Jun 16, 2023, 6:18 PM ETInterview, Fireside Chat

Noah Weiss: How to Master Product-Led Growth; Scaling PLG to Enterprise at Google & Slack | E1026

20VC with Harry StebbingsNoah Weiss, Harry Stebbings

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Innovation velocity at Slack is expected to accelerate significantly from late 2020 through the present, driven by a clarified focus on both enterprise buyers and end users.
Enterprise buyer acquisition efforts are projected to face diminishing returns once standard blockers like Data Loss Prevention (DLP) and Enterprise Key Management (EKM) are resolved, necessitating a strategic shift back to end-user capabilities.
The OpenAI market strategy is predicted to evolve over the next 12 to 18 months to determine whether the consumer product or platform/infrastructure side will dominate.
Slack Connect faced a two-year beta delay, which may have caused the company to miss a window of exponential returns due to increased market saturation and competition.
Slack expects that user needs diverge significantly at the 30,000-user threshold, requiring a product design shift toward enterprise controls, scale, security, and compliance.
While the original product conception targeted teams of five to 50 people, data proved scaling beyond 50 was possible as small teams within large companies adopted the product organically.
Over 85% of Slack's enterprise customers originated as self-service SMBs, validating a strategy where serving end users first facilitates natural enterprise motion.
The "70-20-10" portfolio model is not universally applicable; for instance, AdWords at Google utilized a 95-5 allocation, and Slack's 10% bucket includes the entire platform and workflow automation system.
Generative AI products must align promotional claims with underlying model quality and data confidence to mitigate user trust issues regarding hallucinations.
To address hallucinations, generative AI is expected to evolve into a symbiotic assistant requiring user verification rather than blind trust.
The industry faces a critical strategic question over the next 12 to 18 months regarding how to enable other companies to integrate AI into their own products following the consumer product explosion.
Product decisions should be categorized as "two-way door" decisions to avoid extensive debate, reserving "one-way door" decisions like pricing, packaging, and brand for full executive buy-in.
Product principles must be established early in the scaling phase to prevent CEO micromanagement and allow the organization to build to standard without slowing down.
For a Chief Product Officer (CPO), the initial focus must be on understanding team culture, customers, vision, and strategy, with fundamental strategy changes deferred until high context is established.
Startups scaling from SMB to enterprise risk over-rotating to enterprise buyers' desire for conservative features, which can introduce cultural conservatism and erode the company's core speed and innovation DNA.
Product reviews in a hybrid environment have evolved to be more inclusive through asynchronous recorded clips, allowing larger groups to participate without performance pressure.
Slack lacks a comprehensive software-based bird's-eye view of major company areas, a gap currently filled by manual spreadsheet processes.
Product management is expected to remain fluid rather than rigidly professionalized, balancing art and science that shifts from 75% art/25% science at early stages to 80% science/20% art for mature features.
The core mission to make working lives simpler, more pleasant, and more productive has remained unchanged for at least eight years, guiding all product quality and craft decisions.
Initial PLG mistakes included insufficient rich trial experiences for the paid product, leading to a strategic shift toward providing an intentional "taste" of the full experience.
Speed is identified as the critical "oxygen" for product experience, where latency in features like document editing causes users to revert to alternative tools.
Simple design in enterprise software does not always equate to fewer clicks; guided flows with more clicks can perform better by instilling user confidence.
Integrating acquired products is generally harder than talent integration, and buying a product rarely decreases time to market compared to building from scratch unless it is a multi-billion dollar acquisition.
The "Posts" feature launched in late 2010 or 2019 is expected to fail due to high standards for speed and quality in rich text editing that the company could not initially meet.
Product market fit is viewed as a continuous renewal model rather than a binary state, requiring constant adaptation as audiences and the external world change.
The primary challenge for early-stage companies in renewing product market fit is the founder's lack of self-awareness regarding the fundamentally different needs of next audiences.
Hiring a CPO is deemed appropriate when the product founder CEO experiences team blockage on high-quality, fast directional decisions.
The largest challenge for founders is the transition from designing for themselves to designing for next audiences that look fundamentally different.
If unconstrained, Slack would expand use cases outside the workplace to include communities and shared purpose work, a market historically ruled out.
Slack Connect was delayed in the market for about two years, potentially causing the company to miss a moment of exponential return due to increased competition.
The "70-20-10" model at Google, particularly the 10% for far-out bets like self-driving cars, instilled an ambition level difficult for most early-stage startups to afford.
Over 85% of Slack's enterprise customers started as self-service SMBs, confirming that serving the end user first allows the enterprise motion to happen naturally.
Product management is becoming too rigidly professionalized with frameworks, requiring a more fluid combination of arts and science to avoid missing impact opportunities.
The biggest advice for a PM seeking promotion is to deliver measurable impact to the customer experience or business, considered the "silver bullet" over other inputs.
The biggest generic advice for a new CPO is to avoid rash decisions and focus on understanding the team, culture, and customers to find low-hanging fruit for accelerating velocity.
The integration of acquired products is harder than talent integration, and buying a product often does not decrease time to market compared to building it from scratch unless it is a multi-billion dollar acquisition.
Simple does not always mean fewer clicks in enterprise software, and guided flows with more clicks can actually perform better by helping users feel confident they have mastered the software.
Slack's mission to make working lives simpler, more pleasant, and more productive has remained unchanged for at least eight years and guides all product quality and craft decisions.
The biggest PLG mistake made by Slack for many years was not providing a rich, valuable trial experience of the paid product, leading users to believe the free plan limitations were the entire product.
The perspective of relying on organic discovery of paid value has changed to the intentionality of giving people a "taste" of the full Slack experience so they never want to go back to the free plan.
The "one-way door" decisions, such as pricing, packaging, and brand, require clear identification and often the entire executive team's buy-in, whereas "two-way door" decisions should be empowered locally.
Product reviews have evolved to be more inclusive in a hybrid world, allowing larger groups to participate without feeling like a performance, with much of the work done asynchronously via recorded clips before the meeting.
The biggest broken process at Slack is the lack of a bird's-eye view of the latest state of the company's major areas, a gap currently filled by manual spreadsheet processes rather than elegant software.
Product principles should be enshrined early in a company's scaling phase to allow the organization to build things up to the company's standard without the CEO micromanaging every decision.
The biggest challenge in moving from SMB to enterprise is determining when to shift focus, often indicated by seeing pockets of teams in large organizations adopting the product organically before the organization itself.
Over 85% of Slack's enterprise customers started as self-service SMBs, proving that serving the end user first allows the enterprise motion to happen naturally.
The "10%" bucket of the 70-20-10 model at Slack includes the entire platform and workflow automation system, which represents a huge bet moving away from a primarily text-based product.
Generative AI products need to establish a symbiotic relationship with users, acting as an assistant that requires verification rather than blind trust, to address issues of hallucination.
The role of product management is becoming too rigidly professionalized with frameworks, and that a more fluid combination of arts and science is needed to avoid missing opportunities for impact.
Hiring a CPO is appropriate when the product founder CEO feels like teams are blocking on their ability to make high-quality, fast decisions of direction.
For a mature feature area, product management is 80% science and 20% art, whereas at an early stage or with a new capability, it shifts to 75% art and 25% science.
The biggest advice for a PM seeking a promotion is to deliver measurable impact to the customer experience or business, as this is the "silver bullet" while other factors are merely inputs.
The most generic advice for a new CPO is to avoid rash decisions and instead focus on understanding the team, culture, and customers to find the lowest hanging fruit for accelerating velocity.
If unconstrained, he would change Slack to allow for use cases outside of the workplace, such as for communities or shared purpose work, a market the company has historically ruled out.
The "70-20-10" model at Google, specifically the "10" for far-out bets like self-driving cars, instilled a level of ambition that is hard to afford at most early-stage startups.
The biggest challenge for founders is the leap from designing for themselves to designing for the next audience that looks fundamentally different from them.