Embedded PLG
How atomic units and North Star metrics transformed Slack and Netlify into juggernauts

With Nino Medina

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Jason Tissera | Upmarket: Well, everyone,  in today we have Nino Medina with us. He's a growth expert that previously worked at Google, Sllack and Netlify, to help them define and scale performance marketing and product like growth. Today he's working as a fractional head of growth for, B2B + B2C companies. Thanks so much for being with us.

Nino Medina: Happy to be here. 

Jason Tissera | Upmarket: awesome. So what conversations are you having with leaders at early and growth stage companies? What are their priorities today, yeah, this is really consistent. Across : companies of all sizes for their series. A startups, public companies. I talk to folks across the gametes, and the one thing that I keep hearing over and over again is, how do we do more with less? Well, what does that mean? I guess it's important to t identify. What more means? And maybe in past years and 0 is straight environments that get traffic to the site. Could people try that product. Let's just go the heck out of our product, and we'll see where it goes from. There we'll figure out monetizing  it right. The conversation that's completely swung to the other side of the pendulum where more means of revenue. How do we get revenue? Let me drive more of it. How do we get to profitability as soon as possible? So that's the one part of the question. What is the less? Well, less in this case we need a few things with primarily money. So capital. How do we spend less money to get more output. People? How do we get more output with the folks that we have. And so you you put that equation and you get an output and a and these companies across the and they're asking those those tough questions, and I've seen it with  every company that I've talked to in the past year. So there's it's it's it's definitely a trend. It is a. This is top of mind. This is a problem that needs to be solved. This is a pain point. So yeah.

Jason Tissera | Upmarket: got it. And what are companies doing right today? You know who's actually getting it? Getting it right?

Nino Medina: Well, one are the folks who move quickly. The once you recognize that this was coming, and it's sort of really taking a look and figuring it out. Are we actually doing things the right way. And that means really challenging your prior missions of how you're tracking progress. What are the metrics you're focused on and asking the hard question on. Well, did we send this up the right way? These are right metrics to focus on? Are these the things that that we should care about, and i'm gonna pull back from my experience at slack in 2017 which is a much different environment. There, there's a an abundance of cash and resources. But we are very deliberate about how we wanted to scale. And so, before we, you know, through a ton of money into sort of scaling our growth program.

Nino Medina: We started with those fundamental questions of what is going to mean for us. What are the white metrics? So what is our North Star. Here's an interesting. It's sort of dynamic that was happening in Slack at that time from first sign up to first dollar in as revenue. It takes a very long time. I'm talking like on the order of years, not weeks or months, versus maybe other SaaS started to. So it'd be very deliberate about how we deploy capital given it so that longer feedback period. And so yeah, we spent a lot of time thinking about what our North Star metrics. What is the volume? Every dollar we're spending? How do we think about attribution, and and really getting extremely tight on view and economics? Because of this dynamics, and I find that a lot of companies are now doing that and and kind of scaling back. And we're looking at those fundamentals that's like we did that from the beginning, and so that's one of the reasons we were able to scale a super effectively.

Jason Tissera | Upmarket: one of the things that you mentioned when we spoke earlier was around atomic units. Could you kind of dig into that a little bit?

Nino Medina: Sure, Sure. Yeah. So this sort of ties back to the definition of Are we focused on the right metrics, and again giving that dynamic of a long payback period really wanted to figure out what are, what is the metric that is most predictive of a paid team.  And so we started by looking at sort of the atomic units of the problem. But what does that actually mean? It  is what are the fundamental objects that compose your product? And if you think about Slack, it's super straightforward that it is. It is a message you can send a message to your colleague to be creating a channel. This is a space reorganizer where it could be setting an invite. Hey, let's hang out in slack and let's start and so me along with our our data Science team really wanted to look at what is, what is the combination of of those atomic teams of behaviors that are predictive of paying teams. I always like to label it as our version of Facebook, 7 friends in 10 days. The the key insight that they figured out through a a kind of rigorous analytical study is, if a user gets 7 friends within 10 days of setting up they're much more likely to to be a retain. User and so we wanted to figure out our version of that. But a little bit further down the phone that was predicted with revenue. And so what we found was a  combination of I was sending invites within, like an X amount of time period and simplifying to a North star, really galvanize the team help us organize our tactics, our strategy, how we run campaigns, what are the channels? We are prioritized. First  it. It really gave us a sense of organization. Now, was it, you know, the absolute, most scientifically rigorous, like metric we've got to come up with? Probably not. We. We can spend it here really hunting in on this. But we found something we felt confident, through some sort of analytical regular, that this was good enough. We stuck to it. That's the key. We stuck to it. We put  some resources behind that. We had a hypothesis.

Nino Medina: This is, you know, if we do this, if we optimize for this, we would get that. And that's exactly what happened. So yeah, it's all about understanding the fundamental units of your product thinking about just just logically, what are the ways users could behave and express their product data? What are the things that I think? What are the things they are doing that sort of amalgamated to the North Star where your team can focus and keep things simple. So that's what we did. And Yeah, I take a ton of those settings to this day and encourage every  startup thinking about. You know how to do less of more.  Are you focusing on the right things? That's a really good fundamental question to us.

Jason Tissera | Upmarket: I think that's super interesting, and were you able to use some of that, because in terms of your background you were at slack first and then netlify afterwards. Yeah, were you able to use some of those learnings at Netlify and kind of figure out a North Star metric for them as well.

Nino Medina: Yeah, it's the same sort of a concept. So so I Netlify one the core problems that we were trying to solve was free to take conversion. We got a ton of people coming in to get the free product, and our free to paid conversion rate was to our standard much lower than we thought, and so we wanted to figure out. Okay, what are the cohort of users? What are their behaviors? What are the use cases? What do they have in common for a Graphically, they're like themselves to be more likely to bring to the pay team. And so it's a very similar approach that you think about? Well, what are the core actions? One of the atomic unitsr? It's how to Netlify is building a site. It is getting some traffic to the site. It is. It is getting analytics to your side. And so really kind of the same logic of what are those behaviors that folks are doing, and

trying to put a model, a profile. You can call it a person, and i'll call it etc., whatever it is, like a segment in call in college segment. But the key is, we had a ton of users coming in, as like I mentioned, trying the product so the advantage that we had is product analytics. And so you can combine some of those user insights segments with product data and really figure out. Okay, let's focus on these folks when they sign up. We know what they're trying to do. Let's hit them with some lifecycle emails. Let's show some messages and products and really help them understand the value of the product and connect them, and so they can get to the value, and ultimately to revenue much quicker than we were before. So yeah, it's. It's all the same concept just executed in a different way, with a different business model. But fundamentally same way of thinking.

Jason Tissera | Upmarket: I mean, that's incredible. Do you think that it's really hard for businesses to get to the point of using that fundamental strategy? Is it, you know. Is it difficult? And what are the main roadblocks that they have in getting there?

Nino Medina: Yeah, what comes to mind for me? That difficult? Yes. AndI'll tell you why this is. These are some of the dynamics that I'm seeing in the realm of well, here's the fundamental principle like for any startup velocity.  What you want to do in the early stages is, get your product, that plot product market fit as quickly as possible. And so you're integrating on the product is trying to see what sticks you don't have a lot of data to work with. You don't have a ton of users. It's like using a lot of your intuition and your product sense to sort of build the future of your products. And so and so at the expense of that is product, instruments, chase, instrumentation. And so what I see is once folks get to product market fit, and they want to scale, and then somebody like me, or or some of you who's running a good thing in the past. They start asking these questions, and you realize Oh, wait! We're not checking this, so we're not tracking that. And so, before you can even ask the question, there is a let's get infrastructure in place, but that obviously takes away from the loss of the development of the product, which is that that's always going to be important. So how do you make the trade off between like unpacking sort of the fundamentals? I I eally getting those in place so you can't ask these questions to go while continuing to go to the products. And then you, as you see how you're making straight offs every day. Right? Yeah, yeah, you have your product managers. You have a thing things you want to focus on. There's infinite amount of things you want to build.

Nino Medina: How do you take, you know, some percentage of those research to come back and say, and we really need togo back to to the foundations here and build a right instrumentation, so we could enable this to scale the future. I  don't envy you at all. It's a super difficult decision to make, but the great thing is, you know, there's a ton of great resources on this, and great meetings. I  didn't invent this stuff I've just been on. There. There are ways. You can quantify this impact. And so you're not, You know, 3 dots against support. There are ways to to understand what the trade offs are, and I think the important thing is just to have a framework of how you're making decisions. What's  the time requirements, the expected impact. What is the the confidence that it will work, and that will help you try and get it into? Okay. Now, it's time to take a step back and build these fundamental so then you can ask these questions and do some of this work. Yeah, that's sort of my point of view on that.

Jason Tissera | Upmarket: I think that makes a lot of sense. We, with regards to creating very successful strategies - One of the things that you mentioned earlier was also about figuring out within Slack specifically the qualified lead process. you know, finding out exactly which companies to go after after you've gotten a certain amount of sign up from them. Could you tell us a little bit about that?

Nino Medina: Yeah. So this is sort of the, the evolution of of slides sort of self-served to enterprise model. And so kind of going back to what I was speaking to earlier, really focusing on the zoom and economics and getting that bottoms up motion. I think it was really important to sort of get that squared away and i'd have confidence that you know folks coming in. They're gonna stick around that's probably the most fun thing is, it is retention and understanding that. So now, once you have sort of a critical mass of users. You you start seeing sort of these denials then take place, and that's like in particular, what we were seeing was folks like small teams Within these large organizations we're bringing in Slack the particularly the developer market. I think that's really the fundamental we use case in the early stages of slack, they would bring it in. They find it awesome to work together. There's kind of the deficiencies gain, and so, if you wanted to work with the developer team, you know, within your organization you it would just essentially be a necessity to you, working with Slack. That's where these developers were looking and and hanging out and doing work, and so they would invite people in, and that's sort of how that flywheel started going. What we saw eventually was once there was a certain critical massive in a workspace. It was an an awesome time for sales to come in and say, hey, you have a ton of users using this product, you just swipe in your credit card every month you might have a security issue here as well. Maybe we should have a conversation, and so do that simple model of thinking about it's like critical mass within an organization in the workspace, and having sort of sales come in. It just sort of makes sense to have a conversation, because the value proposition was super clear. It's somebody working at it at an at at an organization they would hear that, and it's actually it has to say no. Maybe we didn't need to look into this, and so there, there, wasn't a We're telling you what the value of the product is. We're just we're connecting to that volume. Those are 2 very different things, right. You can talk all day. But yeah, but there, there is a fundamental like a benefit on both sides, and so we just surface that to you. But what I see is oftentimes these folks that are making decisions just don't have time that you're not paying attention to what they had. Maybe they didn't even have an idea a charge that there's so many folks using it. So we were just there to say, hey, by the way, should pay attention to this and that sort of build, trust and facilitated an awesome sales sort of motion. So yeah, that caring cycle all the way to grow through it is today, and it's also part of it.

Jason Tissera | Upmarket: I mean, that's incredible. In both of these cases, both finding the North Star metric, and also finding the right to use for qualifying these leads. Do they change the game for Slack, Netlify and the companies you've worked at?

Nino Medina: Absolutely. I mean, if we think about where Slack was when I got there the primary, the majority of the customer base, if I remember correctly, was maybe 60, 70, 80% self services that folks coming in stuck in the credit card. Primarily small teams and because of sort of this flywheel understanding these metrics, really thinking about that productive growth, motion sales enterprise. It really allows slide to scale to, you know, to the point where it is today, and eventually going public and getting required, for, you know, many billions of dollars, and it was really right understanding those those core pieces and and and building motions around them, buildings and consistency, testing the heck out of them and just understanding the data. But yeah, that fundamental understanding and those insights are absolutely key to go up again. So I  would say it was extremely fundamental to how they got there. 

Jason Tissera | Upmarket: you know. Thank you so much for taking the time to chat with us today. It's just been incredible. You've been a wealth of knowledge, and i'm so grateful that you took the time to explain and teach me all about what you did at Slack, Netlify and Google.