Merci Grace (ex-Head of Growth at Slack) on PLG, interviewing, storytelling, building a diverse team, hiring salespeople, building a growth team, and much more

Merci Grace has been a founder, an investor (at Lightspeed Ventures), head of product and growth (at Slack), and is now a founder again (Panobi). She’s also one of the co-founders of Women in Product, and Fast Company named her one of the Most Creative People in 2017. — Thank you to our wonderful sponsors for making this episode possible: • Dovetail: https://dovetailapp.com/lenny • Mixpanel: https://mixpanel.com/startups • Whimsical: https://whimsical.com/lenny — In this episode, we cover: [3:41] Merci’s path to Head of Product and Growth at Slack [4:42] What Merci learned from being a VC that helps her be a better founder [6:50] How to tell a compelling story [9:43] What most people don’t know about Slack [10:27] Why Slack hasn’t created a consumer/social product [15:14] How Slack innovated the PLG motion [17:14] Slack’s early growth strategy [19:57] Slack’s activation point [22:10] Why it’s important to find connectors within a company [26:40] Lessons from optimizing Slack’s onboarding flow [32:12] Most common mistakes in going PLG [35:56] Signs you can go PLG [38:10] PLG vs. bottom-up [40:23] Importance of day-zero value in your tool [42:17] When to bring in your first salesperson [44:47] How to hire amazing people [50:21] Storytelling and Slack’s culture [51:04] How and when to build a growth team [52:08] How to build a more diverse team — Where to find Merci: • Panobi: https://panobi.com/ • LinkedIn: https://www.linkedin.com/in/merci/ • Twitter: https://twitter.com/merci • Website: https://mercigrace.co/ • Women in Product: https://www.womenpm.org/ This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.lennysnewsletter.com/subscribe https://www.lennysnewsletter.com/subscribe?utm_medium=podcast&utm_campaign=CTA_2

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

• 0:03Lenny Rachitsky?

  Mercy Grace has been a founder and investor, head of growth at Slack, and now a founder again. She's also one of the co-founders of Women in Product, which if you listen to this podcast, you know I'm a huge fan of. In our conversation, we cover what she's learned from her time helping Slack build a product team and figure out growth, how Slack innovated the concept of product-led growth, and scale it to become one of the biggest B2B companies in the world, the most common mistakes companies make when going product-led, signs you can and should go product-led, when to hire your first head of growth, and what to look for, a bunch of advice on hiring, something Mercy is incredibly good at, and so much more. I hope that you enjoy this episode with Mercy Grace.

• 0:49Lenny Rachitsky?

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• 1:34Lenny Rachitsky?

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• 1:59Lenny Rachitsky?

  This episode is brought to you by Mixpanel, offering powerful self-serve product analytics. Something we talk a lot about on the show is how startups can build successful and amazing products. And relying on gut feeling is a really expensive way to find out if you're heading in the right direction, especially when you're raising money, because VCs don't want to pay the price for these kinds of mistakes. That's why Mixpanel will give you $50,000 in credits when you join their startup program. With Mixpanel, startups find product-market fit faster, helping you take your company from minimal viable product to the next unicorn. Access real-time insights with the help of their pre-built templates, and note that at every stage, Mixpanel is helping you build with confidence and curiosity for free.

• 2:43Lenny Rachitsky?

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• 3:02Lenny Rachitsky?

  Mercy, thank you so much for joining me. I've always been such a fan of yours from afar through your writing and your Twitter. And we've interacted a bit on Twitter. We've never really had a deep conversation, and so I'm really excited and so welcome.

• 3:18Speaker 01

  Thank you. Excited to be here.

• 3:20Lenny Rachitsky?

  I'm excited to chat. You have this incredible background. You're a founder, you're a game designer, you're head of product, head of growth at Slack. Then you became a VC and a founder again. Such an impressive and unusual journey. And I'm curious how you got into product initially? And then just how'd you kind of work your way up to head of product and the head of growth at Slack?

• 3:42Speaker 01

  Yeah, I got into product accidentally. I was first a game designer and actually started a venture-backed game studio right after college, when I had absolutely no idea what I was doing. I got my first term sheet as a founder before I knew what venture capital was, purely accidental. And it's funny, because my career arc went founder, game designer. Product management, VC, CEO of your own startup. Something that people try to do on purpose now. And I was not trying to do it on purpose at all. I was just following my curiosity and my love of how thinking works and how people make decisions.

• 4:25Speaker 01

  And so that really went from games to product management to venture and then back into product.

• 4:32Lenny Rachitsky?

  Having been in VC now, having your own startup. What did you learn in that time that maybe surprised you now being a founder that like, oh, wow, that was useful to learn and experience?

• 4:42Speaker 01

  Oh, yeah, so many things. I think, you know, one of the things that is quite obvious from the get go. When you have had, you know, a few months under your belt, even seeing a bunch of pitches. And seeing the one on one pitches and then seeing the partner meeting pitches. Is how different really great CEOs and, you know, startup leaders are at storytelling. At coming up with a pithy answer, at owning the room. And how different, you know, the fundamentals of their businesses might not even look a lot better. But when you're in that room, you feel so differently about it. So I think how much really, you know, the founder matters. And then the other thing, and this is kind of my surprising thing about of that venture that I tell people that I didn't expect to learn.

• 5:28Speaker 01

  Which is especially on Twitter and even, you know, in the media and the press. Some merger happens or doesn't happen, some deal happens or doesn't happen. And there's a lot of armchair quarterbacking where people are sort of filling in. Oh, that happened because, you know, this fundamental shift in the market for X, Y, Z. Like because this research division and blah, blah, blah. A lot of things that seem really objective and really rational. But deals happen or don't happen typically because of interpersonal dynamics. And sometimes even just like personality clashes or, you know, petty holdouts from years before. And so I think like how personal.

• 6:13Speaker 01

  It is and how it's not always necessarily about the fundamentals business. It's oftentimes because people just can see you as a founder or CEO or can see you, you know, running something like this. And so it's very subjective, more subjective than I thought it would be.

• 6:32Lenny Rachitsky?

  It's interesting in both examples, it comes back to the founder and how they present and how they behave. On the first point, presenting storytelling, being someone that VCs kind of respect and want to invest in. Is there anything that you have learned how to get better at that sort of thing? Or is it just kind of do it for a while and you'll get better? Is there something that folks can do to get stronger at that?

• 6:54Speaker 01

  Yeah, you know, when you have the opportunity to tell the story, you know, when you have a pitch, when you're writing a blog post, when you're speaking at a conference, really it's your stage, you get to manage the narrative and to say things in a certain way, position things in a certain way. And so that's where writing is really important. So even for a pitch or a conference talk or something like that, always start with an outline, always get really clear about what's the arc of the story that you're telling. And honestly, looking at things like movies and TV shows, every pitch should start in the middle of the action, like a thriller or like a drama,

• 7:35Speaker 01

  like a Mission Impossible movies, always start with Tom Cruise doing some crazy shit. You know, in the middle of the job, right before the job that the actual movie is about, because it gets your attention. And so I think that's one of the things that people often try to fit whatever the template they think is and often in business, it ends up being, oh, what's this more staid, boring way to say this? And in truth, great storytellers are not boring and they don't seem business-y.

• 8:09Lenny Rachitsky?

  I love that. Very tactical piece of advice. Start like with the action and the climax and kind of work backwards from that almost. Are there any examples of that that you recall of a founder doing that or a story that does that just to kind of make it even more concrete?

• 8:21Speaker 01

  That is how great pitches always go. So oftentimes, you know, and this is just every sort of like mediocre pitch, mediocre pitch deck that you see will start with, oh, here's the market.

• 8:34Speaker 01

  Or something like that, right? Which is like, this isn't a presentation about the market. This is a presentation about you. And so if you are going to say that you're the only founder that could start this company, or you have this really unique insight, start there. Even though it feels like you haven't built up to it yet, or anything like that, you don't have to. You'll backfill that later, but getting their attention so that, you know, they close the tab, they put down their phone, that's the most important thing. You can, you know, still lose them later in the narrative, but getting attention, just like, you know, going to market and getting attention for a startup is the kind of P zero for any of those interactions.

• 9:16Lenny Rachitsky?

  I love that. So start with the insight. That's a really good piece of advice. I could see a lot of decks improve having done that. And I know a lot of VCs look for what is the unique insight this founder has. And so that's a really good idea to start with that and kind of blow people's minds a little bit.

• 9:31Speaker 01

  Yeah.

• 9:32Lenny Rachitsky?

  Speaking of amazing founders, I want to segue a bit into talk about Slack and your experience there.

• 9:38Speaker 01

  Yeah.

• 9:38Lenny Rachitsky?

  Stuart, what's something about Slack that maybe most people don't know?

• 9:44Speaker 01

  Oh, yeah. It's funny, especially now, you know, many years later. But Slack internally, in, you know, 2015 kind of timeframe, it wasn't totally clear to people that the social aspect of Slack wasn't something that was important or meaningful to Slack internally. And so people would, you know, email us or talk to us at parties about, hey, have you seen Discord? You know, they're coming for you. It's exactly, and like, it's similar. It's not, you know, going after the same market. And people would actually join the company with some very concrete ideas or expectations about the social use case for Slack.

• 10:27Speaker 01

  And so one of the best things, honestly, that the early kind of founding team at Slack did and were able to give to, you know, those of us who followed them, was the understanding that this is a tool for work. And that made thousands of small decisions instant and obvious. There was this internal campaign that was very irritating to me at the time from people saying, we absolutely need to allow people to block each other on Slack.

• 10:58Speaker 01

  You know, all these people who are using it, open source communities, you know, all these different use cases for it. And I went on a bit of a rant, I would call it, in a, in our, I think it was our culture channel, which was just its own sort of like total shit show. But this channel where people would sort of do this like, you know, another thinking about Slack. And there was this consistent question about blocking. And so I, you know, went on quite a little tirade about how blocking is a tool. And so, yes, if someone is, you know, you feel harassing you, and you would like to block them in the immediate moment, it will make you feel better. It'll make you feel a little more

• 11:40Speaker 01

  safe. But businesses have an HR function, and they should absolutely know. You're first of all, sort of brushing it under the rug, and letting this person go off and, you know, treat other people in this negative manner. And then the sort of counterpoint that I also provided is that blocking isn't always used by people to protect themselves. It could be used by people who don't like you at work to exclude you from important meetings or discussions. Your performance drops off, you eventually get put on a pit, or you have issues, you know, continuing to perform your job at work because people singled you out and multiple people blocked

• 12:22Speaker 01

  you and excluded you from the conversation. And I think like that argument eventually sort of made headway with people. But the fact that it was, you know, such an open conversation at the company really like helped me see that it wasn't obvious to everyone that Slack was a work tool, because it feels so social and it feels so fun.

• 12:44Lenny Rachitsky?

  I love that reversal and kind of like coming back to why this might hurt you versus why you may think you really need this feature.

• 12:52Speaker 01

  Yeah.

• 12:52Lenny Rachitsky?

  What this makes me think about is I actually use Slack for social feature in a big way. My newsletter subscribers, there's about seven, eight thousand people in Slack.

• 13:01Speaker 01

  Wow.

• 13:02Lenny Rachitsky?

  And it's the use case that you don't believe Slack should have done. And I'm curious, do you think, no hard feelings, do you feel like they will focus on this in the future? Or should they maybe in the future? I'm guessing there's just not a lot of money to be made there. And so I could see why that's not a focus. But do you think that'll change?

• 13:21Speaker 01

  Yeah, it's interesting. So you are participating in, you know, kind of like this creator economy that wasn't around at the same level in 2015. The kinds of communities that were happening on Slack would be, you know, Burning Man community, an open source community that was massive and everyone had a weird Linux setup. And so it was usually time consuming for, you know, our support team to, you know, help get people's machines working and things like that. So I don't know, because what you have is a little bit of a prosumer use case, right? Where people have a personal, but also, you know, very much a professional community with you as well. And I think that Discord is moving more in that direction. It's a little bit more of a natural step for them to take, I think.

• 14:07Speaker 01

  And it's funny because for me, you know, Slack doesn't exist anymore in the way that it did even a few years ago. It's not an infinite company anymore. And so I think that question would be whether it aligns with the long-term interests of Salesforce.

• 14:20Lenny Rachitsky?

  Yep, that makes sense. We don't have to get into too deep here, but I really like Slack for my use case because my subscribers are generally already in Slack. They're like at work.

• 14:29Speaker 01

  Yes.

• 14:29Lenny Rachitsky?

  And Discord is just such a noisy thing and such a new product for people to kind of use. And people often love to hate on Slack because it's like this big old thing and they're using it for work. But it's actually amazing for my use case. And so I'm going to keep using it and Discord.

• 14:44Speaker 01

  I know. I still have the women in product community on Slack as well for that same reason. And because it's professional adjacent and it is tied into your professional identity as a person. But also, yeah, you're already on it. So re-engaging your community is more a question of like an at channel or a mention than it is like having to re-engage using an email campaign or something like that in order to get someone's attention.

• 15:11Lenny Rachitsky?

  Going in a slightly different direction and into growth. Correct me if I'm wrong, but Slack was one of the early innovators in this whole product-led growth movement. Is that accurate?

• 15:21Speaker 01

  Mm-hmm.

• 15:21Lenny Rachitsky?

  Okay, cool. So what I'm curious to hear is, what was it like, early on, helping figure out how to grow this thing that became this behemoth, massively successful company, and kind of figure out this idea of product-led growth? And then I'll ask a couple of questions as we chat through this.

• 15:37Speaker 01

  Yeah, so, early on, I mean, I definitely got the job that I got at Slack because I had been a game designer. And Stuart Butterfield, the CEO and founder, and I knew each other from our shared time, having both run, it turned out, very unsuccessful gaming companies. So, and being people, I think, who have the same weird taste in kind of indie games and things like that. And so, he knew, and this was, you know, part of our discussion, that I would bring a familiar sensibility to the role I was hired to, which wasn't called growth at first, it was new user experience. So it was the onboarding experience, you know, signing up, getting started, and that's really where we started with it, was coming at it

• 16:22Speaker 01

  from not trying to juice a specific number, or anything like that, but a belief that this is a great product, and we had product-market fit, that was pretty obvious at the time. And so, how do we help sort of clear away the fog of war, and let people see the map that is, here's Slack, and here's where everything is, and here's how you can get started using it?

• 16:50Lenny Rachitsky?

  That is so interesting that so much of that was rooted in game design. I had no idea. That's so interesting that you both had that experience. It definitely shows in the experience. So, at that point, I imagine product-led growth was not like a thing, it was just, how do we grow this thing?

• 17:04Speaker 01

  Yeah.

• 17:05Lenny Rachitsky?

  What did you learn from that experience of just like, how to grow a thing like Slack that is user-first, and kind of the way that a lot of companies are trying to grow these days?

• 17:13Speaker 01

  Yeah. You know, I think one of the best things that we did is that we really started with curiosity first, and we weren't like, okay, here are all of our baseline metrics, we already know what's important, let's just do this. Because April Underwood, you know, former CEO at Slack, had this great line that she would say internally, which is, "No one has built Slack before." And I really loved that as this kind of like mental starting place where it's like there isn't going to be this cookie cutter thing. And it was funny, too, in the experience of building out onboarding and running all these experiments at Slack, to see people copy things from the product that we knew were not working.

• 17:59Speaker 01

  And so I think when I first joined early 2015, we had an onboarding experience that had these little circles that would animate, and it was very light, too light, there were too many of them. And I remember my first few weeks doing customer support in Zendesk, and I would get screenshots from people reporting some unrelated bug. And notice, this person has been a user for six months, and I can see they still have these little throppers all over the place. Okay, this is not working. People don't understand that they're supposed to click on them. I think Discord has a similar design, but they use the little World of Warcraft style exclamation point, which I'm sure is much more effective.

• 18:41Speaker 01

  But it was hilarious and also kind of sad to watch people trying to replicate things in our products that actually weren't even working for us, but they had no insight into that.

• 18:52Lenny Rachitsky?

  I had the same exact experience at Airbnb. People would just sit there, copy everything Airbnb is doing, and have no idea. There's so many failed experiments that haven't been unlaunched, and we're just trying to figure things out.

• 19:03Speaker 01

  Yeah, exactly. Yeah, we're all trying to learn, you know, and I think it is very dangerous to say, this specific metric is an R star for every business. I think one of the most surprising things, and of course, when something's true, it becomes obvious, and of all surprising, but we had thought of Slack as a sync, but also async kind of a platform. But then, over the course of a bunch of experimentation and user research, saw that a bunch of the things that moved the needle for us were about getting people into their new Slack team at the same time. So Jules Walter, PM on the Riff team, did some experiments around push notifications on mobile, just getting people in.

• 19:48Speaker 01

  It's still live in the product today, because it was, it turns out massively successful. It really matters, you know, that someone is there to greet you when you join.

• 19:57Lenny Rachitsky?

  Did you have kind of a rule of thumb? How many people needed to be in a Slack for it to start to take off?

• 20:02Speaker 01

  We had a activation metric that we got to through some initial regression analysis and then we tested the hypotheses that we developed from that regression analysis and made it into the product. And so for us, it was three people, real human beings, not bots, and 50 messages, real messages, not people, because that was our real messages, not bot messages. Three people ended up being the lowest number at which things do start to break. So having a one-on-one conversation is a lot easier. Having, you know, one-on-one text message or email, anything is going to be

• 20:44Speaker 01

  more straightforward. There's almost nothing, and especially when we were comparing ourselves so actively and successfully at the time to email, there is nothing broken about, you know, a 35 message, one-on-one email conversation. It's totally fine. It's this year, it's of letters back and forth. As soon as you add one more person to that, it gets a lot messier.

• 21:08Lenny Rachitsky?

  I forgot about that initial vision of Slack trying to replace email. That's not even, we talk about anymore. Interesting.

• 21:14Speaker 01

  We never talk about it. Yeah. And now it's funny. I'll see some of the, you know, media that gets created or the television commercials and I'm like, what is this? You know, balls moving around and little grooves and stuff. And I'm like, I'm, I'm not sure what they're supposed to be comparing themselves to, maybe just themselves.

• 21:34Lenny Rachitsky?

  Right. I think Slack is Slack now and you don't need to replace email. I think they found a niche.

• 21:40Speaker 01

  Yeah.

• 21:40Lenny Rachitsky?

  That also reminds me, I actually tried using Slack with my wife. It was just me and my wife in Slack. And we tried to use that as our main communication hub and it was, it was a little much. We moved away.

• 21:50Speaker 01

  Yeah, it is. It's funny how it's just a little too much. Architecture, a little, yeah. Too big of a house for two people, kind of.

• 21:58Lenny Rachitsky?

  That's right. Yeah. But it was fun. We had channels for events and. Love, we had a love channel. Anyway.

• 22:05Speaker 01

  No.

• 22:07Lenny Rachitsky?

  So you mentioned this push notification feature being really effective. Is there anything else that just kind of stands out to you as these are just like lessons I've learned on how to grow a product that's kind of prosumer, product led, bottom up-y, things that stick with you that you bring to future products?

• 22:22Speaker 01

  Oh yeah, one of the big ones in that regard is the understanding that there are people who are just more social. Right? I'm sure you're this kind of person. You're a connector and you know a lot of people, you love introducing them, bringing them together. We are who we are fundamentally. And so within any population, including a user base, there will be people who are more likely to invite other people to the product or to bring people around into it, especially if that's something like a collaboration product. And so I thought it was much easier to get those people to share the product with bigger groups of folks than it would be to get someone

• 23:04Speaker 01

  who's just not like that, who never is the host, who doesn't invite people to stuff. It's a lot easier to get someone to send more invites than it is to get someone who's a little shy to even send one.

• 23:16Lenny Rachitsky?

  So what that makes me think about is just like pick the right persona in ICP. A person, especially for a social oriented product, will invite people into the product. Is that kind of how you think about it?

• 23:27Speaker 01

  Yeah, exactly. And it's knowing the persona and then it's also doing things like making sure that someone has multiple opportunities to invite, even though it's a counterintuitive thing. Across many types of products, I have seen user interviews where people are going through an onboarding experience and they come to, you know, the invite screen and they say, I would never invite someone, you know, I haven't seen the inside of this product. I wouldn't do this, et cetera. And that is advice to not listen to. You need to have invites early and often so that you catch people who want to share it, are social people. And then for the people who

• 24:09Speaker 01

  would never participate in that, they can ignore it or skip it. But that doesn't mean that it shouldn't be all over the entire product.

• 24:16Lenny Rachitsky?

  And it's optional at that point, right? It's just like, if you want to invite, invite, but you don't have to.

• 24:21Speaker 01

  Yeah, yeah, I'm never a dark pattern person. You know, I think it was Marco Polo, the kind of async video chat app, did a bunch of dark pattern stuff, I remember, maybe three or four years ago, where they would auto-select a ton of people and, you know, send them a text message, you know, that looked like it was from you. It was really awful. So I'm definitely not a dark pattern, growth at any cost kind of a person, but it is like, um, you know, have the, have the invites there for the people who, who will want to and the people who, even though they sound pretty offended and their tone of voice when they talk about it, it's not enough for them to, you know, not engage with your product.

• 25:00Lenny Rachitsky?

  I find the same pattern effective with credit cards for like a subscription app and B2C subscription, just like this is a trial. You can enter your credit card now if you want, or you could do later. And I find that drives a lot of growth and revenue because a lot of people are just like, yeah, I'm ready. Like, yeah, let's just do it.

• 25:15Speaker 01

  Yeah, exactly. I think people often, and this is probably even a larger statement about human beings, but we're so focused on ourselves, right? And I think that's one thing that parents tell middle schoolers is like, I know you feel really awkward right now, but so does everyone else. No one's thinking about you. They're just thinking about themselves and how they come off. And then we'll do that to our own detriment in business, where you'll set up something like a timed trial and say, okay, well, I want to start getting revenue as soon as possible. So we'll just let people have this for a week. But the truth is, for every week that you continue to let people use it, you get incrementally more people who do convert because their timing on buying your product

• 26:01Speaker 01

  has nothing to do with your schedule or how quickly you want revenue and everything to do with where in the quarter is it for them? Do they have a new project that they can use to try out your product?

• 26:12Lenny Rachitsky?

  I love that advice, just kind of step out of yourself and recognize people have different motivations and are in different stages of the journey and may just be ready to go and give them a chance and it may actually work out really well. I wanted to chat a bit about onboarding. You mentioned that you initially started working on onboarding and that kind of turned into this growth team. And I find onboarding often ends up being one of the biggest levers for retention, obviously for activation and then just broadly growth. Is there anything that you've learned over time of just like how to think about onboarding and how to optimize onboarding, how to approach onboarding as a growth team and maybe just as a startup?

• 26:49Speaker 01

  Yeah, you know, my thoughts and feelings that onboarding really go back to my experience designing games where I would design the game from the onboarding experience. So there wasn't a sense of, okay, here's exactly, you know, the game and all of the game dynamics, but how you introduce something, how you frame something matters a lot. How will someone discover this? And so if you can think about even an online product that you're working on from that first introduction, what will it be like for someone to come in here? What will I be asking them to integrate with? Will I be asking them to upload something, to invite someone else?

• 27:33Speaker 01

  What are the steps between the user and the full value of your app? Is something that's very useful to think about, literally from the first days that you're designing the product. And unfortunately, many people think about onboarding at the last minute and it ends up being the final, you know, piece of product work or, you know, and this may be a little bit controversial of an opinion, but I'm not a fan of the plug and play frameworks for onboarding for that reason. I've seen them advertised actually using like, here's how to replicate Slack's onboarding in using our tool and things like that.

• 28:14Speaker 01

  And I'm like, oh God, don't do that because what worked for Slack won't necessarily work for you and it certainly won't be like native and feel deeply tied into the product experience, which it absolutely should be.

• 28:28Lenny Rachitsky?

  This episode is brought to you by Whimsicle. When I ask product managers and designers on Twitter what software they use most, Whimsicle is always one of the most mentioned products. And the users are fanatical. Whimsicle is built for collaborative thinking combining visual, text, and data canvases into one fluid medium. Distributed teams use Whimsicle for workshops, whiteboarding, wireframes, user flows, and even feature specs. And it includes thousands of built-in icons and a rich library of templates. See why product teams at leading companies call Whimsicle a game changer. Visit whimsical.com/lenny to have my own templates added to your account when you sign up. That's whimsical.com/lenny.

• 29:14Lenny Rachitsky?

  For somebody that's trying to improve their onboarding and think about onboarding, are there examples of companies and flows that you think of that are really good? Maybe other than Slack?

• 29:25Speaker 01

  Yeah, the ones that I really find a lot of delight in tend to be ones that are deeply intertwined with the product. So it's the product. Throughout the course of using the product, you learn, you get on-boarded to the value of it. Probably the clearest tools in which you can see this dynamic are things like to-do lists, where there will be an item on the to-do list that says, you know, "Click the square next to this to mark this task as complete." And now you've just completed your first task and it's really in there and it doesn't feel like this fake kind of veneer on top of it. I really like something that is not kind of pasted on top of the experience,

• 30:08Speaker 01

  but something that uses the product to teach someone else how to use the product.

• 30:13Lenny Rachitsky?

  You're telling me there's no easy plug-and-play silver bullet solutions? Goddamn.

• 30:18Speaker 01

  Yeah, I'm sorry. It turns out it's just hard work. And the other thing that people don't do enough is stay in touch with like the real human experience of what onboarding is for your product. So it's very easy, especially if you work at a company that has a high volume of signups every day, to just always look at the conversion number and, you know, anonymized. Pile of people winding their way through your kind of actually made up benchmarks for them. And it is messier and way more awkward to have to talk to human beings, but absolutely necessary. You want to hear the tone of voice. You want to see the expression on their face.

• 30:59Speaker 01

  So once a month, ideally, you should just have some sort of a schedule for yourself where if you're at a larger company and you have a user researcher who can recruit people for you, that's great. But if not, just go find people who either fit the demographic for your user or even are your user and have them, you know, sign up for an account and walk you through it. And it is embarrassing, but very educational.

• 31:25Lenny Rachitsky?

  That's awesome advice. It makes me think about Teresa Torres and her framework around continuous discovery habits, where she has this whole framework of setting up counties where people could just book you and you automatically talk to a customer every week. And we're going to have her on a different episode, maybe before this, maybe after this. I'm not sure how it's all going to play out, but that's a great reminder to invest in actually talking to customers. And that's the good segue. I wanted to come back to the whole idea of product led growth, especially because it's so popular and hot and everyone wants to be product led these days because it's cheaper and grows quickly and you have to hire big sales teams. So first question is, what have you found in looking at companies, talking to companies, advising companies?

• 32:06Lenny Rachitsky?

  What are the most common mistakes would you say startups make when they think about figuring out product led growth?

• 32:12Speaker 01

  Oh yeah. So one of the most common things that I see folks do when they haven't had much experience, really simplifying onboarding down or something like that is they'll often have an idea of, okay, here are the seven things that you have to know about our product. And one of those is usually some power user feature that an executive really likes or something. And they'll have this idea that they want to have like a carousel that meets you when you open up the product. And it takes you through all of these like informational pains. And what's funny is that then if you were to talk to those same people in, you know, usability study for some other product, they'd be like, oh yeah, no, click, you know,

• 32:57Speaker 01

  I'm not going to read that. But again, that's that sort of like, we have this expectation of our users that they're going to give a shit, you know, that they're going to read the text, that they're going to be at the level of investment in our product that we are, which is just categorically false. You have to understand that people have really limited attention and no one cares about your product the way that you do. And so it can feel like you're dumbing it down or oversimplifying. And if you don't feel that way, you know, about your onboarding, about the growth work that you're doing, it's probably too complex.

• 33:33Lenny Rachitsky?

  Do you find that if you have a carousel, something's gone wrong? Or are there times when a carousel and kind of a little guide makes sense?

• 33:41Speaker 01

  If the carousel is in a product where that's the modality of the product. So, you know, I could see a carousel honestly, working for something like Tinder, where that's basically what the product is, right? You're swiping through it. Sure, you can use a carousel for that, right? But only because it matches the user experience of the core product. But most, you know, apps that use carousels at the beginning, it is actually this like pain that's built to be dismissed quickly.

• 34:14Lenny Rachitsky?

  Interesting. So what should people do when they're just like, oh, you're going to create this whole introduction carousel? Is your advice kind of simplified such that you don't really need that broadly?

• 34:26Speaker 01

  If you haven't been able to talk someone out of it, you can always show them. So I'm a huge fan of learning without shipping and building paper prototypes or building, you know, prototype in Figma or Proto Py or something like that. And just do a bake off and prove the point, not with you saying, hey, like, CEO, you're wrong about XYZ. We shouldn't have this like three image carousel. Just come up with some different alternatives, you know, like tool tips that are embedded in the product, things that are obvious next steps that you can guide people to within a sort of like constrained user experience. And then you'll just be able to actually compare

• 35:09Speaker 01

  whether people understood it, you know, experience A, or whether more people understood experience B. And it can be shockingly clear.

• 35:18Lenny Rachitsky?

  Awesome. Yeah. And I think in that you can probably tell people aren't going to want to sit through a carousel and check every step. They're just like, leave me alone. We've got to figure it out.

• 35:26Speaker 01

  Yeah. Or even ask someone, oh, what was the last carousel that you remember?

• 35:33Lenny Rachitsky?

  You finished?

• 35:34Speaker 01

  Yeah. It's like, where was the last one? Oh, that's right. I always close them.

• 35:40Lenny Rachitsky?

  I love that. Coming back to product led growth and kind of figuring out how to do that. Well, what are signs that your product and just general business can be product led? Versus like, okay, we're going to try it. It's probably not going to work out. We're probably going to have to hire salespeople quickly.

• 35:56Speaker 01

  Ideally, that's something that you've thought about pretty deeply before you even started to code the product. Because whether you thought about it consciously or not, you have already decided whether it is going to be product led or or sales led. If it is the type of a solution that you need buy in from the head of HR to use because you need to integrate with systems that have a lot of PII in them. And no, I see has the keys to that system at any size of a company. Boom. You know, you have a sales led motion. That is what it is. And so I think just having that sort of like objective distance to your own product is always like a fruitful kind of place to begin.

• 36:40Speaker 01

  If it's something, if you have a product that even if it's for a specific function, but kind of anyone at any seniority level in that function could pick it up to use it. So DevTools are probably the most successful product led growth. Companies that we don't talk about being product led, but that's totally how they grow. A junior engineer or really senior engineer can pick up some dev tool and play around with it and start using it, decide to take it into work or not. So anything that you can pick up without needing to have the sort of keys to dad's Porsche in order to to test out can be product led.

• 37:20Speaker 01

  More and more, I'm also seeing companies that have a enterprise, you know, sales motion to capture the customer at the point of adoption, but then they want to use product-like growth sort of frameworks or tools to expand their usage to either drive up retention or to actually expand the number of seats and the number of departments that are using that tool. And that's actually a very good use for all of these same sort of, you know, frameworks and user experience concepts.

• 37:53Lenny Rachitsky?

  We're throwing out a lot of these terms and I realize it might be helpful just to kind of try to set a little context. I don't know if you have like a clean definition of these things, but how do you define product led versus bottom up versus a sales-driven, I think is pretty obvious, but how do you define these terms and think about them?

• 38:10Speaker 01

  Yeah, for product led, I think about it being, you know, something that anyone can get value out of your tool immediately. And that the tool doesn't need to be augmented by a conversation or a webinar or anything like that with someone else in order for them to get to a certain threshold of value. Often you learn a lot, you know, as a business from doing like a white glove onboarding for certain personas and they didn't need you to do that, but you wanted to do it. So that's still really product led. And then it's funny, bottoms up is often used. Exactly the same way, but I would think of bottoms up as being not just product led,

• 38:55Speaker 01

  but also something that can be adopted by anyone at any level within the organization. So there's tools for people managers, like a range and a bunch of other ones, whereas, you know, a manager is running their one on ones, getting feedback from their team, et cetera, and using this tool, that's a product led tool often, but that's not really bottoms up. Because in order to grow that tool, you need to do a very good job of finding where managers are in businesses, targeting them, retargeting, and doing things to specifically reach out to someone in that particular function, whereas bottoms up should be like literally anyone at a 500 person company can start using this.

• 39:40Lenny Rachitsky?

  Got it. That's really helpful. I imagine the Venn diagram overlap of product led and bottom up is very overlapped, but in theory, you could have a sales driven bottom up strategy or a product led top down strategy. Is that right?

• 39:56Speaker 01

  Yeah.

• 39:58Lenny Rachitsky?

  Very cool. Okay. So we've talked through the context and just definitions of these things. When a company can be product led, it sounds like the main thing you look for is can an individual adopt this product at a company? That's kind of like a sign that this can be product led. Is there anything else that you think is important that like, if these things don't exist, you should probably not try to be product led?

• 40:23Speaker 01

  Yeah. You know, the other one that I don't hear people talk about very often is whether there's really day zero value in the tool. This is something that came up for me a lot when I was looking at a lot of these sort of like video apps. So both the kind of presence app where you're replicating a kind of office experience or pre pandemic, now I think this use case is a little more obvious, but pre pandemic, you know, getting on video chat with someone and what it does is, you know, creates an automatic transcript of your meeting. There isn't necessarily a lot of day zero value from doing one meeting on a tool like that. But often the pitch would be, hey, in six months or three months, you'll be glad that you recorded

• 41:08Speaker 01

  the transcripts for all of these interviews that you did because of XYZ reason. That is not, you know, something that is valuable. They've been using it for months is not something that can be chronicling. Because people, you know, there's like product led in one direction, there's product led back out that same direction. And that can be the frustrating part about product led growth is that the easier you make it to come in, also the easier it can be to leave.

• 41:37Lenny Rachitsky?

  Got it. So you're finding that it's really important for people that adopt it to stick around and like basically finding value immediately is like a way to increase retention and keep people around. And you're finding that if people don't stick around, it's not really going to work. And you need people there, salespeople, basically, keeping them

• 41:53Speaker 01

  Yeah.

• 41:54Lenny Rachitsky?

  on the product and using it.

• 41:55Speaker 01

  Yeah.

• 41:56Lenny Rachitsky?

  Very cool. Eventually, most companies end up hiring a salesperson. I was doing some research on this and I found 100% of product led growth companies hire a salesperson and a massive sales team eventually, like 100%.

• 42:07Speaker 01

  Yeah.

• 42:08Lenny Rachitsky?

  Do you have any thoughts, insights, experience on when it might make sense to bring in that first salesperson?

• 42:13Speaker 01

  Yeah, so founders are always selling. So even from the time that you have your very first alpha customers, and it's funny because I often reference actually the post that you did about how, you know, how to find your first best B2B customers.

• 42:27Lenny Rachitsky?

  How recursive.

• 42:29Speaker 01

  Yeah, I know. And here we are again. It's all, you know, in that initial network, right? So the founder is always the first salesperson. So in that way, it is often the case that, you know, one of the first three or four people who work in the company is actually a salesperson. But the point at which you should start to hire someone else to do that is when you, as the founder, absolutely cannot meet the demand, you know, even though you're getting up really early and staying really late and, you know, building your investing deck on the weekend instead so you can continue to meet with customers. And then the other time to do that, apart from just being maxed out, is when you are moving into and usually up to a customer that both wants and expects.

• 43:12Speaker 01

  To meet with a salesperson. And that was what we went through at Slack was moving from that engineer-driven SMB motion to then getting adopted at companies that really wanted to have a conversation with someone before they continue to spend a lot of money on their product. And I think that's one of the things that, you know, maybe younger founders or people who haven't worked at enterprise companies before can discount is the customer preference. And then actually, there's a whole set of customers that literally have to talk to someone before they can buy anything, or just really want to.

• 43:51Lenny Rachitsky?

  I've never heard of it put that way, where the customer is looking to talk to a salesperson and kind of pull the sales team out of you. Interesting.

• 43:58Speaker 01

  Yeah. And those are, of course, the salespeople's favorite person to talk to. Because like anyone, it's like, you want to talk to someone who actually wants to talk to you.

• 44:07Lenny Rachitsky?

  I like that. So the advice is high level. Wait until you just can't do sales as a founder and/or wait for the fact that the companies you're selling to you are just expecting a salesperson or a sales team to support them.

• 44:21Speaker 01

  Yeah.

• 44:21Lenny Rachitsky?

  Awesome. So that reminds me of another topic I wanted to make sure we chatted about, which is hiring.

• 44:26Speaker 01

  Yeah.

• 44:26Lenny Rachitsky?

  We were tweeting a bit about this, about the team that you built at Slack and how epic that alumni class is. We're going to have Fareed on here who worked for you for a while. And so I wanted to get your insights on just what do you look for when you're hiring people? How do you find, select, keep amazing talents on a team when you're building a company like Slack?

• 44:47Speaker 01

  Yeah, I think a lot of that is the approach is not an exam that I'm proctoring, right? When I'm hiring a role, I'm not sitting, you know, in an ivory tower, like in the seat of judgment. What I'm trying to do is to make sure that whoever I offer the role to wants to take it and will thrive at the company, that they're the right kind of person for the role, especially in product where.

• 45:16Speaker 01

  You know, someone who's a super successful PM list is not necessarily going to be a super successful PM at Slack or at Airbnb or at Pinterest, even though if you think about that class or that cohort of companies, we would have all applied to each other's companies. In fact, I think I actually got rejected by Airbnb like on three different occasions, like throughout the course of

• 45:40Lenny Rachitsky?

  Oh, boy.

• 45:40Speaker 01

  different years of, because I love travel and it's a great company. But you know, I think there is just something about, I probably would not have been successful in the same way I was at Slack if I had had one of those roles. So I think, understanding that it is a two-way street. And when a hiring manager has that vibe, they're going to end up, I think, hiring people who are just positioned to thrive at the company. Because you're not saying, oh, here's someone that I can get and I can pop them into this like power structure that means something to me. It's, you know, finding someone like, breathing, saying, okay, I could see you having a long, really successful career at this company because of your curiosity,

• 46:22Speaker 01

  because you're a great communicator, because anyone who's ever worked with you would immediately work with you again. And those are things that I think if you're like, let's do this whiteboarding exercise and I'm going to talk down to you, you never end up sort of finding out about something.

• 46:37Lenny Rachitsky?

  Got it. So a lot of it is particular to the company, understanding the culture, how they work, and finding that fit for a person, kind of like person, company, product market fit.

• 46:46Speaker 01

  Yeah.

• 46:47Lenny Rachitsky?

  Are there kind of universal things that you look for that maybe other people may not look for, things that you've learned of just like, oh, I'm gonna make sure these habits, traits, behaviors exist?

• 46:58Speaker 01

  Yeah, I always ask people to do, you know, for an ICPM role, it's different if you're hiring a director or a VP. For a kind of standard PM role, I always make people do work. I think we've gone back and forth on Twitter about this and it's funny, it's definitely something that it's like, Just in the last, I don't know, five or six years, I feel like people are really pushing back on doing what they, I think, fairly characterize as like free work for a company. And I tweeted this out, but I mean, if you don't want to even do three hours of like free work for a company, you probably don't want to work at that company.

• 47:38Speaker 01

  It's this weird like, if you need to be paid for every second of effort that you're putting in, I mean, you probably shouldn't be near a startup in that case, because I hate to break it to you, but the startup that you're at might not be successful. And then you will have, you know, done all of this work for quote unquote, nothing. And so I really use that as a way to see into how someone thinks, the quality of the solutions that they bring, how they communicate. There's just so much bundled up in giving someone, you know, an actual problem, ideally to pick, not one that's assigned to them, but here's three different problems. Because you learn a lot about someone from every choice that they make.

• 48:19Speaker 01

  I think that's probably my most controversial hiring tactic, but I found a very direct relationship between the people who just really kicked ass on this, went on to be very successful and lead organizations at Slack.

• 48:32Lenny Rachitsky?

  And you're specifically referring to the project that they do, right?

• 48:34Speaker 01

  On their end. Yeah.

• 48:36Lenny Rachitsky?

  What did you look for in their results of their project?

• 48:40Speaker 01

  The quality of the solution. Something like Slack is not like a deeply technical product. But I was a little bit surprised to see a number of, you know, smart people who'd worked at good companies who decided that, okay, it's like magic wand time. Now that, you know, assuming that like, for instance, Slackbot was like a state machine that had a bunch of contacts and would have this almost like NLP sort of driven conversation with you. So that was like a big red flag to me for someone just not. And it's funny because like, I'm not like an engineer and I wouldn't even think of myself as like a quote unquote, like technical PM, but PMs have to know.

• 49:27Speaker 01

  Basics of how the tools work and like what would work in the tool. So that's a big one. Whether someone was able to tell a compelling story was huge, especially at Slack, which is a very product-driven company, a very narrative-driven company. If you were going to present data, it needed to be within a very specific context. And it wasn't a company where the number always won. It was a company where the story always won. And so if someone did a great job of structuring a narrative, they had technically possible, but also creative solutions. And they picked one for good reasons.

• 50:11Speaker 01

  They would know how to measure it and how to build something like that. They were just going to be much better than someone who didn't hit literally every single one of those things at a high level.

• 50:21Lenny Rachitsky?

  I like your point about Slack being story-driven and how people with a great story often win. Is that a part of the Slack culture and how Slack works?

• 50:31Speaker 01

  I think it's still probably that way. It was a huge part of the culture. You know, when I was there, when it was the kind of initial founding team and an independent company as well. So who knows, you know, what will be successful for them within Salesforce. I think it's like quite literally a different company now.

• 50:49Lenny Rachitsky?

  Whoever has the best CRM wins.

• 50:52Speaker 01

  Yeah, exactly. The good leads.

• 50:55Lenny Rachitsky?

  Yeah.

• 50:57Lenny Rachitsky?

  So we've been talking about hiring and I want to come back to the growth element. So you built a growth team at Slack. How did you think about building out a growth team? And I'm also curious, just like, when should a company bring in a first head of growth?

• 51:13Speaker 01

  Yeah. Yeah, it is time to start working on growth. When you feel like you have product market fit, it doesn't have to be totally perfect because you absolutely use a growth team to really accelerate and improve your product market fit. That is a part of the value of a growth team, but you do need to feel like, okay. Once we, even if it's do a white glove onboarding with people, if I spend 20 minutes with you and I show you my tool and I explain how it works, wow, you really get it. You want to pay me money for it. You're still using it six months later. You're ready for a growth team. You don't have to have all of your ducks in a row. You don't have to have everything instrumented.

• 51:59Speaker 01

  And then what I often tell people is that your first PM to touch growth or just engineer or PMM to work on it should be someone who has a lot of trust at the company and who really loves and understands your customer. Cause a lot of the growth stuff is pretty straightforward, you know, like it's a funnel. Right. There's a lot of, you know, fantastic classes like Reforge. There's a lot of writing on the internet about how to do it, but to a certain extent, everyone is inventing the specific things that work really well for their customer and their product.

• 52:35Lenny Rachitsky?

  So you co-founded Women in Product, which is an organization as an outsider, I've been incredibly impressed with and I'm trying as often as possible to collaborate with the community. There's all these local chapters and everyone I've ever met that's in the community has been incredible. And so I'm curious as a product leader, as a founder, looking to bring in more women and have a more diverse product management org or just org in general.

• 52:59Speaker 01

  Yeah.

• 52:59Lenny Rachitsky?

  What are one to two things that folks can do? Like the obvious answer I imagine is hire more women. Is there other advice you could share with folks that are trying to have a more diverse company and product team?

• 53:08Speaker 01

  Yeah, it's funny. I don't think it's always hiring more women because not all women are friends to other women. Um, and they may in fact relish their position as like the only girl if the, you know, I think on Reddit, it's like the I'm not like the other girls meme or whatever. You could easily get someone in like that and she can actually actively turn off other women.

• 53:31Lenny Rachitsky?

  Oh, wow.

• 53:31Speaker 01

  One of the interesting things that I've seen about hiring women is that women do tend to be less aggressive and risk seeking than men do. I really didn't want that to be.

• 53:46Speaker 01

  True, and I think I'm an outlier in being a very, you know, multiple time founder, things like that. I have a risk profile that I have been bummed to see as not something that's like widely shared by other women. And so I think part of it is that you, if you're just looking at passive inbound or, you know, through referrals or things like that, you're just going to end up with fewer women in your pipeline. And you are going to close women, I think, at a lower conversion rate than you close men, especially if you're an earlier or riskier business. And so in order to offset that, you just need to go interview a lot of women and not sort of like blame it on the pipeline.

• 54:30Speaker 01

  You need to actually like go seek them out and find them. And then once you do, it can be this really self-reinforcing mechanism in the way that a lot of, you know, diversity initiatives that companies work is that, you know, it's one thing to have a team of all like white men, but if you have like two African-American people and you're first like 20 people, you could have a lot more diversity and not even amongst just that one group. Like women want to work with other women, but like men of all races, I think, look at an organization that let's say it's all white people, but there's a few women. They may look at it as just like a more diverse, more friendly place and be less intimidated to be, for instance, the first person of color who works there.

• 55:16Lenny Rachitsky?

  That makes me think about Slack. Early on, it was one of the most diverse teams that I'd seen. Is that relatively accurate?

• 55:22Speaker 01

  Yeah, we spent a lot of time on that pipeline, making sure that there were a lot of people who got interviewed. And it was never like an excuse, you know, was to not like not find someone. And then that kind of inertia that can make you end up with a company of, you know, 50 white men.

• 55:43Speaker 01

  Because they refer their friends, the people who they naturally feel comfortable with and things like that, that can also work in your favor if early on you just hire more women and you hire more people of color, they'll feel more comfortable because they're not the only one and then they'll refer their friends as well.

• 56:01Lenny Rachitsky?

  So it's especially important when you're just starting out to put a lot of time into this and it sounds like that's kind of the core of this is prioritize it, put in the time, especially early on, because that'll kind of create this flywheel.

• 56:12Speaker 01

  Yeah, it's funny, I've often been the only woman on a team at a startup or literally at the startup, you know, entirely. And there is a huge difference I found between being the only woman and being one of even two women. The tone really changes. People then are like, oh, now we have like, women coworkers. It's not just Mercy who also plays D and D and you know, curses the office or whatever. It is like women is this more general class. And so they start to honestly be like more respectful and kinder to each other and treat each other better too. And so I think that's like the other thing. It's not like it's

• 56:55Speaker 01

  better for anyone to be in a homogenous group. I think it's actually better for everyone to be in a more diverse group because the sort of baseline for how you treat each other goes up.

• 57:07Lenny Rachitsky?

  Speaking of founders and startups, you're working on something now.

• 57:11Speaker 01

  Yeah.

• 57:12Lenny Rachitsky?

  For people maybe interested in working with you or maybe even potential customers, is there anything that you want to share about what you're working on, where it's going, anything there?

• 57:20Speaker 01

  Yeah, so we're really early and I'm not exactly sure when this podcast is coming out, but if you go to panobi.com, it's P A N O B I dot com, there's either a real landing page there, or today, there is just a Google form for you to fill out that will ask you a few questions sort of about product-led growth, which is the area that we're building in. And if you're someone who is curious about product-led growth, if you're a head of growth at a company, if you're a CEO or a founder or investor who's interested in finding out more, taking a, you know, maybe even a tool to help you be successful at it, go to panobi.com and you can also just DM me on Twitter.

• 58:02Lenny Rachitsky?

  Speaking of that, where can folks find you online? How do they reach out? And then also just how can, how can the audience be useful to you?

• 58:09Speaker 01

  Oh, that's nice. So you can find me online on Twitter. I think it's probably my best sort of public inbox. My DMs are open. I do respond to them, especially if it's something direct that I can be helpful with. If you are a woman in product management, go to womeninproduct.com and you can apply to join our community. We've been going since 2015 and there's many people who are in it as well. And then, yeah, if you're interested in growth more generally, go to panobi.com.

• 58:40Lenny Rachitsky?

  Amazing. Mercy, thank you so much for joining me. I had a ton of fun. I learned a ton and thank you.

• 58:46Speaker 01

  Likewise, Lenny. Thank you.

• 58:49Lenny Rachitsky?

  That was awesome. Thank you for listening. If you enjoyed the chat, don't forget to subscribe to the podcast. You can also learn more at lennyspodcast.com. I'll see you in the next episode.