Growth insights from our Fireside Series with Jordan Nolff
November 16, 2023
The Evolution of Growth: Insights from Jordan Nolff
In our recent Fireside Series, Jordan Nolff, the head of growth at Productboard, joined us and shared his experience and insights on the evolution of growth strategies in his previous role at SurveyMonkey and how it informs his approach to setting up growth at his new role at Productboard. Having spent almost seven years at SurveyMonkey, Nolff witnessed the transformation of growth from a focus on user acquisition and virality to a shift towards monetization. Now, at Productboard, he sees the need to balance affordability, personalization, and onboarding to drive growth. We delve into Nolff's journey and explore key takeaways. See the full chat in our Fireside Series video below:
Scroll down to read the full transcript.
The two levers of growth
According to Nolff, growth can be driven by two opposing levers: user acquisition and virality on one end, and monetization on the other. The balance between these two levers depends on factors such as product-market maturity and organizational scale. Nolff explained that when he joined SurveyMonkey, the focus was primarily on user acquisition and virality, which led to the company's widespread recognition and millions of users. However, as the company matured, the focus shifted towards monetization to better balance the value provided and value extracted from customers.
Shifting from user acquisition to monetization
At SurveyMonkey, Nolff was involved in a significant project that transformed the company's monetization strategy. The team overhauled pricing and packaging, which had a huge impact on the company's growth trajectory. The changes resulted in a double-digit growth percentage, almost overnight. This experience taught Nolff the importance of aligning value extraction with value delivery and highlights the significance of pricing and packaging strategies in driving growth.
Navigating tensions across teams
As a leader, Nolff acknowledges that tension can arise between product managers, product marketing managers, and other team members due to differing goals and perspectives. He highlights that core product managers tend to have a myopic focus on the metrics related to the adoption and usage of their features without always considering the complete customer journey and broader business impact. To bridge this gap, the growth team acts as a connector, bringing a more holistic perspective to the product management teams and showcasing how specific features influence business metrics such as acquisition, retention, and expansion.
The importance of net revenue retention (NRR)
Nolff discusses Net revenue retention (NRR) as a crucial metric for evaluating a company's growth and customer value. NRR measures the renewal rate of a customer cohort compared to their previous term. Jordan shares how a high NRR indicates that customers are expanding their usage and spending within the product, leading to sustained growth. Conversely, a low NRR suggests that customers are churning or not increasing their usage, indicating a need for improvements in product-market fit and customer value delivery. Nolff cites Gong, a purpose-built solution targeted at revenue centers, as an example of a company that demonstrates exceptional growth by successfully differentiating itself from generalized platforms.
Key insights for building a successful growth strategy
1. Balance user acquisition and monetization based on product-market maturity and organizational scale.
2. Pricing and packaging strategies play a significant role in driving growth and extracting value from customers.
3. Align growth efforts with broader business goals and create a culture of understanding metrics throughout the organization.
4. Act as a connector between cross-functional teams to bridge gaps and bring a holistic perspective to product management.
5. Differentiate from generalized platforms by targeting specific customer needs in a commoditized market.
We really enjoyed having Jordan join us for our Fireside Series and hope you find these insights valuable as you build out your own growth strategies. By understanding the evolving dynamics of growth, balancing user acquisition and monetization, and fostering a culture of metrics-driven decision-making, companies can set themselves up for sustainable growth and success.
Stay tuned for upcoming guests and more key insights to help supercharge your growth team.
Merci: We are here with Jordan Nolff who is running growth at Productboard. Hello, Jordan.
Jordan: Hey, Merci, thanks for having me.
Merci: Oh my gosh. Thank you so much for joining us. So you recently joined Productboard to help them flesh out their growth efforts and build a new team. After spending almost seven years at SurveyMonkey, where you grew from an analyst role to the head of growth, which, what a freaking run. What ways did you see Growth at Survey Monkey evolve and how does that inform how you're thinking about setting up growth from scratch?
Jordan: Yeah, I spent a while at SurveyMonkey. What am I week nine or ten at Productboard?
So still getting up to speed, but I think I have an idea of what we need to focus on. But looking at SurveyMonkey, I mean, the company has been around for, when I joined, 17 years, and really in the seven year span I spent there, growth really came full circle in terms of where we focused.
So at its core, growth can be driven by two somewhat opposing levers. There's the whole unit acquisition and virality on one end. You grow the business by acquiring more users, and there's monetization on the other. So how much value am I extracting or delivering for customers? And so, depending on where customers are, where a company is with respect to product market maturity, the organization, scale, you're constantly balancing where you sit on that spectrum.
So, when I first joined SurveyMonkey, we were very much focused on the user acquisition side and the virality side. It's how SurveyMonkey became a household name. It's how it had millions of users, hundreds of thousands of paying customers. And really monetization wasn't a major focus. So, where we focused at the time was driving improvements on things like website optimization, onboarding, experience, personalization. That's really what fuelled growth at the company.
For those first 16 years, we were metrics obsessed. I mean, Elena Verna founded the growth team, built it out and she has a photographic memory of numbers like I've never met with anybody else. But, we looked at every stage of the customer journey just to uncover the small opportunities for percentage points improvements because given the scale that we had, every fractional improvement had some pretty robust impact on the business side of things. And so improving a fraction on activation drove a large number of new users that signed up which would engage, retain and ultimately convert. So, when I first joined, that's when the slider started to move over to monetization.
The first project I ever worked on at the tail end of 2016 was a complete overhaul of pricing and packaging. We had made pricing packaging changes at SurveyMonkey in the past, but it had always been for new customers. Existing customers were always grandfathered into their previous pricing. They might have gotten new features, but for the life of the company, I mean, I remember looking at the data of our customers at the time. We had customers renewing for ten to 15 years and were paying customers the entire time. And they were paying like single digit, two, three dollars, for their plan, given where SurveyMonkey started in 1999.
We changed that as part of the revamp we did. We made those changes, and we'd spent a lot of time researching it, doing it right. There was a lot of internal debate on just a lot of apprehension on touching the existing customers. But, the moment we went live with it and started to move existing customers over, the company's growth trajectory changed pretty much overnight.
When I joined, we were in probably the low teens from a year over year growth perspective, and we jumped to north of 20% virtually overnight because of that. It was like a drug. So we spent the first seven of the company focusing on acquisition. We spent the next five or six focusing almost exclusively on monetization. We had built a ton of value for the company, hadn't focused on value extraction, and that's where we had pivoted.
Fast forward to 2022 when I took over the growth team and we started to realize we were running out of the monetization juice. We had now better aligned the value we were extracting from customers with the value we were delivering. So there wasn't a ton more room to continue to change price points in an upward direction. Compounded with the economy, it doesn't give you a lot of room to continue to increase prices. Despite the fact we were still building features, delivering value for customers, the focus shifted. I mean, we were focused on all around value delivery, reinvigorating product virality, all the things that built the SurveyMonkey brand and customer base. So, we were investing in things like affordable plans, improved onboarding product usability.
That's where the focus was when I left, which felt very much like reverting back to the moment I joined in terms of what growth was doing at the time. And so to your question, how do I think about that in the context of transitioning to Productboard?
It's funny because I feel like the transition has actually been pretty smooth and natural because all the things that I was focused on at SurveyMonkey are all the things that I realized we need to focus on at Productboard. So affordability is top of mind. We're looking into pricing and packaging, improvements for that, personalization, onboarding. Those are all areas that Productboard is looking to improve based on where we are in our journey, what our customers need. And I would say the only difference is at SurveyMonkey, we had the metrics and understanding of our customers down to a science.
Productboard is earlier in the journey. So, as I think about standing up the growth team, one of the main focus areas for me is not just building out the function of getting going on experimentation, and driving growth through experimentation and improvements to the product. But, it's also making sure that we have a culture of understanding our metrics. And it's not just for growth, but it's the entire company. Which engagement rates matter, who represent our strongest customers and what data validates that this is the correct activation state we're marching customers toward. Do they retain 50% better if they hit that state? Do they expand better? Do they retain better? And how did those activation metrics ladder up to just the core business metrics that we have? So that's kind of what we're focused on now and where I landed at coming from SurveyMonkey.
Merci: It's so true that designing which metrics are important for your organization and for the company and figuring out how those things all sort of work together, it's both really like you're designing, kind of the game,or here's how to win internally at Productboard.
And that really brings up for me the next question, which is about navigating tension between product managers or PMMs or people on your team. And often that tension can be caused by someone has one goal and someone has something else. And then, of course, it's hard to be a human being. I'm curious, as a leader and someone who deals on a team where performance is out in the open like that, is there an experience that you'd like to share about navigating those tensions with people on your team?
Jordan: Yeah, and I think because growth is so cross functional, we engage with the broadest number of stakeholders both within the product, but also on the go to market side of things as well.
What I've seen where I think I've had the most friction is, I think nowadays everybody is data driven and data centric. But, I guess the difference I see between growth and core product management oftentimes is that core PMs tend to be more myopic in the metrics that they're monitoring.
What I mean by that is they're focused on adoption and usage of features that they're building that add a ton of value to customers, but that doesn't necessarily always mean they're translating those into how that fits with a customer's holistic journey.
So, as an example, joining Productboard, nine weeks in, like with most other companies, we are getting into the AI game - releasing functionality to keep up with market demands on that side. So, what the AI team is measuring as we're going into beta with this functionality and moving into GA with a lot of this, is how many of our customers are using these new features, how are they using it, how frequently, which is great, we need to understand the adoption of it.
But, I want to move into the next phase of like, how does that then translate into the business impact, in how customers are engaging with it? Is it driving additional activity in terms of how they're engaging with the product? Is it bringing more people into it? Are they changing their behavior and other parts of the product as a result of the fact that they're using this new AI feature? And then what does that potentially do from our growth trajectory, from an acquisition or a retention or expansion perspective?
And I think growth helps plug the gaps there - that we have the visibility. We are the ones that are focused on the business side and bringing some of that thought process to the rest of the core PM teams, I think, can be beneficial. So, that's where we're focused on that at this point. And I've seen that at SurveyMonkey as well.
Merci: Yeah. So really doing the work to kind of design your way out of that tension. Smart. Makes sense.
Our last question is a little fun one. We're all numbers people and infinitely curious. If you could know just one metric, it can be a company in the past as well as one that's operating right now, which metric would you pick and what company?
Jordan: I think this is a bit of a cop out, maybe, because I think this is at least a lot of investors favorite metric, but I think NRR is kind of the gold standard in a lot of cases.
Merci: Yeah. Can you define that?
Jordan: So net revenue retention, the amount that a cohorted customer is renewing at from a previous term. I typically would look at that from an annual basis. So 100 customers spending $100 today, how many dollars are they spending twelve months in the future?
It's really hard to grow a company if you're not sitting north of 100% there. Best in class SaaS being north of 120%. But if you're trying to constantly fill a leaky bucket, it's indicative of a lot of different things. It's the quality of the product and services that you're delivering. If customers aren't sticking around or expanding the usage and spend within the product, it probably means there's more in the product market fit world that you can be doing to ensure you are retaining those customers and not constantly having to find new ones to go sell into, to expand the business.
So, with that in mind, the one I'd probably be most interested in learning about that's not already public would be Gong. I think I've been impressed. We were longtime users of them at SurveyMonkey. I've seen the product evolve over time and in a world where video is kind of commoditized, I mean, Zoom is rapidly trying to transform into a platform to compete with teams. Google, you see the down round in Loom's acquisition by Atlassian shaving off a third of their pre 2022 valuation peak.
It feels like Gong is kind of a shiny example of what a purpose built solution targeted at a major revenue center and a company can do to create a ton of value. I mean, I look at a lot of companies, SurveyMonkey being one of them, where you're competing with these generalized platforms and if you don't differentiate in some way in a world where it is looking to cut costs, it's hard to justify. Why should I be spending this much money on SurveyMonkey when I could go use Google Forms or Microsoft Forms, which comes for free in our office subscription or Google subscription. So companies that can target those and continue to grow in that environment.
Merci: Yah, Agreed. Really cool. Thanks so much Jordan. Really appreciate it.