The Science of Scaling · 25 Oct 2023
Community-Led Growth w/ Andrew Ettinger (CRO, Appen)
These are notes on the conversation, checked against its transcript. The episode itself has the full discussion.
In brief
Andrew Ettinger, CRO of Appen and a former sales leader at Astronomer and Pivotal, joins host Mark Roberge to discuss community-led growth. He covers how Astronomer repaired trust in its open-source Apache Airflow community, how to sell to developers who have little budget and need technical value first, and what Appen's shift from services toward product means for its go-to-market. The central argument is that community-led growth is distinct from product-led growth, must earn the community before it converts, and can run alongside a PLG motion.
For founders
- Build and earn the community first, then monetize, following the order of community, content and conversion.
- Starting as a services business can give you the market understanding to design a better minimum viable product before productizing.
- Ship the long-requested core features your community asks for, since unmet promises fractured the Astronomer community.
- Community-led growth involves several intersecting communities, including spheres of influence such as VPs of engineering, not just core users.
- Running community-led and product-led growth together can bring users into the funnel more educated and willing to buy.
For revenue leaders
- Engage the front-line engineer first and use their enthusiasm to reach the VP of engineering, rather than going straight to the decision maker.
- If a champion will not let you join their pitch to their VP, ask them to walk you through it, voice concern, and ask again before building slides with them.
- Involve security, risk and legal early in engagements to surface objections sooner, so that if you lose a deal you lose it early rather than at the end of the quarter.
- Do not let technical champions sell internally on your behalf without a defined engagement model, since deals can go unresponsive.
- Developer advocates can sit in the CRO org, but revenue leaders need to give them room to build relationships that compound over time.
What was said 20, most useful first
Pushing developers into the product through a hands-on workshop, where their pipeline was deployed in a few hours, let management see their code working in the cloud. Listen
At Astronomer, the team ran a sales-led motion into the product rather than a product-led one. They got prospects to deploy a few of their pipelines in a workshop within a few hours so the buyer's management could see working code. The company was upfront about its process, its investment and what it expected in return if the proof worked.
“we drove them into the product which was not product-led growth it was sales led growth into the product and we got them to deploy literally in a few hours in a workshop”
Listen to the episode Sales process & deals Link to this Report a problem
Letting engineers sell internally to their boss on the seller's behalf led to deals going unresponsive, so the team changed its engagement model to be more prescriptive. Listen
Andrew said reps who believed they had done a good job let the developer champion carry the message to the boss, and the deal then closed unresponsive in Salesforce. The team responded by framing each engagement around the situation and main impact, being prescriptive about how the engagement worked, and earning the right to take the next step together with the champion. They then enabled champions with tools and technical personas to communicate value to VPs and heads of engineering.
“you let them go sell on your behalf to their boss and guess what you see in Salesforce close unresponsive”
Listen to the episode Sales process & deals Link to this Report a problem
Engaging the non-decision maker closer to the front line first, then using their excitement to reach the decision maker, is beneficial in product-led and community-led motions. Listen
Mark explained that in these motions, reaching the decision maker through the front-line user can work better than calling on power first. He noted that engineers position a product by how it benefits them rather than how it benefits the VP of engineering, so the seller has to get access to the decision maker in order to avoid a closed-lost deal.
“it's actually beneficial to engage the non decision maker”
Listen to the episode Sales process & deals Link to this Report a problem
If an engineer will not let you join their pitch to the VP of engineering, ask them to walk you through it, voice concern about the VP's reaction, and ask again to join; if refused, build the VP-facing content with them. Listen
Mark described asking first to join the meeting, which he said works about a quarter of the time. If declined, he asks the champion to walk him through how they will explain the product, then expresses concern that the VP might not be excited based on that explanation and asks again to be present. If the champion still refuses, he builds the slides with them so the VP is walked through content positioned for their priorities.
“Are you sure I can't just be sitting there in the room with you or sitting on the Zoom with you to walk them through it?”
Listen to the episode Sales process & deals Link to this Report a problem
Community-led growth follows a sequence of community, content and conversion, and paid conversion only comes after the first two have been earned. Listen
Andrew said that for an open-source company, the first job is the community, and without a vibrant community you do not earn the right to monetize. The three Cs were community, content and conversion, and the first two earn the right to the third. He said Astronomer engaged the community through technical leadership, velocity in the core open source, and rich documentation, libraries and certifications.
“And the first strategy was called the three C's, which was community content conversion.”
Listen to the episode Positioning & marketing Link to this Report a problem
Giving away rich documentation, libraries and certifications with no paywall or email gating was how Astronomer built community trust before converting it. Listen
Andrew said Astronomer hired a top person from Udemy to run classes and gave away 25,000 free certifications. The content was available with no paywall and no emails required, and the company wanted users to use the information without giving anything back. Andrew said the content aligned with what HubSpot and others made famous, such as integration guides for Snowflake or Databricks.
“gave away 25,000 free certifications to go do that”
Listen to the episode Pipeline & demand generation Link to this Report a problem
Community-led growth differs from product-led growth because it involves several intersecting communities, including core users and spheres of influence such as VPs of engineering, rather than just getting the product into users' hands. Listen
Andrew described product-led growth as getting the product into users' hands at all costs and instrumenting for the aha moment, after which the system takes over. For community-led growth he described a core community of the personas served, who evangelize to their peers, plus spheres of influence such as VPs of engineering, CIOs and heads of business. He said these communities can intersect in many ways, making the motion more complicated than PLG.
“The communities are a lot more intricate and a lot more complicated and intersect in many different ways.”
Listen to the episode Strategy & market Link to this Report a problem
Developer advocates in open source exist to help the community rather than to sell, and can sit under the CRO org if enough separation is in place. Listen
Andrew said developer advocates' job is simply to go out and help the community, and that they should not be in sales. He acknowledged that reps often get frustrated when an advocate speaks with a prospect at a conference without selling, but said revenue leaders must give these teams space to build relationships that compound into material value over time. He described it as a flywheel where companies can invest in one or many advocates.
“Their job and their team's job is simply to go out there and help the community.”
Listen to the episode Sales team, hiring & comp Link to this Report a problem
Starting as a services business gives you market understanding and a stronger minimum viable product foundation before you transition to a product business. Listen
Mark said he wishes more entrepreneurs started with a services business, because services businesses were once seen as not VC-fundable and many have walked away from them. He argued that working with real customers lets you see patterns across clients and architect a better minimum viable product from the start, though he acknowledged the transition has challenges.
“You are in such a better position to architect and get right from the beginning your minimal viable product as you transition”
Listen to the episode Strategy & market Link to this Report a problem
Instead of traditional sales engineers, Appen hires data scientists and machine learning engineers who work as peers with customers, run onsite workshops and build prototypes to create the business case. Listen
Andrew said the common thread in Appen's AI sales is a technical sell with real technical engagement, so the company hires professionals who interface with customer personas as peers. These hires whiteboard problems with customers, help them understand the necessary data, and build prototypes in working code on the platform so customers can see how it would work and build a business case.
“instead of a traditional sales engineer, you know, I'm hiring data scientists and machine learning engineers”
Listen to the episode Sales team, hiring & comp Link to this Report a problem
Engaging security, risk and legal early in a deal surfaces objections sooner, and running small pilots while they review helps avoid losing deals late in the quarter. Listen
Andrew said that in earlier roles his team ran small pilots and engaged teams earlier, even when this seemed counterintuitive. He said he would rather lose a deal in 30 or 90 days than on the last day of the quarter after it was forecast. He noted that new AI categories have no standards, so the outcome varies by person and company.
“the sooner you get security involved or risk or legal into these engagements, the better”
Listen to the episode Sales process & deals Link to this Report a problem
Astronomer's open-source community had fractured because long-requested core features, such as a highly available scheduler, were never delivered as a packaged upgrade. Listen
Andrew said developers have a powerful voice and that promised features for the Apache Airflow project went unfulfilled for years, so many users were skeptical. Astronomer's engineering team delivered on that promise, which he credits with reviving the project's growth. He described the company at the time as having about 20 to 25 people and under a million dollars in revenue.
“Namely, the scheduler, which made all of these things work was not highly available.”
Selling to developers means adding value by understanding their user journey and pain before qualifying, which is still fundamental selling but done in a more technical way. Listen
Andrew said a salesperson cannot simply sell to developers and must first show they can help and have empathy for the problems. Once the seller understands the user journey and the pain in the buyer's environment, they can understand the impact they could have. He described this as qualification led by technical understanding rather than by sales process.
“once you understand that user journey, you can understand the pain that they're in, in their environment, their situation, ultimately the impact you could have”
Listen to the episode Sales process & deals Link to this Report a problem
Driving usage through the sales process gave more predictable results, and rising consumption lifted net retention, which Andrew called the best leading indicator of a healthy software company. Listen
Andrew said the process sometimes created friction and did not work 100% of the time, but it gave far greater predictability than the earlier approach. The accounts run through it consumed more, which drove net retention up. He said some pain is necessary to build a sustainable business.
“which meant their net retention rates went up”
Listen to the episode Metrics & finance Link to this Report a problem
Developers' spare-time evaluation of open-source tools is a leading indicator of which cloud infrastructure and data products will rise to the top. Listen
Andrew said many C-level executives reach down into their organizations to learn trends, and that developers are powerful and smart and spend time evaluating and participating in these communities. He also said he believes the shift toward engineering-first decisions has happened, citing the saying don't ever bet against open source.
“it's a really nice leading indicator of the future of, you know, what products, particularly in cloud infrastructure and data are going to rise to the top”
Listen to the episode Strategy & market Link to this Report a problem
Running community-led growth and product-led growth together is powerful but tricky, since users arriving from the community are more educated and willing when they reach the funnel. Listen
Andrew said that executing a community process into a PLG motion gives strong results because prospects enter the funnel more educated, more willing and already partway down the path, rather than simply landing on the product. He acknowledged that running both strategies is tricky.
“in fact, actually running both strategies is really powerful. It's tricky.”
Listen to the episode Strategy & market Link to this Report a problem
Community-led growth can be applied to AI-driven outreach tools for SDRs, but the output needs a personal touch because robotic messages come across as disingenuous. Listen
Asked whether an entrepreneur building an AI co-pilot for SDRs could use community-led growth, Andrew said yes but with caution. He said the technology must be used carefully, as with any applied automation, and that he has seen messages that made him doubt a human was on the other end.
“you need to still ensure that you have that personalized touch, and you don't come off as a robot and a machine because it's very disingenuous”
Appen is publicly traded with about $330 million in annual revenue and has run 24,000 AI projects over 15 years on its own tooling, which it is now exposing to customers as it combines services with product. Listen
Andrew said Appen has been helping companies create data to train AI models in a services-led approach, and is now combining those tools to be more product-led with services enabled around them. He said the company has run 24,000 AI projects over the last 15 years on its own tooling, with more than 50 million man-hours on those tools, and that customers can now use that tooling.
“our revenues, $330 million a year”
Listen to the episode Strategy & market Link to this Report a problem
Enterprises building internal LLMs involve more than a dozen personas, and current tools like spreadsheets, wikis, Jira and SharePoint lack a streamlined way to manage data risk and collaboration. Listen
Andrew used the example of a large financial institution building an LLM for wealth management, where expertise sits in internal data, call center transcripts and acronyms. He said the lifecycle involves many personas who need a platform to collaborate and reduce risk of data reaching the wrong people, and that Appen intends to reposition its existing platform for this.
“if you look at the lifecycle of personas involved, it's a lot and they need a platform to go work on and collaborate”
If most B2B software sales become AI-related, technical sales support will return, especially in the early phases of adoption. Listen
Mark said that technical questions about whether a SaaS product is feasible, and what security implications it has, had largely faded for him over a decade. He argued that AI brings those questions back, requiring technical sales staff again. He framed the point as a prediction for the next five or ten years.
“If 90% of B2B software sales is going to be AI in the next five or 10 years, this is coming, especially in the early phases.”