Product Led Growth - with Kyle Poyar - OpenView Partners

**Ray Rike** (0:07)
Okay, you ready, Kyle?

**Kyle Poyar** (0:09)
Yep.

**Ray Rike** (0:10)
Okay. Hello, Ray Reich, host of the Metrics That Measure Up podcast. Today, we are joined by Kyle Poyar, the VP of Growth and OpenView Partners. I've been following OpenView Partners and Kyle for a few years now, and I've been especially impressed by their thought leadership on product-led growth, coupled with their SaaS benchmarks research. On today's episode, we will cover three primary topics, product-led growth, definitions of the inherent benefits, how product-led growth companies performed in first half 20 versus non-PLG companies, and the key performance indicators that are unique and critical for PLG. With that, Kyle, welcome to the Metrics That Measure Up podcast, and please take a minute to introduce yourself and OpenView Partners to our listeners.

**Kyle Poyar** (1:01)
Yeah. Thanks for having me on, Ray. Quick background around OpenView. We're an expansion stage software VC, investing exclusively in B2B SaaS companies that are scaling through hyper-growth from let's call it 1 million ARR to 10 million ARR when we invest all the way to hopefully 50, 100 million plus on the going public track. Some of our portfolio companies that listeners might be familiar with are DataDog, Calendly, Workfront, and Instructure.
In my role at OpenView, I get the chance to partner with our entrepreneurs in the portfolio around looking at ways to accelerate their revenue growth. I'll work with them on advising and consulting work around top of funnel acquisition, conversion through the funnel, monetizing their products, and then driving faster expansion revenue in their cohorts. I've been at OpenView about four and a half years, and have worked on over 200 different engagements with our portfolio companies in that time. Then previously, I was at Simon Kutcher for six years, and Simon Kutcher is the largest consulting firm focused on pricing and packaging strategy. While I was there, we were working with about a fifth of the Cloud 100 software companies. I've been able to apply a lot of those insights into our portfolio.

**Ray Rike** (2:32)
Great. Well, thank you for joining us today. I think for our listeners, everyone over the last six months has been watching this doc performance of Cloud companies and product-led growth companies such as Slack, Zoom, HubSpot, Shopify, MongoDB, just to name a few. First of all, Kyle, can you provide me some more background on what's led to the OpenView Partners and your specific focus on product-led growth? Why is it such a high priority?

**Kyle Poyar** (3:01)
Yeah. Maybe just for listeners, the definition of product-led growth, because I think the term can sound like motherhood and apple pie, like product-led growth, it's just this nice thing that all companies want to have good products. But when we think about it, it's end-user focus growth models where the product is front and center and how the company acquires, converts and expands their users.
It's not necessarily like an on and off switch, it's more of a dimmer switch. But I think the best product-led businesses are leading with their product experiences and getting users into the product through free meme and free trial offerings, showing value right out of the gate, and then monetizing after the customer has been successful, and most of them have some sort of notion of a self-service conversion and then see rapid expansion from that end user into a team or into an organization enterprise by use case. And so I think that's just helpful context setting because we don't necessarily mean B2C companies or companies that are purely end user focused. And we also don't just mean companies that have a good product. And the background around OpenView's interest in this business model, this type of company, it originated probably with our investment in DataDog, which went public last year and has been just an extremely successful company. And I think what we had just seen with most software businesses that we invested in, growth naturally slowed as the businesses scaled. It was really hard to continue to feed the lead generation, hire sales reps fast enough, get them ramped, get them productive. And it was very expensive to scale a software business. And then businesses like DataDog, on the other hand, have been able to grow extremely rapidly at scale, in some cases even accelerating their growth rate at scale. And they can do so in an extremely efficient manner. So I believe DataDog's rule of 40, for example, is somewhere like 86, right? It's completely off the charts from a traditional SaaS business. And that's because they're able to take things that would normally be done by people, and they're able to apply that into the product, which is a lot more scalable and can fuel faster and more efficient growth. And so this experience with DataDog, that we looked around at the landscape and we said, there's not really a community around growing a business like this. Like we have a lot of conviction in this model, but you hear people talking about bottom sub motions, the consumerization of IT, freemium models, self-service. There's all of these terms for it, even like shadow IT if you want to use a negative term for it. But everyone sort of saw themselves as building a really unique motion or business model, and we thought, let's create an umbrella category around this and try to help bring in frameworks and best practices around how to grow this kind of business so that more entrepreneurs are inspired to start off with this model in mind, and then companies are able to pivot and adopt these tactics to improve the efficiency of their business model.