AMP

HubSpot’s Formula for Building an A+ Team and Walking the Freemium Tightrope

Published on

What does it take to build a truly effective PLG marketing team? Not just one that moves in line with current trends and changes, but one that’s always a step ahead.

With the marketing landscape changing rapidly and Web 3.0 being just around the corner, this is an increasingly important question for any brand in the SaaS space.

Our CEO, Paris Childress, talks to Kieran Flanagan from HubSpot about growing an A+ marketing team, balancing the freemium tightrope, and the future of SaaS in Web 3.0.

Let’s tune in.

What You Can Do to Build and Scale an A+ Marketing Team

With the changing face of marketing, today’s marketing team looks very different from the teams of 10 or even 5 years ago. While modern marketing brings a plethora of new opportunities for effective campaigns, it comes with new challenges and requirements, too.

Speaking about positioning your team for success, Kieran Flanagan, SVP of Marketing at HubSpot, says: “All great marketing teams are broken into three areas. So they’re able to figure out how to reverse engineer the number they need to generate each month or each quarter and map that against things they can test.”

Let’s walk through the three core elements you’ll want to consider.

Grow Into Your Problems

One of the most important factors in any high-performing marketing team is effective problem-solving.

In the fast-moving world of SaaS and PLG, however, we are continuously oversaturated with content on how to grow businesses, and many marketers start to take on problems they don’t yet have.

One advice HubSpot’s Marketing SVP has is to gradually grow into your problems.

“When you’re in the series A, you may not need to take on those problems [that you don’t yet have] because you may be able to grow customers in a way that may be more niche but works for you within that stage.”

Kieran further suggests that marketing teams need “people who are really great at solving the problem of ‘How do I take the thing that I need to be great at this quarter or year to hit my demand gen?’ and start to iterate and make that successful.”

The further your marketing team scales, the more problem-solving skills they’ll need to have in their toolkit.

Some of the top problem-solving skills your A+ marketing team should have include:

  • Creativity
  • Analytical skills
  • Communication
  • Teamwork
  • Organization
  • Evaluation

Foster Brand Differentiation

Effectively, every product you create should, in some way, provide something better.

Kieran shares that, in an effective marketing team, you’ll need people who can help position your product in the market, as well as identify your differentiator and the things that you’re better at than the competition.

Within the product-led growth motion, you want to figure out what your Trojan horse is and ask yourself:

  • What is the one key feature that I’m going to put into the free version of the product?
  • What is better than the competitors?
  • What is the thing that the users are not going to be able to live without?

Enable Brand Marketing

Another core function of an A+ marketing team is brand marketing, and “how you can be relevant within your market and how you can tell stories.”

After all, your marketing team is responsible not just for the creative assets of your company, but also for your messaging. They’re the ones who determine how your brand can best approach messaging and company personality.

One good thing about series-A companies, Kieran points out, is that “you can pick which parts of those [marketing team elements] are most important to you.”

Consider this example: If you’re a product-led company and you have a lot of product virality, customer acquisition is typically not an issue. Because of this motion, your best move would often be to start investing in product position and brand before you move on to investing in customer acquisition.

How Big Should Your Marketing Team Be?

While there’s no cut and dry answer to this question without knowing your business goals and existing talent, Kieran often sees series-A marketing teams having around 5 to 10 people.

That said, it’s important to note that the size of your team will look different depending upon the go-to-market strategy.

With product-led companies, for instance, Kieran gives an important point to consider: “A lot of PLG companies invest in marketing later because they somewhat have the product acquiring users. They invest a lot in product engineering and they start to think about marketing later.”

One of the smartest decisions you can make when building or scaling a marketing team is to “hire someone in a marketing leadership role who can build an A-plus culture where people can come in and learn and, over time, become A-plus marketers for your company.”

A good first hire, for most PLG businesses, is a product marketer ”who can really start to think about how to message the product out on the website and within the onboarding flows.”

Balancing the Freemium Tightrope in PLG

Today’s users have considerably short attention spans and instant gratification needs. This means that your product needs to be easy to navigate and get users to experience value as quickly as possible.

In product-led growth, there are a couple of key things to watch out for when looking to turn free users into paying customers. One of them is striking a good balance on the freemium tightrope.

In essence, when you’re walking the freemium tightrope, you want to bring the core user value into the freemium and give it away to get people excited. At the same time, you should avoid giving that value away to a point where you can’t monetize it.

Many PLG companies, though, tend to either give away too much of their value or create a free version of their tool, which “is not a lever to grow top of the funnel because it doesn’t provide enough value and it doesn’t give the user enough feel for how the product could really help them.”

Time to value is one of the most critical aspects when you’re trying to balance the tightrope and ”build that kind of flywheel in terms of users coming in, gaining value, becoming active, and then sharing that with their colleagues.”

What Is Time to Value and How to Improve It

Time to value (TTV) is the amount of time it takes a new user to realize the value of your product. The shorter the TTV, the more likely users are to stick around.

By their very nature, though, most SaaS products don’t automatically provide value upon buying or signing up for the product. Rather, they require some further action such as importing data, integrating other tools, or completing a user onboarding sequence.

The goal here is to reduce the time to value as much as possible and get new users to quickly experience their first aha moment or activation event.

If your product comes with a long time to value, consider optimizing the onboarding experience around the key actions that lead to activation. You can do this by:

  • Mapping out the actions before value and removing unnecessary steps
  • Leveraging tooltips
  • Using friction logging

What About TTV for Invited Users?

In the PLG world, the growth that comes from invited users is not a topic you hear a lot about. Yet, it’s an important one to explore.

“If you’re an invited user, the way you’re signing up to use that product is different from someone who went out, searched for it, and decided to actually start using it,” Kieran from HubSpot explains.

Let’s take Miro, an online whiteboard tool, for example. If someone invites you to a Miro board, you can start using it right away. In turn, you get to experience value without going through a signup or onboarding process.

With most PLG companies, the activation rate for invited users is lower than for those who originally signed up for the product.

In the case of companies that experience exponential growth (such as Miro), though, Kieran says that “their invited users get immediate value from that product as soon as it’s shared with them by other users and I think that’s really important.”

“It’s why some of those kinds of companies grow much faster than the average PLG company,” HubSpot’s Marketing SVP shares.

How Web 3.0 Shapes the Future of SaaS Marketing

Web 2.0 was all about revolutionizing the way we share and consume information online. Everything became more interactive, social media platforms started to emerge, and we could communicate and network by means of posts, tweets, blogs, and videos.

The main limitation of Web 2.0 today? It has become oversaturated.

Even more, the social media landscape fueled a powerful shift from the business towards the consumers. As consumers start to evolve from highly informed and socially connected into truly empowered and engaged, the transition to the next generation of Web is unavoidable.

As we shift towards Web 3.0, one of the main things the SaaS industry will notice is the greater use of semantic technology, artificial intelligence, and data science.

To put things into perspective, Kieran shares some of the key overarching trends in Web 3.0:

  • Product-led growth. PLG becomes even more impactful in the Web 3.0 space and most companies are going to be product-first.

With that in mind, Kieran notes that “you’re going to need a new type of analytics to figure out the PLG motion because I think there’s a whole new way of looking at data in web 3.0.”

  • Product positioning. The way you position your product and the way you can create a brand for your product is going to be even more important on web 3.0 than it was on web 2.0.

Kieran adds: “Web 2.0 is very well understood. With Web 3.0 that’s not the case. People are not trying to understand what the product does but what is the problem it solves and then that problem itself is hard to wrap your head around.”

  • Community-led approach. Community and turning users into your best marketers is an acceleration for everything Web 3.0.

This new marketing approach – where the community is invested in your company’s success – is going to fundamentally change how you look at your marketing budget and overall strategy. Even more so, because people see the value they brought into the brand/product positioning, they actually want to see the company excel.

To Kieran, the punchline is clear: “Now I’ve created a whole army of marketers who can create content for me and that is the part that’s going to be really disruptive in terms of how we do marketing.”

Taking Your Marketing Strategy From Good to Great in Web 3.0

A marketing revolution is on the horizon. From phasing out third-party cookies to investing in the Metaverse, we can already see the signs of it.

Web 3.0 is the next logical evolution of the web in which A+ marketing teams will be enabled to focus on product-first, offer an even more personalized experience, and seamlessly interconnect content and consumer.

Curious to learn more about preparing your SaaS for Web 3.0? Check out our actionable guide to using semantic SEO.