 Hello, everyone. Thank you for joining us today. We're going to be talking about our experience here at Pendo of growing our premium product. So I'm Hannah Chaplin. I'm the Director of Product Marketing here, and I was heavily involved in this project with my good friends, Karen and more, over this summer. So Karen, I'll let you introduce yourself. Hi, everyone. I'm Karen Wexler. I'm a Senior Director of Product Management at Pendo, and I'm leading a few products. One of them is the mobile product that we're going to talk about today. Hi, everybody. My name is Noor. I was lucky enough to work with these two lovely ladies on this amazing project, and we're going to tell you all about it. Stay tuned. It's going to be cool. Cool. So just as a little bit of background, I'm going to explain why at Pendo we decided it was a good idea to build a freemium product, and why a lot of software companies are taking this approach today as well. So if we go to the next slide, we've got a lovely diagram for you. So you can see here that a lot of organisations are really putting the product at the heart of absolutely everything, the entire customer journey, and also the way in which every function in the business is supported. Some practical examples of that are training and education or onboarding. So traditionally, that might have all been done human to human, but when you become more product led, you can make the product itself do a lot of that heavy lifting for you and onboard and educate and train ongoing within the product itself as users are actually going about using your software. And then from a sales point of view, this is where free can be so interesting. It can help generate leads, not by just downloading content in a more marketing led way, but in actually giving users the opportunity to actually get value from your product itself and kind of get stuck in. And I like doing that. I've always been like that. I like to see it and click on stuff. So we go to the next slide. There's some nice examples from some leaders in this space. So Netflix offer a free trial for Adobe. You've got like a cut down product, and then you can upgrade to get the functionality you need. And other companies offer things like a self guided tour or free tools. And there's no right or wrong way to go about this. Here at Pendo, for example, we've got a free product, we offer a free trial, and we have a self guided tour. So it's thinking about different ways that you can get your product in the hands of the user to get them excited about what you've built. And then if we go to the next slide, thank you, Karen. What this presentation really is about is our experience here at Pendo of expanding our free offering. So Pendo, as I'm sure you've gathered, is a software company, and we help other software companies make their products better. We do that by helping you understand how people are using your product. And you can do in app guides to help them use the product and then collect feedback. So you know what to build next as well. Our free products came into existence, I guess, about a year ago. Pendo is actually available for web and for mobile. And we started with web, just to be like really focused and to kind of learn free in one place. And then we've gradually expanded to mobile, which which kind of launched over the summer. So yeah, Karen, I'll let you take it from here and kind of explain what we did. Yeah, so the journey started with a buzz in the company. Free went well. What about expanding it to more products? And so when asking yourself when is a good time and where you should expand from our experience, the first thing you need to make sure is that your existing free product is successful. And when I say successful, it really is up to you because you must set KPIs and metrics in place in advance to really understand if you're free offering is successful. And that can be a looker dashboards or any place where people can look from all over the company. So in our case, we had lots of dashboards. And we were looking mainly at this kind of funnel that it looks like this, whereas how many leads are we getting for this free offering? In our case, we have an install in place for our product. So we did have an install success percentage out of all the leads, but you might not have that. Of course, the main thing is how many users are actually retained in the product and then how many are converted. And other things we're looking at is like the actual deal size for those that are converted. How many product qualified leads are we getting here? How many users are over the MAU limit in our case that was the limit set for the free offering? So we have a lot of things we're looking at. And so after one year looking at all this stuff, which was very transparent to the entire company, it was pretty apparent. We have a success in our hands. It is a revenue generating stream. People are happy, our customers are happy. So what next? And so the next thing would be selecting from other products in your company, which one should you expand to? And that's not that easy, because there are a few considerations to take in place. The first one obviously is the market. Where do you have the greatest opportunity? So there could be a lot of variants here. It could be getting into a new market or a new persona. In our case, for example, in mobile, we could get into mobile and mobile first companies. So that was a new market for us having Pendo mostly sold to companies that have both mobile and web. And you can get to new geographies. Maybe your product is B2B. And by getting it free, you can get a hunch whether it would also work for B2C. So there are a lot of things that could happen here on the business side. But there are two other big considerations. The second one is your product ready to be free. And so on the one hand, a free product. So we can have some bugs and some problems. People get it for free. But it's the other way around, because a free product has no support. And so people will just drop it in a second if it's not good. They also don't have the loyalty. They did not invest money in it. And so if it's not mature enough, if it's not in a good state and it's very easy to use, it will not last. So the second thing you should be asking yourself is, is my product mature enough to be a free off the counter kind of product? And the third thing, of course, is just seeing that it fits the roadmap. For example, we have a very nice other product in Panda, which could fit that offering. But it had a very, very like loaded roadmap for the year. And that was a priority for that product. So it obviously needs to fit into our plans, because it was an investment to get our mobile product to free. So now that we've decided to go for mobile, and by the way, more and Hannah feels free to chime in if I forgot anything in all our thought process there. Then we actually need to prepare. So what do you need to do now that you have your product, you know, you want to go free? What next? And so the first thing to think about is about the target persona. So you have two target personas right now, you have the one that isn't a free product that is already out there. And you have for us, we have the mobile target persona. So is this within the free offering, would that be the same persona exactly? And just an example, for example, our persona is usually the product manager, but we may find out that it's also developers or marketeers that take it in free. So the target persona could change just because it's a free offering. And because everyone could just get we're not selling specifically to product because anyone could take it and use it. In our case, we concluded that it's a similar target persona. It's probably going to be the product manager, the developer, the marketeer, all those, or success, all those people using Pendo. But it could be a different market because as I said before, it could match more startups, small companies that Pendo is not selling to right now, products first, product led companies. So this changes the way you look at things. So it's really important to start with understanding who is going to use the product. And I think to add to your point on the product side, Karen, for me who works in marketing, one thing we were very conscious of is does that persona change how we might market to someone using the free product versus someone who's using the paid product? So I think it's good to be like quite open minded about it. Because I know when we started offering free, we did see different personas coming through, not just our main product kind of persona that we're kind of used to selling to in a way. So I think it's good to go into it with like an open mind and make sure you are seeing who is actually using that free product as well, because that can help you come up with really good marketing ideas. Yeah, and maybe more can talk about it some more, but we were surprised to see also developers. So you might be surprised here. And this is like, this is the nice part really, because you're expanding everything, anything could happen and you need to be ready. I think one thing to be really aware of as a product person as well is any impact on the revenue team that a free product could have. And this is something, this is the reason I work so closely with you, Karen, and more. Because while we already did have a free product, we had a lot of enablement for our teams, we had lots of documents that helped them understand why free was beneficial for Pendo and how to talk to our customers and prospects about it. A lot of these documents already existed. And this is a like an example of a place where we put all of our documentation for our revenue teams. So as part of expanding free from web to mobile as well, we had to make sure the teams were ready for that and that they knew how to have good conversations. So we like did some additional live kind of enablement, we updated all the documentation for our teams, because there are a lot of questions with free, like salespeople can worry about deals getting cannibalized, customer success folks can worry about, oh, we've got this free product, a load of my customers going to downgrade. So I think you need to be like really prepared to have those conversations and get ahead of it with good documentation and good training as well. Yeah. And for me, I can add that it was a real worry. So what do we do with all the small small customers with all those that are already in the lowest tier of ours? Will they now feel that, hey, we're losing something because we could have we could have gotten this for free. So we really need to nail that statement of why free is different than paid, which I'll touch in the next slide. And so the big question is what do you include in your free offering versus the paid? And so one obvious thing that most of us do is some usage limits. For example, the New York Times, let's see, read 20 articles. And on the 21st, the next one, you need to pay. And in our case, we have an MAU monthly active users come limits. So up to 1000 free users. And then you need to pay. But honestly, that's not enough. And the reason is that people don't feel good paying for something that a minute before they got for free, only because they have that next user to use the product. It's just it just doesn't feel good. So you must provide something else that is actual functionality that is additional in the paid product so that your customers would feel good with paying for that product. And your sales people will feel good with selling to those customers or to just like explaining why you should take the paid and not the free. So this is super important. And one of the ways to understand what you want to include or not include in the free product is monitor for heavy usage, see which features are the most used, most wanted, and then decide should they be in the free or the paid. And it's always a big debate. For us, we made sure that we had really good features and appealing features also in the free offering, because people need to get value from the free as well. And then more complex stuff, stuff that costs us money or really advanced features would be only only on the paid offering. And last point, sorry. Sorry, Karen. I was just going to add there that that is just to back up your point that that is a lot of conversation, isn't it? And I know that when we were looking to expand our free offering to mobile, we had to have the conversation lots of times with lots of different people, especially sales over whether we should include the same as web, whether it should be different, whether if we did that is confusing. So it can definitely take a bit of sorting out that for sure. And then you might change it afterwards. So yeah, you might change it afterwards. One more thing I forgot to note is that even the MAU limit that we had, we had to re-examine it at the time that we added mobile, because it might not be the right limit anymore. In mobile, you might have many more end users in your apps. And so maybe 1000 is not enough. And we do want our customers, our end users or customers, even if they're free to get real value from the product. Because remember, that's our conversion to sales. And that's our brand there that's that out there. So this is another thing we've examined. Should we change the MAU limit and usage limits from the original free product? And the last point that more we touch on is how do we make people understand what they're missing out so that they will upgrade or they would consider upgrading? Okay, so we kind of learned that we have tons of stuff to consider before expending your free product. So let's get into some more details and and see how that looked like. Let's go to the next slide. So what's happening on a free product, you probably all understand that by now, there's no one hand holding your customers. They're going to have to figure out everything by themselves. And there are so many things to figure out. The more complex your product is, the more likely it is they will get lost and will lose the understanding of what's the value you're offering. So the first thing we did is we identified what's the areas in the product that are not self-serve that when there's usually someone who's walking them through, it could be it could be when someone is looking for the product. So maybe marketing is handling them. It could be installing the product. It could be actually using the first feature or understanding what they can do with the product. So we kind of listed all of these areas and we said, okay, that's the bucket list that we're going to handle. And then we build a plan on that. The second thing we did is we had to nail the onboarding flow because it doesn't matter if your customers or users are getting into the product and think that it's amazing if they don't understand how they can start using it. So you have to really nail it and I'm going to talk a bit about it in a second and make sure that they understand quickly what they can get out of your product. The last thing that Karen talked about a little is creating those conversion levers. Well, your free product is amazing, but if it's going to be too amazing, they're not going to pay for it. So make sure you leave out the parts that they actually need. They can handle without them for now, but they will have to have them and pay for them. So these are like the three things that they have to figure out on their own. Let's move on to the next slide, Karen. Okay, so as I said, nailing the beginning is kind of crucial. You need to make sure that they can find it when we figure it out. And again, I'm going to talk about that in a minute, is that not every persona can easily find our free offering because our product and though is built for mainly product managers, CS people, marketing, UX designers, it is not built for developers. And Karen mentioned that not only your persona is going to get to that free offering, some other people and you're going to learn where those people, if you make sure you follow that data, other people are going to get to the product. So you need to make sure that they know how to get there. Once they get there, can they figure out what they do next? We kind of learned that they don't, if they are not the actual persona that we aim for them. And we need to tweak things around. I'm going to talk about how we did that, how we learned that and what actually we did. And once they did the setting up, the first state step, how do they start getting value? So let's talk about it in the next slide. So what we did, that doesn't look like me, right in the picture, but that was me. I was standing there behind those people who started using the product. And I was actually looking over the shoulder to try and understand, what are they doing with my product? So even before they use the product, we sometimes need to install or set it up. So our product is built, as I said, mainly for PMs, marketing, etc. But it must be installed by engineers. So we chose to go to those users' offices and sit next to them, not only to see what they're doing, because you got many tools that can show you what they're doing, but we also kind of wanted to hear what they're thinking and see what they're feeling like, what they wish they had at each point and to help them go through this sometimes existing setup phase. So it has this advantages, right? Because it's weird when you set up something and someone is standing there and looking at you. But the advantages were so much more that it was worth being weird for a minute and watching someone, because we could learn so much and hearing them think through everything they do, that just helped us in an amazing way. So we were trying to figure out if we need to do something huge, we need to make a big change in the product just to help them go through this initial setup phase or if there's anything small or a bunch of small stuff that we could do to make sure the users can start using the product. For example, one thing we've learned is that our product speaks the language of our target persona, which was different than the developer's language. And we have seen that, I think it was about 40% of the people who initially start using a product were developers. So if they don't understand the language that we speak, they're going to fail. They're not going to move later than the first step and we lost them. So that phase was too complicated and we easily fixed that by just simply adjusting the language and knowing the audience just made it that much easier. There are tons of other stuff we've learned. I don't want to tell you all about it, because I really, really, really want to see you guys going and getting to know your customers, seeing what they do in the product, tons of value. So good luck. Can I add something? So the reason why more and even you to look at developers and not and engineers and not a product is that part of what we did is that in the registration flow for our free offering, we don't ask for a lot because obviously that would make them run away. But if we do ask for it, why did you install Pendo, what's your role, et cetera, et cetera. And this is critical for us because that helped us understand where we need to test, where we need to optimize, and who is the persona we're thinking about. So I really recommend to do the same. Yeah. All right. So first impression, once we've got through this first phase of setup for installing your product, we have to make them feel that this is the most amazing product. So let's move to the next slide and see how Dropbox need that. I'm sure you're all familiar with Dropbox. Whoever isn't, it's a simple tool that allows you to use your files wherever you are, whichever device you got. So what we're seeing here is that Dropbox figured out one of their aha moments. It's that moment that makes you feel like, oh, my God, where have this product been all of my life? I need that. And so they took one of those aha moments and made sure that right at the beginning, you're going to go through that phase which is going to keep you sticking to that product and telling everybody how amazing it is and why you must use it. So they really made the screen dark. They made sure that you're not going to do anything else with the product and walk you through to that moment and then you're falling in love right at the beginning and there's no reason for you to not continue using that. So make sure you recognize and identify those moments and make sure those users go through all of these phases as early as possible so they fall in love with it quickly. Let's see what we did at Pendo. Yeah, go ahead. Yeah, maybe I can add here that we did have an onboarding flow already for our original free product, but we've added a big piece and Mobile is a big piece and we had to look at it over again and really understand whether we need to change that onboarding flow and obviously this is just one example of how you could do that. There are so many elements you could add. You could do walkthroughs, videos, like car sales, if it's mobile, anything to onboard. Okay, so that's I think that's the first snapshot from our product here. So welcome to Pendo. What we did here is other than adding this walkthrough that takes you to those aha moments, we figured that in order to see the value with Pendo, which shows you analytics about your users, you have to actually see what are the charts that we're going to show, what data we're going to present you, what value you can get. So what we did, we created this kind of demo mode that already has some fake data inside and then it shows you what insights you can get and what are the actions that you can take with Pendo. So the first thing you get, the first thing you see when you get into our product is something that's already alive, that's already working and you can play around with it. And then on top of that, we've added that walkthrough that we just saw Dropouts also doing to walk you through and see everything that you can do with the product. So not only walkthroughs, if your product requires that, make sure that walking them through all of these points is actually going to show them what they can do and not just like see a bunch of, you did something but everything is zero because you got no data in it and you can't see the real value within it. And by the way, this is so critical that we want to add it to our non-free product because after seeing the value here, how can you actually understand, as Mor said, how can you actually understand the value looking at empty dashboards? You can't. That's a good point actually and all the way through, like with onboarding especially, the things we've been testing and trying in the free product have made it made its way to our paid product because we've learned so much. So that's definitely a huge upside, isn't it? Oh my god, yeah. I really recommend everyone going through this journey because it improved our product so much, especially on the UX and the side of things. So Mor, did you want to add something about, well, well never mind. Yeah, so one thing that I had in mind as Mor was discussing that as part of this testing that we did, we've added some verification tests to make sure that to help users understand that their let's say, install in our case was successful. So everything that you would usually have a sales engineer do, a success person do, a professional services person do, everything of those, if this kind you need to map and make sure that it's in the product, that could be full features that you need to build in order to make sure that that's done, like that's checked, users understand, users completed the install, etc, etc. And coming back to, well, what now? So I built this amazing onboarding flow and setup flow, and I did the user testing and I'm ready to launch my product. So the next thing would be, as we said before, you need to set those metrics ahead of time. You need to make sure that you know what you expect to get from the product. As part of the conversations, me and Hannah and other people had, well, who is the target market? What is the target persona? How many installs or new users are we expecting? Because otherwise we have no other way to really understand our results if we don't have a baseline. Does the funnel look fine? Because once we launch, we would need to find that spot that doesn't work well and hyper-focus on that to fix it. But if we don't have any expectations, we won't be able to do that. And the other thing is that it's never done. So really iterating over a product even, but especially a free product where it's so hands-free, no support, you will always have more things to improve. And this is why it's so critical to set those KPIs and to measure them and to see what's not working and what you need to improve that you were just blind to and didn't even think that would be an issue. And of course, you can also celebrate successes this way because maybe everything is great. And then, oh my God, we thought we'd had, let's say, a 20% install rate and success rate and we have 30% and we can celebrate. And so it's not only that, it could be great, which leads me to this, I think one of the last slides around transparency. And so one of the key things we did in Pendo, even before we added mobile, was to be super transparent around the success or in success of over free product by sending an email that looks like that with some numbers that are actually real around all the KPIs, everything that we're looking at, with links that anyone in the company can access to look at and anything you want around how we're doing, what is the funnel, how many conversions, what are the product qualified leads, oops, there is, and like even what is the average ARR for those deals that did come through, what's the install success rate, et cetera, et cetera. So every engineer, every person in the company gets this email and understands how we're doing, are we trending well or not, and can ask the right questions. And that brought to a lot of transparency and trust in the product, nobody had to talk, everyone knew what's going on. And this is, by the way, how we knew we were ready for mobile or for this expansion, because everyone saw that and were like, well, we're good, let's go, let's build more on top of that infrastructure. Yeah, I was just going to add there, Karen, it made my job really easy when it came to the enablement for mobile, because I was able to use these and say, hey, everyone, this is the success we've had, this is why we've added mobile, and it just makes it a lot easier if you bring everybody with you. So let's talk a little about, yeah, the key takeaways, because we've said a lot of stuff, right? So just to keep you focused, guys, the first thing we talked about is, should I expand my offer, you need to understand if your product is ready, and that's the right time to expand it. And the next thing we want to figure out is, what should I add to my offer? If you only have two products, then that's going to be easy, just add the second part. But if you have multiple parts, make sure you're going to add and expand to the right thing, make sure it's ready and then edit. The next thing you want to make sure is that it's self-serve, there's not going to be anyone holding the hands of the free users. So make sure they're going to be able to make it through every single step of your product. And the last thing that I don't want you guys to forget is that make sure that your paid offering is worth paying for, just not to keep everyone on the free side unless, and we didn't talk about it, unless your goal is just to have everyone use it. That's also a valid goal. If you just want everyone to use your product, even though it's free, you don't have to worry about that last one. But if you want to make some money out of it, make sure they need to pay for those pieces. I think I covered everything, guys. Did we talk about anything I forgot to mention? I think that was very comprehensive. Yeah, any closing comments from you, Karen? Yeah, we just say we didn't touch on that, but there is a whole literature about how do I then chase the users to actually convert? When do I access users after they're over there? Let's say in our case, the MAU limit, should I do it immediately? Should I block the product, which we don't? And we just contact them. How much time should we let them use the product before we do that and so forth? And even should we expose the full offering for some time to some customers so that they understand what they're losing? And so they're missing out. And so those are things that we're thinking about right now. We're going to do a follow-up. We're going to do a part two, everyone. Be back for part two. That's the next one. Fantastic. Well, thank you all for joining us today. I hope you've enjoyed the session.