How product-led growth enables you to build a better product and onboard people faster with less support overhead

Product Stories

How product-led growth enables you to build a better product and onboard people faster with less support overhead

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Summary

How can your product drive growth, adoption, and market itself? That’s the idea behind product-led growth. Esben Friis-Jensen from San Francisco-based Userflow explains what it means, how it works, and how user onboarding plays a large part in it. Ready to grow your SaaS?

Episode

Victor [00:12]

Welcome to Product Stories. We explore how founders build successful software products. This is a podcast about product management development, remote work and anything else non-technical as well as technical founders need to know to launch and scale software products. Today’s guest is, Esben Friis-Jensen co-founder of Userflow. Together we’ll dive into product-led growth, improving user onboarding and reducing the support burden for SaaS companies. Esben welcome to the show.

Esben [00:41]

Thanks for having me. It’s a pleasure.

Victor [00:44]

Yeah. Thank you. Esben why don’t you give us a little background about yourself and your company.

Esben [00:51]

Yeah. I’m one of the founders of Userflow and Userflow is basically a no-code or low-code way to build in-app onboarding, product tours and surveys. We started the company a bit over two years ago, and then going strong and especially moving fast these days where product-led growth is becoming a big thing.

Victor [01:20]

Yeah, that’s awesome. How did you get started? How did you realize the problem you’re solving right now?

Esben [01:28]

The company was originally founded by my co-founder, and then I joined later, but he had built a small, he came from another Saas startup as well. Then he had seen the need for a better onboarding. Initially, he built like a video onboarding service, but he found out that wasn’t interactive enough for the end-user and actually as part of that product, he had built an in-app guide himself. All the users kept saying like, can we get something like this?

Then he just realized that maybe that was the product he needed to build. He pivoted and then I joined him. I came from another company that I founded, Cobalt, which is a security SaaS as well. In Cobalt, we had also done a big initiative to move towards product growth, and I found it extremely fascinating and I see it as, the future. That’s why I wanted to join my co-founder Sebastian on this journey.

Victor [02:38]

Yeah, no, of course, when you’re building a tiny feature and suddenly everybody wants that instead of your main product, that’s what product validation looks like. That’s awesome. You are completely bootstrapped, right?

Esben [02:55]

Yeah. We are the two of us. In Cobalt, with the LBC traditional VC route. But in this one we’re going to go completely bootstrap. So far two people. We’re focusing a lot on making it product-led to reduce the need to hire a lot of people in the team.

Victor [03:22]

We’ve not gone into what is product-led growth yet. But already since you’re mentioning it is that the approach a bootstrapper should take? Is that what saves resources? Am I understanding that correctly?

Esben [03:38]

I think if you want to have a product that scales at least then yes. Of course you can build a small business with two people. But if you want to build a larger business with more customers and go for, even for like billion-dollar company with a few employees, then I think you need to have a really strong product that does a lot of the work for you.

Victor [04:04]

Do any companies come to the top of your mind, that people would know who you would say, hey, this is a typically really well product-led SaaS business that people recognize?

Esben [04:18]

Yeah. There are a lot of product-led examples that come to mind. [inaudible 04:25]  I think they’re VC backed or at least the founders have a lot of money already. They have this freemium model right, where everybody in the world can download [inaudible 04:39] has that kind of viral word of mouth effect from using their product that they then use to sell to larger persons. I think they are great examples. Slack is a great example of somebody who offers a freemium model and really sells via their product and have a lot of like viral effects in their product.

Then of course drama, these days with Basecamp. Basecamp is like, there are some things I admire about Basecamp, like the number of few employees. That I think is really interesting, because the traditional route is always that you have to grow in employees. But I find it super fascinating that, you can grow maybe without hiring that many employees.

Victor [05:40]

Yeah. So now we know product-led growth might have something to do with hiring less people, might have something to do with freemium but to give an introduction, what is product-led growth?

Esben [05:54]

Product-led growth is basically the product is the main focus of your business. You use it kind of as a sales tool. You also use it for retention, and the entire company focused on having a great product that drives both growth and retention. That’s kinda how on a high level I see product-led growth. The alternative to product-led growth is sales-led growth. Where you more do the traditional, especially in SaaS, you do the traditional kind of demo request and then a sales meeting.

Then when you actually sell the deal, you might have customer success managers who take over and service the customer. I think that’s the opposite of product-led growth. I think many businesses in SaaS will end up in some kind of hybrid. I don’t think it’s black and white kinda that you do one or the other. Most SaaS businesses will do some kind of hybrid I think in the future.

Victor [07:16]

How would you decide what approach is best for your company? Are there some clear indicators like the target audience or the type of product, or is there anything that founders can decide on?

Esben [07:29]

Yeah. When you start out as a smaller SaaS company, I think product-led is kind of a natural path because you have limited resources available to you. You’ll almost always as a SaaS founder are very focused on your product. I think the kind of sales-led model happens a bit later as you grow. But, my honest opinion is I would try to stay product-led for as long as I can, to really focus on that because the sales-led part is going to kind of come on its own. It’s gonna come in on its own, because of larger customers who require sales meetings and a longer procurement cycle and so on.

But even in enterprise, I think you should always have somewhat a product-led mindset. Can I somehow make them more self-service? Can I retain them another way? Can I grow them via the product in a smarter way? You’re not always thinking sales-led in enterprise, but also thinking product-led. Especially in SMB, I think you can think product-led all the way because SMB customers like startups are very used to buying everything self-service. You’re creating a barrier of entry by asking them to have a demo, right. Someone like me in a two-person company, I hate when I have to buy a tool that I have to do a demo. I much rather just want to try it out, and see what it can do.

The exception to this rule is a community called productled.com. They put it in a good way I think. If you’re in a very niche market, where a lot of things has to be explained, and it’s a new kind of SaaS market, then you might need a more product-led approach because it requires more explanation. I would say Cobalt actually started out that way. We were very product let’s begin with, and then we moved more to sales-led the cost. We were replacing a service industry, like consultancies [inaudible 09:51] At that point in time, we saw that a lot of the customers required a lot of explanation around what is a pen test? Why is Cobalt different from the others? And so on. Pen test became such a standard thing to do that this explanation was not as required.

Everybody found out: “oh, you can do it via software as a service platform”. That meant that we could [inaudible 10:23] product-led model, where you do less explanation and you can easier sell self-service. But I would say there are probably some niche markets out there, where you might want to start with sales-led model, but I think that’s the exception and not the rule.

Victor [10:44]

But, that’s very interesting. I’m glad you’re touching this because one might think that before you hit product-market fit, everybody’s saying: “talk to your customer”. Actually doesn’t matter even if you’re selling $10 a month plans, at the book a demo button, just to get in touch with people, learn more. Get that quantitative, not that qualitative data. How would you work with customer feedback when you really start product-led?

Esben [11:18]

First of all, I would never remove the demo path. At Userflow we also had a demo path. But our primary path is a free trial. We have a two week free trial, that’s the time we try to get the most people down up, but we do offer the demo path just in case people want to talk. But I think it’s a common mistake to think that just because you do product-led, you don’t talk to your customers. I talk to customers every day via chat. We have a chatbot on our site. They ask us questions all the time and we learn from that. We learn how to become better and what they’re looking for and what they might not like.

The other thing in a product-led approach is that you are very analytical. There’s a lot of like product tools out there Lock Rocket, Heap, Amplitude, Iteratively, data tools that you can use to your customer behavior. I would say for an early-stage startup, that might be a bit overkill sometimes, but later stage like just when you grow a bit, you definitely can get a lot of benefits from looking at them, how you can improve your product. I think that’s another way to go about it. It’s a more kind of product-driven and analytical way, instead of the more like you have to speak to every single customer to understand who they are.

Victor [12:52]

Oh yeah. A hundred percent. The tool belt that a product-led growth company should have, is probably, as you already mentioned, some sort of analytics tool for gathering user insights and usage insights. Probably software to better manage the backlog, prioritize new features, according to that user input, and probably something that you are building, which is a user onboarding solution that helps people find their way around the application. Is that more or less correct? Or is there anything else?

Esben [13:35]

Yeah, no, I think, the last bit I just want to add is maybe, you still want to have that open communication channel on your site that people can reach you. I think that’s key as well. You don’t want to be a machine, right. You’re still human beings, and there should be a way that they can reach a human to speak to. We learn a lot from that. But yes, we do a user onboarding at scale, right. So instead of having to explain the users what to do every time, they kinda go into your platform and especially the first time they go into it, we built a way to allow you to build onboarding for the customers at scale, basically.

Victor [14:21]

What are the common mistakes that people, SaaS founders, SaaS businesses, in general, make with user onboarding?

Esben [14:31]

Yeah. I think – this is just, of course my opinion, – but data also seems to say this. But in general, what we see is the first thing many will do when they build in-app onboarding. The first mistake would of course be, just let your customers into your product, and do nothing. The problem in that is that unless you have the best UX possible, you will have a hard time [inaudible 15:05] there are hard moments you want them to go through, especially in more complex SaaS, B2B kind of software, where there’s a lot of different things you can do and you want to drive them to that action.

You need some kind of path through what they should do. But the common mistake, when you start building something like this is that you often end up explaining every page in your app. Let’s say you have an app bar with like six items, a common mistake is that you go to each item and say “this is this”. Really what you should be doing is focusing on the key jobs you want the user to do, to get the aha moments as they’re called, especially in a free trial, but also in a post-purchase onboarding. You really want to drive them to the actions where they see, wow, this is why this tool is great, and this is exactly what I wanted to do.

For us we use a very meta, we use a Userflow. On Userflow the key action we want the users to go to, we have like an onboarding checklist. You can also build that with Userflow and you basically drive them to the builder. We want them to build their first flow, and see how the builder works. We drive them immediately to that part of the product where they didn’t build like an initial go and see how easy it is to use. So they get that aha moment. Wow, this is really easy. Anybody can do this. I don’t even need to be a developer to build the flows. I think that’s a common mistake that you tend to explain pages instead of focusing on jobs to be done and actions that you really want them to be.

Victor [17:07]

What should I do if there are multiple possible next steps for a person, where you have multiple personas. How would you go about finding the best onboarding route here?

Esben [17:21]

Yeah. You see a lot of businesses out there when they do onboarding. They do ask the customer questions at the beginning. I think you’d need to be a bit careful, in Userflow we also allow you to ask in the beginning and then choose a flow depending on that. We actually also allow you to also start a flow based on system attributes. Actually, look at what role does this [inaudible] Clearbit data, HubSpot data, to determine what flow they should see, you can integrate with HubSpot into Userflow and segment.

But I think really they wanted to of course get some idea of who they are, but you should also know your users. I think it’s a bit risky to ask customers a million questions in the beginning. Because that’s also annoying.  I think they got, who are your most normal users and maybe you’ll have a couple of different roles within your platform and then you build flows accordingly, but they are automatically started based on those roles. Then you can maybe ask one question to begin with. I always [inaudible] with those questionnaires in the beginning, who are you, what do you do and so on. It takes a long time for the user to actually get any value in your tool. So do it, but do it with, with a bit of [inaudible 19:01]

Victor [19:02]

That’s great advice. If you have three different personas then just ask enough questions to put people into these buckets, and not overdo it. With Userflow, how does it differentiate from other onboarding tools? Is there a definitely a couple round?

Esben [19:23]

I think in general and that I didn’t even touch upon, but the most important part of product-led growth is having a great product. That’s actually, what I love about product growth. Assume it’s not winning in the market because they do a freemium. Slack is not winning in the market because they do a freemium, they have amazing products and then they do a freemium to show how amazing those products are. I think that is what we’ve been focused on at Userflow.

One thing we’ve been extremely focused on is usability. You kind of have two groups in our market. Today you have the advanced tools that are harder to use, and then you have the very basic tools that are of course, easy to use, but they’re also very basic. We try to find that middle ground, like where you have an advanced tool, but it’s easy to use because you have a great UX. One of the big things we did was have a Kanban-style builder you might know from Trello or similar tools. Kanban-style, where you get a full intro and overview of your flows and where the more traditional ways to build flows have been screen by screen. That’s just one example.

But in general, we have a very strong focus on UX, usability and UI and really making the product nice to use, while still giving the advanced features like integrations and ability to do version environment control, brainchild flows, all that stuff. But if we added all that and didn’t make it easy to use, it would be a bad tool. That’s something we’ve been really focused on.

Victor [21:15]

A hundred percent. Just because you touched on it, I just wanted to ask you as well, because in the beginning we spoke about freemium and now of course, why we speak about freemium, why are we mentioning it now, because with product-led, the goal is that your product doesn’t just replace sales, but it also a bit replaces marketing. Or at least taps into it.

Esben [21:41]

Yeah. You’re probably never going to replace sales and marketing. But you’re gonna empower them actually. You’re gonna give them  an easier path because a user that’s already tried your product, is much easier to sell to. I would say you should never forget. There should also be some kind of sales touch process around the product. Like emails. It doesn’t have to be meetings, but it should be like maybe an email sequence or something like that kind of personal touch so they can always reach out.

But yeah, I agree. Marketing is another big thing. You’re changing here. Product-led is about getting all functions aligned, marketing, sales, customer success. It’s not only a product management thing. It’s actually all those functions needs to be focused on using the product as a sales and customer success leader. I think that is clearly the future. I think especially product marketing is gonna be a huge function in markets going forward because of this unless they come up with some new name but I think product marketing is a function that they’re right in this perfect middle ground. If you’re a product manager, you should definitely get your head into product-led growth.

Victor [23:22]

A hundred percent. Now back to Userflow. Who should use it? Who is it for? ideally?

Esben [23:31]

Yeah. I would say SaaS business. That’s our main customer base. We’re looking to onboard and guide their customers in a better way. The most normal ones are B2B, but we also do have B2C SaaS customers. Then the third type of business we see larger enterprises that have customer portals and similar. A lot of enterprise businesses are actually learning to become more SaaS, software-driven. They built to work with our customers and those they also need onboarding for. I would say that’s the kind of customers we see today.

Victor [24:19]

Perfect. So where can we sign up for it?

Esben [24:24]

userflow.com the website, and as mentioned, you can do a two-week free trial. We made it very easy to get started. As I said, it is low code, no code. You have to technically install a small piece of JavaScript on your website to get started. We actually have a Chrome extension so you can just like build the flows inside your own application and do everything without a developer.

Then when you are ready to kind of say, okay, this is super nice, let’s install JavaScript and release it to real users. That’s why you should go.

Victor [25:01]

That’s actually really smart. That makes sense. Where can we find more about you or follow you? Where do you hang out?

Esben [25:10]

I’m both on Twitter and LinkedIn, are my, I would say two communities. On Twitter, I’m esbenfj and on LinkedIn, my full name Esben Friis-Jensen and just connect with me. I’m also very active in the community at productled.com, which is a community led by Wes Bush who wrote the product-led book that everybody reads these days. His colleague Romney John he’s also writing a book actually on onboarding that I look forward to seeing because it’s our space, of course. I read the first chapter and it looked good. That’s a community I highly recommend everybody to join as well, who want to move into a product-led group.

Victor [25:58]

And the book, any other resources?

Esben [26:01]

Yeah. I think that’s a good book. There are so many resources and I think you can read many books on many different topics. There is something, and that’s actually not related to product-led growth. But there’s this [inaudible] that I’m a big fan of, which basically means it’s a way of thinking that I think many SaaS businesses have a tendency to actually under sell their product and, and have like a lower pricing.

But actually if pricing, you don’t have a big enough share of wallet with your customer. So they don’t really care about your product. Money is a way to also show that you care about something. I love freemium, all these free trials and stuff, but for the customers you wanna like get revenue from, there’s usually think about this shared wallet concept and what is the right price for your customer base.

Victor [27:09]

That makes sense. Thank you so much for sharing that. Thank you so much for being on the show. I think that was super valuable. It was good having you.