add saas gtm post

Author: mrocklin

images/example-customer-usage.png

@@ -0,0 +1,296 @@
+---
+title: SaaS Go-to-Market
+date: 2023-02-01
+blogpost: true
+author: Matthew Rocklin
+category: startups
+---
+
+SaaS Go-to-Market
+=================
+
+Where are we on product and GTM?  What are some open questions and what should
+we do to improve?
+
+This article gives a snapshot of where Coiled (Dask company) is on product
+development and sales and marketing / Go-to-Market (GTM).  It's mostly written
+with internal audience in mind, but should also be helpful for other early
+stage tech/SaaS companies as an example.
+
+Summary
+-------
+
+Our product is now good enough that when people try it, they like it,
+eventually use more, and pay us real amounts of money.  🎉
+
+But we don't have many of these customers.  😔
+
+How do we get more? 🤔
+
+How did we get into this situation?  What should we do from here?
+
+History
+-------
+
+For the first couple years of the company, the product kinda sucked.  That's
+ok!  We were still a baby company learning how to walk.  At the time we also
+had a mature sales organization that did its best to sell this kinda-sucky
+product.  This was inefficient and frustrating for all involved.
+
+In May of last year we let go of the sales team, and a couple months later we
+let go of the the folks in marketing who owned voice/messaging (this wasn't
+particularly strong either).  We became very engineering-forward as a company.
+The platform team became staffed only by very senior engineers who had full
+agency.
+
+This was great!  Our product evolved quickly, our Twitter account stopped
+sounding spammy, and our website started to make sense!
+
+What's more, platform users started to use us more, and became happier.  Usage
+ticked up a couple months later and really started to take off recently as we
+spread within organizations.
+
+<img src="images/example-customer-usage.png">
+
+Whereas previously we were unbalanced with a bad product and good sales, now we
+have a good product and relatively little sales experience in the company.
+What should we do?  Try to go back to our previous state?  Maybe / maybe not.
+Let's explore our options.
+
+Customer Profile
+----------------
+
+The kind of GTM engine we build depends on the market that we're going after.
+This affects how we market ourselves, how we price the product, and what kind
+of sales team we build:
+
+What choices do we have?  Mostly we break down this choice by company/team size:
+
+1.  **Individuals:** we target individual data professionals to use our platform,
+    kinda like Github does
+
+    -   **Marketing:** highly technical online content, maybe some events, focusing
+        on ease of use and accelerating work
+    -   **Pricing:** mostly free with a possibility of swiping a credit card for up
+        to a few hundred dollars a month (typically the budget for individual
+        data professionals)
+    -   **Sales:** no sales team, must be self-serve (we can't hand-hold
+        individuals, and sales teams will want commissions)
+
+2.  **Small teams:** we serve small teams of data professionals, talking mostly
+    to the team lead, who cares mostly about getting work done, but also has to
+    justify costs
+
+    -   **Marketing:** a mix of highly technical content with some business value
+        thrown in as well
+    -   **Pricing:** free tier is useful for trials, but we expect to charge a few
+        thousand a month, either with a corporate card or with a purchase order
+        (typically the budget for a team lead without getting higher approval)
+    -   **Sales:** maybe rely on a self-serve motion to get people in the door,
+        and then try to sell them to pre-commit to greater usage with
+        discounted rates.  This requires a lightweight sales team attached to
+        a product that can sell itself.
+
+3.  **Enterprise:** we target entire companies, probably talking to some IT
+    architect, or a CTO.  They care about accelerating the company, and also
+    about costs, security, and generally not causing a panic.
+
+    -   **Marketing:** focus on business value with a simpler technical message.
+        Some online content but direct outreach.
+    -   **Pricing:** $100,000-$1,000,000s, probably after a POC and with some
+        healthy support contract thrown in
+    -   **Sales:** this is a high contact sales process that takes many months.
+        This requires a sizable and expensive team working full time on chasing
+        down new deals and working those deals to completion.
+
+As a company we could play at any of these levels.  Dask has great community
+adoption and could leverage those users into a strong individual userbase (like
+GitHub).  Alternatively, we're also heavily used inside of large organizations
+(banks, government, healthcare, etc.) that are used to paying millions of
+dollars for a product like ours, and so an Enterprise play could also make
+sense.
+
+Which market we go after affects our choices about sales and marketing.  What
+do we choose?
+
+Most of the money is in large enterprise sales.  It's hard to find a company in
+our space (data infrastructure) bringing in hundreds of millions of dollars
+where most of that money doesn't come from large enterprise contracts.  We have
+a few of these already, mostly focused around [Dask
+support](https://www.coiled.io/blog/enterprise-dask-support), and we like them.
+
+However, selling into these companies has a long lead time, long iteration
+cycles, and poor visibility/learning due to stringent security.  For this
+reason, we've focused on the less lucrative, but more informative individual
+and small teams groups.  This allows us to focus on a cloud SaaS product, which
+gives us a lot of visibility into usage, which we leverage to accelerate
+product velocity.
+
+Our thesis is that by starting with small teams we can more rapidly iterate
+towards a delightful experience, which we can then pivot to larger enterprise
+for real money.  Will that work?  🤷 I think so?
+
+What team is best?
+------------------
+
+Given this focus on individuals and small teams, what kind of GTM team do we
+need?  Our previous sales team had SDRs, account executives, sales engineers,
+customer support, customer success managers, and more.  This team made lots of
+sense for a large enterprise sales motion, but it may not make as much sense
+for individuals (no sense) and small teams (maybe some sense).
+
+### What did we like about our old team?
+
+-   **Outreach:** They reached out directly to potential customers
+
+    Our marketing at the time was not good (it's still not good).  Lots of
+    people said "Of course we love Dask, but who's Coiled?".  The sales team,
+    through direct outreach, was able to shore us up a bit here.
+
+    This feels like a bandaid though.  Our marketing should be doing outreach for us.
+
+-   **Explanation:** They explained our product to customers
+
+    Same as above, we didn't describe ourselves well, and so prospects had a
+    bunch of questions like "do you deploy in my cloud", "are you secure",
+    "how does this compare to Databricks?", and "how much will this cost me?"
+    which our sales representatives were able to answer and bring people in.
+
+-   **Onboarding:** They helped customers onboard to the platform
+
+    The platform had issues, and the sales engineers were able to set things up
+    for the customers so that they could onboard and actually use the product.
+
+    This is mostly handled today with the product (it's much better) or with
+    light touches from the engineering team itself.  I think that it's good for
+    the engineers to have this direct access.  I don't think that I would want
+    to change this today.
+
+-   **Customer Success:** They helped customers use the platform to solve business problems
+
+    Once the platform is running well for the customer, and they start really
+    banging away with Dask, they eventually run into some problem with Dask or
+    the PyData system generally.
+
+    We don't have a good answer for this today, and could become better.  Our
+    OSS Dask engineers are asking for more customer exposure, and this could be
+    a good fit, as long as we figure out how to make it informative rather than
+    distracting, which is hard.
+
+-   **Tracking:** They were organized about all of the prospects and customers and who needed
+    what to move along
+
+    There are lots of people using this platform, and we're not mature enough
+    where everyone gets to their ideal state (using us as much as possible as
+    efficiently as possible) without help (really, no product is this mature).
+    The sales team was somewhat organized here.
+
+    We don't have a good solution for this today.
+
+-   **Closing:** They navigated organizations to find buyers
+
+    When an individual without purchasing power arrives, the sales team was
+    good at saying "Do you have the ability to buy our product?  No?  Who does?
+    Can I ask you to set up an introduction?" and then once the sale was
+    complete they helped to hound the customer's internal bureaucracy to make
+    sure that money flowed through.
+
+    This is less important for small team sales than for enterprise customers,
+    but there is still non-trivial value.  Today I / our director of finance
+    does this.  It's been ok but not great.
+
+### Focus on Marketing
+
+A lot of the tasks above should have been automated (outreach, explanation,
+onboarding), but they weren't.  We used people/conversations as a replacement
+for technology/writing.
+
+Mostly, we lacked a strong product marketing function and made up for it with a
+lot of hands-on outreach and explaining.  I'm entirely in-favor of doing
+hands-on work to learn, but we didn't then translate those learnings into
+long-term assets that help *everyone* understand the value that we provide
+without having to tell them one-by-one.
+
+Because of this experience, this time around I'd like to focus on on product
+marketing, this includes assets like ...
+
+-   Architecture diagrams / videos
+-   Build vs buy comparisons in a few common situations (individual, small
+    team, larger more active team) and how we're always the better choice
+-   Our Security model and FAQ about data privacy
+-   Common use cases
+
+Even if we were to hire out a sales leader for more outreach/tracking/closing
+I'd want to have these things first.  Otherwise I think our newly hired sales
+leader would be be spinning their wheels (and those are very expensive wheels).
+
+Question: self-serve or direct sales?
+-------------------------------------
+
+I like the idea of self-serve.  The story goes like this, a user ...:
+
+-   Learns about our product
+-   Uses our product for free and loves it
+-   Uses it enough to start paying money and can do that easily in the product
+    with a credit card
+-   Uses it even more, to the extent where they need to get authorization and
+    have an actual conversation
+
+Examples of this motion include GitHub, AWS, and Atlassian.  It's great because
+you can focus on building an amazing user experience, rather than focusing all
+of your energy and money on sales.
+
+In principle this sounds great!  It speaks to my inner-engineer and
+community-oriented mindset.  However, almost no company in our space makes most
+of their money this way.  Most companies do direct outreach and sell a complete
+package to companies from the start.  The self-serve nature of the product ends
+up being useful for companies to quickly do proof-of-concept (POC) work, and
+for students, but that's it.
+
+Self-serve feels right, but imprudent.  This is still an open question for me.
+
+Question: Straight to Enterprise?
+---------------------------------
+
+Big companies use Dask.  We're not like other early stage tech companies that
+are trying to get their name out there.  We regularly turn away big companies
+with lots of cash looking for a self-managed Dask management platform.  Maybe
+we should stop turning them away, and instead lean into this?
+
+This goes against the common wisdom of the day which says "go cloud", "go
+broad", and "go managed" which, from a learning and velocity perspective, I
+like.  But it does with the timeless wisdom of "go where the money is".
+
+I intend to stay with Cloud SaaS, which kind of precludes Enterprise until we
+get a lot more mature / trusted.  However we'll experiment with deploying our
+platform in a self-managed way in a couple of friendly customers to see what
+the experience is like.  This is an experiment and a distraction from focus,
+but I think a good one if we can do it well with the right partners.
+
+Who to hire?
+------------
+
+Right now three of us in the company think broadly about the entire GTM strategy:
+
+-  me
+-  product owner / engineering manager
+-  finance director
+
+It's good for the three of us to have this exposure (it informs how we do our
+normal jobs) but we're all also pretty busy, and so are doing a suboptimal job
+of the GTM work.
+
+I think I want to hire a single high performing individual who can flex between
+product marketing and some salesmanship, as well as be organized and creative.
+Over time, once they're successful, they'll hire a team around them.
+
+How do we find such a wonderful person?  Classic sales roles are typically not
+sufficiently technical for a product like ours, and they tend to be a bit more
+mechanical.  Classic marketers tend to be creative, but lack the technical
+and sales experience.  Maybe a product marketing manager or a product manager?
+Our ideal GTM role doesn't fit into any traditional job description.  Probably
+I'm looking for someone who has done a couple of these jobs, and is used to
+[early stage thinking](think).
+
+Right now I'm talking to lots of people.  Do you know of someone like this?
+Please put us in touch!