually is and so as a result baked into the product, you have to be on the highest skew of survey monkey before you can remove the domain names, surveymonkey.com because we know it's really valuable and likewise as you go through the survey taking experience, you have a footer at the bottom of every survey page that says powered by survey monkey use this tool to create surveys online. Likewise, it's monetized and packaged. Similarly, you have to be on one of the higher skews, a survey monkey before you can really customize this and it shows up in the data. It shows up as direct low traffic. It shows up as brand to traffic and SEO. It shows up as branded traffic and search because people, when they eventually get to the point where they need a survey, they think to themselves like, oh yeah, yeah, you know, I need a survey and there's the survey monkey product that I've actually heard of and so when you look at the metrics inside of survey monkey, it really shows is one of their top superpower and very defensible methods of growth.
Ada Chen Rekhi: But again, think about if they built the survey product and then said, hey guys, hey marketing team, we need to work on word of mouth and branding and awareness. If it was just a PR move or a bunch of content marketing or a bunch of events, it would be nowhere near as effective as harnessing product driven growth, branding driven through product and it's much deeper and baked into the product as a collaboration in order to make this chapter effective and successful. Final example, Hubspot, I did not work at Hubspot, but I wanted to bring them up because I actually think they're just this really, really interesting tale of how they took marketing, sales, et cetera software, and brought it to market through unintuitive product decisions. So Hubspot, when you look at their data is particularly unusual as a Sass B to B product because their average revenue per customer is around ten thousand ten thousand dollars is pretty extraordinarily low in terms of value per customer.
Ada Chen Rekhi: And one of the big challenges with that is that once you get below 10,000 it's very difficult from a unit economic standpoint to justify a sales team. And so you're kind of in this dead zone in the bottom half of their customer base where it costs a lot of money to acquire them. And then because they're going after small businesses, that costs a whole bunch of money to educate them, onboard them, you know, kind of get them to a point where they're seeing value out of the product. And so Hubspot is sort of doing this amazing job of executing against the segment and what most people think of when they think of Hubspot is content marketing, right? They've owned this term inbound. If you Google anything marketing related, they've got all these pages on it but actually their secret super power and what drives 40% of their revenue is agencies and so the VP of sales at Hubspot talks about this.
Ada Chen Rekhi: Peter [sp] at one point he basically identifies, you can, you can read all this stuff on the screen isn't talking. He identifies that there was this whole unserved market of small digital marketing agencies and these agencies were really struggling because they were doing these one off transactions with the businesses that they were serving SEO project here, email project here, design project here and they weren't really able to get it to a point where it's a recurring revenue. Hubspot capitalized on it. Here you have this group of people, agencies that are really excited about providing a lot of services and education to the long tail and by giving them Hubspot and a value added reseller program, they were basically able to create a package for those agencies to sell that turn their one off deal flow into a recurring relationship with all the businesses that they were serving and you know that is actually something that's created, you know, a huge portion of Hubspot's product channel fit and if you dig in to their website, there's actually just so much that's built out to support this partner program.
Ada Chen Rekhi: The entire inbound conference is a fantastic example of this where it's really oriented toward a lot of their agency partners and education and connection. They have an entire dashboard built out in terms of both managing these third party accounts that you're dealing with as an agency as well as tracking your revenues. They have multiple programs, multiple events, lots of content, lots of primary trainings. This is not something that happens overnight. You can't put that in that spreadsheet and say, hey guys, I think we should try agencies out as a channel because the success of something like this is so dependent on how well suited and how well built has your product for that. And you know, if you think about it from a product and engineering standpoint, can you imagine the amount of work it would have taken to re architect your product to suit an agency model?
Ada Chen Rekhi: If you really had that in mind right at a later stage as your products built down the line, it just be a lot of work. And so to just kind of bring this to to a close LinkedIn Sales Navigator, SurveyMonkey, Hubspot, these are all examples of companies that have one or two primary channels that they have just nailed it on, right? Not only do they have product market fit, but they have product channel fit and she knows, they've sort of taken this moment where they really thought very early on, you know, identified those one or two channels and baked it very deep in their product. And you can actually see based off of the amount of code infrastructure, product development that they've used, how well integrated it is and how deeply integrated it is and how defensible it is because they really thought about the fit with the product from a very early stage.
Ada Chen Rekhi: So you know the, the key takeaway, depending on where your product is, you could be a new product development, you can have an established product is actually to think about your distribution, not only from a marketing exercise of all the things that you can do downstream as growth experiments and Ab tests and landing page optimizations. But actually to bring it further up the stream to actually have that conversation from a product development and engineering resources standpoint to think about how can you make your product more molded to your channel in order to drive successful growth in the long run.
Ada Chen Rekhi: So I think we have a few minutes for questions if anyone wants.
Ada Chen Rekhi: Do you want people to come up for questions or I can repeat them as well if anyone has any.
Speaker 3: Yeah. Do you know how early on Hubspot started focusing on agencies?
Ada Chen Rekhi: The question is, do I know how early on Hubspot focused on agencies? Um, so if you Google Peter [sp] and I think it's on the think growth blog, he, I don't remember the specific date, but actually he talks about how when they were doing early sales for Hubspot, that was one of the core insights that they had early on this unaddressed market. And they started building for agencies pretty early on in their life of starting to scale Hubspot. But I don't have the exact date. Right. Good. Interesting story though, right?
Speaker 3: Yes. I work in marketing automation. So they did that lately after they realize that it's hard to get one client at a time. It was an agency, they can just educate them on what you've already addressed. Maybe later down the line. [inaudible]
Ada Chen Rekhi: yeah, I think it was part of their scale. Right. As they, as they hit scale. Yeah.
Speaker 3: Again, five at a time by just meditating. Right.
Ada Chen Rekhi: So agency driven by reality.
Speaker 3: Yeah. Agencies wanted to work with them.
Speaker 1: Yeah. I'm curious to the Hubspot easy. Beautiful. Um, and then when you're building away, um, if you're spending what you did in the customer development and research process to try to identify some of these potential findings or out most of it comes from your deep experience in industry.
Ada Chen Rekhi: Got It. So the question is, um, from the experience looking at Hubspot as a case study in [inaudible], are there any actions that you can take to try to identify these channels early on as opposed to intuition? Um, absolutely. So when we were building no choice, uh, we had a Beta phase of about nine months and we get hundreds of customers on board that we're using no joy as a product prior to it being released public. And we knew from the start that one of the channels we really wanted to take advantage of was collaborative notes, right? Like getting people to take quick notes and then share it with the team or share it with individuals. So as we were doing a lot of the customer development interviews and having people use it, we're pretty relentless with asking, why haven't you shared this? Have you shared it?
Ada Chen Rekhi: Who'd you share it with? How'd you share it? How would you like to share it? You know, if you haven't shared it already, why aren't you doing it? What else are you sharing? Right. And like we basically just hammered those customers to really try to understand what are the core um, types of notes that they would want to share. What are the ways that they share things today? How can we co-op that sort of natural flow and then really, you know, have done a lot just in terms of thinking about how do we make the sharing model incredibly simplified as you can guess. Right. And like bake that into the product as an insight very early on. Because you know, as you look at some of the other note taking products that are out there today, they're sharing models because they start from an individual's note-taking, like the concerns around privacy or how to share, how do you get a link out? It's very difficult to retrofit collaboration into an individual product after the fact when it's really established. Particularly because you know, you have all this like scale in architecture issues.
Speaker 1: Yeah, you're welcome.
Ada Chen Rekhi: So I know we're running short on time, so I will go ahead and end the presentation, let you guys get to lunch and, uh, feel free. I'll stick around for a couple of minutes after if you've any questions. Thanks guys.
Keep me posted on Empower 2019.