Lessons - Building a Product-Led Growth Engine | Yoni Tserruya - CEO of Lusha

In this lessons episode, we explore product-led growth and its impact on B2B company. Discover how self-service options can drive customer acquisition and brand awareness while optimizing sales processes, learn strategies to prioritize sales activities, and enhance data-driven decision-making for maximum productivity. Describe to me through LUSHA like, what is product-led growth? What does that mean and how did LUSHA adopt that strategy? And also, why did you know that that was a strategy that you should take? How did you know that? The beautiful part is that we didn't know at the beginning, with the good sense of honesty and voice. Yeah, yeah. I mean, as you understood, my background was B2C product. So when we thought about building the product, my intuition was, okay, so let's build something simple, which anyone can start using for create. And if you want to buy, you can upgrade, premium, because this is what I knew from mobile work. I didn't know that it is so rare in the B2B world back then. After several years, after three years, I think we learned that there is a name for that, which means product-led growth, and we suddenly did it without even thinking. But I think the benefit of product-led growth is exactly what we thought. We just didn't know how to say it. So let's go back to that. And the idea is that if you're not doing product-led, your classic B2B company means that once a visitor goes to a marketing website, and he reads the value proposition, let's say he understands that, because in a lot of cases, he just doesn't understand. And then you want to use it. What you see is that you have a form, which you need to fill up the form, and then schedule a demo. And today, and I as a consumer, but I think 75% of the people today, doesn't want to talk to a sales rep before they know the product. They want to talk to someone after they know the product and when they have questions. So the idea of product-led growth is that just open the funnel. Let the user try before he buy. Let him even buy, but only if he needs scale and only if he needs or have any questions, he will go to the sales team. And so what product-led is doing is that the product is out there. Anyone can use it. You go to a marketing website, you can sign up for free. You can start using it for free. You can even buy itself service. You don't need to talk to anyone. And if you need to talk, you can do that. And I think at the beginning, a lot of sales people, even those we hire here in Lucia, they don't use it. They use to talk to everyone. They want to manage the sales cycle. And the idea is that when the sales team manage the sales cycle, you might bring bigger deals at the beginning, but you're not bringing or you eat very hard to create a big brand awareness without many marketing resources. Because the funnel is closed by a rep, and you need a lot of reps to talk to a lot of people to tell them the value. And when you do product-led, you actually put the product out there. Anyone can use it. You create brand awareness by the product. I mean, if the product is good, it just works for you. And when the sales people just talk to people, they are actually talking to users. They are not talking to prospect, which means that doesn't need to explain the value proposition. The user already know the value proposition. He know the product. He know the service, the conversation is much further than that. It's about how much it's cost, or maybe I didn't understand some feature. But the job of the sales rep is to connect the dots, and just go to the sales conversation to the negotiation area much quickly, then talk about the product composition. So product-led grows company actually sells more, and grow much faster than classic B2B companies. The beginning of the journey might be different, but in the long-round, PLG just grow faster. Better user experience as well. And you were bootstrapped up until, I think, you've raised money, I saw you raised 40 million early February. Congratulations on that. Was that the first round? Was that you ever raised? Yeah. Yeah, it was the first round. Up until then, we are completely bootstrapped. We reached to almost 1500, 15,000 customers. Totally bootstrapped. And the reason we succeeded to do that was exactly because we did it product-led. So, a lot of our customers are completely self-serve. And those who need scale or want a bigger solution, well, we sell them via a sales team. But the sales team just speaks to those who want to buy. Just, you know, talking to people. And when you're doing product-led growth, you're focusing on the product. But also, you must have some sort of inbound or demand-gen. And if you're bootstrapped, I guess, somebody who's listening to this may wonder, like, okay, so it's a little bit scary for me to not depend on sales people. Where do I invest my limited resources so that people even know I exist? And where did you do? So, I mean, what we did at the beginning, we just tried to publish that there is a service called NUSHA. And, you know, Facebook recruiters groups and LinkedIn recruiters groups in some websites that cover recruiters. And we did it for like a week or two. We also brought, like, several influencers in the recruiting area. But mainly that's it. After the very first, you know, push that we did to the product, everything else happened organically. Because the product did deliver. And the value was good for the people. And the data was good. And so, people start, you know, telling about it to other people. And they were getting the word of mouth just word. And we had natural growth rate. But actually, most of the product that grows company, if you have a good product and you invest most of the resources in a good product, this is what it what's happened to. I have the word of mouth. You have the word of mouth. You have natural and organic growth, even without marketing spent. Now, marketing spend can definitely accelerate that. But it's not that without it you are not growing. You can still grow because the product is your marketing. The free mule is your marketing. And a follow-up on that in was there was there any, it sounds like you, you know, I think you're going to answer this question saying like, no, we actually, we didn't have a ton of issues, but it sounds. Well, in in this particular space, it seems like there's a lot of competition. So how did you do the way you differentiated was just having an incredible product? That was that was really how you did it. I think I think two things differentiate Lucia for the market. Firstly, the data quality is the data quality. At the end of the day, tell about the data. And we succeeded to provide very good result, the beginning of the journey. So the dinner was good. Better than the better than most of the competitors back then. And the second thing is how we sell it. So today, even if two companies are selling the exact same thing, but one company does it much more easily. With no friction, with self-service experience, we can just and this is the PLG. It is exactly what we did. Then it's going to succeed faster. And because how we sell it was much more simpler. So yeah, I think I think the data quality and the way of selling it, that we are we we we sold to the end user to their to their AE or to their DR, the city in the company. And you don't need to create a big deal with the procurement. We used $25,000 annual contract. So anyone could just download and start using it. So people just started. Yeah, that makes a lot of sense. And then now you've raised some money. So what is your vision for the company? Where do you want to take it next? Because now you actually have some capital funding you. So what are what are next steps for LUSHA? Yeah, so the capital is basically accelerating everything we're doing, starting from headcount. And we now do have marketing budget. That we are we're we're increasing because of the fund. But the main division is to build the largest community of sales people in the world. Because we believe that the sales industry needs to be much more data-driven. And and and be more focused about the people that want to buy when they want to buy. And just make sure that the people are spending more time selling. So instead of trying to, you know, spray and pray to everyone with cold calling or whatever other approach a lot of companies are doing today, we want to provide them really accurate data. So they want to spend time on just, you know, those who doesn't want to buy and try to provide the best intent and timing to do that. Both for sale and but also in the future for customer success. Well, go ahead. Hey, no, it's it's very smart. And then I guess just to follow up as you're in the industry, what are what are the trends that you're seeing with the best practices in sales that if somebody's listening and they're perhaps in a more legacy organization, or they're not sort of, you know, up to times with with what works, what do you recommend people start to do as a sales rep or as a sales leader? I think what we see as trend is that more and more companies are not trying to necessarily talk to as many people as possible. Like I said, it's a spray and pray. It's more going to be to super prospecting, to be very, very accurate about what you want to spend the time on. And this is exactly also what you're doing in ABM. But you just want to know what you want to run after and then work there and get deeper in the organization. So you need to know where you want to reach out and not just spend time and a lot of cut. So we see that we see the trend in sales teams going to that direction. And this is what we enable and trying to to provide even better data play to do that. And one thing one thing that you did touch on, I just want to sort of reinforce while we're on the topic, you mentioned about getting people to spend more time actually selling. Like I'm sure, you know, even the fact that you installed, you created this initial iteration of the product as a Chrome extension so that people aren't navigating to a web app or some other other application and taking them away from the prospecting. It's meant to be seamless with their workflow. Speak to the issues that sales reps have. So I know you see them with spending too much time on non-sales activities and how this solves for that. Yes, I think salespeople today spend a lot of time on admin work and identifying who they need to talk to next and you know, understanding the trends in the company. So the conversation would be more sleek and they will know what to discuss about. And honestly, what happened in this data is according to southwards.com. Salespeople are actually selling 33% of their day. So the rest is about admin and prioritizing and getting data. So if you provide them higher quality of data or you help them prioritize the lead based on, you know, some criteria like industry, number of employees or technologies or stuff like that, they can spend more time selling because you actually help them with automation and data to prioritize their work. So I think that the industry is going that direction, how to optimize, and the optimization is based on data like making a lot of other areas in the world today. Watch the full episode. See you in the next one.