Saas

Tips on how to Construct and Promote a Product that Clients Love (Video + Transcript)

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As we gear up for SaaStr Europa 2024 back again in London on 4-5 June and SaaStr Annual 2024 in the SF Bay Area on September 10-12, we needed to have a look again at a few of our most iconic audio system and periods from over the yr, that we will nonetheless study from right now.

And you may seize 15% OFF SaaStr Europa tickets now here ->

Right now, Datadog is at $2B+ ARR.  It’s a collection that almost all of us use to handle how our software program operates.

However the place was it at $100m in ARR?  An enormous deal, sure however simply preparing … to develop even sooner.  To go way more multi-product, and extra enterprise.

And Olivier Pomel, CEO and co-founder of Datadog, was form sufficient to hitch us in Paris on the first SaaStr Europa along with Jean-Baptiste Coger, Co-Founder at PlatoHQ, after they have been at about $100m ARR.  We will look again at how Datadog scaled on this unimaginable and trustworthy deep-dive.

Pomel targeted his session on:

  • Making your SaaS startup customer-centric:
  • How occasion advertising has helped him combine his engineering and gross sales groups.
  • The essential position of product managers and methods to make the most of them successfully.
  • Lastly, he gives his piece of recommendation to all founders that wish to change into customer-centric.

 

Transcript

CEO @ Datadog | Olivier Pomel
Co-Founder @ Plato | Jean-Baptiste Coger

JB: I’m some tremendous privileged and excited right now to have Olivier right here has. So for individuals who don’t know him, Olivier is the founder and CEO of Datadog. So why don’t you inform us a bit of bit about what Datadog does?

Olivier: Positive. Hello everybody. It seems prefer it’s working. So, Datadog what we do is…we do monitoring and we do analytics for utility and infrastructure in cloud environments. So mainly any firm that’s working infrastructure, servers, functions and that’s working it in cloud environments is a buyer for us. And the excellent news is that almost each single firm is busy proper now transferring from legacy to private and non-private cloud.

JB: Cool. It’s a really area of interest setting. How did you find yourself in that world?

Olivier: So I began the corporate with a longtime buddy and coworker of mine, and by the way in which we began the corporate within the US, so regardless of the French accent and all of that, I’ve really lived within the US since 1999, and it was pure for us to begin an organization in New York. So what occurred to us is that we had … Earlier firm, I used to be working the event staff and he was working the technical operations staff or ops staff. And the story there was that we knew one another very nicely. We had labored collectively in 4 completely different firms earlier than that. We employed all people on our groups. We scaled them from scratch, mainly. We had a strict no jerk coverage and but we ended up a few years down the highway with builders that hated operations, operations that hated builders, finger pointing, the entire issues imaginable.

Olivier: So the place to begin was, why don’t we give all of these groups the identical viewpoint? How will we get them aligned and perceive their issues are the identical means? In order that’s how we acquired began. We began the corporate in 2010. We didn’t fairly perceive on the time that the cloud was going to be so huge. We thought, hey, it seems cool. Why don’t we construct it for the businesses which are transferring into these new cloud environments? Perhaps that’s an effective way to get in. The opposite factor we didn’t fairly notice was that bringing dev and ops collectively, bridging these two groups, was not only a characteristic of the brand new world. It was really one of many key the explanation why firms and enterprises could be transferring from legacy IT to the cloud. So we ended up proper within the heart of it. And while you quick ahead right now, the corporate is about 700 individuals. We’ve been doubling the dimensions of the corporate each single yr and it seems all people’s transferring to the cloud and all people wants to grasp what’s occurring to their programs and functions.

JB: Cool. So dwelling the issue first, that’s what the foundation of Datadog. So we’re right here to speak about constructing and promoting a product that clients love. So extraordinarily related as a result of I believe, not solely your self-claim, but additionally acknowledged in the neighborhood by being a type of firms that truly are very customer-centric. So let’s begin with what’s, in your opinion, a customer-centric firm. What’s your definition?

Olivier: Proper. So the one factor that’s counterintuitive is that so all people needs to be customer-focused.

Olivier: The issue is that almost all firms find yourself being both sales-driven or engineering-driven and, if you wish to be customer-focused, you possibly can’t be both of these. So you might have mainly to maintain correcting what’s occurring inside your gross sales groups and inside your engineering groups to verify all people is specializing in the shopper first. What this implies is that in case you let all the things be sales-driven, you’ll find yourself being very quick time period. Gross sales groups are nice at determining what’s going to get a deal performed and fairly often getting the subsequent deal performed is definitely not what you wish to do for the long term in your clients. However on the flip facet, in case you let your engineering groups run on their very own, I imply, you’ll find yourself with organizations the place individuals focus an excessive amount of, means an excessive amount of, on their options, focus means an excessive amount of on the long run, what’s going to make sense and be sustainable in the long run, and you find yourself bridging that hole again to the shopper, which is tough. So I’d say it’s a wrestle of daily to ensure that we return to the shopper and begin from there.

JB: And the way did this type of fashion of administration or firm tradition began? Was it a aware alternative?

Olivier: So the selection for us was … Truly, we have been compelled to do it as a result of after we began the corporate it was actually, actually laborious for us to boost cash. We have been primarily based in New York, which isn’t the apparent place to begin an infrastructure firm. A lot of the firms within the US began in that house have been within the Bay Space. Neither my co-founder or myself got here from Google or Fb so we didn’t have the credentials for serving to firms run at very massive scale. So mainly we didn’t have thousands and thousands and thousands and thousands of {dollars}, we didn’t have an entire suite of folks that have been repeating to us that we have been geniuses so they may spend money on our firm. So we mainly needed to give attention to the issue, like we spent actually the primary couple of years of the corporate listening to clients and attempting to grasp what the issue was.

JB: In order that’s the way it began. So let’s come again over the course of Datadog. You’ve been round for eight years. Let’s begin from the start. How did all of it begin? So in case you may give extra particulars of those two first two years. We mentioned it earlier. There have been a number of phases. And the way did you handle to be customer-centric in these early days?

Olivier: Yep. So the very first thing we did is after we began the corporate, despite the fact that, so I’m an engineer and my co-founder is an engineer too, for the primary six months of the corporate, we didn’t write a line of code, which took some restraint as a result of while you begin an organization, you’re tremendous excited, you wish to get it performed, you’re considering of all these lovely issues you possibly can construct. And so as a substitute of that, we really spent all that point speaking to potential clients and potentials customers. And the factor that we came upon there’s that … So initially, while you don’t have something to promote, all people is tremendous pleased to speak to you. You’ll get hours and hours of actually incredible individuals at incredible firms and I spend all that point explaining to you what their issues are, what’s working, what’s not working for them. They’ll be extraordinarily candid.

Olivier: That adjustments upon getting one thing to promote as a result of then you definitely’re tainted, you might have an excessive amount of of a vested curiosity and also you’re attempting to push one thing, so individuals received’t open up so simply. So it’s really very simple to try this tremendous early on. So then after that, what we did is we constructed the primary alpha of our merchandise. We spend six months constructing the primary alpha, acquired it to deploy it right into a small variety of clients. We really seen that the product was not precisely what it wanted to be. It was means too open-ended, means too common on the time. So we needed to change that fairly a bit. But additionally one factor that was counterintuitive to us was that we have been actually limiting ourselves by strictly having access to our product.

Olivier: So we had a closed alpha, we hand-picked the individuals that may really be on the alpha, we tried to select one of the best firms, one of the best individuals at one of the best firms. And it was really actually, actually laborious to get a variety of sign from these clients the place we’re doing that. What we ended up doing after that’s we opened it as much as a large beta, and abruptly all the things modified. As a result of, because it seems, it’s rather a lot simpler for customers to self-select and to go and begin utilizing your product than so that you can perceive for whom you’re going to be the suitable factor on the proper time and so they’re going to have some free bandwidth proper now. And all the celebrities will likely be aligned to allow them to get you deployed.

JB: All proper, so open beta, that was one of many secrets and techniques. You’re not a robust believer within the MVP, proper?

Olivier: No, I really don’t suppose, for what we do, an MVP exists. There is likely to be exceptions, proper? However in our case, we promote to enterprises. We promote a product that serves a pretty big objective prefer it wants to watch all the things that’s occurring throughout the entire infrastructure, the entire utility. There’s a really massive variety of options our clients depend on, and none of those options in and of themselves are revolutionary. I imply that’s not why we construct a product. There are all kinds of differentiation we inbuilt, however it’s essential have them, in any other case, you can’t be minimally helpful. And so the way in which we see it’s it’s extra of a continuum, you retain including these options, after which at a sure level you might have sufficient of them that clients can begin shopping for. And the laborious half there’s to determine actually how you understand which of these options are and that’s why you need to, once more, return to the shopper, be sure to have sufficient of them as a way to really extract some sign from these conversations.

JB: So we’re two years, you’re in the marketplace now, you’ve launched, and in order that’s the subsequent stage for the corporate. So how do you, now at that stage, ensure that Datadog continues to be customer-centric. So what are the stuff you put in place? What are the methods and hacks? And the way huge is the corporate at the moment possibly?

Olivier: So the product went to the market in 10:15. And I believe that section of reaching an preliminary scale, I’d qualify it as being from 10:15 to a bit lower than 100 individuals. So, initially, we needed to set ourselves up in order that we’d be straight aligned with our clients. And one recurring theme for us is that we wish to hear the dangerous information rapidly. Truly, we’re searching for the dangerous information. You’re not going to study something in case you go and meet your clients and also you say you lead by saying, isn’t it nice? And so they say, yeah, yeah, it’s form of nice. And then you definitely discover out really, it’s not all that nice, and so they’re going to churn, and one thing dangerous’s going to occur. So that you really wish to get the dangerous information.

Olivier: A method structurally we set ourselves up for that’s for a really very long time we didn’t promote yearly offers. We solely offered month to month, which means that clients had the chance to churn on a regular basis. Which means, if one thing is flawed with a product or if we don’t resolve the suitable drawback or it’s not invaluable sufficient, then we all know instantly. Clients are simply going to churn. We will have a dialog with them. In the event you don’t do this, in case you begin promoting time period offers, you’re going to have the dangerous information, however a yr later, and by then you definitely’ve wasted a yr. You’re going within the flawed route. You’ve made all these errors that you may keep away from in any other case. The opposite factor that we’re nonetheless doing is was that we needed to ensure that the entire firm was as near the shopper as attainable.

Olivier: So for instance, we had the entire engineering staff on assist rotations, so we nonetheless had skilled assist as a result of we’ve got assist engineers which are on the entrance strains and so they do a variety of the work, however each single engineer is just one week rotation all year long that truly brings them in entrance of the shopper. And it’s incredible as a result of initially, engineers are tremendous pleased when it begins and so they’re even happier when it ends and while you don’t need to begin to repair all these points. However actually what it provides is it provides a variety of empathy for the shopper as a result of they see really what issues they face on a each day foundation. Additionally they see the implications of their decisions. Generally sure issues within the product appear to be incredible concepts. After which, while you see it from the shopper’s perspective, it seems, yeah, really it was a bit complicated, so it was an awesome thought. However we’re going to vary it as a result of it doesn’t work fairly as nicely.

Olivier: The opposite factor we did to reveal the engineers to the shoppers is we really … We do a variety of occasion advertising as a result of we promote to firms that migrate to the cloud and most firms need to go to occasions to find out about it. Everyone’s new to it. So all people goes to conferences for that. So we go and we exhibit at these conferences and we give plenty of demos and we really deliver engineers to do all these demos and all people’s on the rotation and all people’s going to get to at least one, two, three, 5 possibly of these conferences and spent each time a full day mainly giving demos to potential clients or current clients and answering questions. And that’s one thing that additionally helps construct empathy for the shopper. It additionally helps make the entire engineering staff extra assured about the issue they’re fixing and about their relationship to the top consumer.

JB: You had an attention-grabbing trick on the occasions to make engineers extra comfy. We’re additionally promoting to engineers and a few of them are introverts or communication will not be, for some engineers, their greatest expertise. And then you definitely had some attention-grabbing methods to make them really feel extra comfy.

Olivier: Yeah. So one factor that’s not pure while you’re an engineer, like me, really, goes and looking for different individuals’s consideration. I don’t wish to use stereotypes as a result of, I imply, clearly all people’s completely different, however typically talking, a variety of engineers will not be going to be tremendous comfy attempting to speak to 40 completely different individuals in two hours. That’s not what everybody’s job is on the engineering staff. So what we do for that’s we really produce other individuals on the staff which are chargeable for getting individuals’s consideration after which introducing them to the engineers in order that they do a demo. So then all people enters a rhythm the place engineers can do demos and reply questions, that there’s by no means a scarcity of individuals speaking to them, which solves that subject.

JB: And a few individuals say that you may solely enhance what you measure and observe. So what have been the metrics that you just’re measuring, monitoring and attempting to enhance on a each day foundation?

Olivier: Yeah, so curiously sufficient a for firm that’s gathering so many metrics, we’re not extremely metrics pushed for the product. It’s attention-grabbing as a result of we course of like 4 or 5 trillion data a day for our clients of their very own metrics. However on the subject of our product, we predict that many of the metrics are lagging indicators and so they don’t convey all of the nuance of the worth that our clients are going to seek out with our product. So we don’t really practice ourselves to optimize to the metrics. The issues we’ll watch … As an organization, we’ll watch the quantity of knowledge and the quantity of infrastructure that our clients are monitoring with us as a result of it’s an indication of the worth we give to that as a result of they deploy us into extra locations. We’ll watch the engagement, after all, when that’s not authentic. And we’ll watch the churn, which is why very early on we’re specializing in that.

JB: Cool. So, so let’s quick ahead a bit of bit. So, so now you’re, as you stated, round 700 and rising. You informed me you run 16 places of work around the globe. So what does it imply at that scale to be a customer-centric firm?

Olivier: So, while you scale, among the issues that labored initially will not be going to work anymore. So for instance, we will’t have the chief staff assembly with all the shoppers on a regular basis. My co-founder and I and our chief product officer have been doing a variety of the product work initially the place we’re spending all that point with clients, can’t scale this anymore. So the very first thing we did is we really created a really sturdy product administration operate. We didn’t have product managers for the longest time. I believe the primary product supervisor was employed as soon as we have been over 100 individuals, however now we’re investing closely in product managers, and the position of the product supervisor could be very particular.

Olivier: Product managers will not be right here to invent product. They’re right here to spend essentially the most time attainable with the shoppers, so exterior of the workplace, to grasp what their drawback is, to grasp what they’re utilizing, what they’re not utilizing, what they’re paying for, what they’re utilizing or not utilizing, and why. And mainly perceive, get one of the best understanding attainable of the issue and the worth that these issues characterize for the shoppers. Then after that, what they do is that they current our product and so they get suggestions from clients on the product in order that they have their position is to not invent the product, however to verify it solves the suitable drawback and it has the suitable worth. That’s what they do for us.

JB: So that they’re huge PM groups, huge product groups, and investing in them. And likewise how do you relate to that section, to the early stage mode. Do you do nonetheless have some, domestically, some actions and initiatives which are extra scrappy, early stage?

Olivier: Yeah. Truly. So one factor that’s an enormous problem is while you begin branching into new merchandise, so both you begin new merchandise otherwise you’re go into new markets, which requires some tweaks in your merchandise or completely different sorts of firms, completely different geographies, issues like that. Rapidly you’re again into startup mode and it’s simple to not notice that. It’s simple to mainly get used to successful and then you definitely anticipate all the things’s simply going to work this fashion. And they also will do the one factor it’s essential do there’s it’s essential ensure that the groups that work on these new merchandise behave precisely as you’ll have while you have been a tiny firm, which implies soliciting as a lot suggestions as rapidly as attainable, which implies additionally going as extensive as attainable with the betas, and there’s fairly a little bit of pressure there as a result of when you might have an current product, you don’t wish to taint the opinion of the present product by releasing a brand new product that’s not going to be as polished that you just’re going to distribute very extensively.

Olivier: However nonetheless, in order for you that product to work, it’s essential go very extensive in a short time. The opposite factor it’s essential do is it’s essential create a tradition the place individuals search the dangerous information. And it’s really rather a lot higher to go to a buyer and ask them, okay, so this new product, are you’re going to pay for it? You’ve tried it, et cetera. Is it ok? Are you prepared to purchase it? It’s really significantly better to listen to from them, no, I’m not going to purchase, and for this reason, than to kick the ball down the highway. And down the highway hope that possibly in three months, six months, 9 months, they’ll change their thoughts or possibly they’ll offer you some suggestions in the event that they haven’t informed you something but. So it’s really a very good factor to know what’s not working, it provides you a thread to tug, it tells you the place it’s essential go.

JB: So it’s an awesome transition to … As a result of I wish to speak about pricing. So it’s nice, you discuss to clients that let you know what their issues, you resolve them. However in some unspecified time in the future you want that form of robust discussions, all proper, it’s going to price xx {dollars} or no matter. So how do you retain your buyer as an ally in that dialogue? And the way do you begin the dialogue and have it nonetheless profitable?

Olivier: Yeah. So it’s counterintuitive since you’d say that’s the half the place you’re going to be disconnected out of your buyer as a result of your clients wish to spend as little as attainable. You need them to pay you as a lot as attainable. So clearly there’s going to be some disagreement there, I believe the very first thing is you need to agree on which form of firm you might be and which form of product you might be. The way in which I see it, there are two sorts of merchandise, two sorts of firms. There are the low-end disruptors, the place the most important characteristic is that it’s cheaper. And in case you do this, mainly the dynamics together with your clients are going to be, they’ll push you to be cheaper and cheaper, and to determine what you possibly can take out of your product that it may be as low-cost as attainable. Otherwise you may be the high-value product the place you’ll be charging in your product. You’re going to attempt to cost extra in your product and also you’re going to need to ship extra worth for that.

Olivier: So the cycle together with your buyer is to ship increasingly. So you need to agree together with your buyer that they’re searching for excessive worth, excessive influence, and never as low-cost as attainable, as a result of in any other case you’re by no means going to fulfill. When you’ve agreed on that, you’ll be aligned within the medium, long-term, proper? As a result of your clients, they need you to achieve success. They need your organization to be in enterprise two years from now. They need you to ship new options. So that they really need you to achieve success. So when you’ve performed that, that’s good.

Olivier: After that, there’s nonetheless going to be some friction. However that friction can also be the way you’re going to study in regards to the worth of your product and about what would it’s essential do and the place it’s essential go subsequent. You’re going to listen to from clients. Yeah, so for that specific a part of the product, I completely see the worth. We would like it. It’s advantageous. That different half, we don’t see the worth but. So we’re not going to purchase. It’s a big sum of money. Asking for cash and placing a greenback quantity on the product actually focuses the thoughts for the shoppers and it helps you get actually, actually good suggestions on the place it’s essential go. So I’d say in the long term it’s a really wholesome relationship to have.

JB: Tremendous attention-grabbing. It’s not simply being customer-centric, it’s not all about constructing the product. It additionally displays on just like the gross sales staff, the way in which you promote, as a result of the way in which you body it, it’s all about seeing your buyer as a accomplice. Let’s do that collectively. You need me to succeed and I need you to succeed and the dedication in your facet is to pay. And I believe that’s tremendous attention-grabbing, tremendous obtainable lesson right here.

Olivier: Sure. And actually, actually specializing in worth. You need to perceive the place the worth is. And once more that’s the job of the product managers. That’s why we’ve got spent all this time with clients.

JB: Mm-hmm (affirmative). So that you guys are fairly huge now. So in comparison with us, we’re 12 now and rising, enthusiastic about tripling the corporate measurement inside the yr, and we’re enthusiastic about tradition. How do you scale your tradition, even from possibly 12-30 in our case. It looks as if an enormous problem. And from two to 700, what are the information and methods on learn how to scale the tradition and at your stage, as a CEO stage, how do you ensure that all the things is form of going proper?

Olivier: Proper. So the one factor we haven’t performed to this point, we really haven’t written down these different seven values or the 14 stuff you do. We haven’t performed that to this point. It’s one thing we’ll do sooner or later as a result of I believe, as we scale, we’ll want that so we will higher practice. However tradition on the finish of the day it’s actually about who you rent, who you hearth, who you promote. That’s what reveals the tradition. And for us the tradition we wish to have is a tradition the place we’re utterly customer-centric. So for instance, we practice individuals, we practice the managers to care in regards to the particulars. So one factor we do, I really do nonetheless as a CEO, is I see each single buyer grievance and assist e-mail that involves us. I don’t learn most of them. I delete most of them instantly. I simply scan them in a short time.

Olivier: However what this does is it provides me a way of … It helps me sample match, mainly. It provides me a way of what’s really occurring. How persons are really reacting to the product. What are they saying? I by no means really act on them straight. I by no means return to the shopper, I by no means reply, I don’t attempt to resolve the issue. But when I wish to really impact change, what I’ll do is I’ll return by means of the administration and thru the chain of managers, ensure that individuals simply get some suggestions and resolve whether or not they should change one thing. So we encourage individuals in any respect stage of the group to try this, mainly care in regards to the particulars, to allow them to sample match. The opposite factor that is essential if you wish to preserve a buyer targeted tradition is that you need to be tremendous cautious about the way in which you discuss in regards to the clients inside the corporate.

Olivier: It’s tempting, typically in gross sales it may be tempting to speak to clients as … You get some manipulative that you just speak about them since you attempt to handle them by means of a gross sales course of and issues like that. Generally on the engineering facet or the product facet, you possibly can suppose that clients are making the flawed decisions or why are you’re doing that? Why are they doing this silly factor with our product? The way in which we see it’s in the event that they’re doing a silly factor with our product, it’s our fault. We allow them to do this. We made them suppose they need to be doing that or we didn’t clarify it proper sufficient. So that you all the time need to assume that the shopper is correct. But additionally, even in case you suppose they’re flawed, the truth that they’re considering one thing flawed in and of itself is a truth. It exists and you need to cope with it and you need to consider. So you possibly can’t let your self dismiss what you hear from the shoppers.

JB: Perhaps one of many final questions right here. So alongside your historical past, you’ve acquired two firms, and when you might have such a robust tradition of being customer-centric, how do you make this work? As a result of you might have new individuals coming in, they’ve their very own tradition, clearly. How do you choose these firms? And the way do you make all of this acquisition work?

Olivier: Yeah. So we’ve made two acquisitions and each have been closely tilted in the direction of the tech platform, the product and the staff. So we acquired firms to construct upon. We didn’t purchase income streams so as to add to our gross sales engine. And in each instances what we optimized for is what’s going to occur after we shut the deal. Are individuals going to stay round? How lengthy are they going to stay round? Are we going to have the ability to construct on prime of that staff and switch that staff of 20 we simply acquired right into a division of an organization that’s going to have 200 and 500 individuals? So it’s all optimized on the match, what occurs after the acquisition and if the businesses are going to share the identical values we do.

JB: Cool. Final query. Brief reply. I’m guessing there are a lot of founders within the viewers right here. And what’s the one recommendation for them and for me as nicely? As a result of I believe most of us wish to be customer-centric. So how will we make this work? What’s the one piece of recommendation that we must always take out of this?

Olivier: My piece of recommendation is admittedly, search for the dangerous information. You run in the direction of the dangerous information. Whether or not it’s early, while you simply shipped a product, whether or not it’s late while you’re renewing an enormous buyer, the flawed factor to do is, you understand there’s some subject in some account and then you definitely present up in entrance of the shopper and also you hope they’re not going  to deliver it up. Hey, possibly expectantly, we will get away with it. Truly, no, the very first thing you do is you speak about it, you deliver it up and then you definitely really hear straight from the shopper what they need to say about it. It really goes a good distance in the direction of constructing the partnership and it additionally helps you study from the dialogue together with your clients.

JB: Cool. Thanks. Time to wrap it up right here. One factor that I take out in addition to it’s rather a lot in regards to the tradition. It’s rather a lot about additionally coming from the highest. And so it brings it again for what we’re doing additionally at PLATO is admittedly serving to your engineering staff ingrain the tradition of their day-to-day actions. So if you wish to study extra about what we’re doing, simply come to our sales space. Thanks rather a lot, Olivier.

Olivier: Thanks.

JB: I hope you guys discovered some stuff right here. I did. In order that’s a win.

Olivier: And we’re clients, so it’s best to take a look at their sales space.

JB: Yeah. Thanks very a lot.

And a bit extra on Datadog’s journey right here:

5 Attention-grabbing Learnings from Datadog at ~$2 Billion in ARR

 

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