Product-Led Growth with Self-Service

Thanks for joining us today on the Fuel Growth podcast.

What is the right growth equation for your company? Is it pipeline?

Brand?

Product?

Customers?

Employees?

Join us as we interview CEOs, entrepreneurs and seasoned executives to explore what it takes to propel your business into growth. Joining us today is Esben Friis Jensen, Co-Founder and Chief Growth Officer of Userflow, a B2B software company delivering simple tools for in-app onboarding and user surveys. Userflow initially bootstrapped to millions of dollars in annual recurring revenue with a team of only three employees. How do they do that you ask? Well, that's what we're gonna find out today. Welcome to the show, Esben.

Thank you. Thanks for having me.

So with your background, I'm sure there will be some really good takeaways for other leaders that are listening in today that want to explore some growth options for their business. So why don't we start there with your background? Could you spend just a minute talking to us about?

Sure I'm, as mentioned, one of the founders of Userflow. But prior to Userflow, I co-founded another company called Cobalt, which we call the pen test as a service. We pioneered and new way to do penetration testing, which was more software driven. And I was part of that company for what, eight years to get from zero to 200+ employees or something like that. That was an exciting journey. And Cobalt, as many other startups, we started out being very product-led and so on. But we turned into being a very sales-led company, which was great at that time, because we were competing against the service industry, and needed to be a bit more high-touch. But as we grew and the model matured, we saw a possibility to become more product-led again, and to have lower touch on customers. And that was an exciting journey to go through with Cobalt to kind of try to transition from this high-touch sales-led approach to a more low-touch product-led approach. And as part of that excitement and challenges, I kind of got an interest in that whole space. And that's why I decided to join my co-founder, Sebastian to start Userflow. He had already been working a bit on it at the time. But it was just that product that basically could help businesses built better onboarding inside their product, so users could self-serve onboard, basically.

Nice, I love that idea. We're gonna dig into that a lot more. But before we do, you're a two-time co-founder, you're a serial entrepreneur. I think, you know, based upon your accent, you've probably grown up elsewhere in the world, I'd love to get to know you a little bit better. Right? Who is Esben? So got a bit of an icebreaker question for you: seeing how you've probably lived in multiple countries, let's learn a little bit more about where you would love to live the most. If you could live anywhere in the world for a year, where would it be and why?

It's a tough question. I've been many places around the world already. I took a sabbatical during my time with Cobalt, went to South America for six months. And this year, or last few years, I've been traveling all over the US. And then I'm originally from Denmark, in Europe. So I was in many places in Europe, but someplace I want to go in the future is probably Southeast Asia. I mean, I've been there once in a couple of countries, but one ago, it's from like Bali or something to stay there for a long time.

Awesome, to live in Bali for a year. That will be fine.

That wouldn't be too bad. So that's probably on my bucket list. But I would also love to go back. I've been to French Polynesia, which is an amazing place to live as well. So yeah, many, many places around the world I would love to go through.

So you're traveling around the United States, I have to ask how many states have you visited now?

Oh, man. I don't have to count actually there but been all over mostly on the Western part of the US. But I've been to the Eastern part as well, in the past, pretty much been to most of the largest states really enjoyed the Utah, Colorado area. Just beautiful nature. So that's where I spend most of my time.

You've probably been to more states than US natives had been.

Probably the case, I've only been to maybe 15 states myself. So there's a lot more for me to see. Well Esben, you just kind of opened up the topic here of product-led growth. And in fact, when you and I had a chance to chat beforehand, we learned how passionate you are about this topic. And we've also seen this topic of product-led growth coming up over and over even here in previous episodes of the Fuel Growth podcast. So let's dig into this product-led growth idea bit further, we want to explore this idea. So just to set it up for us, in your words, describe what being product-led means to you.

So to me, you can really explain it in two ways. One, it's a cultural mindset in your company where you always think product-first so whenever you have to do something you think, how could the product solve this? So basically, if you want to better onboard people, instead of thinking we should hire a bunch of support and customer success managers to onboard people, you think how could the product onboard people itself? Or how can we get more people to upgrade to this given plan? Instead of hiring a bunch of salespeople, you think, how can I get the product to get them to do that upgrade. So it's really a mindset where everybody in the organization, not just the product team, but also the entire go-to market team thinks product-first. So that's one way of looking at it, the mindset. Other good way to look at it to make it a bit more in comparison is, as I mentioned, the sales-led growth, as I mentioned, in relations with Cobalt. So kind of comparing it to sales-led growth, so sales-led growth is basically where you have a sales team, you have customer success managers, you have all these different people being the primary handlers of the process. In a sales-led process, you would have somebody with a software product goes to your website, go get demo, then you would speak with an SDR you would then get moved to an account executive, then you'll get a demo, you will have meetings back and forth, and then you decide to buy and then you get onboarded with a customer success manager, and then you get to try the product. Whereas in a product-led model, you kind of simplify and turn that around a bit by having a free trial or freemium. So the product just goes to your website, tries to product, sees the value, and ideally buys without speaking with anybody. So you're kind of like reducing steps, and you're also putting the product first into motion.

So in that, you're probably investing a lot of resources to make sure that the product in its current state is always evolving to meet whatever you're hearing from customers so that you are really honing in on this product-led approach?

Yeah, I think that's what I love the most about product-led growth, because people will see it as a go-to market model, right? It's just like a growth model or whatever. But really, the power of the model is that you cannot fake it, right? You cannot fake that you have a bad product. So really, what you end up with when you have a product-led model is a better product, that's the only way you can win with that model is by having the best product possible with the best UX that solves a real problem. And that's actually what I love the most about the model.

So knowing that Userflow, I think I heard you say Userflow was co-founded, it sounds like from day one as a product-led business. Is that right?

Yeah. And actually Cobalt was kind of as well, we all started out like that. But yeah, Userflow, we were product-led from day one. So yeah, we were born product-led, and we never had sales, and we're still only three people, but we have millions of USD and in AR and just, you know, growing fast. And we've been able to do that by having this model where we are not increasing the need for support, sales and all these things, because it's just very product-led as well. We had an advantage because we started out that way. And I know from Cobalt, the history of Cobalt, that it was a much harder transition to go when you had become sales-led to then become product-led. That's a much harder transition than if you're just product-led from day one.

Yeah, we definitely want to talk about that with you a little bit more today, Esben. Would you mind sharing a couple of examples of how your team of three is living and breathing by this concept that the product comes first.

So we have a bit of a unique situation where my co-founder, Sebastian, he's like a true 10x developer, if not a 100x developer, so he's a developer, a product manager, UX designer in one person. And that's unique to us, that's probably why we've been able to get that far. Because he can just build everything and build it fast. He then has one UX designer to kind of help him speed up his work. But that's basically it. And then I'm handling the entire rest of the business. So that's everything from growth, making sure we have marketing channels support. So we still do support right with an actual person. But we solve a lot of these product challenges we solve by improving the product. Whenever we get a support issue, we always solve it in the product. Again, this product-first mindset.

So I hear the UX side of things, you've got someone that's an expert in that. What are they doing to learn what changes or improvements need to be made in the product?

Yeah, so number one is just listen to your customers, customers are typically quite vocal about this. The good thing about being in a team of three is you're not too far from your customers. I think that's what happens when a company grows. And especially when you have a sales-led approach, you're close to your customers. But the team that's close to your customers is the customer success managers and salespeople. And then they have to communicate all the way back to the cycle of product managers, UX designers, and in the end developers. And in that chain of communication. A lot of stuff just gets lost in translation, right? And then you cannot delay it. Is that really important and so on. But in Userflow, my co-founder Sebastian feels the pain of the customers directly on our support. If they ask something on support frequently enough, he sees it, he's very close to the customers and can kind of react to that. Right. And I think that's something large organizations, especially sales lead organizations who keep more in mind, how can they keep product closer to the customers? I think that's a problem many software companies have today.

That's an important consideration, that chain of communication and what can get lost in that. And I do believe that the Lost in Translation thing is very real. When you have customer success managers or sales on the frontline, they often don't know how to communicate in ways that the product team will receive the information, or the UX team, to then be able to make changes that really will be impactful for the customer. I'm glad you pointed that out.

And then I think it's also the second thing is priority, right? Like how high do we prioritize UX versus new features. And with us, it's kind of like a 50/50 distribution, where we solve UX issues, that's 50% of our development work is just to solve UX, right, and not just to build new features. And I think that's important for our product-led businesses to do that.

So Esben, I'd really like to tease out this idea of product-led versus sales-led versus marketing-led. In past episodes of Fuel Growth, we've talked with other executives who follow sales or marketing-led approach. But you know, you've really been describing how you have this specialty around turning a business from, you know, sales-led into product-led, and how you've had real hands-on experience there. So can you talk to our listeners, many of which I'm sure, currently in a sales-led organization, about the practical steps they can apply now, if they're truly interested in honing in, on zeroing in on that product-led approach as their North Star for the company?

Yeah, for sure. So number one thing, as I mentioned, in the beginning, it's a culture change, right? It's really a change of culture in the company. So it needs to start with the management. If the management doesn't buy into you doing this, then forget about it. And it needs to come almost from the CEO level. They need to kind of say, Okay, this is what we're doing, we need to become more product-led. And then the rest of the management team needs to buy into that, because it's really a cross-functional initiative. And if that doesn't come from the top, it's not going to happen, at least it's gonna move very slow. So that's the number one thing I think, then There's a number of things you can do to kinda make it easier to do to transition. One is to reduce your scope. So for instance, at Cobalt, we decided, okay, we only want to start doing product-led for our smallest customers. So the ones with the simplest use case, it was more transactional buyers, even though they were buying a subscription, but it was much more transactional. And those, you can easily build a simple product-led workflow for and there also, at least, our theory was that they were easier to get to self-serve, they were used to doing self-serve with a lot of things. Then that way, you could reduce the scope. But you should still think big, you should always think, okay, we should probably in the future, expand this to everyone, right, everyone should be able to self-select that path. But by making it very focused, you're not scaring your own organization too much. Because this is, again, a culture change. So keep it at a reduced scope to really make it focused. And then from there, you really should iterate and learn, don't over analyze, the most common thing with these changes is you end up in analysis paralysis, people will try to measure everything down to the last detail. Let's do an experiment. Let's measure it, let's do another experience. Let's measure it right, it becomes too much and you never move forward. One you should look at what are others already doing. And if other successful SAS businesses are doing it, you can do it too. You're not like that special that you need to over analyze, okay, we need to do it in our own special way. Because my analysis tells me that right? No, more SaaS businesses or Software as a service Businesses are very similar when it comes to that. So I think that's a common mistake that you end up in analysis paralysis.

You've kind of described a standard theme and change management, which is start small, think big, move quickly. Start small, think big, move quickly.

And take risks. Don't be afraid, right? Like you have to iterate but take risks based on what you're seeing others are doing. If others are doing it, why shouldn't you be able to do it? And then I mean more practically, one thing we did great at Cobalt I think is like we mapped out our entire intern process for go-to market, everything from how we sell, how we onboard, how we do everything. And then we said at this step, the customers can self-serve. At this step, they cannot self-serve. It's like a hand-holding step. And then we just started from scratch and kind of looked at how can we replace these hand-holding steps so it doesn't become a need to have a person involved. But it comes as nice to have, because I want to kind of highlight it's not that in product-led growth, you don't need to remove your people from the equation. But they should be more of a nice-to-have that can add that kind of cherry on top to maybe make a larger deal or help the customers who need a bit more help. But there shouldn't be a need-to-have and what we had at Cobalt at least was and I think many SaaS businesses have that is your have some steps that are so high-touch that the person is a need-to-have. And that's what we looked at how can we remove that need? So we mapped it out basically in a big spreadsheet. And then we just started from scratch and looked at solutions for how we can make it self-serve. I like that. Think of your salespeople as accelerators, not gatekeepers. Yeah. And then you've got your other side of it, where customer success managers can really be value-focused at that point. So probably not fielding a lot of questions around comes with the product or whatnot, because you've got the product team focusing in on it. And the other thing you want to do is like, get people to sign up for your product yourself, like, become a customer of your product, right? Like, understand what is the journey? And are we doing stuff that's kind of ridiculous today? Like sometimes you are doing high-touch just to do high-touch, right, and you already built the self-serve function, but you're just doing high-touch because that's what you're always been doing. So you just like keep doing it. And you don't believe the customer can actually do stuff on their own. But I think you should take that leap of faith that some customers can do stuff on their own, as long as you have the capability for them to do it on their own.

That's like a form of Value Stream Mapping internally, where you're going through and you're seeing what the teams are doing today that can be eliminated, or that are costing money and unnecessary time from your customers.

Yeah, I always find it amazing. The number of of executives who've never actually been through the new customer process. They don't know, what are the communications? How are they delivered? What are the words? And so, you know, executives in a company, will be making comments and decisions in a vacuum. And I love your point, go through the process of becoming a new customer and decide if you think that's the right process, probably going to find those things you want to fine-tune.

Exactly. And then another great thing I think we did at Cobalt, and that's kudos to our customer success team, as they kind of took the chicken and egg decision and said from this point in time, we're not going to have customer success for our smallest customers,.We're only going to have like a support team. So they basically said, I don't care if we're ready, or the product is ready. Of course, we should like build stopgap automation or whatever we can build outside of the product. But they basically said like, this is the day we're gonna say, now we don't have customer success for the smallest customers unless they pay extra for it. And I think it's like a friendly pressure on product to move towards getting to that point. But still, the customer success team was then helping as well to build stopgap automation, right.

And the thing that that does, because one of the things that many customer success people do is they'll handle the renewals process. Or if you want to add more users or add-ons to your product, that customer success person will facilitate that process. But when you pull that customer success person out, that means you have to put ordering and billing and all of those traditional back-office activities into your product. And you have to automate them. And suddenly your engineering team has to be thinking about, well, how does the customer actually buy? For a lot of larger companies, the engineering team doesn't think about how somebody buys or adds because you know, that's something that's done over in the finance world. And it really causes everybody to get focused on the customer. I love that idea.

So we've talked about sales and customer success. Where do you see marketing fitting in when you have a company that's really dialed in on a product-led focus.

Marketing, that's always why when you say like marketing-led versus sales-led versus product-led, I don't see it. Marketing-led, I feel is part of both models, there will always be a need for marketing, because you need to market your product to the world. But what is going on in the industry right now, I think the role has technically always been there. But it's becoming increasingly popular. It's called product marketing. And basically, for me, it's just, that's the new marketing. That's the new marketing function, we're just calling it that because it's going to grow and grow and grow. But they're going to take on more and more responsibility in the marketing team. And then the end, they're gonna be the biggest part of the marketing team, at least in software. And product marketing is basically a marketing team that's hyper-focused on using the product in the marketing, right? Like how can we market the product to the world, not just the why which became very popular. The vision, the why, these kind of like fluffy things, you definitely need that, that's super important. But people are now at a state where they also need the how, how are you solving that problem? You're a CRM yourself, they're like, maybe 10 CRMs, right, like everybody knows the why, but how are you solving? How are you doing it better? That's what people want to know. Why are you better than the rest? And I think that's something product marketers are very focused on is like, how do you show that value to the world, and that's a big part of it.

Promoting the uniqueness of your products.

Basically the dominant force and marketing

Yeah, exactly.

So we've covered how everything should be working. But let's look at it from a different perspective, a different angle, when it's not working. What are the top three biggest mistakes you've seen, or you've made yourself while growing a company.

So I think, one thing I learned, and that's, of course, due to the market, I'm in this onboarding, right, if you move to a product-led model, and you have self-serve, you still need to onboard your customers, you still need to show them the value of your product. It's not many products, some products are so easy to use, and so amazing that you're just like, instantly, okay, this is great. But most products require some sort of self-service onboarding. So that's number one. And one mistake is having no onboarding at all. But when you then move into building it, then the typical mistake is you're not focused on driving the user to the aha moments, that value realisation, you are more focused on describing your platform. That's a typical mistake. You're basically do this like boring kind of introductions through your platform. And really what the customer is looking for, is, how do I solve my problem? Where's the value in your product?

What are the outcomes I'm gonna get? I've always seen that over and over with technology companies certainly probably do this the worst. But I've seen this across every industry where everybody likes to talk about the product, and what it does, and what features it has, and all those different things. And then, you know, maybe they're thinking a little bit more and say, okay, you know, what's the benefit that you get out of this, but then connect that benefit to a business outcome. So a lot of benefits mean, end up translating to you save more time, life is easier. Okay. How's that going to impact my company? I've saved time, and I've made life easier. And then what? You got to connect those together. And I think you're saying that product marketer needs to be really driving that that messaging,

Yeah, it's again, like you make a promise on your website. And then when they log into your product, you need to show them that promise pretty quickly. This is how, for instance, with Userflow, like it's super easy to build in-app onboarding, then within the first five minutes, we need to show it's super easy to build in-app onboarding. And ideally, they build a flow within those five minutes. Love that point Esben, like as you say it, it's so obvious to me. You make this promise on your website, you got to show the promise quickly. So that's a big thing, then a second thing is friction. And that goes back to this scare people have about moving, especially sales-led companies moving to product-led growth, they tend to add unnecessary friction, because they think all those sales-led processes, they were there for a reason. But they were not always there for a reason. They were there because people were enrolled, and then you add complexity. But sometimes you should really just remove steps, right? Like you should remove certain steps from your flow that are not needed anymore, because now you you don't need it.

Yeah. Times change. People change.

So I think that's a typical thing you'll see like, it's often coming from security teams—

Everybody wants to solve the corner cases, instead of making the simple things even simpler.

Exactly, you come from the CRM world. So you notice you can build integrations with any, you can integrate your product with a CRM, but the people-driven processes in a CRM are not necessarily fitting to whatever you're now building in the product. So you don't necessarily need to force-fit that process to fit with the integration, maybe you should just simplify it, build a separate flow in your CRM for that. And then simplify the integration based on that, instead of you trying to say Okay, at this step, we need to report that metric in the CRM. So therefore, the product needs to report that metric to the CRM, no, maybe let's just forget about that for now. And say, that was a process we did when we had a person involved. Now we're just gonna let the product do that on its own without reporting anything, right? It's these kinds of things that you tend to do because you you have an old process and you're trying to force-fit the old process down to a self-service model. So that's a common mistake as well

That's two. You're on a roll here. Number three.

I think I already touched on so many things. So I'd like iterative analysis paralysis. I just want to reiterate on that, but yeah,

You talked about how important it is to have a culture of growth at the foundation. Any common mistakes that you've seen around getting that culture in place?

Yeah. Oh, maybe product culture. I'd like a culture where you think product-first. I think it's resistancy from sales teams and Customer Success teams will be there because they will feel we're getting replaced and that's where change management is super important because they're not necessarily getting replaced. Userflow is special with a three-person company and it just shows you can everybody do it with a smaller team, but in many SaaS companies and larger SaaS organizations, Software as a Service organizations, sales teams and customers she says managers are still there. They're just doing different stuff. They're doing more high-value, maybe focused on the larger customers also focused on the customers that are maybe struggling. And a common theme that's becoming more popular is this notion of product-qualified lead, which is basically where the product has kind of qualified this person. But they didn't self-serve buy. They didn't buy themselves, they were fully like some metric shows: This is a user who was supposed to buy, it's the ideal customer profile, and they did all the right things in the product to become a product-qualified lead. Then the sales team, or customer success team can really go out and say, Okay, we should target this user and find out how we can actually get them to buy, maybe they just need that final sales push or guidance. So that's where it becomes a much more high value discussion, because suddenly they know everything about your product, but it's just like one last, two or few things that you need to resolve for them to close the deal, right? So you're actually making in some ways to sales team and customers seem more efficient, because they just have to focus on those.

And it sounds like when you think about the culture of it, you want to make sure that the sales and customer success team is reminded that they have purpose and focusing in on what their purpose is and making sure they're aligned on it. While the product UX teams are focusing on the product that seems like that would help with the cultural aspect within the company. So Esben, thanks for all of this information, it's been an absolute pleasure. We always ask anything, it's probably especially when people can go to your website, but where can our listeners find you and learn more about you?

So I'm on LinkedIn, very active on LinkedIn, that's a thing another big part of the whole new product-led and marketing. The world is social selling is becoming more dominant. So yeah, um, I wouldn't say I'm social selling, but I'm very active on LinkedIn, posting about product-led growth, and all sorts of other software-related stuff. That's the best place to connect with me.

LinkedIn. Got it.

Outstanding. Well, there you go. What a great session here. I've got a really thank you Esben for helping to unpack the product-led growth topic for us. We appreciate your time and we encourage all of our listeners to follow you on LinkedIn. And also learn more about the Fuel Growth podcast by checking out some of our other episodes. I appreciate having you here today Esben. It's been a great session.

My pleasure.