 Hey, hey, this is Carlos and the founder and CEO at Product School. Today I'm here with another founder, Miki Alon, who's also the Chief Technology Officer at GainSight. Hey, Miki. Hey, Carlos. Good to see you again. Good to have you on the show again. You're an OG. I remember when we first had you, we had a great conversation mostly around PLG and the intersection between customer success teams and product teams. I'm happy to dive deeper into that as well as getting an update from your perspective on what's going on now with the future of product management. You have a finger on the pulse. Absolutely. I'm happy to dive into that. So let's start from the beginning. For people who might not be super aware of GainSight yet, can you please give us an overview of what your company does? Sure. At GainSight, we help companies build a durable growth business. We have three main products. One is community, which we believe we can drive community-led growth, and then obviously with customer success platform, which is helping you with customer-led growth. And you have the product experience platform, which I own, which helps with product growth. We believe that to build efficient growth and durable growth, you need to use technology to scale and to tap into user demand, understand how customers are using your solution, and also reach out and close the loop with customers. And for that, we believe those three channels are really, really important and feed into each other. And now we're also seeing in the market that companies obviously are now measuring against efficiency. Right? It's no longer... Just two years ago, we saw massive investments and growth at any cost. But now the companies that are efficient, cash flow positive, their net revenue retention is good, they will get the best valuation as opposed to just the high growth. So at GainSight, we're trying to really build everything you need to run an efficient SaaS business. One thing that I found really unique in your business is that you have these three business units that are interconnected, focused on consumer success, community and product. Most of them, other product tech companies that I've seen, have an intersection between like user acquisition and product or data analytics and product. You guys seem to be very focused on like that retention component. So why did you take that approach? That's a great question. I think if you look historically, and I've led the global product development team at Marketo for three years as well. And so if you look at historically on the evolution, Salesforce obviously pioneered the cloud and SaaS and everything, and they wanted to create this and they created customer relationship management. But then the cloud happened and SaaS happened and Marketo and HubSpot and all these tools came in and they tried to take their customer relationship to the next level with the digital offering, with personalization, ended up serving mostly top of funnel, the acquisition part, which is a massive challenge and there's a lot of needs around customer acquisition and personalizing that and creating a brand awareness and so forth. And then the SaaS took over in the past, I would say 10 years or so and with SaaS, a big shift has happened in the market because you have to, in order to be a sustainable business, you have to thrive, you have to retain customers in the past. You do this marketing customer experience and everything and you can do like customer marketing. In the end, your customers will download a solution and it's up to them to be successful with SaaS, that's no longer the truth. Suddenly, the opportunity is to help customers get up and running quicker, but you have to make sure that they're renewed, you have to make sure that they actually derive enough value from your product in order for them to stay with you and if you're not, you have a licking bucket. So in the game side, we say, hey, who's going to be the next generation of customer experience? I think marketing automation is doing a fantastic job, but they have a huge blind spot, which is the product and again, the product is still, I feel like misunderstood completely because that blind spot is massive. If you think about where are your customers spending most of the time and how do you acquire customers today? So acquiring customers is very, very expensive, it's going up, but customers want to even start small. You can use your product to acquire customer better, but from that point and throughout customer lifetime value, it means that throughout the fact that you need to retain them and then expose them to additional product or functionality or increase their spend, you need to optimize that type of experience. So customer experience, in my view, is becoming the product experience, is 95% product experience. This is where customers spend their time and at game side, we want to make sure that we offer you that solution. We did realize, by the way, speaking about PLG, for example, and what's happening in PLG. So you see companies that are building PLG from the ground up, very simple to use solution. They don't hire salespeople, they sometimes don't even customer success, but what happens as soon as they hit five or 10 million ARR, either some other player builds a simple tool like them and just cheaper, because they just didn't build a mode around their solution. Because eventually, if you want to go upmarket, you need more functionality, you need to cater to bigger customers, or you offer more solutions. This is where sales and customer success have to jump in, and this is where it makes sense for having high-touch mode. In game side, we are the only solution that can blend high-touch and low-touch and zero-touch. This is like, and I think that most PLG companies, as they go upmarket, they actually are building sales, customer success, to kind of really cater to this bigger solution. So we believe that that's going to be the next generation of customer experience. And again, the no star for us is to help you escape, to build a durable growth business. And I'm not just throwing more people at the problem. You're actually using technology to escape what you do. I noticed you used the word on the term customer experience multiple times. And I'm very interested in that. I want to double-click, because on the one hand, obviously product or product experience is important. On the other hand, customer success is important. And I've seen this integration happen, hopefully now more often. I remember when the PLG term was coined, was maybe around 2016, 2017. My Lord, when did you publish your book on PLG? Right. I wrote some blog posts then, like, what kind of book was it? It was 16. We published it at 17. Together with OpenView. OpenView is like the term that I contribute a lot to their initial blog post, writing about that. So obviously, there's been some time for the market to adopt this mindset. It now seems more obvious that retention is the new growth, and it's actually cheaper and more efficient to do a good job keeping your users happy and renew them instead of just bringing new customers all the time and having them live after a year or so. Now, in terms of the maturity model for companies, what is the next level for companies that are fully integrating product management with customer success in what you call customer experience? I think it's for them to get this alignment. First of all, again, like expansion and retention are kind of tightly coupled. I think that if you improve, imagine improving one point of retention in your company, how much that will contribute to revenue as opposed to improving one point in conversion in trials. Usually, one point in retention will translate to way, way more revenue for you in sats, right? So if you really try to build a sustainable business that has its leverage and growing very efficiently, you make sure that retention is there. Once retention is there, then you're open up for expansion. So I think the next level is to kind of have this interlock relationship between when is the right time to have customer success, have this one-on-one human interaction with your customers, and when do you use the product to carry some of the heavy lifting required to drive adoption? Because eventually, your customers are actually trying to be a sort of serve. I like to kind of figure out by myself, and I like to speak with an expert when it's truly strategic discussions and I want to hear best practices. So I think the interaction is to create that journey and map that customer experience journey and decide at company level what should be part of the product and what should be a high touch. And there's a lot of consideration going into that. One is like, what's the error of customer? Like, what's the minimum threshold that at that point makes sense to apply a human interaction and what should be, you know, maybe support, but that should be the kind of, it should be on the product to deliver. And we're seeing that it's a combination. Like throughout the lifecycle, even if you're high paying account enterprise, still you have a lot of users and you need to make sure that the product experience is always attentive to users. It's number one enabling users, making sure that the product is intuitive, collecting feedback from end users. Because what we saw is you cannot rely on one champion as a customer yet because if the end user is not happy, you know, things happen. One, they feel there's no ROI. Second, like, you know, they kind of decide either to leave the company because this is the baby tool. So they influence the renewal dramatically over the decision on tools. So the user, even in high touch, even in both top down decisions, I think you have to worry about the end user. That said, it's not going to be just that, you know, when, for example, we use Amazon Cloud, Google Cloud, at some point when our spend hit a threshold, then we started to have closer discussions with Google Cloud, Amazon Cloud, and then they start to also listen to what do we need in the future. Right. This is where the product needs to have the customer success input from strategic accounts, which are paying you seven figures. What are they? What's their strategy next year? And is it aligned with your product strategy? Because that's not going to come from the end user feedback or usage. So that's kind of the intersection that we feel from customer success, helping drive the business and the product that kind of helps scale the business. And that's an evolution that I've seen in product lead. Obviously, the definition was, yes, you have to satisfy the end user and create these bottoms up motion. And I agree with what you said that it's also important to have the buying from the top. So thinking about how those two relations connect, it's critical, not just one or the other. Kind of like reminds me of this concept around B2C is the new B2B. No more, oh, it's B2B. We just need to make the decision maker happy. We don't need to worry about the user experience, whatever. We assign a contract, and then we show the product. And then one year later, when we have a conversation. Yeah, I think there's still no kind of chooser versus user. And I think you have to worry about both. I think the chooser is definitely important. But eventually ROI for them will come from the user. If the user doesn't use the product, the chooser, right? So advice versa. You can't just rely on users. Because sometimes there's like a change in the company, or they don't know necessarily how to translate through ROI from your solutions. I think it's a combination. But definitely the end user should be your focus because you can be super successful. The chooser, even like you as a company, but they choose other tools. That's the wall that can happen. You built a category, you and Marketo, we built a category, we built the strategy. And suddenly, in some cases, they love Marketo, but they buy something else. And that's like really painful. And then so we invested a time in the product to make sure that we re-retain those users and deliver value to them. Because that's eventually what the true value, the intrinsic value is. One thing that I'm curious to learn from you is in terms of org design, we understand obviously there's a chief technology officer. By the way, you are the most product-led CTO I've ever met in my life. Because you can go deep in both technology and business. A few years ago, we were all evangelizing the need of a chief product officer at the table. And I think that's more mainstream. But if we want to really elevate the role of the customer experience or customer success, what is the highest ranked person in the organization that can really advocate for this? I think it's like the customer experience leader is I think it's like the one that should advocate and should see both the digital aspect as well as the human interaction and like everything about the customer from post-set perspective as well, like from onboarding to adoption to expansion. But it spans also, like you need to get like alignment around different ceiling. I think you have to get the alignment from the CRO, CMO, it's a thing eventually it's a team sport. And I think you have to have all these people in the table. And still the CPO I think has the most impactful long-term impact on the business because it's very hard to go fix a roadmap or product. It's way slower, it's way more expensive. So those decisions are critical. And I think again, they can truly leverage and embrace product led or product assisted motion and prioritize the roadmap to have an assistance. So by the way, I'm seeing another trend which is like product assisted as opposed to product led growth. So in some cases you do product assisted in areas that you say, hey, still gonna be gonna speak with sales but we're gonna have the product assist with scale. But it requires prioritization from the roadmap from the product organization. So I think eventually CPOs have a massive impact on the customer experience end to end, right? Eventually it's about the product. If it's intuitive, customer are happy, your customer success leader is happy because their retention numbers are amazing. If your product is not, then the customer success are basically dealing with product gaps and you see burnout and they will not be ultimately be able to fix those, right? So eventually I think the CPO still is in my view one of the top like leading positions that you wanna make sure that they are very customer centric and they are aligning in partner with the customer success leaders and CRO. Yeah, that's how we structure our current organization. We have our customer success leader part of the product organization reporting directly to our chief product officer. I know there are companies that are taking this even further and defining like a chief customer officer which I think it's awesome but ultimately respecting and elevating the role of the customer success and not just calling it customer support, not putting it at the end of the process just to fix bugs instead of just being in the conversation even before a user becomes a customer and really trying to care and do what's right by the user. It's something that I know it's necessary. I also know it's really hard for companies that have been operating under a traditional model that kind of works, right? Like, hey, if I have a strong enough sales team I have good relationships with people who've been buying me for years. Like why would these people need to change? Like what are some of those reality checks that you've seen that are pushing these companies to now consider a more modern approach? I think they're just saying that how efficient products get crazy valuation and make their job much, much easier. This is why I think also like coming from product perspective long term, eventually the customer, chief customer officer still they need to be kind of product with a strong product background at least. So they know what the company delivers, what can be done, what to influence the roadmap but look at those companies that in the past, you know, years and their valuation. Look at Figma, for example. Like really powerful tool, very focused on customer, collaboration, all those features, grew like crazy and their numbers, their efficiency is amazing. Look at their NRR. So it's a product that actually deliver meaningful value and which leads to really strong retention, strong expansion numbers. So all the other counterpart in the company are doing better job because the product is doing a better job. Vice versa, I didn't saw a lot of examples. Like if the product's bad, then at some point, initially you can get away with it. You can get away with when you kind of, the first in the category, the end user and the chooser are not experienced but those companies suddenly get competition and at some point, some of you are starting to see key account that was like, usually they would win very easily, suddenly they lose those accounts. And usually the number one reason is not necessarily like, oh, these other companies just cool or they, no, we still love you as category leaders but the others actually delivering great products, great functionality, maybe it's better pricing, maybe it's better functionality, maybe it's a fuse but it's a reality that is suddenly gonna hit you and there's gonna be more in any market, market automation at some point, after Eloquah, Marketo, suddenly became like more and more market automation, more and more vendors and it's up to the product still. I think Marketo is differentiated and this is why they're able to be strong on the larger accounts because of the product, not because of anything else. So I feel that is a reality that is gonna happen. Just a question of when, sometimes you can just be, if you're the category leader, there's not enough traction in your space, you can still get away with it. Totally, I agree with you. I've seen this happening in Martek as you mentioned, eventually these technologies become commodities and what separates one from the other is the quality of the product and that's something you cannot win or just fix at the end. I heard you talk about NRR, Net Revenue Retention and I think that's great because back in the day, most of the key metrics that investors would use to value a company were like CAC, like customer acquisition cost and maybe lifetime value, but that was pretty much it. Now we're taking a deeper look at the funnel. So what is NRR and how do you guys use it? That's fantastic. I think so, so Net Revenue Retention or Net Dollar Retention is a good indication to see how well are you retaining and app selling and cross selling to your customers. So it's combines together if it's just growth revenue retention, it's how well you retain but when you think about Net Revenue Retention or Net Dollar Retention, it takes into account both churn but also app selling and cross selling. So in that number, obviously if you're hitting 120%, 140% it means that you're way more efficient in terms of the way you continue to grow your install base. And this is why it actually means that you're able to build a sustainable business. So NDR is becoming the number one metric both for investors and also in public sector like in public companies, if you're NDR and especially PRG companies tend to have very good NDR metric because once you start using it, you grow by consumption. So for you to spend more, for example, if I spend more in Google Cloud and Amazon Cloud, they didn't need to invest in almost anything. I start from X amount of ARR and then they grow to 10 X ARR, they did not need to invest 10 X investment. For them it's actually just very, very organic. And I think that's where it shows how well your company can grow and it's almost unstoppable business as opposed to bad NDR, which means that you're kind of not either have an issue with your cost of sustaining or retaining customers too high, you have a leaky bucket so you will never be able to truly become a capital efficient business. In a capital efficient business, eventually it should be the goal for every company. If we assume all companies will just continue to lose money, it's not really sustainable way, right? We'll see those market downturns every time but at some point people say, hey, you should pay back the investment. That's a great reminder. And I really like this metric because when using churn alone is not enough. It almost assumes when you are going to lose a customer but it doesn't include the opportunity to upsell or cross sell a customer. Like technically that should be the end game, not just keep the customer as is. Exactly and I think from a roadmap perspective, think about that like how many of us will prioritize the stickiness of our product and investing in features that drive stickiness. We invest in features that differentiate and create wow effect but the sticky features sometimes are not the same. Sticky features, for example, can be collaboration feature, right? Sharing, integration because the more you get customers to put more data in your system and then you enrich the data and then you share the data and you allow them to collaborate, you're creating this stickiness that it's very hard to swap and very hard to switch to another solution as well as just getting more value because you integrate with all these systems and you allow them to collaborate, so we increase productivity, you grab more mind share. So those are features we can prioritize to drive the GRR and NRR efficiently. And then second is like, we need to do also, product leaders need to do a discussion or run a discussion with product marketing and go to marketing saying, is the pricing and packaging still optimized for what we deliver, right? It's usually it's like, oh, it's very, we're trying to do simple pricing and think if you're not moving towards some consumption based market pricing and then adding some features that customers will actually pay for as an expansion, you're losing out on the opportunity to build a healthier business because your customers might not be able to pay or consume all your features, especially in B2B takes them quite some times to really take all the advantage of what you build. Why not to just slice it and then you can actually optimize the price and then expand, you will get faster deals and more organic expansion as opposed to create always unnatural pressure points and you as a product manager, kind of always need to deliver a ton more features. Everything is for free, like not for free, but under the same subscription. Why not to just, hey, I have like small companies, larger, I can actually build packaging that if they get the bigger package, they actually pay for more. And then you can also prioritize your roadmap. Yeah, where do we see more growth opportunities? Let's invest in those set of features. If everything is the same bucket, then it becomes very tough to really optimize our product roadmap versus revenue, right? This becomes very, very tough. Yeah, amen. We could do a whole episode on pricing and I would love to do that actually because there's so much evolution on that. This is constantly made between freemium versus free trial versus now there are models that include both. And I think that's a good approach because putting a cap on usage of a certain feature instead of just saying, no, you have to pay in order to use the feature, it's an artificial barrier allowing the user to use actual product for real. And then beside, well, if you want more of these, then is when you have to upgrade, seems to be like a better way for the user to get full value. Absolutely. And I think eventually if you look at the longterm, the only way to drive growth is with more products, right? But if you have one price for your product, then expansion is very tough. How do you expand? If you have only seed base, so companies don't just hire like crazy and so the seed base is limiting you. If you do consumption plus freemium features, now you're allowing your sales team to truly drive expansion and growth as opposed to kind of really maximizing the first deal and it just makes their life, I think, harder because they're trying to optimize the first deal and once the deal is done, they have to run for the next customer because there's nothing to expand and expansion is very marginal. So I think, you know, the discussion should be like, can we build the product and functionality and it's not necessarily freemium or free trial. Let's say you have a customer, but can I just sell them like a smaller package and then grow as opposed to try to again, squeeze everything to the first deal and then deal with like stress for renewal and like it's always like, you know, and then not having good focus on expansion as well. And so I think that's a different mindset and then if I think on political leaders, as product managers, if we knew, hey, this is a new pricing and packaging, here's what we can actually charge for, we are building that into the pricing as well, then we can actually balance our roadmap in a better way because we truly can drive more features that will drive growth. Today we kind of drive features and eventually it's like to help win more but not for expansion. So ask yourself, you know, how can I build features for expansion to drive more organic growth and that should be roadmap plus pricing and packaging. And that's a discussion that companies has to do and it's sometimes just overlook like they keep the old pricing and packaging and just like, and kind of put all the burden on the product to kind of somehow figure out growth. And I want to make sure we make a little space to discuss community and know that you guys acquired a company called Insighted and that connects nicely with the other two products that you have on product and customer success. So how does this complement what you have and what do you see, what is the role that community is going to play in the customer experience? Yeah, so as you saw, there's like thinking evolution wise was marketing like growth and then product like growth is just helping you escape from the product. So community like growth is what we bet as the next kind of a channel to grow your business and customers. And for us, we're seeing that, you know, customers actually spend quite some times in the community helping each other, right? And then like all providing more feedback and looking for best practices. So we're seeing that as a fantastic channel to help you build in mode actually. If you have a strong community around your product, you're getting more expertise, you're getting deeper feedback, you get, you know, you tap into the future demand from your product because you're seeing the discussion. You get this awareness or tapping into those discussions and you're able to also communicate them to them back like here's the roadmap and allow them to do like feature prioritization and allow them to vote because it's kind of a community that they actually know your product, they use your product. So it's not just like, you know, fly my or just like, you know, those early feedback. So I think we see it as very, very strategic to growth. And if you don't have a community, then you have a gap. I think, you know, the product itself is not enough and customer success is not enough. You have to make sure that you are facilitating discussions and communication with customers. And that should feedback to as a customer, if you're a customer, then it should feedback to your product experience and the customer success play to see, hey, this is a way to scale. There's another trend that is called digital debt. Countries are trying to improve ratio between how many customer success to how many customers you have. And increasing that ratio at some point, that ratio means that it's not gonna be very personalized anymore. And one way to address that is through community. You can have, hey, all customers are here, they're gonna share knowledge, they're gonna be exposed and as customer success, I can post things that are relevant to 100 customers in my book of business or 200 customers. So I'm scanning the way and it stays there. What's nice about it, it actually stays there and it's searchable. So we believe it's another channel to invest in. And it's gonna be part of any kind of SaaS business that wants to scale. And I agree, I mean, Figma to your point is a great example, not just of a product-led mindset, they also have an incredible community-led mindset. And I think those two things combined ultimately are generating unstoppable growth as you define. So I'm very excited, you know, because when we started product school, we also invested, we're still investing very hard in community. And it felt lonely when we were talking about this because it's hard to measure ROI at least in the short term. But I think if we take a longer term approach and we truly are not just in terms of dollars but actually like value for people because at this point it's not only the company evangelizing it's also the users of the same company connecting and helping each other out. It can be also extremely cost efficient. Yeah, but if you think about like what is, if you ask the Marketo, what was their big life differentiation? And one of the key modes is actually the marketing nation. We had a huge community of marketers both customers and non-customers. It was bigger than Marketo. And then so, yeah, I think very early we had like 5,000, you know, marketers as part of the community. So obviously it helped us position the brand, be the thought leaders, learn from them. It's very bi-directional. Learn from your community is really important but own that. And that was like the biggest mode that helped drove Marketo to be very iconic. Pulse for games that is the same, right? Pulse is actually community and many customer success, whatever tool they use they still come to Pulse to learn, to share ideas, to grow the customer success community. And now the product community is something obviously communities is really one of their modes that you have to consider if you wanna go serious about scaling and efficient, capital efficient growth. Miki, it's been a pleasure to learn from you one more time. Thank you so much for your time. Awesome, thanks for having me.