Yamini Rangan on the ‘whys’ behind a successful product-led strategy

At Mixpanel, we strive to be product-led in almost everything we do. After all, what better way is there to serve your customers (and prospective customers) than to focus all your internal and external strategies on how they ultimately lead to value in your product?

Another company I’ve personally admired for being a leader in product-led strategies is HubSpot. So I was very excited when I got the chance to sit down with CEO Yamini Rangan to pick her brain about, among other things, how she and the various teams across HubSpot approach development and growth in a product-led way—and measure their success in doing it.

Here’s Yamini on everything from operationalizing NPS to empowering employees with autonomy as you scale past the startup size.

The following interview has been lightly edited for clarity and brevity.

One of the things that I’ve really admired about HubSpot is your transparency as a company. It comes out in the content you publish, where you’ve been incredibly open about your metrics. A few years ago, I saw a post from HubSpot about product qualified leads, and I took it as the first indication that you were moving into product-led growth, which wasn’t yet as trendy as it is now.

Why did you make the shift to product-led, and what have you learned in the transition that you can share?

A lot of companies start with a product-led growth strategy and then shift to a rep-driven strategy. HubSpot did the opposite: We started from a rep-driven model and then got into a freemium model with product-led growth. The move made perfect sense for us since HubSpot was founded on the vision and philosophy that you have to provide value to customers before you can extract it. 

Around the time we shifted to be product-led, our cofounders, Dharmesh Shah and Brian Halligan, were seeing that ease of buying and ease of use were resonating deeply within the segment that we had. The traditional customer relationship of a seller picking up a contact card, calling someone in a company, and saying “Hey, do you want to buy this?” wasn’t the future.

We started thinking: “Okay, how do I make it easy for people to try? How do you make it easy for people to buy?” That brought us to the buyer experience we have today where the buyer can go to our website, they can trial our product, and they can get through 90% of everything that they need to do without talking to anybody within the organization.

Overall, I think the biggest transformation we have seen within the market is that it’s about buyer empowerment today, not seller enablement. 

What are the key metrics that you watch for to analyze success in the freemium part of HubSpot’s product-led strategy? And have there been any other learnings around encouraging customers to upgrade out of freemium?

Before we even look into how our freemium customers are upgrading, or how that monetization flow looks, we want to make sure the customer experience is exceptional. So we ask ourselves, where in the freemium customer motion are we doing well, and where are we not doing so well?

We have Jay Simons on our board. He was at Atlassian for many, many years. One freemium “metric” he turned us onto is measuring how often your customer needs the support of a support or sales human. Think of every time they need a person to get involved as a bug in your experience, and then you want to fix that bug. 

We also have a chat-assisted sales motion that plays with this product-led growth motion. So, in addition to measuring how customers complete processes, we also have that mostly hands-off tool to help collect more data on the pain points. We usually get things like “I’m on the pricing page and I have two questions, but I don’t want a full demo.” Through this, we’re learning which questions come up the most, and then we can go back and improve the experience accordingly.

“Overall, I think the biggest transformation we have seen within the market is that it’s about buyer empowerment today, not seller enablement.”

Can you tell us how HubSpot thinks about and operationalizes NPS (net promoter score)?

The customer is at the center of everything we do, and we operationalize this in a few ways. Our first email of the week is the customer NPS email. It’s not an ARR (annual recurring revenue) update, it’s the NPS update. And that sends a signal through the whole organization that we are focused on customer retention. 

Our product organization carries our NPS feedback loop. We have a team that’s constantly pulsing customers and following up with detractors and passes. And speaking with promoters is critical, but it’s a lot of conversations to get the next level of detail into why someone felt a certain way about a certain part of the product experience.

To close the loop, that team works with the rest of product and engineering to make improvements according to the feedback. We run a very, very autonomous engineering product organization. They’re releasing and innovating at a fast pace, which turns into quick value for the customer.

What other quantitative data do you use to monitor success in how users are getting to value?

The other thing that we’ve done is align teams to really care about revenue retention. Why revenue retention? Yes, you need to sell, but more importantly, your customer needs to continue getting value. When customers make the decision to stay with you, it’s a big indicator that they’re getting value. So we see revenue retention as the singular metric that measures the net of those drivers.

Last thing: In hearing you talk about how HubSpot executes on its product-led strategies across teams, it sure sounds like—even at a $20 or $30 billion market cap—you still get to operate very startup-like, which I adore. How have you maintained that agility as you’ve grown in size?

This is the biggest challenge. The typical playbooks say that as you get bigger, you get bloated and you build these internal silos. No organization wakes up thinking “I want bureaucracy. I want red tape. I want silos.” It’s just the default context. You have to work actively against it.

The way we stay almost like a startup is by maintaining a culture of autonomy. Now, when you truly are a startup—or your whole company is a two-pizza team, like Amazon talks about—it’s super easy to do this. Then your company becomes a 200-person team, and then a 2,000-person team. We’re about a 5,500-person team right now. To scale this function of autonomy, what you need is a clear mission, values, and supporting guiding principles—as I’ve said, promoting customer value is certainly a big part of ours. Then you make sure the right guardrails are in place, too. One way we do this is through our Culture Code, which clearly states who we are as a company and who we aspire to be.

All of this means that a new person coming into the organization can be empowered to make decisions because they know “This is the vision. This is what the strategic bets are, and here’s where we are going.”

About Yamini Rangan

Yamini is the President and CEO at HubSpot and a tech industry veteran with more than 25 years of experience in leading high-performance teams with empathy and curiosity. Before HubSpot, she served as Chief Customer Officer at Dropbox, VP of Sales Strategy and Operations at Workday, and held several customer-facing leadership roles at SAP. Recognized as one of the Most Influential Women in Business by San Francisco Business Times, Yamini is passionate about customer-centric growth and scaling high-performance teams.

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