PLG Needs Sales

“No salespeople for us, says CEO of $4 billion startup Slack.”

That was the headline Business Insider ran to write up Slack CEO Stewart Butterfield’s 2016 SXSW conversation. Less than three months later the publication ran another story on Slack’s approach to sales, only this time the headline read a bit different: “The $3.8 billion startup Slack just hired its first sales chief after hitting two big milestones.” Today a look at Slack’s career page finds 71 openings on the sales team, many of which are almost certainly for individual contributor roles with multiple openings each. Slack, in other words, has a lot of salespeople.

And they weren’t alone. In 2016 Bloomberg Businessweek published a story on Atlassian that covered much of the same ground. “This $5 Billion Software Company Has No Sales Staff” introduced many to the magic of the bottoms-up SaaS business. What wasn't as well reported, was that Atlassian also started to move away from this no-salesperson approach right around the time of publication. “If you’re a large enterprise customer that has more complexity, or potentially more value to us, we have a team that can help steer you in the right direction and answer a more complicated set of questions that you have,” explained former Atlassian President Jay Simons in 2019. Saas needs sales.

While Slack and Atlassian have both grown to be worth many times more than their 2016 valuations, it’s also hard not to wonder whether their companies would be even bigger if they had recognized that a hybrid go-to-market of product-led growth (PLG) plus sales. Of course, they’re far from alone. Take a look at the data compiled by investor Chase Roberts:

Some of the most famous success stories in developer-led/product-led growth are also some of the biggest sales teams in Software. Take Segment, where Roberts worked before becoming an investor. On a recent episode of Founder’s Field Guide that was aptly titled "Learning How to Sell," Segment co-founder Peter Reinhardt talked for a strikingly long time about the importance of sales and a sales team in the growth of Segment. In fact, Reinhardt puts selling right after product-market fit on the biggest challenges for the company. He goes on to tell an amazing story about how he became sold on sales:

Later on, we were starting the scale of the sales team, we had an amazing first salesperson named Ralph. I gave him free rein to go build a team. And the first person that he brought in, I was like, “there's no way.” There's no way that this guy is going to be successful in selling to VPs of engineering. He was from Jersey, slicked-back hair, not the vibe that you expect an engineer to be really excited to work with having sales, intense vibe. And so I actually said no. And then Ralph overrode me. He said, "No, you're wrong and I'm going to hire him. You're going to see." I was wrong. He was our most successful sales rep for the entirety of Segment's history and his customers loved him. What I learned from going out in the field with him over the years was that he was extremely intense about extracting information from the customer about what the value was to them. Many cases, I think clarified their own understanding in the process. And so by clarifying what the value was going to be, then he could walk back to well, and here's how the product is going to solve that value. It's very simple, very clear, exceptionally methodical and customers love him for it. That last piece of what makes a great sale? Yeah, sure. Relationship building, being a smooth talker maybe, but what actually matters is, can you get the customer to actually tell you what the value is that they get out of the product? And then can you connect that to what the product does.

This was fun to hear for a few reasons. First, it matches our thesis that the best go-to-market motion is to combine PLG with a strong sales motion. Second, it echoes my own experience and epiphany of working with real salespeople for the first time in my career. Here’s something I wrote in 2014, three years into our previous company, Percolate:

The best seller in the world is more like a doctor than a bulldozer. They treat every new client as an opportunity to understand the challenges and try to reach a diagnosis. When they encounter a barrier they don’t run it over, instead they feel around, understanding every nuance of the barrier that stands in front of them. They feel for curves and openings and every other important aspect until they understand that the best way to the other side is one step up, three steps over, and a small twist of the wrist.

At the end of the day what PLG offers is the very best data imaginable for making these diagnoses. Whereas sales was once wholly reliant on asking questions, they can now augment those questions with real data about how the customer is, or is not, using the product as part of a trial or small implementation. This is the kind of data any good salesperson would kill for, and it’s our goal to make it easy to access, manage, and act on.

I have a strong suspicion we are going to see a lot fewer headlines about great SaaS companies without sellers this decade. And that’s a good thing.