👋 Hi, I’m Kyle from OpenView and welcome to my newsletter, Growth Unhinged. Every other week I take a closer look at what drives a SaaS company’s growth. Expect deep dive takes on product-led growth, pricing, benchmarks, and much more.
Who should be the first go-to-market (GTM) hire at an early startup?
This isn’t a new question, to be sure. But the right answer keeps changing given the rise of product-led growth, an ever-shifting fundraising environment, and the recent enthusiasm for product-led sales (PLS).
Unfortunately, “it depends” isn’t an answer that anyone wants to hear. 🤦♂️
Many PLG founders immediately jump to hiring a head of growth—someone who can develop a data-driven view into the customer journey and then come up with theses around the top priorities to get better.
The reality is that a head of growth tends to be most effective at scaling a PLG company with product-market fit rather than building one from zero to one. And let’s be honest: growth talent is extremely scarce and it’s almost impossible to find a great one without real traction and data.
For an early PLG business, I could make the case for two potential first hires: GTM lead (sales background) or growth marketer (marketing background).
GTM lead (sales) - A Jack/Jill of all trades working with customers across sales, customer success, and support. They become the customer advocate for the product org and are looking for ways to “replace themselves” by putting what they learn into videos, FAQs, guides, and etc. Ideally they have 4-10 years of experience in different roles, starting as an individual contributor.
Growth marketer (marketing) - PLG companies need to find scalable ways of reaching users, ideally through referrals, viral loops, and organic discovery. Without enough users, it’s impossible to collect consistent product data or run meaningful experiments. This person has a strong grasp of the product as well as the target user, and can use that knowledge to generate an initial pipeline of prospective users.
So, what does the data say?
I turned to OpenView’s 2022 Product Benchmarks report, which includes data from 450+ software companies (PLG and non-PLG), to find out.
The data shows that software companies still pick Sales as their first GTM hire most of the time (51%), although nearly one-in-three (31%) hire Marketing first. The remainder go with growth or another function (ex: support, customer success).
I wanted to go deeper and so I split up the data for PLG and non-PLG companies. Here’s what the data looks like for companies who lead with a freemium product experience, a free trial product experience, or a contact sales (sales-led) experience.
The findings are fascinating:
Growth marketing wins out for freemium companies (49%), which require attracting a significant volume of new users at a low cost and tend to see relatively low free-to-paid conversion.
Marketing and sales are tied for companies with a free trial offering (41% and 41%), indicating that free-trial companies are torn between prioritizing acquisition versus conversion/revenue objectives.
Meanwhile, sales is overwhelmingly the norm for companies that require prospects to contact sales – no surprise there.
What does a first Sales hire look like at a PLG company?
I was curious to learn more about what the day-to-day of the first GTM (Sales) role looks like for an early stage PLG company. To help teach me I turned to Dave Barron, global director of sales at HubSpot.
Dave joined HubSpot eight years ago as the early GTM hire for HubSpot Sales Hub, the company’s first-ever PLG product. His team scaled Sales Hub’s revenue from <$1M to $25M annual recurring revenue (ARR) in only two and a half years – mind-blowingly fast for any software company.
Dave has since replicated the success of Sales Hub as a GTM and Product Leader for HubSpot Service Hub (grew it from nothing to $35M+ ARR) and Operations Hub (the fastest growing product line in HubSpot history according to Dave).
Read on for insights into Dave’s role during the early years of HubSpot Sales, how HubSpot built out the sales-assist team over time, and what advice Dave has for up-and-coming PLG startups.
The early years at HubSpot Sales
Back in 2015, HubSpot was mostly known for marketing automation. Product-led growth hadn’t taken off just yet.
HubSpot wanted to launch its CRM product and go freemium, but knew it was risky. The company decided to spin up a new business called HubSpot Sales. This team had about 20 people when Dave joined and was treated as its own startup inside of a startup. It had a separate P&L and it wasn’t a foregone conclusion whether HubSpot Sales was going to work.
The profile when Dave joined was “AE-ish” - although in reality there was no product for him to sell. All the team had was HubSpot’s Sidekick offering, which was a mere $10 per month and was fully self-serve. (Side note: Brian Balfour was the VP of growth at the time. He has since founded Reforge, the professional education company extremely popular among growth practitioners.)
Dave’s goal was to talk to as many users as possible. He saw it as “early-stage product discovery” rather than traditional sales. When someone signed up, Dave would reach out to understand how they perceived the product and its value proposition, as well as what suggestions they had to make it even more valuable.
He attributes part of his success to having a product management background at the beginning of his career before he shifted to sales. This allowed Dave to have credibility with HubSpot’s product team and have a hand in improving the product.
“When you make an ask to product, is this going to be something reasonable or not? Is it a back-end problem or front-end? I would walk over to our dev team’s desk with a suggestion, they’d mock it up in Invision, and then I’d be able to pitch the idea on my next call with a customer.”
This “early-stage product discovery” process took a full nine to 12 months and ultimately led to HubSpot’s $50 per month product. Dave has since gotten the timeline down to five to six months. According to him, the length of time is less important than the quality of conversations with customers.
“It’s less about the volume of users I’ve talked to and more about consistency. When I get on the phone with someone, I should know what they’re going to say and I can repeat that back to the business. This person needs to be your persona and they need to be the voice of the customer internally.”
Scaling the product-led sales motion
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