How to achieve PLG with Founder of Sendbird
Joseph Lee (CEO)
Oct 18, 2022
Sendbird is a US B2B SaaS unicorn startup that provides API and SDK solutions for chatting and video calls. Sendbird founder Dongshin Kim, an angel investor and advisor to our company, recently had a chance to talk about US B2B SaaS and product-led growth (PLG). We were able to hear about the characteristics of B2B SaaS, which customers actually pay for, and what conditions a product with PLG attributes satisfies.
What B2B SaaS does the customer pay for?
The final verification of the utility of B2B SaaS occurs with the customer's payment, and the product that the customer is willing to pay for is basically 'Buy wins in terms of Build or Buy'. What are some examples of these products and services?
1. Is it messy enough?
Definition: You can do it yourself, but it is very 1) cumbersome and 2) repetitive tasks
Twilio case: communication API related to text, phone, authentication, etc.
In the world before Twilio, in order to develop a function that can send SMS, you need to sign an agreement with a mobile carrier to link APIs, rather than simply coding. It has to be done in a way, but it is very cumbersome, time-consuming, and cumbersome.
In the case of Twilio, by providing various APIs for such communication purposes, it provides users with repetitive and cumbersome tasks instead.
Stripe Case: Payments API
In the world before Stripe, it was necessary to build a payment system considering the linkage of different payment systems and tax issues by country and region, but this was also a very cumbersome and repetitive task.
In the case of Stripe, the problem is solved by providing a simple payment module API that covers these cases.
Sendbird: API and SDK for chatting and video calling
In the world before Sendbird, there were too many exception handling cases to develop a chat function once, and there were a lot of things to worry about.
In the case of Sendbird, it reduced development resources and rapidly increased Time-To-Market by providing chatting, messaging, and video call APIs.
2. Is it hard enough?
Definition: Problems that objectively require high technical difficulty
GPT-3 is a representative example, and high AI research capacity and large-scale data are required to create a similar deep learning language model. Since it is difficult for service operators to develop it, they use the developed GPT-3 and pay for it.
3. Is our current organization lacking in expertise in terms of competitive advantage?
Cases of developing products by supplementing capabilities through UX consulting, etc.
In addition, for products that are in the middle of the core workflow of each function, from possible product R&D to sales and CS, the willingness to pay tends to increase proportionally.
Among the B2B SaaS products, what are the characteristics of products with product-led growth (PLG)?
Product-led growth (PLG) is not a requirement for product success. However, it is true that products with product-led growth requirements have an advantage in terms of early product spread, and products with these requirements are Easy-to-play, Hard-to-master, such as Super Mario product, which enables online multiplayer. So, what exactly does this mean?
Time-To-Value, that is, a product that allows the user to experience the value of the product on the same day as much as possible. Ideally within 30 minutes to 1 hour of using the product.
Must have a single play mode. Small product for MSG (Minimal Social Group) within 2-3 people.
Among the new customer acquisition methods, it is more advantageous if the product itself contains a viral loop. Because it can drastically reduce Customer Acquisition Cost (CAC). A typical example is a structure in which products are naturally exposed to the other party when sending an invitation, such as Calendly and Zoom.
In light of the conditions, it can be seen that Twilio and Stripe have elements that are relatively suitable for PLG.
Twilio requires only one line of API to send SMS,
Stripe can also install a payment module with a single line of API. (Of course, for both products, the more examples are added, the longer it is than one line, but in the case of the Core function, one line of code is possible)
In the case of Sendbird, the reason why it did not focus on PLG due to the nature of the product is that in the case of Sendbird service, UI/UX is basically attached to the app, so the customer must have their own app, and a single-point Because it is Multi-Point Integration rather than Integration, it is said that it is because of the reason that it takes a relatively long time to link and therefore it can be long in terms of Time-To-Value. Therefore, we came to the conclusion of strategically focusing on enterprise target sales, and were able to win market competition with similar services at the time.
In particular, in the case of products adopting the PLG strategy, there are many cases where too many indicators are seen at the beginning. It is said that it is good to consider in terms of priority to focus on establishing a user pool that is enthusiastic enough to actively referral.
“In the case of an early startup, focusing on this can be a good thing in terms of team priorities because if you can find a product that a few people use very passionately, no matter what product it is, you can start anything from there. The size of the market is also important, but in the end, even in a large market, a product loses its meaning if users do not use it, so rather than worrying too much, if 10 users came in and 50 users were invited, what would happen from that point on? With a little more approval, you can see the highland. Todoist and Basecamp all went through a similar process, and Twilio was also a product that unexpectedly faced many challenges in terms of market size at first.”
-Kim Dong-shin, CEO of Sendbird