Everyone Hates Marketers | No-BS Marketing & Brand Strategy Podcast

I know it's not your fault, but those acronyms, and those fucking PLG, and ABM, and ROI, and all of that, and all of those concepts that are thrown around that are fairly not new at all, right.
Like showing a fucking product, making people use it before, before you ask them to pay, that's not something that appeared in the last five years. Right. So do you feel overwhelmed by all of this? Or do you like, you just have so much experience? That it just, you know, it's easy for you.
Leah: So this is a funny one because so what I do in my job is I advise companies on the side, I have an interim gig usually.
Right. So like I get to see a lot of portfolio companies as well from VC funds and so forth. So I look at their pitch decks. I also start to work with them more on an operational level. And. It is funny that there is absolutely not a single metric that everybody that I have on these calls would agree on what it actually means, not even revenue.
I can even fight about revenue. So, if you're in an industry like this, where terms are not as clear as you think they are. So, for instance, what is CAC? When is a customer churned? What is a customer? What is a user? What is a GMV? When is a GMV? When is CAC payback really actually counting and so forth? What is actual net revenue retention?
Should we do it on a month basis? Is it on a week? Is it on a year? How should we define anything? Then you know that absolutely no one has any idea what they're talking about.
Louis: Bonjour, bonjour, and welcome to another episode of everyone hates marketers.
com the no fluff actionable marketing podcast for people sick of marketing bullshit. I'm your host, Louis Grenier. In today's episode, you will learn what to do when all your competitors look perfect from the outside and how to differentiate yourself. My guest today is a leading product led growth advisors for scaling B2B companies.
She has 25 years of experience, not going to tell her age, but 25 years of experience as an operator, as an exec. She worked with small PDF before with 50 million plus monthly active users. I know them as well. I had a few interaction with them. She has a sub stack with over 20, 000 subs, the Lea's Project T, obviously a podcast and a cohort based course on PLG, which I believe is she's scaling that down a bit so that she can focus on each cohort a bit more, you know, more value, which is the kind of the point of our philosophy, I believe.
Anyway, Lea Tarrin, welcome.
Leah: Thank you very much, Louis Grenier. And I want to say two things. Yes, I also hate marketing, obviously. I mean, I have to, I'm working in product. And the second thing is, yes, I've also been in the industry for 25 years. So now we have a problem. Either you called me old or I started to work as a child in the industry.
So, you know, like, like five years or six years old. So I just leave this to you, like how you want to handle this, but happy to be here. Thank you for having me.
Louis: I'm going to call you old, if that's okay, because I don't like child labor.
Leah: I think I'm losing the connection right now. I'm not sure, like, everything gets a bit hard right now.
Yeah, it's fine. I'm old. I'm proud and old. It's fine.
Louis: So you've opened an online Shopify store in 2015 about board games, right? Like selling board games. If you had to explain what product led growth is using a board game, which one would it be?
Leah: Product led growth with a board game. Okay. You thought long and hard about this question to throw to me as a curve ball.
So I got you covered. The way that you can learn about board games is in two ways. So the first one is you have some kind of idea. So like, let's say you've heard about Monopoly. Everybody loves Monopoly. So therefore it must be a good game, right? Like we're hearing something about it. So then I have some kind of conceptual idea on what it should be about.
And you have now two choices. You can ask your friend Gary, the sales guy, to explain to you the game. And then you're eventually going to, you know, decide to spend your time on it and then also play it. Or you could try to self serve yourself through the, through the manual and just like try to read the manual and then try to kind of make sense of it and kind of figure out like whether this is worth your time to play it actually with your group of friends.
And the second part is self serving your value. That would be product led growth. And the problem is that with Gary, the sales guy, the guy that tries to sell you on the game, you're never really sure because he gets a little bit of money if he talks you into the game. So you're not really sure. It's also a bit awkward because if you don't like the game, you cannot just send him out of your apartment and just be like, Hey Gary, you know, like I'm not interested.
Just go away. Right. It's hard to disappoint people. On the other hand, we have another problem. So if I have to learn a game or like product growth through a manual, the manual has to be pretty good. It needs to be really self understanding because there is no Gary on the side that can kind of rescue you.
So in order to figure out whether the game is good without playing the game itself, it's going to be very, very difficult, right? So we need to have some kind of good onboarding in this regard. And that all comes down to a manual and a game that is easy to learn. And that's product led growth for you. So self serving value without Gary, the sales guy.
Louis: And if, if you have to compare product led growth with sales led growth, because like you seem to oppose those two things the most. Like what specific board game would Product Lead Growth be, and what specific board game sells Lead Growth would be?
Leah: I think any game where you need to have someone to explain you the stuff, otherwise you just like you check out.
So like the very modern war games, like there's a couple of games that are extremely complicated to learn on BoardGameGeek, which is one of the biggest board game sites that are categorizing games. There is a heavy, heaviness rating. So usually these sales led games are extremely heavy. They're also very
Louis: But like, how heavy are we talking about?
Because I know nothing about board games, which is exactly why I wanted to ask you.
Leah: So, okay. First of all, shame on you that you don't know anything about board games, but let's just put this to the side. So we have a rating between one and five. And I don't know, Mao Mao, or like, you know, rolling the dice and comparing what is a higher number than the other is probably a 1. 1, right? So like, even your child can probably can probably understand this. Once you're starting to enter the 4. 5 region, then you need probably a PhD to understand the rule set, what it all means and how everything is special. And this is a good analogy because these, these complex solutions are very niche interests usually, right?
So like, it's a game about the Vietnam war in a very specific year that is simulating planes that are flying around in a very specific region where the more simple games are very, very abstract, right? Like they're, they're serving a very specific case, like, Hey, you know, like, let's have a good time, like for 10 to 15 minutes, that sort of thing.
So just to give you some, I don't know, like, assume that you have played Monopoly, if not, shame on you as well. Monopoly itself, I would rate somewhere around a two or something like this, right? So like, you know, a relatively simple, a bit stupid, but hey, whatever, it's fine.
Louis: And what's the board game that you actually took the time to learn that was the most the heaviest, like, and how long did it take you?
Leah: The heaviest is called High Frontier, the fourth edition and the third edition. This is a game about space where you have to learn how to stage rockets, launch them into space and plan accordingly. This is very, very math heavy. At least in some regards, it's not math heavy for someone, for a machine learner or like machine learning engineer or whatever.
But for someone like me, it's, this is, this was, this was quite difficult because the rules are very, very specific. You need to learn a lot of stuff that is not that intuitive, but it's very, very realistic. And I'm a huge space nerd as well. So I love the, I love the theme.
Louis: How long did it take you to learn?
Leah: I would say about four to five hours, but like, what does learning mean? So like when,
Louis: when you could play without looking at the rules,
Leah: but this is a problem, right? So like the first game and then the second game, and then you finally starting to get it. And then you may be running out of steam. So depending on how you look at it, definitely a couple of hours to maybe, I don't know, 10, 12 hours, but this is normal for a heavy game like that.
Louis: Okay. So I think this analogy is actually pretty good. As a way to explain those two terms that are being thrown around a lot in marketing circle. By the way, product is part of marketing because you know, the four P's and all of that, but you know, we'll put that aside for a second. Can I just put my, can I just step on my soapbox for a second?
And then we'll talk about the step by step, how to apply that to your organization, and how to apply which one, how to know which one. I know it's not your fault, but those acronyms, and those fucking PLG, and ABM, and ROI, and all of that, and all of those concepts that are thrown around that are fairly not new at all, right.
Like showing a fucking product, making people use it before, before you ask them to pay, that's not something that appeared in the last five years. Right. So do you feel overwhelmed by all of this? Or do you like, you just have so much experience? That it just, you know, it's easy for you.
Leah: So this is a funny one because so what I do in my job is I advise companies on the side, I have an interim gig usually.
Right. So like I get to see a lot of portfolio companies as well from VC funds and so forth. So I look at their pitch decks. I also start to work with them more on an operational level. And. It is funny that there is absolutely not a single metric that everybody that I have on these calls would agree on what it actually means, not even revenue.
I can even fight about revenue. So, if you're in an industry like this, where terms are not as clear as you think they are. So, for instance, what is CAC? When is a customer churned? What is a customer? What is a user? What is a GMV? When is a GMV? When is CAC payback really actually counting and so forth? What is actual net revenue retention?
Should we do it on a month basis? Is it on a week? Is it on a year? How should we define anything? Then you know that absolutely no one has any idea what they're talking about. So why? It's not because they're ignorant or whatever. It's just that there's usually two people coming into the room. They talk about God.
They leave the room, think they have an agreement, and then they start to kind of understand that. One person talked about a different God than the other, uh, person. And this is not to knock religious people. I'm just saying, this is a big, big problem in the industry. So what I usually say is stop using these shitty acronyms and go down to the problem level.
However, I do teach PLG and B2B. I do teach all these first principles things, but I try to get it really. Always down to the ground. And I also spend a lot of time in defining terms in the way that I mean to define them and not in how the industry defines them. I cannot tell you how important this is.
Also like from management that we are really talking about the same thing because. I, for instance, I heard someone in my organization dropped the word aha moment. So if someone else is hearing this and they don't mean exactly what an aha moment is and they're going to go out and they take some other definition from the web, then we start to compare it.
And then my CEO was getting some kind of ideas on what we should do and so forth and so forth. And the same happens for marketing, right? What is an MQL? Good luck defining this. Good luck.
Louis: Yeah, it just drives me nuts. So I used to work in the startup world, and I don't anymore because, partly because of this.
Leah: You finished it, right?
Louis: Sorry?
Leah: You finished it successfully. You're done, right?
Louis: Yeah, I'm done. I got, I got almost sacked and I chose to leave on my own terms. Because I just, I just couldn't handle all of this fake complexity. Right. And you said the word that I really like, that I use all the time, you use the word first principles.
So I think today, what we're going to do together is trying to like break that, all of those fucking acronyms and fake complexity into first principles that folks listening can apply to either their business or their client's business and help them be trusted by their customers, be differentiated in a way that, you know, differentiate them from competitors who look perfect from the outside.
I like that you said that in one of your talks, that was pretty good. So anyway, where do we start? Like, like what's the base level, right? You mentioned in the board game analogy that if it's easy to get into, then it's product led. If it's not easy, that says led, but I'm sure that it's probably not just the only distinction.
Leah: Yeah. So would you like to hear the first principles definition from PLG? In general, and then sales led growth. Should we start there? Okay. So product led growth in my definition is the method of distribution of your product into a market by way of self serving, whatever you can, so it is. As easy as possible for a customer to experience product value without monetizing them or like without, or, or by monetizing them as late as possible, or like as feasible, let's put it that way.
Monetization step is very, very important. Why is it important? We're trying to be as honest with the customer as we can, the very honest form of relationship building, because we try to convince them on two sides to spend something with us. The first one is the time. This is becoming specifically important for B2B clients.
We need to convince others that it is worth their time to investigate whether a product is good enough or not. And the second one is the price. Everybody talks about price. Oh, this is 300. This is 500 and so forth. But the actual amount of time it takes to evaluate a solution, whether it does the core job of what I want it to do, is actually far more indicative of whether something is worth a lot of money to me or little money.
The price is just like how much I can probably charge for it, and then whether it's in my budget and so forth. So, this is what PLG is for me. We try to deliver a customer experience as fast, as authentic, and as honest as possible. And we're doing this also, even if we convince someone by charging them in a way where they can cancel again fast.
So that means usually you do not have multi year contracts, that kind of stuff. So this is also a differentiator. Hey, even if you make a mistake with us, you can get out fast again. That's PLG in a nutshell for me.
Louis: So if we forget about the software world and B2B software, which is extremely influential as a, as an industry, right?
Uh, on any other businesses, like sectors and whatever, it's crazy by the way. Uh, if you forget about it, like an example would be. My wife went to the pharmacy the other day. She bought some shampoo, whatever, and she got samples from other like tiny little fucking, you know, facial cream or whatever, right?
So that fits your definition in a sense, although maybe not as tied because you can't just contact them you don't really know how they use it. There is a looser relationship there, but at least they were self serve to experience the product themselves.
Leah: Absolutely. And the analogy is pretty much on point because the product has to perform really well compared to what they're using already.
So you, you always compete against two things. So the first one is either you're competing against the customer who already has something in their life. So it's about replacement. If it's about replacement, of another solution, then we talk about the gap between the existing solution and the new solution.
And this gap has to be significantly higher for someone to even consider switching their solution. The second thing is you're competing against a greenfield where you say like, Oh, I didn't know this, this even exists. In that case, you're like, you're competing against. Something else that they use in some kind of other way.
So there, the gap also needs to be big enough, of course, that you're even considering like, Hey, I didn't know I had this problem. Right. So like, this is kind of like this new product adoption into your life. But these two things are in, in essence, working the same, but it depends on the person that is picking them up.
Yeah, absolutely.
Louis: Okay. And sales led growth, then, what's the difference?
Leah: So sales led growth has an absolute place, by the way, I don't want to give the impression here that it's sales led growth versus product led growth. It's just that sales led growth is extremely good. If you are specifically are trying to convert people with a very niche problem where it's very, very difficult to experience any kind of form of value before, or like it's just, it's just, it's, It costs you a lot of effort, money, and time for someone to see how something is going on.
So like, for instance, anything that is integration heavy, like where I have to tell you a lot of my stuff first before I can get any value out, their cell phone boarding sometimes does not make any sense. So it's easier to actually send someone that helps you get this entire thing. And what we talk about usually is like either it's sales assisted or it is product assisted, right?
So like, there's always like a primary form. So it's either a salesperson that's trying to do something and then the product helps or it's the other way around. But the principle is in sales led, it's always like someone getting out. Sales led growth is really, really good in new categories. Where there's, it does not exist.
People do not really understand the product very well, that someone goes out and actually starts to generate interest. A good example would be Tesla about 10 years ago, before the market was actually ready for EVs. They needed to have a sales led approach. Why? People understood conceptually electric cars, but it was not, you know, so you still needed to have someone talk to you.
And now we have the same product, but the market adoption has completely changed. Everybody knows what an EV is so now it's more of a product led concept.
Louis: So the category, the maturity of the category is important as well as the criteria. So it's like the, the niche, it's quite niche. To go back to your boardroom example, like let's say it's like war in Vietnam in the, like in the forties with specific, you know, you need to know a lot about it and it's quite specific to this world.
Um, and it needs to be difficult for you to see, to experience it. So if you have to learn for five hours straight, the rules of the game before even beginning to experience how it feels like to play it, then it's more likely that a sales led approach is the right way to go. And then if you factor in the category maturity, where people don't necessarily know what the fuck it is in the first place, or they don't have the frame of reference, or no one has of their friends or their colleagues told them about it because it's fresh, you know, new enough, then that's more sales led.
Leah: Yeah. I think that's on point. I would only add one thing here in the sense that. The more upmarket we go, so the more money we charge per individual person that is going to use our stuff or like per account or whatever you want to call it, doesn't really matter. Why are people paying us a lot of money for anything?
And you might say that, well, okay, if something is very valuable, then they pay us a lot of money, but that's not the entire story. So for instance, what my cleaning lady does for me is extremely valuable. She's giving me actual time back in my life. I do not pay her thousands of dollars per hour, though, even though it would be worth it.
So there's something else at play as well. And what is at play? At play is, is that price for what we pay for a solution is not just determined by how much value we get out of something, but also how easy it is to replace it with something else. My cleaning lady, although she is absolutely great, the moment she's going to charge me a hundred dollars, I'm going to go to another cleaning lady that just like charges me 35 or 40 or whatever it is.
And so I can switch much easier. And the offering itself is much more commoditized. So sales led has to charge a lot of money because Gary, the sales guy, is more expensive to actually explain to you the product, of course, but also at the same time, therefore, this only works if the product is also valuable enough at the same time, right?
So like, you know, if the product can be self served and you're using a salesperson instead, then you will be competed against with products that actually can self serve. So you will be disrupted. And that has very little to do with the actual product, but how we distribute it into the market. And that's where this tension is coming from between sales and product like growth.
So when both is possible, product like growth tends to work out in equal markets.
Louis: So let's imagine a scenario where you're being called by a company that might be interested in working with you. Let's think about like the typical scenario that you see the most. As you said, you work, you do a lot of like interim, a CPO type role.
You also advise folks, right? You would coach them, consult with them. I don't exactly know, but like you do like ongoing stuff. So you're, as you said, you get a lot of companies in front of you wanting to work with you. Let's try to pick perhaps the most common or most painful type of you know, scenario that you see coming to you.
Let's try to maybe help them through that problem. Right? So first let's, let's set the context. Like, what are we talking about when we say like, you know, the typical company coming to you, the typical use case, what is it?
Leah: So usually my positioning is relatively clear in the sense that I, I advise mostly B2B companies, so I get very, very little D2C and B2C companies.
Let's just put this to the side. So usually these companies are coming to me because. I'm talking a lot about product led growth. As you said, this is not a new concept at all, but specifically in B2B, it is a special concept. So like there, it actually starts to matter whether you're selling to an enterprise client or am I selling to mid market and so forth.
So most companies that come to me are B2B companies, and then they already have some kind of revenue traction, which means they have at least one, two, maybe 3 million in revenue. They either come in through my VC network that I have, where they just say like, this is a win win situation. Like I'm advising these companies.
I make them happy. They get something valuable from it. I get exposure, you know, like my name is also being passed around. I've been very, very successful in industry in the last couple of years because of this and so forth and so forth. So I classically have companies that are in B2B tech SaaS and best companies.
So like my ICP, if you want to call it this way, is a scale up, up until, but not more than a hundred million in revenue. So somewhere between 10 and a hundred million in revenue. Now, why? Okay. Because these companies already had product market fit. So they have a really good product. They know how to run marketing on it.
They know how to distribute it into the market, but now they start to notice something is happening. We either need to optimize our product led growth distribution, or they are a sales led company that wants to now add product led growth to their entire toolkit. And that is very, very typical, but these two have wildly different requirements on like what we should fix or like what we should optimize and so forth.
I'm going to pause you for a second, but these are like the main two scenarios that I see in my inbound.
Louis: So let's go with the sales led companies looking to like move into experience with the product led stuff. Because I feel even for folks listening who are not in B2B tech SaaS, they might benefit from it.
Because most companies out there, small and medium businesses out there that are not in tech, not, you know, they would have a sales led. approach, right? Whatever you want to call it. So I think that could be interesting. So there is a trigger there though. So they don't contact you just because, Oh, let's go into product led.
What do you tend to see as the main trigger that make them say, fuck it, we need to do something about this.
Leah: So the way that we evaluate performance in tech, which is roughly the same with retail and some other ways is we are trying to monitor our revenue, whether it's growing or not, like how much of this is new, how does it relate to the cost, you know, the very basic principles.
So one of the things that we started to notice now in the past, I would say one to two years, is that there's a lot of competition coming into the market. And this is also true for some hardware companies, right? Like it has never been easier to produce products to distribute products, right? Like to get access to distributors, all that kind of stuff.
So you start to compete with a lot more people. You remember this five years ago, everybody was a drop shipper. Everybody did their marketing through social media. What has happened now? There's so much more competition that the price to advertise a thousand impressions. Has actually risen, I think on YouTube or something.
I read some numbers today, actually from 2021 to 2023 from 6 to 18 in average. So we have a problem. It's not that people have multiplied or like people have gone away or something. So like, it's not the actual people or the eyes that have changed that much. It's how many people want to also advertise at the same time on this stuff.
And the inroads to these people. Is still kind of like, you know, the road did not get much, much wider. There's just much more cars on it. So you need to pay much more dollars for this kind of access. So what does this mean now? This means that as a business, if you're being competed with much, much more, and you do digital advertising, that does not mean that you're a SaaS company, of course, but like you're doing probably some kind of digital advertising, you're also probably listening to this podcast on a digital device in some kind of way.
Then you're also competing with. others who are also trying to use the same channels. And if they have the same product, then you're not only competing against those that pay more, you're also now competing with others that may be satisfying the same need. So why is this now important? This is important because in order to differentiate yourself from this other competitor on the side, You need to differentiate yourself in some way.
You need to be different. And how can I differentiate myself from someone else that claims to do exactly the same, if I'm not special, if I cannot get my product into the hands of people? That's a big problem, right? So, in that sense, what we see right now, broadly, not just in tech, is that verticalization.
So, being specific with your product in a very specific use case is becoming the play in the future. Why? Because these ultra horizontal approaches, where you try to have this one product for every use case, tends not to work that well anymore. Because if you have a very specialized use case and you're happy with the smaller market, then you can start to target these people also much more narrow.
You pay less for your advertising money because you can also target people much more narrow and so forth and so forth. So I would say to just like drop a really cool sentence in here. We really have entered the era of niche product offerings. It's never been easier to create products. And this is always happening, right?
Like the big solutions, they just like tend to struggle against these in some way. There are some exceptions, of course, but that's where I would, what I would say.
Louis: I like how you define that problem by saying that who do we trust as a consumer? If everything looks perfect from the outside, right? Which is kind of, this is why I started this episode with, which is the core challenge.
When people contact you, when those companies like the sales led companies contact you, do they frame the problem in that way? I don't think so. Right. Did they say something more specific such as our sales is like dropping a bit plateauing, we don't know what to do.
Leah: Yes. So, so yes. So core numbers that we are looking at in businesses like this in sales businesses is the CAC and the CAC payback.
So like the costs that we have to, that we incur. Uh, so from sales and marketing to get a customer and these numbers are worsening now over the last couple of years, we're seeing this everywhere. That means for a sales led business, they cannot pay the salaries anymore in the same way for the salespeople that they have.
And that also means another core number that we are looking at is CAC payback. So like, that's the amount of time it takes for this cost that we have to acquire a customer to pay back. This is extremely important. Why is this number very important? Because the longer it takes to get this money back, the longer my capital is bound, and the more risky it is that if something in this time happens, so a market downturn and so forth, that my company goes bust, right?
I start to get in trouble and so forth. So these numbers are not looking that good. And usually the reaction of a market has always been the same. Every company is trying to go up market. So they try to find some kind of version of their product where they can try to charge more. And if you, if you do not change your product fundamentally, then you need to kind of find out what makes my product very special for a smaller amount of people. So I can really advertise and go into this direction again. And this is difficult, right? Like this is very, very difficult. So like D2C, like direct customer companies like Peloton or like Blue Apron and all these kinds of companies, they're feeling this very, very hard right now.
And they struggle with differentiating themselves right now. So because their advertising costs went up. And if you're direct to consumer, you cannot use distributors, right? Like it's not like that people are just like coming in and they're doing a little bit of shopping. So you're driving very, very, very close to the road.
And this is why this kind of sales led approach, but also like direct to consumer are struggling with the same problems on both sides.
Louis: Yeah. Direct to consumer in particular, I think are breaking one of the most fundamental laws. Of marketing product, whatever I'm going to call it, that have been proven across market across decades, which is the fact that you need to be where people buy in a sense.
And if you only stick to an online model where you expect people to come to you, then over the longterm, you're going to be. In deep trouble. This is why, like, what's the name of this mattress company? The D2C.
Leah: Oh yeah, I know which ones I'm bad at names. I know exactly which one did you mean? That's something with C.
Louis: Casper? Casper. Yes, that was it. Yeah. They, they have to go through retailers and stuff like that to survive because if they don't, if they don't distribute more, then they're fucked anyway. So. Yeah. Let's go back to that scenario. So they're telling you, listen, we cannot pay ourselves people, or we cannot pay as many salespeople as we, as we could before, because CAC is going up, payback is going, it's longer now.
Can you help us? And they are roughly in the, in the range, like 10 to 100 million, as you said. Yes. What do you do next? Like, let's say you say, yes, let's go for it or something like that. Or maybe no, you ask them specific question, but you know, what is the, the first most impactfull thing you choose to do.
In that scenario and feel free to pick a specific scenario to make it make more sense if you want.
Leah: So the most difficult scenario for a sales led company to wrap their head around is what is happening before someone pays. So sales is really good in optimizing and understanding acquisition of a product.
And so like, Hey, you're coming in, you're a lead. Now I need to convert you step by step by step by step. But there is a moment with every product before that usually is attributed to marketing where someone hears about it for the first time, then they're maybe, you know, they hear about it for the second time.
And then they kind of maybe try it out by just sitting into the car of a friend or whatever it is, you know, like if you're a car company, that kind of stuff. And in this journey. Between marketing and this classical sales interaction, there's a lot of stuff actually happening. And a good example would be, let's take my retail store, let's take the board game store.
People that were buying board games at my store were buying the exact same game that was standing in the next store on the other side of the road. Like, you know, exactly the same barcode, exactly the same components. Like I did not, I did not sell anything special in the sense. But what was different is that I built this store very product led.
I made the store the product. So how was this different? This was different because I only listed games that were above a specific rating on BoardGameGeek. And I knew that my particular store was serving people who did not know exactly which game that they want, but they want to have a good one. So they came in, they did not really know, Hey, I want this exact thing.
Because if they were starting to compare my prices with someone else's prices, I was always losing. Right. Like I did not have to, I did not have the cheapest prices and so forth. So I turned the store itself as into a differentiator because I knew that if someone comes in, that this is something that they are going to care about.
This is not the entire story. We also started to kind of group the games by, you know, like by categories, like, Hey, this is good for couples. This is good for getting to know people, that kind of thing. And we also had demo games on the side. So you could also sit down and play these games. So very, very often people came for a board gaming evening.
It's a very classical board gaming scenario. You just, you come in, you play the game and then you can also take it with you and buy it. And this kind of convenience was the entire store. And the reason why this worked so well in the end with the positioning is because I did not claim that I am the cheapest in the entire industry, right?
Like I did not claim anything else. But I advertised myself that this is the board game store in English, in Switzerland, where expats can learn to, or like get to know other people and also get the best games. That's what it was. And this positioning is so incredibly important. Because it's not just the positioning where you can sell the most games.
It's the people that I can retain the most, right? People were recommending this from one person to another, to another, to another. So the average rating in the end was a 4. 9, which I'm really, really proud of. And this is very, very product led. So I never went out. I never had to advertise my store. It's just, you know, like this one person that got in.
They were doing some stuff and then they told another one. So then, you know, like it goes a little bit around like a wildfire and you need to kind of figure out how do you differentiate yourself. So your product always fulfills a specific basic need. But then on top of this. What does it do special? A Tesla drives exactly the same like any petrol car, but what does it do special?
What makes it to go like for which group does it make it really, really special? And this differentiation is just so, so, so, so, so important for me, it was always extremely important to serve the customer above the standard retail experience. If you wanted to know where your stuff is, you got to know it.
If you ordered it on like on day one, then you had it on day two and so forth. So this was unquestionable, the value that I wanted to serve. This is why I could also charge more money than my competition, because people were also willing to pay for it. And that's how I would look at it from a product life perspective.
Louis: When you talk to those companies that are in this situation and you explain this, you give your example, let's say, or whatever, what is the biggest objection that they'd have about it?
Leah: So they're always afraid that we are cannibalizing their offerings. So in a classical company, what we actually say is that, Hey, you know, like you can try it out.
And then, you know, like there's, there's usually a freemium or a trial in some kind of ways, and then you can have a subscription. So like in tech, everything is about subscription. Subscription or some kind of cheaper offering and so forth. So they're always afraid about this kind of value. And it turns out that when you start to work with them, that you can actually use this, right?
So like you can, you can start to address a different group of customers. with product led growth that you might not have with your sales led people. So the much smaller customers that want to have a simpler product where, you know, things are simpler, but also cost less money. But one of the really good untapped potentials in there is that you can use now this downmarket segment where you have much more customers, much more people, to test out your stuff, because you couldn't do this if you were just selling to enterprise customers, you know how this is, you're doing marketing, and you have to do some, I don't know, some ABM marketing to like 50 enterprise customers.
You have no idea whether your messaging was good, because there's just not enough companies to make any quantified statement about this. But if you start to also address like the more down market, and it's still worth it, you can start to test with new value propositions, maybe also new interface changes and some, you have to be also careful about this, but we can start to play around with data.
And this is why usually PLG companies, so for instance, Spotify, Slack, Netflix, all of these companies are very, very easy to use. They are very, very modern. But when you look at Salesforce, all these old, like gross, like really gross products, it just looked like garbage. The reason is, is that. They just started to pile stuff on top, but they did not have enough people to actually validate whether the interface is still good enough.
And then at some point it was just too late. Right? So this is a very, very common scenario that I see where they are just like, they're afraid that we are cannibalizing like their upmarket segment. But what you actually want to do is you want to do product led sales. So you want to combine both of them.
And that's, that's where the strength is actually lying in the future as well.
Louis: So you said to extract the basic need that you can solve and then add. Yeah. There's something special on top of it, right? So if we reverse engineer what you said about your own store selling board games, I'm just going to give a few examples of like needs that are like common in humans.
And I would call them irrational ones because those are the ones that if you see someone else struggling with this, it just seems a bit weird, right? So anyway, we crave approval. Like, so this is the fitting in part, the self love. We want to feel good about ourselves. Not like a loser. We want to be seen by others.
We want recognition. We love patterns as well. Organizing chaos. which is a big thing, you know, control freak type thing. Fewer decision, too much choice, tends to overwhelm us. So like having this kind of feeling of, again, going back to control, reducing risk, right? We don't tend to pick the best option on a very rational scientific way.
We pick the least risky. And so if I, if I look at what you describe with your board game, I think the fewer decision and control, That's probably two big things, right? Like you give, by curating the games that were the best, you really help them to make a better decision, less risky decision than if I had to go, they had to go to this like huge website that had all the fucking board games in the world.
Like where the fuck do you even start? So that's a fire. Summary?
Leah: I think it is. We're using something that HubSpot was, was also using as a description. It goes a little bit into what you said as well. It's like you have different features about your product that turns strangers into prospects and you have different stuff about your product that turns prospects into customers and you have different things to turn customers into promoters.
So people who are recommending it, who then attract strangers again, right? So like, so why is this important? Let's take the store again. It's exactly as you said, there are some factors to this that make it really easy to tell someone else, Hey, this is a board game store that only has good games. It's a very easy story to tell, right?
Let's take it to attract people like this. This is really, it's a good story to tell. It's very interesting. So people get in, but in order to retain people, to really keep them, in the product, like to engage them on a continuous basis. I need to also cycle my inventory constantly, right? Like I need to stay on top of this.
So nobody's going to go around and say like, Oh, Leah has to store that always has the newest stuff. That was not the original pitch. This is what retains people. And if they retain and they stay with me, then they're delighted with times and then they become promoters. Then they can say like, Hey, you can come to Leah and you can just trust her.
And that's, that's the kind of good thing. So to just like, to, to, to add one sentence to this, I was not interested in making revenue. I was interested in making revenue with people who have a high potential to retain. And this is how every business should, should look at this. It's really about the recurring revenue that I'm getting from something.
Obviously, this is not possible for every business, but this is why we have subscriptions. This is why Peloton also started to diversify themselves, you know, like with, with subscriptions and so forth and, and so forth. For example, but we need to look at our product in a little bit of a different way. You need to have different products that kind of convinces you for the first time.
Hey, this is really good. And then one that really keeps you. And then one that really turns you into a promoter. And this is a very powerful concept. I feel like that also goes a little bit into this because you need to address all these base feelings, as you said, and we try to cover this also with product growth as much as we can.
Louis: So when you work with a company that is sales led and you're slowly transitioning it like to product led, the first, am I right to assume that the first kind of big concept you tackle is really break down those four categories of people that you need to serve properly, right? Like the stranger, prospect, customer, promoter.
Leah: Yes. Correct. So. That's a, that's a very good point. So, yes, we try to figure out what is the aha moment for any prospect to understand what your product is about. Now, what does that mean? Let's say you are a delivery driver for Uber Eats or whatever, and the aha moment could be the first time you have finished a delivery for Uber Eats.
This would be your aha moment. At this point, you now have a very good idea, as a driver, what this product is about, how this feels, and now you can make an informed decision whether you want to keep driving for Uber Eats, you know, like you want to do this and so forth. So this is what we call an aha moment.
Stripping down your entire experience to this particular aha moment and only coming with the bells and whistles and everything that comes afterwards, you know, like, so how do you manage a hundred rides? How do you submit all of this stuff to the taxes and so forth? This comes way, way, way later. So this is what we try to really kind of.
This is what we try to find out. You have to make some assumptions, but you always try to like exactly in the way that you said, right? Like we try to separate, Hey, what is now stuff that is retaining people? What is attracting them and what is delighting them and how do we make them to recommend afterwards?
Louis: When you work with a client, do you just get together in a room with the key decision makers, customer facing staff, or like folks who have some knowledge about the people they serve, and then you just make assumption about each stage or. Is that it?
Leah: You kind of, you kind of have to do this with everybody from the sea level at the very least.
Sales needs to be in the boat. Sales knows a lot of stuff, right? Like sales knows so much about these customers. They also know like which features work and which doesn't and so forth. All of this is good. The problem is with sales is that they're the experts in closing. They're not the experts in retaining.
Marketing is really good in knowing what attracts people. Right? So like, we know what's working from the messaging and so forth. Product is really good in understanding what engages people. So like what keeps them in, what turns customers into promoters, right? So like, or like what annoys them? Like what is driving all these customer tickets and so forth?
Sales doesn't know that. Marketing doesn't know that usually. So we need to kind of find some kind of common ground where we really start to understand, Hey, can we distill the core value that it takes for a customer to experience? Before we charge for it, that is not always possible for every product, but usually what we try to do is we try to limit by usage.
So for instance, if you have a board game cafe, the way that I did, which, so I also charged a table fee, you know, like you come in and then you want to stay the entire evening, you just paid like 10. What do you do? You gift them the first night for free. Of course, right? It's a very, very obvious kind of concept.
And why do you do the gift, the first one for free? Because it doesn't cost me a lot. My tables do not cost more. But there is a chance that in this first night where they get it for free, that they have such a good experience, that they're going to come back again and again and again and again. Now, you could say that, well, if you have such a great store, why don't you just charge for the very first entry?
Because there will also be a couple of people who are not your ideal customers, and because they were in your store for free, there's a, there's a lower likelihood that they're going to complain about it afterwards because they didn't pay money for it anyways. So, it's also about filtering your inbound in some way and product like growth is really geared towards filtering people out that are just like short term revenue, which is actually damaging to you and, and really honing in on this longterm revenue.
Like what actually gets people to come to you over and over and over again? What are the good reviews driver? That's, that's very, very important.
Louis: So you break that down, like the four kind of steps you talk to product, product sales, marketing, whoever is customer facing or have some knowledge of the business, you pick the very first aha moment that, you know, is going to be, you know, the key one, right?
Let's say you have like maybe two or three. In the short lists, which one do you, how do you know which one to pick? What criteria do you use?
Leah: That presupposes that there is a correct one. There might be multiple correct ones. Usually it's quite obvious. So for instance, we just might know, I don't know, like I'm a photographer.
So like, what is the aha moment for a photographer? Is it the first time they took a picture or is it the first time they actually charged a customer or whatever it is? It doesn't really matter that much. It's just like, if your product is serving photographers, you need to kind of find a moment that you can measure.
So like, this is the second thing. You need to be able to measure it in some kind of way. Why is this important? Because if you can measure it, then whenever you change something to your onboarding process, or like to this free version of your product, whatever it is, or your service, Then you can now start to measure whether you're changing it positively or negatively.
This is a thing that I really hate about the NPS, for instance, right? Like we think that if we start to ask people how happy they are with the product or like, how likely would you recommend this product to another person, Louis? I always get, I get a very red head. I'm like, this is such a garbage metric.
Prove to me that you love it. Prove to me. I don't want to ask you. I want to measure some kind of action. So for instance. If they are making a review afterwards on Google, that is a pretty good review, right? Like that is a good proof that you actually, that you actually have a good product.
Louis: So they have to have skill in the game, right?
They have to have paid something, done something, or the reputation, or there's some, there's a cost to them as well, right? Like there is proof and the NPS is asking about future behavior, which is one of the biggest no no about customer research.
Leah: And we know how good customers are in predicting their own behavior.
So, for instance, a good aha moment that you could measure theoretically in a board game store is whether someone has stayed for more than an hour. Why an hour? Because it's probably longer than they just like stay around and just browse a little bit. And an hour means, hey, they're interested, right? Like something is now they understand what the store is about.
So they have been staying around. So this would be a very good one. And you could, you could technically measure this. And you could say like, Hey, instead of like, we had 40 visitors today, we had 15. Who stayed longer than an hour. And from those, we made that many sales and so forth. And that is the same principle as just like treating visits versus MQLs versus qualified, whatever, right?
Like we're trying to qualify our, our traffic in some ways.
Louis: But what about folks selling stuff that is not online, right? Like going back to the shampoo stuff, let's say they only distribute to supermarkets or whatever, um, that, that makes it very difficult for them to measure any aha moment, right? So they have to revert to like resort to mystery customer, mystery shopping, mystery shoppers.
Leah: So with physical products, let's say, I don't know, let's just take some example, like a shampoo or I don't know, whatever it is, right? Um, we still need to kind of understand the context in, in which a product is used. And if you have an existing hardware or like, like physical retail product that is being used somewhere.
You might be surprised how much the form factor, for instance, might actually play a role. Like you might not know, like, like if you do not know why people are really picking your stuff in the shelves when they can choose 10 other products, then what are you doing? Right? Like this is where we do market research.
So we start to understand like, Hey, so why did you buy this? You know, like maybe you have some really silly reasons. So like a very good example is this, what's it called? The Stanley cup. So the Stanley cup is like this product that is coming from a company that was marketed to men all the time. But suddenly the sales were rising with, with women, like this is an actually very interesting story.
I highly recommend for people to check out the story on, I think it was on the Wall Street Journal. They had this huge story on the Stanley Cup. Very, very, very interesting. It took them so long to really understand why women were suddenly buying this product. Why were they buying these products? So the Stanley Cup is like a relatively big, cup where you can store liquids in it.
I'm not American. I never know like what kind of units they use. Oz, gauze, whatever. And liters. That's for sure. It's a big one. It's one that you can carry on your little finger when you have your hands full and it's, it's spill proof. It's perfect when you have a baby on your arm and you have to carry all the shit from the house to the car while you're just being completely busy.
And. It took them, it took them almost too long to understand why their product was being loved by these women. And now it's, I think they're like 10 X to their revenue. And this is just sad, right? Sometimes your product is loved by a very specific group. And if you would have gone to, to them like five years ago, and you would have said like, specifically, you could have looked into the future and you could have said, this is the product.
Women will love it. They would have said, no, we are a company that markets to men. Right. Or like, like we are going to market this like for women. Like, it was like, no, it does not make any sense. This is the thing. If you have proof from the market and you can look at it and you see it also in quality, the feedback, this is where you double down and you go hard on it.
Also for hardware.
Louis: The, the advice I usually give around this is like pay attention to the little accidents, to the thing that don't make sense. You know, that are like of the rational thinking and the completely left field exactly the Stanley Cup is a perfect example, and it goes back to the irrational needs I mentioned earlier.
Yes, functionally, there's a few things, as you said, like the ability to like hold things in one finger or whatever, but now it's became a craze. And now there's this also the feeling part of the same tribe and feeling you're being. you know, keeping up with the Joneses and all of that. So now you're also having that fucking flywheel running for them.
So very difficult to stop.
Leah: Yeah. And you know, the fundamental product is still the one that they produced for quite a long time. So the product didn't change. This is the thing. Sometimes you have to just double down so you can get exactly this flywheel going. Another, another favorite example of mine is Twitch.
I don't know whether you know the story about this one, but Twitch is a huge, huge, huge, huge streaming platform. Yeah.
Louis: The gamer scouts. For gamers, right?
Leah: No, it started as Justin TV. And Justin TV was like this platform where just like people could like, I don't know, I think stream about their lives or something like it was not very, very specific.
So same story. They started to figure out that some really small subgroup was loving their product much more than the rest. And if you just look at the balance sheet. This is something that sales does, right? And I don't want to knock sales in this regard, but like, this is one of the weaknesses that sales have.
If you just look at the balance sheet, yeah, most of the money did not come from these people. But if you start to scale the solution and you really focus on the gamers that really love this, then you start to end up with a Twitch platform that is just multiple, multiple, multiple times bigger. So sometimes for companies like these, specifically if you want to go past the 10 million in revenue, you have to find this little segment that loves you and you have to be willing, and this is hard for a lot of founders, to pivot from your original idea.
Cannot tell you how many companies died because someone wanted to keep on their idea that just did not happen in the market. If you're flexible, you have a chance. Every marketer can tell you the same.
Louis: Have you heard the example of the sandwich, how it was invented and for whom?
Leah: It sounds familiar, but no, I'm not sure.
No.
Louis: It was created for Lord Sandwich. It wasn't actually a fucking name. The guy was an avid gambler. And he wanted to be able to eat his food at the gambling table.
Leah: Fair enough.
Louis: Without cutlery and shit like that. So, when you think about it this way, which is exactly what you described, when you pick an unmet need, something that is very, you know, very important, very painful for people, or very, something they want to get done, you identify the group, the subgroup, as you described, that really, really, really, really, really cares more than the average, right?
And you find this kind of difference between the two. So the sandwich is one, this other example, a counter example is the cockpit. I think it was the U. S. Air Force. They measured the dimensions of like the typical pilots in terms of arm length, like many, many different measures. And then they created an average cockpit, meaning like they didn't have to personalize it for each.
And you can guess what happened. The. No. None of the pilots fitted in the cockpit because it was just average for everyone. And therefore it was for no one. So this is kind of the thing, right? Like if you create that product, you create a cockpit that no one can fucking fit in, even though it looks great.
Leah: So this is funny because I'm an avid flight simmer and I actually know how to fly an 16, at least in the simulator. And this is a very interesting thing because this is actually American military design philosophy that you see quite a lot. Like they average it out and they just like pile features on top of each other.
And it kind of makes sense in some level, but not as a sum of it. So like, it becomes like the interface becomes a little bit more complicated. So I'm sorry for everybody who is now going to complain and going to tell me that I have no idea, but this is different from like a German philosophy, like, or like the European design philosophy that we have in some ways, so yeah, it's very true.
Yeah.
Louis: Let me try to find a couple of more examples, because I, I actually studied this. There was a, there's a company called sand to go. Uh, they sell sachet to put down the toilet, little sand things so that when you go number two, it doesn't smell on the noise is less as well because it creates this kind of stuff around the self, uh, above the surface of the water.
And when you think about, yes, you could sell that to anyone. Everyone takes a shit, you know, most, most days. But if you, they looked at. Um, if you look at the founder story, actually you have the answer, the folks who really needed this the most, more than the average, were mostly women, mostly younger, on the younger side, and who had some sort of a digestive issue would make them go to the toilet more often than the rest.
And the founder is a woman who has Crohn's disease, and so therefore she has to go to the toilet more often than the rest. And because she was a socialite traveling more than the average, boom, you can find then this kind of very, very core and start there, right? Or restart there.
Leah: I have, I have one more funny example because this is, this is very, very relevant as well.
So like when I was working at small PDF, we were doing research, like we were also like selling worldwide, of course, right? So like one of the solutions that we were selling was called eSign. And eSign is the signature of a digital document. So instead of you like, you know, you having the document, you just sign it and then you're doing this, you're doing it digitally.
And for some reason we had problem finding adoption in the Brazilian market and we could not figure out why. So it was not the language because in Portugal it worked, which is kind of, it's almost the same language. It's just like in Brazil, it just did not work. So this could also work against you exactly for the same reason, because like some kind of market just does not want you, it took us way too long to kind of figure out why our product was not needed in Brazil are not used and the reason is sometimes you have geographical specialties in a country that completely prevent you from adopting your product and Brazil does not have a culture of trust where you trust a digitally signed contract, as stupid as it sounds. So we were doing interviews. And we were having, having this one guy that we asked like, so how do you sign your documents?
And he said, well, you know, like just the other day I had a 10, 000 something, something Brazilian reales contract with Microsoft. So the guy from Microsoft came physically and I went with him to a notary office down the road and we signed the contract in front of the notary. And I'm like, are you kidding me in 2020?
And this is exactly how they do business. So they sign in front of the notary and this entire industry is built this way. So the notary is also hyper modern. They create a QR code, they have everything signed, and then you just walk out of the office and this is how they sign contracts. They do not trust each other just like with digitally signed contracts by themselves.
So even if you know about these oddities. This particular market was for us too small to worry about it. And that's why local solutions could actually flourish. So it does not need to be even secret. Right?
Louis: Yeah, yeah, exactly. Funny enough. I mentioned in the intro that I actually had, I work with small PDF a bit.
I didn't work with them directly, but while I was at Hotjar, I actually did a, a partner up with them to write a couple of articles because they were using Hotjar for a few things. They were talking to me about how this and emails to administrative assistants, explaining that they like to observe them at work, see how they actually worked.
So they went to offices, looked, and how they were using stuff day in, day out. And if I'm not mistaking, maybe you're aware of this more than probably more than I am, but they watched them and they learned that they frequently needed to scan documents into PDF format and then convert them, convert those PDF back into docs, right?
Correct. And so they found an unmet need there or something that was, that could be optimized. So when we talk about customer research, this is what it takes, right? It's not fucking Google analytics or whatever.
Leah: No, this is such a good point. I want to just nail this. I had 17 million specific PDFs being converted into Word documents every whatever, like months or whatever.
No amount of quantitative data analysis tells you why someone did this. You have no idea. Do they do it because the PDF does not render in the device that they want to look at it? Do they do it because they want to edit it? You have no idea. And unless you really understand why they do something, you cannot really offer a better solution.
If you do not do customer research continuously at the same, like all the time, then you are damned and cursed to just optimize an existing solution until a better one comes around to solve the same problem in a different way. And we were really good at this. Like we were, we were really, really good at this.
Like we were constantly interviewing customers all the time. Okay. And everybody should. Yeah.
Louis: Now, uh, the silver lining or the actual end of the story is that you found out that administrative assistants needed to do this because their boss asked them to fucking, you know, here is the, the paper thing. I sign it and I can, you scan it back.
And then I can edit the things in it, like some weird fucking workflow. So it was fun. I should actually work with them. And I don't remember that by heart, but it's part of the, again, examples that I have from the last few years. Leah, I could keep speaking to you for hours. It's already been an hour. Uh, I'm cautious of your time.
It's later than, than it is for me slightly, but I just want to ask one last question before I let you go, which is something I always ask my guests. And actually perhaps, um, let me just give a very quick summary of what you said. I took notes while you were talking about it. So we mentioned the difference between PLG and sales led growth.
Product led growth is like method of distribution into a market by self serving as much as you can, basically. Sales led growth is specifically for people like within, with a niche problem, where it's very difficult to see how the value, takes ages, but you can merge those two approach in a sense with like product led sales, where you kind of imagine this, this pyramid and, and you can go down market with product led, up market with sales led.
You mentioned that, yeah, it's never been easier to create and distribute anything. Therefore everyone looks perfect from the outside. How do you get trusted? Well, you need to show, not tell. The cost of digital ads is increasing. CAC is increasing. CAC payback is increasing. Everything's increasing. And to do this, you need to first Identify a basic need, and then add, think about what is special about it.
And you do this by identifying a subgroup of people who really give a shit about this more than the average. And we, we showed a few examples of that. And then you mentioned the four kind of criteria, the four steps, which is like, you know, from stranger, to prospect, to customer, to promoter. And you identify the aha moment for each, which is the moment where they experience the product.
They have the biggest, you know, high from it in a sense. And you optimize just for that. So we didn't talk about that in detail, but. You strip everything out, and just keep that, deliver that thing, right? So that means you need to say no to 99. 9 percent of all the shit you could be doing. We didn't say that out loud, but that's kind of where we went.
Anything that I forget that you really wanted to talk about today before I ask you the last question?
Leah: No, I think that was a very good summary. I agree with it. Go for it.
Louis: What are the top three resources you'd recommend folks today?
Leah: So personally, for not just like PLG, but also like education in general, I'll give you, I'll give you three different ones in three different mediums.
So the first one is Superforecasting, which is a book by Philip Tetlock. That is a book that talks about how bad we are in predicting the future and relying on our senses. That's a very, very good book for every marketer, for every product person, every salesperson, doesn't matter whether you're in tech offline, doesn't matter, fantastic book.
If this does not convince you that we all suck, then I cannot help you. The first thing. Second thing. Is a podcast that I'm a huge fan of it's more like tech related. This is the science of scaling. It's a HubSpot podcast. It's moderated by Mark Roberge. It's a fantastic podcast. It's very, very sales, salesy, right?
So like a lot of sales leaders and so forth that are talking about this. And more on the online side, I'm a huge fan of anything that goes on on Substack. So like Substack is a platform where you have a lot of blogs, you know, like newsletters and that kind of thing. And in there, you can find a lot of creators in your specific interests that are quite good.
And my personal one, when it comes to B2B. Is for instance, Elena's growth scoop. She's really fantastic. She does the same stuff that I do. And yeah, like, and people like this, right. But like, it's, it's very, very easy to get lost in sub stack because, you know, like people are recommending other people. So like, it's a very good point to kind of just start there.
This would be the three things that I would say. are the future of learning. I would say. Yeah. Podcast books and website.
Louis: Thanks, Leah. It's been a pleasure. And to blog your stuff again, you have a sub stack, as you said, Leah's product T. Yeah. You have a cohort based course on maven. com. You have a podcast.
Yeah. So thank you so much today for answering all my questions and being so thorough with me. You also ask yourself questions that you answered. So that made myself, my job easier. Yeah. Once again, thank you so much.
Leah: Thank you for having me, Louis. .