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Product-led growth (PLG) is defined by VC firm OpenView as “a growth model where product usage drives customer acquisition, retention and expansion.” This is a major shift from growth driven by hands-on selling efforts, with broader implications than it may initially seem.

A key difference is that the most successful product-led companies only reach out to a small portion of users that sign up for their product — 14%, according to OpenView’s third annual product benchmarks report.

For companies hoping to emulate the success of Figma, Slack, Zoom and the like, this leaves a tough question to solve: Which of their users should they reach out to, and when?

Uncovering sales opportunities is what Swedish startup Ripe is offering its product-led clients. The role of its platform is to help them “understand which users are both successful and fit their ideal customer profiles, and what next steps to take with them,” its CEO and co-founder, Elin Lütz, told TechCrunch.

Lütz and her co-founder, Jonatan Dykert, have firsthand experience building SaaS products and realized that product-led companies don’t necessarily need more data: They just need to be able to connect the dots between product and sales, which is what Ripe does.

The duo joined forces to found their company in Stockholm in 2021, which was initially called Chimer. Lütz explained that the new name is meant to reflect the company’s role in helping customers “target the right ripest accounts within [their] own existing use cases.”

The data that Ripe is relying on comes from clients themselves — but from various sources that were previously disconnected and inaccessible to sales teams.

“We saw that there was something very strange happening with data being stuck in the product […] and not served throughout the whole organization,” Lütz said. “There was a huge discrepancy between what sales worked with and how product worked.”

In a product-led company, it is critical for customer success teams to have access to product usage data; otherwise, they have no way of knowing which users are worth their time. Static profile data doesn’t help much; they need to know who’s engaging with the product and how.

Think of signing up for a freemium product: How will the company behind it know if you are just a single user who will never leave the free tier or someone who represents an enterprise-sized lead? In a sales-driven process, the sales team would already know. With bottom-up adoption, which is more and more common, answering this question requires connecting data.

The fact that more B2B companies are adopting a freemium model undoubtedly creates tailwinds for companies like Ripe.

“The way that enterprise software is being purchased has shifted, attributing most of the buying power to the end-user. Yet, there is no infrastructure allowing sellers and buyers to instantly connect with each other,” VC Paul Klemm said. “Entering into this relationship at the right time and manner represents a huge opportunity.”

Klemm is a partner at European venture fund Earlybird Venture Capital, which co-led Ripe’s $2 million pre-seed round alongside Norway-based firm Alliance Venture. Individuals from Europe’s B2B SaaS and tech scene also participated in the funding round, such as Pleo’s and Mentimeter’s VPs of sales, Soundtrap’s co-founder and Livi’s CEO and CTO, Ripe said.

Similar companies already exist in the U.S., such as Endgame, Correlated and Pocus. But with a growing number of businesses adopting product-led growth, there seems to be plenty of space for service providers that can help them avoid building their own internal dashboards. After SaaS for SaaS, companies enabling product-led growth are a new trend to watch.

Stockholm-based Ripe helps product-led B2B companies find the ripest leads in their customer base by Anna Heim originally published on TechCrunch

Source: New feed

2022-09-29T14:00:09+00:00
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