20Growth: Inside Dropbox, Salesforce & Heroku's Product-Led Growth Engine; What Works & What Doesn't | Why Startups Doing Paid Under $100M ARR are not PLG | Why PLG is a Business Model, Not a Go-To-Market Motion with Adam Gross, Former CEO @ Vimeo

Adam Gross is one of the masters of product-led growth (PLG). Most recently, Adam was Vimeo's interim CEO. Before Vimeo, Adam was CEO of Heroku, which he joined after selling his startup, Cloudconnect in 2013. Additionally, Adam has held executive leadership roles at Salesforce and Dropbox, and has been an active angel investor & advisor to companies, including Buildkite, Cribl, and Tailscale. In Today’s Episode with Adam Gross We Discuss: PLG Tactics from Dropbox, Heroku and Salesforce: What were Adam’s biggest takeaways from his time at Salesforce? How did it shape his growth mindset? What did Adam learn about customer acquisition at Dropbox? What would Adam most like to change about growth today? Product-Led Growth: The Fundamentals: What is growth? What is it not? What do founders get wrong about growth? Why does Adam think PLG is not for everybody? What do most great PLG businesses have in common? How are value propositions segmented in PLG? How can startups transition from individual to enterprise clients? Why does Adam think startups doing paid acquisition sub $100M aren’t actually PLG? The Secrets to Optimizing Growth Channels: What are the most common reasons fast-growing companies plateau? How does Adam advise founders on diversifying channels? What are the biggest mistakes founders make when scaling into enterprise? How should startups do effective product marketing in horizontal products? What is emotive & strategic marketing? How should startups balance both? How Angel Investing Changes How You View Companies: What are Adam’s top 3 pieces of advice for founders? What does Adam mean when he says you are either hiring a poet or a librarian? What are the biggest mistakes founders make when hiring? What was Adam’s biggest investment miss? What did he learn from it?

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  PLG is not for everybody and PLG is not a go to market motion. PLG is a business model. Every, not even great, but good PLG business I've seen has some specialized customer acquisition piece that is not paid acquisition. If you are doing PLG and you're doing paid acquisition, sub 100 million in revenue, I'm not sure you're really PLG.

• 0:25Harry Stebbings?

  This is 20 Growth with me, Harry Stebbings, and we're joined today by an all time master of product led growth or PLG, Adam Gross, hailing from Salesforce, Dropbox and Heroku. Adam has seen the good and the great of PLG and this episode is a masterclass in when PLG works, how it works, lessons from the best and mistakes that founders can and need to avoid if they want to execute a PLG strategy well. It's time to get the pen and paper out. This is such an actionable show. But before we dive into the show today, short form video has never been more important for your business. Social media managers, growth marketers, this is the single biggest opportunity you have today. They say ad creative is king, but man is UGC creative a pain in the ass to pull together?

• 1:11Harry Stebbings?

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• 1:53Harry Stebbings?

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• 2:10Harry Stebbings?

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• 2:55Harry Stebbings?

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• 3:26Speaker 00

  You have now arrived at your destination.

• 3:29Harry Stebbings?

  Adam, I've wanted to do this one for a long time. So first, thank you so much for joining me today.

• 3:34Speaker 00

  Harry, it's been a long time coming. I'm delighted that we finally got it scheduled and nice to spend some virtual FaceTime with you.

• 3:41Harry Stebbings?

  Oh dude, this is gonna be great. So we're gonna start with like a, an interesting quickfire. So when we look at the different companies that you've been at, there's some iconic brands there. And I wanna do basically, what's your biggest takeaway from each and how did it impact your mindset? And so if we start with number one, Salesforce, what would that be for you?

• 3:59Speaker 00

  I'll try and keep these brief. You know, so I was very lucky to be very early at Salesforce. I joined in 2003. One of the things that people don't maybe understand about Salesforce, looking at it as this huge, big enterprise software company now, is that thing was built brick by brick. That thing was built through the pure energy and intentionality of all the people on the team there, which was amazing. And so what I really learned there was just the kind of genuine power of a growth mindset and what that really means and what that means applied every single day. That thing was forged into existence. It didn't just kind of get lucky, right place, right time. And that was a very powerful lesson.

• 4:34Harry Stebbings?

  Can I ask you, sorry, what is a growth mindset really? We hear it from everyone as the book.

• 4:38Speaker 00

  Sure.

• 4:39Harry Stebbings?

  Out to what, what is it?

• 4:40Speaker 00

  It's really interesting and we'll talk about some of the other companies. I've worked at a lot of companies that have enjoyed a lot of fast growth and Salesforce was different. Salesforce owned its own growth. The growth didn't happen to it. It didn't just kind of experience, you know, kind of a viral growth and kind of took off on the internet. When it started, maybe the internet wasn't even big enough for that to happen. It owned it through understanding the power of marketing, understanding the power of a message, understanding the power of an industry transformation narrative and really being intentional on owning it.

• 5:12Harry Stebbings?

  So when we think about like the ownership of growth there from Salesforce, if we were to move to Dropbox, another of the iconic brands,

• 5:18Speaker 00

  Yeah.

• 5:19Harry Stebbings?

  what would be the takeaway from there?

• 5:21Speaker 00

  I was at Dropbox in the very beginning. I was employee 11, so it was 2010 when I started. And it was already clear, even in the very early days, that they were on to something very, very special from a customer acquisition point of view. One of the many things I learned from Dropbox was the power of being really innovative around customer acquisition. One of the things that I think is maybe underrated that I'm really attracted to, and I encourage entrepreneurs to think a lot about, is what's changing? Where is there innovation in customer acquisition? I mean, it's hard to find a company that was more innovative in customer acquisition than Dropbox.

• 5:56Harry Stebbings?

  I had Kip Bodnar, who's like CMO at HubSpot on the show. And he said that actually it takes one channel to get to 50 million an hour, two channels to get to 100 million an hour. Do you agree with that in terms of how to think about channel alignment to growth?

• 6:12Speaker 00

  I would hope that one channel could get me further than 50. And I've certainly seen PLG businesses that got well past 50 on one channel, or even back to Dropbox, got well past 50 in one channel. That that seems a little low to me. I would, I would hope I would get more, given how hard it is to build a channel.

• 6:29Harry Stebbings?

  We've mentioned the word growth a lot, and so I do want to dig in and start there. It's a little bit misused today as a term. When we think about what growth is, what is growth and what is it not, Adam?

• 6:39Speaker 00

  I honestly don't love like the title VP of Growth and I don't love growth function. All of that stuff, it is a lot of local maxima. It's improving a flow, it's improving a journey. All of that is really, really important, but that's more kind of bottoms up growth. Where I spend a lot of time with the companies I've led or or work with as an angel investor, a board member, is a little more of the top down idea of growth, which is fundamentally, how do you set a vision for yourself, for your customers, that you can articulate and communicate at scale that is going to be transformative for them and is going to be really, really valuable and is empathetic to where they are as an organization? So one thing I like to think a lot about and talk to companies and founders I work

• 7:24Speaker 00

  with a lot about is, is what's your theory of your business? Which is another way of saying, kind of holistically, where are your customers are going to come from? How are you going to make them successful? How are you ultimately going to make them profitable, growing customers, both in terms of them getting value and and your business getting revenue? The thing about kind of just bottoms up growth is it's just very narrow in its perspective. It doesn't take the kind of holistic view of how does your product value proposition interact with customer experience of how they engage with your product? How, what's the journey that your customer goes on if they start as an individual free user and then convert to a self-serve paid user, maybe as a team? And then from there, convert into an enterprise customer?

• 8:07Speaker 00

  Each of these kind of different phase transitions, this is kind of a whole architecture of a business. I really encourage founders to think more holistically about all the pieces and how they come together, because that is the hardest thing about growth in the modern SaaS era. It requires all the pieces coming together.

• 8:24Harry Stebbings?

  Should they think holistically about it from day one? Or do you really just need to focus on the next step, the next step in the zero to one phase?

• 8:32Speaker 00

  Maybe not day one, but definitely year two. At some point, you need to decide who is your customer, not just from a use case and value proposition point of view, but from a go-to-market point of view, which the best proxy for that is deal size. Are you going to get from year one to year three, from seed to A, or maybe A to B, depending on how you name the rounds, right? Are you going to get there by getting X customers at 50K a pop? Or Y customers at 5K a pop? The physics of those two systems are entirely different. And at some point, you got to decide. And you have to decide pretty early because nobody has ever raised an A, or I would think a B, doing both.

• 9:14Speaker 00

  You just would spread yourself far too thin attempting to do both. And it's a very, very challenging discussion to have, especially in the early days. Because if you're doing founder-led sales, or even early MVP development, by definition, you're more in the category of fewer, larger customers, right? Because it's very personal and engaged. So companies can say, oh, well, I'm going to go down, or founders go down that path and say, great, I'll just get more of those. And you realize, well, you know, it's easy to get the first five, but then you got to build a whole customer acquisition machine to get the next 50. Versus, you know, the challenges as well on the smaller side, you have to be expert in a whole different kind of customer acquisition.

• 9:51Harry Stebbings?

  Listen, you're the PLG expert. You mentioned that they're kind of, are they paying 50 or are they paying five? I think the thing that I see a lot and have a lot of portfolio companies do is they spend on the customer acquisition like they're a 50. They have customer success like they're a 50. The enterprise cost structure is then shifted to a 5,000 ACV customer who doesn't expand in the way that they think they will do. And that's for me, the biggest problem with PLG, actually. The businesses aren't good because they don't expand in the way they think they will, but the cost base is so high.

• 10:22Speaker 00

  I'll channel Jason Lemkin here. PLG is not for everybody. And PLG is not a go-to-market motion. PLG is a business model. It is a, again, holistic way of architecting and constructing your product, your business, and your entire organization. It is not something that you add on, say, gee, wouldn't this be nice to have? As a kind of addition. Distribution channel, you know, it has to be really, really intentional. With that in mind, every, not even great, but good PLG business I've seen has some specialized customer acquisition piece that is not paid acquisition. If you are doing PLG and you're doing paid acquisition in the early days, and I'll even say like sub 100 million in revenue, so pretty far up.

• 11:07Speaker 00

  If you're doing paid acquisition, I'm not sure you're really PLG. Whenever I talk to founders, a good PLG business, even at the 5, 10 million range, they usually have discovered one good acquisition mechanism that is contributing to a disproportionate 50, 60, 70% of their actual customer acquisition volume. And usually that's like one or two things. The distribution of acquisition methods, or specifically even content, right, is highly asymptotic. One good piece, two good pieces will move the needle as opposed to doing a thousand.

• 11:42Harry Stebbings?

  How do you advise founders on channel diversification? You said there about kind of having that one channel that works, that one innovative customer acquisition channel. I hear a lot who are like, you know, I need to diversify. What happens if, you know, we have too much channel risk? How do you advise them on that? And when's the right time to try and add a second channel?

• 11:59Speaker 00

  Going back to kind of what I was saying before, you know, enterprise versus PLG or self-serve, how do you think about that decision? My rule of thumb there is you only get to have one, one of those until at least 10 million, if not further. If you're up at like 5, 6 million and you're like, gee, now's the time to add enterprise. Usually the challenge is companies going enterprise too soon because it's very tempting. It can be the other way of companies trying to go into PLG from enterprise, which is a much harder path to go. If you're doing that under 10 million, I just think you're not big enough. It's too distracting. You haven't built enough of the machine. I would hope that a channel would get you pretty far. Again, into the, you mentioned 50 before, 100. And maybe it's also, you know, I think about a full-fledged channel

• 12:44Speaker 00

  as in a full-fledged enterprise sales organization with all the SCs and SDRs and all the mechanics and machinery. That takes a lot to, to really get spun up.

• 12:53Harry Stebbings?

  If you're a startup founder listening with a PLG motion, the question then is like, how do I have the sharpest point going into an organization? How do I hook the champion most effectively? How do you acquire champions in companies most effectively? How do you get that first user to love your product so much that they sell it to the rest of their team?

• 13:11Speaker 00

  One of the key things to understand about PLG is it's not linear. It's not a single product that you have a value proposition for or an experience for that you sell to one user, market to one user, that you then take the same thing and then try and get them to adopt to as a team and then get the same thing and adopt to an enterprise. What makes PLG PLG is it has these distinct, discreet, but complementary motions and value propositions. I'll give you a specific example. I think when you look at PLG, this does tend to be true. That first step, that individual free, typically free step, is usually a creation value proposition. Right? In the Heroku case, creation meant like building and deploying an app.

• 13:52Speaker 00

  The second step, which is usually your team self-serve step, is usually a collaboration value proposition. GitHub is another great example, a company I did some work with as a consultant. As an individual developer, I'm using GitHub to find code, find samples, find libraries, whatever, right? Creation-oriented. As a team, I'm using it as part of my workflow in a team in order to collaborate, right? Collaboration value proposition. And then enterprise, what's the value there? It's compliance. That's where I have my security, that's where I have my auditability, that's where I have my observability, all those kinds of pieces. These are distinct products. They're distinct value propositions and they're distinct go-to-market motions that you assemble in a kind of an adjacent way into a layer cake, if you will.

• 14:37Speaker 00

  So, yes, you start with that individual free user, but in order to make the jump to team, you're going to have to have a different value proposition and probably a different product, complementary product.

• 14:48Harry Stebbings?

  What is the biggest mistake that founders make when moving from stage one creation to stage two collaboration and teams?

• 14:55Speaker 00

  I think the biggest mistake is not understanding that it's different, not approaching it with the intentionality of it's going to require a different value proposition that having a single-player product, a product that has value on a single-player basis, and that you can then build a multiplayer collaboration product experience on, you're doing MVP, you're doing product-market fit twice. And I've seen this a bunch, and I've seen companies I've invested in not make it, where they get the individual value proposition, but they're not able to translate to the collaborative value proposition.

• 15:33Harry Stebbings?

  How do you do effective product marketing there? Say you have a billboard and you wanna emphasize the abilities that you're able to deliver with creation tools. And then you also wanna emphasize the team and the collaboration features. How do you do two stages of product marketing on one billboard or one advert?

• 15:49Speaker 00

  Excellent question. And usually this debate comes up not in the billboard, but in the homepage of the website. Imagine now when you've got the full-fledged PLG model, you've got enterprise two. How do you manage that? A friend of mine runs the website for GitHub and this is, you know, classic GitHub problem in spades. My default is the website is about the top of the funnel. It's about establishing the initial customer relationship. You wanna yoke towards that free customer acquisition. And that's kind of the primary thing. Because once you are engaged with them in the product, you have all kinds of additional communication mechanisms, in product, out of product, events, you name it, to engage with them and move them on the journey. But the website is frankly a kind of a blunt instrument.

• 16:31Speaker 00

  And so I point it at that largest pool of unwashed masses. And then as you kind of pull them up into your journey, into your company experience, you reveal the different ways of engaging with them and delivering these other messages. You know, the Heroku core website really was always just about getting free developers to sign up. And in fact, a lot of the work we did, and again, this is my era was 2013 to 2018. So this is a while ago. The enterprise products that we built and spent, you know, customers would spend millions of dollars on. Most of like your Hacker News crowd didn't even know that stuff existed. But that's because it was, we would communicate with them individually or differently versus what you would experience on the website, or in this case, maybe the billboard.

• 17:10Harry Stebbings?

  You know, we mentioned that kind of creation with regards to Heroku and signing up developers. Respectfully, it almost feels like an easier product marketing challenge than other horizontal tools. Because we know we're targeting developers specifically. Okay, we know where they hang out. We know what messaging resonates. If we take something like Notion, there's dentists, there's data scientists, there's mothers and fathers. The horizontal product audience is so large. How do you think about effective product marketing with such horizontal products?

• 17:39Speaker 00

  Really, at its core, it's what is the narrative of your company? What is your industry transformation narrative? How are your customers even going to imagine your product and how the impact it's gonna have for them?

• 17:54Harry Stebbings?

  What was an industry transformation story? Is that it?

• 17:58Speaker 00

  Narrative, yeah.

• 17:59Harry Stebbings?

  Now, I really like you, Adam, but that feels like it came out of an SAP book. Like, what's an industry transformation narrative? I don't know what it is.

• 18:07Speaker 00

  If your company doesn't have one, it should. What you're always trying to do is navigate your company on two dimensions. One is be emotive and the other is be strategic. You need to be emotive, right? Because you want people to care. You want people to have a an experience with your product that they feel emotionally and passionately and viscerally connected to.

• 18:25Harry Stebbings?

  What have we done to create these emotive brands? And how do you create emotive brands then?

• 18:29Speaker 00

  You start by thinking that it's important to do so. Have some intentionality to say, this is important. Experience is important. This is why do like big old software companies suck? Because they're not experience oriented. They don't care about these things. They've lost the connection to the individual user. It's why these companies tend to be PLG companies, because to get the individual user, you have to be empathetic. You have to care about experience. You have to have meetings with the CEO and, you know, the management team where you're debating minor switches in the command line, which, trust me, we did at Heroku. So you have to care. But emotive is just half of it, right? The other part you have to do is be strategic. And if you're emotive and you're not strategic, you're interesting and cool,

• 19:13Speaker 00

  but you'll never command the kind of business impact and ultimately budgets and ultimately growth for your company that you're trying to look for. And it's on that strategic dimension that this idea of transformation narrative, or just strategic impact is maybe another way of thinking about that, that's so important.

• 19:30Harry Stebbings?

  What do people get wrong on the strategic impact side? What are the mistakes that are made there?

• 19:34Speaker 00

  They think about the world too much from their worldview, their situation, their consciousness out versus customer in. The hardest thing about being strategic and about having that transformation narrative is having genuine, what I like to think about sometimes is enterprise empathy. It's very hard for organizations to do is have enterprise empathy, which really means being able to understand how your product sits in the full context of your customer. Politics, its org structure, its business processes, its successes, its dysfunctions. All of your products are kind of sitting in this context. And to genuinely understand that takes a real kind of presence of mind.

• 20:15Harry Stebbings?

  What are the most common ways that you see growth plateau in fast-growing companies? In companies that do plateau in growth, why?

• 20:24Speaker 00

  Maybe kind of the implicit contradiction of being a high-growth company. I see this play out all the time. You have this initial thing, this initial idea that whether you're GitHub, again Dropbox, Heroku, you name it, that has generated unimaginable success. You've gone not just from zero to one, but zero to 10, zero to 100. You've broken through on the internet, one of the rarest things to do. You develop internal ideas and theories about why that was the case. This one thing that you did, the set of values that that thing represented, was this thing that got you to this unimaginable place of success relative to all the odds and all the other companies out there. Then you have to say, I'm going to put those aside, or I'm going to challenge those, or

• 21:08Speaker 00

  I'm going to think beyond that and develop a new framework of value or a way of contradicting even maybe some of the principles that got us this far in order to serve customers at that next level of impact or depth. And that is a very, very hard thing for organizations to do.

• 21:26Harry Stebbings?

  Alex Nordstrom is the co-president and the chief business officer, head of growth at Spotify, and he talks about committing surgery on yourself, which is essentially examining yourself in that core moment of intersection and realizing that you might have to kill the golden goose that's got you to stage two to get to stage three. How do you think about sometimes needing to really examine the core to get to the next level?

• 21:50Speaker 00

  Amen, amen. You know you're doing it wrong when the company, it gets too religious about its own culture, and ultimately it gets too introspective. We are successful because we've always done it this way. We have whatever special T-shirts on Fridays that we spend an exquisite amount of time building, GitHub and Heroku. This is so core to our culture, clearly this has to be the reason for our success. And almost in like this religious way where you don't even know where the growth comes from, you're just afraid of upsetting the growth gods, you romanticize. Or elevate these kind of semi arbitrary aspects of your internal culture that have served you very well in the past,

• 22:32Speaker 00

  but are not what's going to get you to where you go, we need to go in the future. That comes, that's part of you asked before, what's growth, growth mindset? That's growth mindset, being so religiously customer focused that you're willing to challenge the core values that you genuinely believe have contributed to your success. Because they may not be the values or the strategies that will deliver that next frontier of growth.

• 22:56Harry Stebbings?

  Speaking of next frontier of growth, often at that kind of intersection where you do need to switch chapters, sometimes name changes happen, Adam, and I hear you're the master of name changes. Literally, like everyone I spoke to about you was like, Adam comes in and he's like, let's do a name change. And he masters it and he does a brilliant job with it. But why, why do you like name changes and how do you think about strategy here?

• 23:20Speaker 00

  It gets to what I was saying before about capturing that strategic and emotive position. Customers want to love your products. They want to be excited about them and they want to understand and inhabit the vision that they represent. And the positioning and ultimately the naming is the invitation to do that. Two examples, when I was doing some work with GitHub, the team there came up with this great product that let you build workflows. And you know, there are a bunch of names being kicked around like flows and workflows or stuff like that. And now, then I'm, I'm happy to take credit for this. It's of course called GitHub Actions. Think about like workflow versus actions.

• 24:04Speaker 00

  Which product do you want to use? Which kind of captures the essence of, of what this product was about? One way of thinking about what was behind that product naming was GitHub was this kind of inert set of nouns, right? It's just a database. It's just, you know, you're, you're just interacting with these files versus a thing that actually does something. What a powerful concept. What a big change and evolution for the company and for how you want people to conceive of that. What's the simplest way you can kind of capture and communicate and get people excited about that? For me, it was actions. I think that was a pretty good name. You know, at its core, it's just getting to the essence of why people should care about your product and how they should relate to it, just trying to be as customer centric as possible.

• 24:46Speaker 00

  And appreciate that somebody's going to have microseconds to contemplate what this thing is. And so you want to have as great as impact as possible.

• 24:54Harry Stebbings?

  Going back to the element of PLG and moving into enterprise, I'm thinking about kind of naming and what enterprise names resonate best. But the thing that I was really thinking was the hard thing that I often see is often honestly, sales teams feel like second-class citizens when growth is largely product-enabled. How do you think about not having second-class sales teams when it is such a PLG emotion?

• 25:16Speaker 00

  Where it tends to go south, and this happens all the time, is when you cross the streams, is when you don't have the clarity in how you run the business of this is our self-serve product, and this is our self-serve business, and this is how it works, and this is our sales-led business, this is its value proposition, and this is how it works. The most common failure mode is that those intermingle in ways that they're not differentiated by motion, by customer, by product and value proposition, by message. And then you just have teams that are stopping all over each other, and then you have acrimony. So having, again, the idea of these kind of distinct businesses that are adjacent and connected in really important ways versus effectively a scrum, very, very common failure mode.

• 26:01Harry Stebbings?

  Does AI change anything about the PLG emotion, my friend?

• 26:05Speaker 00

  You know, the question is, how is AI going to change customer interactions and ultimately customer experience? And man, is that a fascinating topic. And so, you know, I think what we see in the market today is the most obvious first places are support, case triage, and routing. Okay, from there, how sophisticated can AI become in educating and moving customers through an injury and experience?

• 26:36Harry Stebbings?

  Do you think there's much value to be created in that layer? I mean, that with respect, but do you not think that the core value accrues there to your OpenAI of the world who did voice synthesis and single-handedly kind of destroyed a layer of voice creators in its path?

• 26:51Speaker 00

  I'm of two minds on this. I think a lot of AI value will accrue to existing large distribution players. AI is not naturally disruptive in the way that the shift from on-prem to cloud was, right? Which obviously I had a front row seat to. Moving from on-prem to cloud, the reason why so many companies were so poor in doing it is it required not an upending of their product, it required an upending of their business models. Moving from perpetual licensing, from a sales point of view, from a finance point of view, moving from an engineering process that, you know, delivers software on CD to delivering continuously on the internet and operating a

• 27:31Speaker 00

  service versus just shipping software. These are tectonic shifts in how an organization structures and runs itself. And the further and more public company you are, the harder that is to execute, right? That's why it was so, so hard to do. And we saw so much opportunity for new entrants in SaaS. AI is not the same. AI is much more of a continuous, a continuing innovation, where it's much easier for incumbents to adopt and take advantage of these technologies without upending their entire company structures. So this isn't like early SaaS days where all this new value will be created. That said, when we dream about user experience paradigms or engagement

• 28:11Speaker 00

  models that you and I haven't experienced yet, that's likely to come from somewhere else. There's likely to be new value there in this kind of AI narrative.

• 28:19Harry Stebbings?

  Sarah Tavell from Benchmark said that we will sell the services and not the tools. So instead of, to your point, selling the creation tool, it will sell the output of the creation tool, which AI will have created the product itself. Do you agree with that transition?

• 28:34Speaker 00

  I would kind of call that maybe like full stack AI versus kind of an AI tool thing. Absolutely. What an interesting opportunity that is. You see hints, just hints of this. If you look at some of the support companies, moving from seat licensing, support tool companies, to incident resolution, that's getting, that's further up the stack, that's closer to business value, that's closer to kind of selling the end result and output. If you really squint, you know, what does that look like in other kinds of industries? What would it mean to pay a CRM company per lead?

• 29:06Harry Stebbings?

  Before we do a quick fire, one part of your career we haven't covered is your angel investing. And you've made some pretty awesome management investments. What are the top three things you tell startup CEOs?

• 29:16Speaker 00

  The first thing comes to hiring, right? The first thing I see go right or wrong in a hire is knowing what you are hiring for. The biggest question people tend to get confused on, and wait with me for a minute on this, is are you hiring a poet or are you hiring a librarian? Which is to say, for any given role, you are trying to mix some blend of process expertise and kind of domain or content expertise. This comes up in every single marketing hire conversation I have with founders. Do you want somebody who knows the space, who can use the product, who is expert in talking to customers, i.e. a poet?

• 29:59Speaker 00

  Or do you need somebody who understands all of the process machinery of setting up demand gen and the systems and the analytics and the best practices for customer acquisition, i.e. a librarian? Same thing with engineering. Do you want somebody who's a technical leader, who will configure Kubernetes in their sleep and elevate your technology prowess by their personal ingenuity? Or do you want somebody who's a process leader, who will help the trains run on time and scale the systems? First and biggest place people go wrong is looking for one and or thinking they need the one and hiring the other, or not being clear about it. Because people like you and me tend to be a little of both. Like, Harry, you're a poet, right? If you were a librarian VC, you'd have a big, you know, supercomputer sitting behind

• 30:44Speaker 00

  you, running math models, doing high-frequency trading. That's not you. You're a man of stories and people and narrative. Like, that's poetry. It applies to your VCs, too. So that's the first thing. Number two, the power of alignment. I'm a big believer in kind of planning methodologies, and they tend to have a bad rap. Like, everybody's had a bad experience with OKR, right? Where it just feels perfunctory and like it's bureaucratic and it has no impact. And most of the time, it is done wrong. I use a methodology from Salesforce that's called B2MOM. It doesn't matter what methodology you use. It doesn't matter if you have a methodology at all. If you are doing it right and you are genuinely aligning and focusing, and you can feel it viscerally, you can Feel it miserably. There is nothing more powerful.

• 31:28Speaker 00

  An organization's time and attention and focus is the most precious resource you have. And your ability to actually steer and navigate that across this collection of people, across these different functions, across this chaotic environment. If you can unlock that power, it is a superpower. And that is why you have these planning methodologies, not so that you can do some checkbox accounting on people's performance or whatever.

• 31:53Harry Stebbings?

  Do I have to have a planning methodology from day one? And I know you said that you can use whatever one you want, but do you advise any founders on a specific type that generally works well from zero to one?

• 32:03Speaker 00

  The very simple version is make sure you're all getting in a room, ideally cross-organizationally, and spending the time to hammer it out. So it's usually a day or two minimum to get to your eight shared priorities in stack rank. If that's the simplest recipe, if you're trying to take anything on, I've done a bunch of work with TailScale, brought this to the organization, in this case, how we are structuring the self-service business. And with having that clarity, having the time spent across organization to say, these are just even the buckets how we're thinking about things and this is their stack rank. It's simple. It doesn't have to be complicated. It's hugely powerful. You will know when the team feels the value. It won't feel like that OKR spreadsheet that's pointless and administrative.

• 32:46Speaker 00

  It'll feel like, ah, clarity, alignment. Okay, let's go. We now know what we need to do.

• 32:51Harry Stebbings?

  How often do you do this?

• 32:52Speaker 00

  For the company, you do it on an annual basis, but it's a great tool to deploy if there's a new area or a project where you just need to get everybody on the same page quickly. But the cycle should be annually.

• 33:03Harry Stebbings?

  Okay. And then number three?

• 33:04Speaker 00

  Number three gets right to that question about, about how often do you do it? What I call the seasons of software. And that is imagine for your business, a giant metronome that is just sitting there, ticking. And part of any leader's job is to coordinate and align the activity of all kinds of diverse sets of people in their activity and their nature. And getting aligned to a cadence, to seasons, which is typically a quarterly boundary, is so helpful in helping you Organization understand when are we working? When are we all lifting our heads up and saying, okay, boom, here we are? And just having everybody operate on a common schedule. And we have the seasons built in. I've done this at countless companies.

• 33:49Speaker 00

  And it's honestly, one of the most powerful, simple things you can do is just have quarterly releases. It doesn't matter what your actual software development schedule or process is. But once a quarter, do a blog post, do a webpage that says, this is our Q1 release. Here's what's in it. This is our spring release. Here's what's in it. Even that basic cadence creation, that seasons of software, that creating that kind of predictability starts to create that beat and rhythm that everybody starts to align to. And it's incredibly powerful to keep the organization moving at a constant and hopefully accelerating pace.

• 34:25Harry Stebbings?

  Listen, we mentioned the angel investing, final one before a quick fire. I think one learns from mistakes. What's been your biggest angel investing miss, Adam? And how did that impact your mindset?

• 34:35Speaker 00

  Oh, I mean, if we're going to talk about deals that got away, I'm good. You know, it's morning here, but I'm going to need to trade my water for a drink. I saw the Twilio seed. I didn't think big enough. And this has been a problem with my kind of personal cognitive model for a while. I didn't think big enough. I didn't understand how much value was there. And I over indexed on how commoditized it would be. But also it was six people in a room, you know? It wasn't exactly the same vision as we see today.

• 35:04Harry Stebbings?

  Oof, yeah. Can you give me one more? One more.

• 35:07Speaker 00

  I think if I worked a little bit harder, I could have used some relationships to maybe get into the Stripe seed. I definitely had visibility into it.

• 35:16Harry Stebbings?

  Oh.

• 35:18Speaker 00

  Yeah, I know. Remember I had done, I was the platform guy at Salesforce. And so even in 2007, you know, I was doing developer stuff since 2003. So I remember meeting with GitHub when they were three people. I was a seed investor in Heroku from the beginning. So I saw all that early developer stuff. So Twilio, Stripe, all that kind of stuff. I was the first check into Docker. That's a whole nother story.

• 35:42Harry Stebbings?

  Did you get recapped?

• 35:44Speaker 00

  I did. Well, I was the first check in. I was in the first round with Docker. I mean, I remember meeting with Solomon and those guys at Founder's Den on Third when there was like three people in a room. Yes, we did get recapped and I was not happy about that at all. Look, I mean, I can be not happy about it. I'm just delighted that Solomon team had such an amazing impact with their vision and that I could even have some infinitesimal part in it.

• 36:08Harry Stebbings?

  Oh.

• 36:09Speaker 00

  But that's done.

• 36:09Harry Stebbings?

  That's done. Okay, listen, I want to do a quick fire answer. I say a short statement, you give me your immediate thoughts. Does that sound okay?

• 36:15Speaker 00

  Okay, we'll see if I can talk quickly.

• 36:17Harry Stebbings?

  Oh, you'll be great. So what have you changed your mind on in the last 12 months?

• 36:21Speaker 00

  The macro environment for SaaS. I'll say it's just more uncertain than maybe I thought it was.

• 36:26Harry Stebbings?

  Why is that? That's really interesting.

• 36:28Speaker 00

  Just looking at growth across the industry, I sure hope it comes back, but it's taking longer than it has. And if you look at where growth rates are, even for SaaS leaders this year compared to last year, it's a more challenging time than it was last decade.

• 36:43Harry Stebbings?

  Jason Lamkin, you mentioned earlier, and I have a big bet on IPO markets and the timing of their opening. Jason has to essentially has bet that they will open H224 and I've bet that they will not open in 24 at all and they'll be earliest H125.

• 37:00Speaker 00

  I'm going to side with, not to disrespect my current host, I'm going to be an optimist because hey, we can't be in this business if we're not going to be optimistic. So I'm going to go with Jason.

• 37:08Harry Stebbings?

  No, that's awesome. You can both be wrong together. What would you, Jason now is like, bugger, I've got to pay you a lot of money. What would you most like to change about the world of growth, Adam?

• 37:19Speaker 00

  Get people to think and operate more holistically, that growth is not a function, it's something that really has to pervade to work, it has to pervade all aspects of the organization.

• 37:32Harry Stebbings?

  How do enterprise software cultures compare to consumer ones?

• 37:36Speaker 00

  They are much more customer centric and frankly more predictable and controllable.

• 37:45Harry Stebbings?

  How do you advise founders that you work with on growth teams versus baking growth into other functions in the company?

• 37:53Speaker 00

  I tend to be shy on specializing growth teams early because growth is an optimization and you can pursue local maxima and early stages, you typically have much bigger fish to fry than thinking about local maxima.

• 38:08Harry Stebbings?

  Best advice to someone leaving university today?

• 38:11Speaker 00

  Be good at two things. Don't be the best at one thing. Be pretty good at two things.

• 38:17Harry Stebbings?

  Final one, Adam. 10 years' time, 2034. Where do you want to be then? Are we still angel investing? Are we back operating? Are we founding a company? What's the plan?

• 38:25Speaker 00

  I want to be as excited and enthusiastic and energized about the world of technology as I have been for the past 10 years and the previous 10 years before that.

• 38:39Harry Stebbings?

  Adam, listen, as you know, I've wanted to do this one for a long time. Thank you for putting up with my many twists and turns of conversation and you've been fantastic.

• 38:46Speaker 00

  Harry, I'm delighted to be able to have it. Thank you to your listeners. I hope you find it valuable and I'll look forward to continuing the conversation and getting that beer in London with you.

• 38:55Harry Stebbings?

  It's so funny. I started doing these verticalized shows because I really wanted founders to get such actionable takeaways. Adam is a master of PLG. I could not thank him more for being so structured in his thoughts there. And if you want to see the full episode of you, can of course, check it out on YouTube by searching for 20VC. That's 2-0-V-C. We always love to see you there. But before we leave you today, short form video has never been more important for your business. Social media managers, growth marketers, this is the single biggest opportunity you have today. They say ad creative is king, but man is UGC creative a pain in the arse to pull together? Imagine if you didn't have to. Captions just launched AI creator ads. So you can produce dozens of UGC style creatives instantly.

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• 41:07Harry Stebbings?

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