$100M is the magic number all SaaS companies are trying to achieve. Bitly CEO Toby Gabriner and CPO Kelsey Stevenson share the three secret ingredients that helped them when scaling to $100M ARR and what they could have done differently. The three core areas to focus on are:
- Evolving your growth engine
- Building and solving for when to become a multi-product platform
- Investing in your people and team
#1: Evolving Your Growth Engine
Let’s start with some context for Bitly’s journey. Bitly began in 2008, right around the time that other link-shortening companies were starting. Bitly happened to become the defacto tool used globally for link shortening, with a lot of that driven by its robust freemium offering. It became a self-fulfilling organic engine that started to proliferate throughout the web.
Bitly had a huge inbound funnel created early on, and it continues today. Around 2012, the focus became solely on the Enterprise, which is interesting considering they had a full-blown PLG engine.
For many years, if you had gone to the Bitly site, you probably wouldn’t have been able to figure out how it made any money because they cherry-picked out the Enterprise opportunities coming through the funnel. This worked well for years until it didn’t.
Hitting a Plateau in 2018
The company ran into a bit of a plateau around 2018-2019. Kelsey joined them as CPO, and they started experimenting with less expensive packages downmarket where customers could go online and set up a subscription. They got great early signal, and it was transformative.
Toby joined Bitly in 2020 as CEO, and they started to lean in and push hard into the PLG motion. They were more aggressive with adding more packages, and QR code experimentation began. There were big opportunities in the QR space, so Bitly made an acquisition that was a big accelerator and set the stage for becoming a multi-product platform.
You can see a significant uplift in ARR over the last 3-4 years, and the funnel continued to grow. Because millions of users from 190+ countries came onto the platform, they had a big opportunity to convert more users into paying customers. Now it’s time to get into the details of how this went down so you can apply the learnings to your own business.
4 Callouts If You’re Going Down a PLG Path
Bitly’s focus was bringing all the different functions in the company into alignment, particularly with product and marketing. As you head down this PLG path, keep four things in mind.
- You might have to rebuild your marketing team. Bitly had an Enterprise sales-focused team. They had to rebuild that team and bring in new DNA to help with PLG efforts.
- Optimize your acquisition funnel. You’ll have to figure out how to best optimize acquisition funnels for your PLG path.
- Expand pricing and packaging. Figure out how to convert some subset of users into paid.
- Refine the user experience. Be maniacal on refining and understanding the user experience by creating an experience customers love and finding ways to convert customers into paid packages or upsell them.
Bitly had an incredible opportunity in front of them with millions of website visitors daily. When they came on the site, they were greeted with the anonymous link shortener. They’d enter their destination URL, hit enter, and bounce: no sign-ups, no introductions to the product.
That was okay when they were free, and it was Enterprise only because it helped with virality, but the moment you try to move toward PLG, you don’t want to miss an opportunity like this to get users into the product.
Eventually, they set out to replace the anonymous shortener with a simple, still-free tool, which presented the perfect opportunity to use multiple products as an entry point. Now, people go in, shorten their links, create a QR code, or create a link in bio. But when they hit enter, they’re taken into the product where they sign up.
As a result of this change, they had almost 30k free users per day sign up for the product. 30-40% of those users came from the free hook, and even more surprising was their conversion rate in product from free to paid also increased. Why didn’t they do this sooner? Because of fear.
Fear Prevents Growth
Not capturing these users for years was a pretty obvious missed opportunity, and the reason they didn’t do it sooner was a general fear at the organization. It had been around for so long, and customers thought the anonymous link shortener was the product. No one was interacting with customers, and it was time to make some bold decisions.
One of their biggest fears was that this anonymous shortener drives SEO and the breadth of traffic. They might lose all of that if they tweaked or removed it. And you know what? Those fears came true.
They saw a decrease in website traffic. While that might seem like a bad thing, it wasn’t. The biggest learning here is that changes like this mean you get quality users over quantity of users.
The quality of users that started coming to the page was almost irreplaceable, and losing low-quality users is a good thing.
Pricing and Packaging Can Fuel or Kill Monetization
Bitly’s online channel was relatively young, launching in 2019. When they launched it, there was still a lot of fear that it would cannibalize their Enterprise motion. They leaned into the fear and focused on frequent and rapid experimentation as they evolved the product.
With experimentation comes pricing and entitlement tests. You should be doing these often. When Bitly had only free and Enterprise plans, the free plan had 10k links per month. At the time, the product’s value was determined by link volume.
When they launched the online channel, they didn’t reduce the number of links in the free plan. Again, it was a missed opportunity. If they restricted the entitlements, the Bitly team feared people would leave.
They did it anyway, and the 10k links per month became 10. They saw what users would pay for as they added more value to the product. What they learned by restricting access and making people pay was that users in the product understood they could do more with links and QR codes and were seeing the data, value, and insights from those engagements.
The takeaway here: Experiment daily with pricing and packaging and do it often. Another aspect of this is changing the way you measure success. Don’t let fear get in the way of launching new ideas, and don’t let outdated or misinformed measures of success hold back growth.
For example, Bitly launched an annual package, but they feared it would cannibalize the basic monthly package. It did, but not to the detriment of the company. Annual plans had a much higher LTV, and customers were upgrading and staying in the product longer, but if you aren’t measuring LTV, you might not see the value it’s adding.
Refine the User Experience
Now that you have users signing up, in the product, and purchasing, it’s time to look at the user experience. For Bitly, they saw a pretty dated experience. Users came in and wouldn’t even see a CTA on the site, so they decided to have the teams work on a complete UX redesign.
They started small, as the task felt a little scary, and looked at the simple feel of the product. They wanted to lean into Bitly being easy to use, simple, and modern. In the image, you’ll see the right-hand side, which is an updated version of what the app looks like.
They made a subtle change with the CTAs, and when they launched the new experience:
- There was a 30% increase in in-product subscriptions because they drove users to the pricing page.
- They saw a 20% increase in daily MRR that they were capturing from new and existing users.
- They also saw some movement between plans and upgrades.
It was the foundation for building a multi-product platform because they were able to increase the discoverability of more features.
#2: Becoming Multi-Platform
Bitly had forever been a point solution and a successful one. But there were a number of opportunities to expand. Toby and Kelsey walk through that thinking.
- They saw incredible market trends related to QR codes.
- In 2017, they released a fairly nascent QR code offering.
- In 2020, the trend took off when the pandemic hit, and everyone was moving toward touchless.
Were QR codes just a flash in the pan, or would they last? The number of use cases and how businesses were embedding QR codes into their operations gave Bitly a lot of conviction that QR codes were here to stay.
- Bitly saw a lot of signal that their customers wanted to use them for QR codes.
- They saw signals that customers were already using Bitly behind their QR codes.
- They also saw a lot of customers shortening links and sharing them on the leading link and bio platforms.
So, they set out to build a solution. They didn’t know how it would resonate with customers, so they built a quick MVP and sent it out. What kind of feedback did they get?
They loved having their QR codes, and Bitly links in one place. And even more surprising, that people didn’t know Bitly offered all of this. Bitly was ready to move into a multi-product platform.
Watch Where the Market Is Going
Bitly has over 550,000 global customers and close to 4M monthly active users. With that comes a lot of feedback and data. As a founder and startup, you need to be maniacal about researching, talking to, and surveying customers and market trends. Where are trends heading, and where is the market going?
And then, you need to push yourselves in that direction, even if you’re a little nervous about it. You want to be bold, take chances, and encourage customers and your team to imagine the possibilities if they open their minds and be bold.
#3: Build and Invest in a Stellar Team
To achieve anything we’ve talked about so far, you have to have a stellar team, and you have to unlock them and give them the ability to execute effectively. When Toby joined Bitly in late 2020, they did an engagement survey to get a sense of the sentiment and morale at the company.
It wasn’t good. People were disenchanted with the company. But you can’t fix something if you don’t know it’s broken, so the silver lining here allowed them to think about transforming not only the commercial side of the business but also the culture.
What folks at the company felt fell into three buckets:
- People didn’t feel aligned with the organization.
- They weren’t clear on their goals.
- They didn’t feel connected to the vision and mission of where the company was going.
So, the leadership team leaned in. They changed the culture by:
- Simplifying operations in a lot of ways
- Ensuring everyone was clear on where they were headed
- Including the team in developing OKRs and goals.
Getting everybody to buy in and feel committed to where Bitly was going was important. They also saw a big opportunity to make diversity, equity, and inclusion a core part of building the company. It wasn’t just about diverse representation but about creating a space where people feel like they can come and do their best work.
You also want to create a culture where people feel safe to try things. At Bitly, their term for this is “safe to try.” It’s opened folks up to try things, knowing it’s not the end of the world if it doesn’t work out.
Those are the three cornerstones of building a strong culture and high-functioning team.
- Simplifying operations and aligning on OKRs
- Weaving DEI into the DNA of your organization
- Giving folks permission to be bold and fail
If you’re going to unlock all of your opportunities, you have to unlock your team first so they feel like they can achieve great things.
Key Takeaways
- Identify where you are on your growth journey. Bitly started Enterprise and moved to PLG, which gave them unique opportunities. The same will be true for those going from PLG to Enterprise.
- Discover opportunities in your data and customers. Get to know how customers are using your products and what opportunities exist.
- Adapt how you measure success. It might be uncomfortable, or you might second guess your decisions, but you have to do it.
- Actively look for signals for product expansion. Product expansion brings people in, keeps them happy, and retains your users if they love your product.
- Continue to take risks and experiment boldly, regardless of whether you’re just starting out or close to $100M. Lean into the risks and experiment.
- Enable and empower your people because they are going to be the ones who unlock your success.
The post The 3 Secret Ingredients for Scaling to $100M ARR with Bitly CEO and CPO appeared first on SaaStr.
via https://www.aiupnow.com
Amelia Ibarra, Khareem Sudlow
