Kate McCullough: Hey, everyone. Thank you for joining us on a RevOps Review. I have today with me Sam Levan from MadKudu, where he's the CEO and co-founder. We're here to talk about product-led growth and also sales-led growth and then both of them together and the trends around that that we're seeing in the industry. Before I jump in, Sam, it's really nice to have you. Can you just do a quick intro of you and your background and what MadKudu does? 

Sam Levan: Yeah, my pleasure. First, the accent is from France, but I've been in the US for the past 15 years. So, I'm the co-founder of MadKudu. We are a sales intelligence platform and we help hundreds of B2B software companies find more pipeline by translating all data into actions for sales. So, we've helped a lot of companies transition towards a PLS model, a PLG model, or the other way around where they had a PLG model and went to a more sales model. I live in the Bay Area and I have four kids plus one dog who is giving as much work as two kids, I would say.

Kate McCullough: The dog. All of what you're saying about your background in terms of product-led growth matches and aligns to how we think about the world at Nue where I'm also co-founder. We think of it from more of a pricing and billing perspective, whereas you're thinking about it more as a go-to market motion perspective. So, every time we've talked, it's been really fun to just put our minds together and share what we're seeing. I don't have four kids and a dog, but there's the dog park near me. I go and I am like the aunt to the local dog park, so I don't have as much. So, let's just jump into the current state. 

So, right now, in the economy, everybody's tightened budgets and this is where I think PLG, product-led growth motions, think commerce motions off your website, tend to suffer a bit because they're really opt-in. Oftentimes they're tied to potentially usage-based pricing or consumption-based pricing. So, there's so much flexibility and variability and potential churn risk. So, I'm curious from your perspective, Sam, what's the current state of product-led growth motions, PLG, and is it in effect dying? Are we seeing less of it? How do you think it's going right now for companies that are focused on a product-led growth motion and not the sales-led motion? 

Sam Levan: Yeah, I think we often go through those [thoughts], “inbound is dead, product-led is dead, outbound is dead.” So, I think some people are wondering if product-led growth is dead. In a way, I think there is a lot of headwind on the product-led growth motions. I can tell you that one or two years ago at every single board meeting, your investor, your board members would come and say, "Do we have product-led growth motions? What are we doing about it? Have you seen the example of Stack, Atlassian? The efficiency cost of acquisition seems extremely good. Why don't we have one?" The buyers now want to go digital. They want to buy without talking to sales. 

We heard all of that and it was a very top-down adoption of PLG. That has completely switched in board meetings for the companies that we work with and even my board meeting. It's almost the other way around. The change that has happened very drastically is that CFOs now are running organizations in some way. When CFOs look at the organization, I think what they realized is one, a bit of “valley of despair,” where a lot of people got hyped and then now when it doesn't work as fast, a lot of companies got burned by trying a PLG motion, not seeing success right away. 

The gap between expectations and reality has been big. But the other one is I think few companies or few board teams realize the investment that it takes to get a PLG motion to work. I would say one of the fastest motions is often outbound in some ways, very expensive. It doesn't work very well at all now, but you can get started within a week or so. Inbound can take six months. PLG is often an initiative that's going to take a year. So, are you ready to invest? The partner-led motion is also something that takes a long time. So, do we have alignment with the CFO on that one? 

Kate McCullough: Yeah, it's really interesting to see how companies tackle sales motions, because you can start out being product-led growth first and then add in a sales-led motion. You can start out being sales-led and then add in a product-led growth motion. I think that's what you're alluding to is that people didn't realize maybe how challenging it is. Then partner motions, usually, you don't see that until companies are really large, because that is a lot of coordination to get that motion going as well. It's interesting, because I look at it from a venture capital standpoint and what we would see is companies that started out with a product-led growth motion oftentimes hit a plateau point. 

So, they would get really good at their inbound motion, but then at some point, the market would get saturated and their growth would plateau and then they'd be forced into a sales-led growth motion. I think you can see that at Slack and Airtable is another great example. I think that 65% of the customers that Slack started as product-led until the sales team engaged them. That's an incredibly high percentage, but at some point, that can potentially bonk. I think Airtable, hero of product-led growth motions, had to shift to an enterprise motion. It's a notoriously common story of that shift. Zendesk did it. They started out PLG. Then they were forced for growth purposes to go up market. I come from a background where I was at Anaplan and we were an incredibly wildly big enterprise. 

I mean HP was one of our first customers, but then we were always noodling on the idea of how do you expand down market to get more market share. So, it's interesting, because the consideration set on both is very, very different. You're right. I think that product-led seems deceptively easy and I don't think it is. You're right, outbound in a weird way, while it's hard, is somewhat easier. So, yeah, I think that's an interesting point that CFOs are "running the show" right now. I think that's pretty accurate to what we're seeing. I mean even yesterday, you look at Snowflake's reports and they crashed.