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Don't just make big bets. Consider rapid experimentation to outpace the competition. We share 5 concrete examples, a process we've followed - all to enable you to conduct rapid experiments.
Creators and Guests
What is The Revenue Formula?
This podcast is about scaling tech startups.
Hosted by Toni Hohlbein & Raul Porojan, together they look at the full funnel.
With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.
If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.
[00:00:00] Toni: Hey everyone, this is Toni Holbein. You are listening to the Revenue Formula. In today's episode, we are going to talk about rapid experimentation, how you can apply it, how it works, and actually we're gonna spend quite some time on five very specific examples of Mikkel’s and my past. Enjoy.
[00:00:24] Mikkel: that's better.
[00:00:25] Toni: This reminds me of freshness.
[00:00:31] Mikkel: Yeah, that's the cost of recording late. Late in the.
[00:00:35] the day.
[00:00:36] Then it's like quality of
[00:00:38] Toni: We will upset the people that are watching while, while they're cycling.
[00:00:42] Mikkel: This is, I'm just drinking apple juice. I don't know about you.
[00:00:45] Toni: wait.
[00:00:47] Mikkel: Yeah, remove it. Damn it. Now they know. Now
[00:00:51] Toni: I know.
[00:00:52] Mikkel: So if you're only listening, go check it out on YouTube.
[00:00:54] Then you'll laugh for about a second and then go like, ah, okay. Next. Those, those
[00:00:59] Toni: Danish idiots. Danish slash German idiots again.
[00:01:03] Mikkel: you. Thank you for correct.
[00:01:07] Toni: Okay,
[00:01:08] Mikkel: but
[00:01:09] Toni: segue,
[00:01:09] Mikkel: segueway, segueway. We spoke last time about rapid experimentation. Yep. Sorry. We spoke about continuous improvement last
[00:01:19] Toni: know what, actually, maybe I take this away from you now. Yes.
[00:01:22] Mikkel: no, I'm tired. I spent the entire weekend working outside in the garden. Look at my hands. This is not
[00:01:27] Toni: saw that. I saw that you, you touched a rake for five
[00:01:29] Mikkel: minutes. Yeah, exactly. I. Oh no. Um, no. Last time we talked about, uh, continuous improvement. Yes. Uh, which is a way for you to basically compound performance over time.
[00:01:41] The more things you improve, the better performance Yep. Et cetera, et cetera. But one of the things continuous improvement does not do is deliver entirely new things. So taking things from zero to one. Yep. That is not. If at all. It's not even developed for that purpose, to be honest. And, um, if you wanna grow or grow faster, it is a given.
[00:02:03] You're gonna need to develop more new motions, more new initiatives for you to acquire new customers.
[00:02:09] Toni: Yeah, and I think this can go all the way from, you know, this typical or enterprise emotional new market, um, where it takes something from zero to one. It can also be, uh, things on the micro level than that. Right. So it. It's basically, uh, still about the S curve. Yeah. But not everything needs to be a massive thing.
[00:02:29] There can also be smaller versions of that throughout your funnel and throughout your, your revenue engine.
[00:02:34] Mikkel: And so one of the, the classic, classic examples, so we're talking back when Twitter was cool.
[00:02:41] Toni: you know,
[00:02:41] Mikkel: 5, 6, 8, I dunno, long
[00:02:43] Toni: people will probably say it's cool again,
[00:02:46] Mikkel: let's table that one. But, but so what, what Twitter did really well in the early days of growth was they ran rapid experiments. So they were testing a lot of new things at scale and that helped them, you know, outpace a lot of the competition and grow faster.
[00:03:02] The same goes for
[00:03:03] Toni: like MySpace.
[00:03:04] Mikkel: Yeah, the ziko for Dropbox, I mean, I think everyone will remember the growth hack they had around, Hey, refer a friend and get more storage space. Right? Really cool.
[00:03:14] Toni: also the, this thing that they did with universities, remember that? Okay, well, not everyone apparently is gonna remember that then, but, uh, basically kind of they did the whole thing. Hey, here's a university ranking and the more people that can sign up from those universities, you know, then the university's gonna win.
[00:03:31] Uh, and basically kind of everyone who then signed up under that, uh, university.edu, uh, got like, I don't know. A lot. I don't know what it was back then. A gigabyte was a lot, I think a gigabyte of free storage for five years or something like that.
[00:03:45] Mikkel: But anyway, but so they, they, they over grew pretty fast because of that trick, however, They had a lot of testing happening that led them to that point in time, and that is really the kicker at the end of the day. Right? They had figured out,
[00:03:58] Toni: I think the, the, the importance here in that little story is that, um, it wasn't that they were thinking about.
[00:04:03] Mikkel: this,
[00:04:05] Toni: Uh, in our sharing concept and we're tweaking it together.
[00:04:08] Right. They did a lot of different concepts at the same time. Yeah. Um, and then this particular one took off by a lot. Right. And obviously when it then took off and when it went from zero to one, then, you know, I'm sure they applied continuous improvement. Got it. Even better over time and so forth. Uh, but that's kind of the distinction that we are trying to, that we are trying to outline here.
[00:04:29] Mikkel: And so I think we're gonna start by jumping a bit into the, one of the challenges we see at least happening at the moment today, um, faced by a lot of businesses, and one of them at least, that, that you and I have talked.
[00:04:40] Toni: about
[00:04:41] Mikkel: Previously is when you look at new things you want to develop as a business, there's a tendency for them to be very big bets.
[00:04:49] Mm-hmm. And there's a tendency for them almost always to be part of the plan.
[00:04:53] Toni: plan. Mm. And I think sometimes you just don't have the luxury to not have them be there. And I think this is, this is the situation that many people then are being faced with, um, trying to hit a specific target and especially early on when things are still super in flags.
[00:05:10] So we're still talking pre 5 million or something like
[00:05:13] Mikkel: that. Yeah.
[00:05:13] Toni: Yeah. Um, then it's, Hey, let's try this thing and this thing really needs to deliver ax and otherwise it doesn't work. I think as you scale and as you kind of. Plus 20 plus, 50 plus a hundred and whatever. I think those, those bets become a little bit less impactful in your ongoing planning.
[00:05:32] And you will probably also have some more maturity in saying like, Hey, we, we can't, we can't have that in here. And then completely miss, right? I think it's a bit of, um, uh, of a thing that is more pronounced earlier in, in a company lifetime where you basically, um, uh, yeah, you pretty much don't have the luxury not to do it
[00:05:50] Mikkel: Yeah. So what we wanted to do was effectively to run through some examples that are outcomes of experimentations, that we have experimented and perhaps also discuss some of the frameworks you. Apply in your own business to basically get going with rapid experimentation as a business.
[00:06:07] Toni: That's it.
[00:06:07] Do you want to take those things?
[00:06:09] Mikkel: we start with a, a failure of success? We've usually only have success, success stories, but we also prepared one that wasn't.
[00:06:17] Toni: I mean, let's, uh, no, let's start with, um, with the success.
[00:06:22] Mikkel: So you wanna do a shit sandwich, basically. Yeah.
[00:06:25] Toni: that's it.
[00:06:26] Mikkel: Okay. So, um, maybe let's take a, just a few steps back before the test even appeared actually.
[00:06:34] So we, um, We basically implemented a process for testing in, uh, at the marketing team at Falcon way back, uh, back in the day. So this is probably five years ago, so not that way back, but we implemented a process. This was really inspired by Sean Ellis's book Hacking Growth, where he outlines a simple framework where you, you pick an objective.
[00:06:53] For us it was, Hey, can we generate 25 more inbounds per month, uh, just to keep it super simple and get ideas flowing, and then you develop a backlog of. And you score them against ice. So it's a scoring framework, impact confidence and ease of implementation. And then you have an average ranking of ideas, and we will then prioritize ideas using those, those averages, uh, and pick what is, you know, most likely to succeed against that objective.
[00:07:21] Yep. And, uh, one of them. That we got it. It was basically, so we had, we had introduced a contact us page, cuz we didn't have, one didn't exist, so people didn't, you know, the only way to get in touch with us was request a demo. And through the Contact us page we saw we were getting a lot of questions about.
[00:07:38] The product, can it do, does it support this channel? Can you schedule something for this channel? Whatever. Right. And our, our hypothesis was, well probably there is a bunch of people who have questions. They can't find the answer, they can't be bothered filling in a contact us form and waiting. So they're just gonna bounce.
[00:07:58] So we said, what if we implement web chat as a test? And I think normally a project like that you're looking at if you wanna do it, you know, perfect quotation marks, you're looking at a couple of months because you do need people to staff it. You do need training and how do you handle the questions you're gonna get?
[00:08:14] What if it's a customer, how do we route them to cx? And there there's a bunch of how do you measure performance, how do you integrate it into the system? You can kind of keep going down that rabbit.
[00:08:23] Toni: hole.
[00:08:25] Mikkel: We spent two weeks on it. We literally talked with the, um, uh, the manager of all the SDRs and said, Hey, we wanna test this out.
[00:08:33] Do you have two people who would be great for it? And it's like, yep, let's do it with these two people. Uh, we can staff it probably on average this amount of time per day. And, um, Then we just agreed to get going. We didn't think about how do we pass the leads. It was literally in a spreadsheet at that point in time.
[00:08:49] And, um, what we saw it, it basically significantly increased the opportunity production, even for us doing so.
[00:08:56] Toni: But let's, let's actually unpack this a little bit. So number one, um, did you come up with a solution because you heard about Drift and were like, oh, you know, let's figure out how we can squeeze Drift in here.
[00:09:06] Mikkel: No. No, because we had picked on an object. We had picked on objective and, uh, I think there was a trend of companies adding web chat to the websites back then that we were noticing. And then I think the real, the real kind of aha moment was people were asking very specific product questions. Yeah. Via email.
[00:09:26] Toni: But I mean, usually, you know, other people would say, okay, I think we need to have a, something like an FAQ page or something like this. Yeah. Right. Uh, this could have been a solution as well. Why did you go for, for Drift in that case, or for a web chat?
[00:09:40] Mikkel: Well, because we, we thought the interaction would kind of enable you to then on earth, hey, is there actually legitimate interest?
[00:09:47] Yeah. And should we then showcase something with an FAQ page? We wouldn't be able to, and we did have a help center where people could go and search, but it was just, sometimes you also have that, you know, I just want an answer to my specific question. I don't wanna research it.
[00:09:59] Toni: I mean, it's, it's one of those things where, um, you basically then rather go on Google, ask a question for falcon.com Yeah.
[00:10:06] Or Falcon io or whatever we had. Yeah. And then you find the page, you wouldn't be on the, the homepage. And have any chance of finding that ever. Right. So, and this is then where, where web chat basically came in and was really helpful and this then Yes. So this is how it went from zero to one. I still remember that.
[00:10:22] Um, and then we obviously, you know, after those two weeks started to continuously improve, right? We had like those, uh, those playbooks and those bots and we staffed it differently and we gave it to the inbound SDRs and, and all of that stuff, right? So there was a lot of then additional stuff after we proved out the, the initial
[00:10:41] Mikkel: Yeah, and I think that's the cool part. You can then, you know, go back and listen to continuous improvement if you bring something to one. Um, I think it's also about accepting that you don't need to deliver something final, final, final.
[00:10:54] Toni: Mm-hmm.
[00:10:54] Mikkel: And I think it also requires that you have buy-in from your stakeholders around you.
[00:10:58] And they, they involve teams as well. Um, I, I think at, at that point in time, obviously, if.
[00:11:03] Toni: if,
[00:11:04] Mikkel: If I went to the Remy operations team, there might have been some feelings around the tool not integrating what tool we select, but the whole idea was, is a test so we can always change it.
[00:11:14] Toni: Yeah. And I think that sometimes requires also some understanding and bind from the organization.
[00:11:20] I think this is sometimes a bit hard to, to combine. Right. And I think by now, because we chose this web chat, um, Example, first is also clear to everyone, okay, this is not, you know, a big, massive product rolled out or a big something else. It's kind of something smaller. Um, and then over time, I mean this, this 25 opportunities that kept on growing into something else, right?
[00:11:40] And became actually a revenue stream in itself. Very similar though, uh, in behavior to the demo request, right? Kind of was very, very similar in that Yeah. In that behavior. Right. Cool. Um, I'll go next.
[00:11:53] Mikkel: Yeah, go fun.
[00:11:53] Toni: it. Um, I'll go with, um, uh, no, let's talk about PLG because that's cool. Uh, and first let's do a, um, also from the Falcon time, but basically kind of a very, very simple.
[00:12:09] Easy piece that we tried to roll out, which obviously wasn't so simple after all. But the hypothesis was that, you know, we looked at our competitors, you know, we talked about this in another episode as well. Um, and we got inspiration because a lot of them were able to execute. PLG didn't call it like this back then, was just self-serve, uh, really well, right?
[00:12:31] They, um, uh, they were able to acquire a bunch of different customers from that, uh, get them through the door and then upsell them later on. Um, and we were basically wondering, okay, so why, why can't we do that? Uh, and, and how would we do that actually? Uh, and basically what we ended up doing is, uh, very simple.
[00:12:50] We obviously aligned with all the different stakeholders, how we're gonna do this, and are we okay? And our high five and everything. Um, but we basically didn't change, uh, anything in the product. We didn't change anything, uh, in Salesforce on the tool, on the lead floor, nothing. Um, the only thing we did is, um, we created a landing page, um, with a bit of pricing, bit of words, and then a, you know, open trial or buy now button.
[00:13:23] Yeah. None of those buttons
[00:13:25] Mikkel: actually, no. You couldn't put in a credit card and you wouldn't get access to the product right away.
[00:13:30] Nothing.
[00:13:30] Toni: Um, but you could still hit the button, uh, you know, start trial, fill in a form, which still felt like, oh, I'm about to go in. Yeah. Yeah. Then people completed the form and then there was like a Thank you. We'll, we'll, we'll open up a trial for you and like latest probably 24 hours, you know, unless it's a Friday, it's probably gonna be later.
[00:13:50] Um, and then basically behind the scenes, we had then a workflow for someone. Yeah. To create their trials, send them the login and so forth. Well, it's all terrible, you know, it wasn't encrypted even when we sent them like, Hey, your password is 1, 2, 3, 4, 5, 6. Yeah,
[00:14:02] Mikkel: please change it. Yeah. Here help, help article.
[00:14:07] Toni: Um, and the same for the buy now button, like, you know, the by now button. And then I think we even had, A MasterCard and a Visa logo and stuff. You know, we made it really feely, like it would be this, but you know, you, you, you put this thing in and then the next logo step would be put in your credit confirmation, then nothing.
[00:14:25] And instead we send you a, uh, a DocuSign basically. Um, so, um, uh, this was an extremely simple way to get it from zero to one. Um, we obviously. Didn't have great conversion rates or something like this. We also really careful to funnel, um, uh, funnel traffic to that website and so forth. Um, but basically we had some people request a trial.
[00:14:49] We had some people buying this thing. Um, and it was, uh, it was so weird when suddenly in Slack there was an announcement, you know, just an automatic trigger. Yeah. That we closed one a deal for $120. Yeah,
[00:15:01] Mikkel: Yeah.
[00:15:02] Toni: our usual, you know, our usual, uh, ticket size was around a thousand dollars actually, and then suddenly this thing came through, so it was kind of cool.
[00:15:10] Um, Unfortunately, I think the Falcon guys, after you and I left, kind of, they never really took it to the full extent of a next level. Um, it was still this site, site project, but they did take it to a trial actually functioning, um, you know, it shutting off when it needed to shut off and parts of the platform being, uh, uh, segregated the way.
[00:15:32] So you only had kind of this one piece. Um, and they did get. They did get some, some revenue through, but nothing that was, um, uh, that was substantial enough. Um, and, uh, in order to faster achieve that, it would've been this typical, um, uh, well, continuous improvement. Right. We really need to kind of build this out.
[00:15:51] Yep.
[00:15:52] Mikkel: but I think that's also like the, the most important thing for the business here is if you have spent the time in r and d Yeah.
[00:15:59] With the revenue operations team, that would've been a massive project, a
[00:16:04] Toni: be honest. You know what, and maybe I just omitted this really interesting part of the story. So this was the third time we tried it. This was the third time. Uh, we always had this idea, Hey, it should be easy to just sign out. Why can't we? Why can't we, why can't we? Uh, and every time, um, previous to that, we basically were like, okay, you know, let's dedicate product resources. We need to get a picture perfect first. We need to at least make, uh, the trial shut off.
[00:16:30] Uh, we need to at least not give them all the capabilities because what if someone is cheating this and suddenly they're inviting a thousand users and suddenly it's Coca-Cola on there. And, uh, none of these things ever happen. Obvious. Um, this is also around the time where, uh, where we came up with, um, well if someone is inviting a thousand users and it's Coca-Cola, then that's called a champagne
[00:16:52] Mikkel: Yeah.
[00:16:53] Toni: Yeah, let's get to that Champagne problem,
[00:16:55] Mikkel: No, but I remember.
[00:16:56] Toni: remember
[00:16:57] Mikkel: We're having a conversation with, uh, r and d around them, Hey, we have to shut this trial down cuz apparently they're posting a hundred thousand messages every 15 minute minutes. So we need to shut it down now because it's dragging, pulling down performance of the entire platform. But I think also that's the beauty when
[00:17:12] Toni: but that was not an essential, was it?
[00:17:14] Mikkel: Yeah, it was really. Yeah. But that's, I think that is the beauty of running the testing. Because then you get the insights of what are the, some of, even the precautions that you're gonna need to take if you really want to bring this, this forward further. Right. And I think that knowledge, again, is super powerful as a business to obtain faster than, than your competitors.
[00:17:33] Toni: Um, okay, you are the next one. So do the one that failed.
[00:17:37] Mikkel: Yeah. Let's do the failure. Uh, so I think, uh, funny enough around this whole, um, self-serve model with pricing, one of the things we did actually wanna test was adding pricing to the. And that was because we got a lot of feedback, especially from people interacting with us through web chat on email.
[00:17:55] Just tell me the price I need to, I got to know. And uh, we were like, okay, so the first step we had done was to create a pricing page without pricing, and it kind of worked, right? And then the natural next step of that test was to say, okay, let's add the actual price. Let's, let's say starting. A thousand dollars.
[00:18:14] And then obviously, you know, disclaimer, disclaimer, disclaimer, the price can change to leave a lot of room to negotiate depending on what the need actually is. And I think after,
[00:18:23] Toni: up, up to that, by the way, massive debates in the whole team.
[00:18:27] Yeah. Sales, upper arms, flipping tables, you know, shooting, shooting away, you know, uh, paper on the desk
[00:18:35] Mikkel: having resignation led us ready and, you
[00:18:37] Toni: I need, you know, my quota needs to be reduced by 50%, otherwise I'm gone.
[00:18:41] Mikkel: yeah. There people were ready already. Now. Well, I lost the, I'm gonna lose the deal if that happened. Like so a lot of, you know, in internal politics, which I, I think again, we were able to pull some of that off because we had backing. Especially the, you know, my manager and, and other people in the organization to actually pull this through and communicate that it is an experiment.
[00:19:00] This is not the change, you know, the new world we're introducing. And then, and somehow I think that's easier for people to kind of then accept that, you know, it's, it's us testing and if it doesn't work out to deliver us more revenue.
[00:19:11] Toni: Just, just to be clear, what you guys then ended up doing, basically, so you put pricing on, but you did it in an ab split taste
[00:19:19] Mikkel: Yes, yes, yes. So, so half the visitors would see the actual price, the other half wouldn't, and a week and a half later, usually the test would run for two to four weeks to get, you know, Sign no statistical significance. Um, we had to shut it down because opportunity production for marketing fell 20%.
[00:19:37] Toni: Yeah.
[00:19:37] Well, you didn't have to shut it down. You just learned that doesn't
[00:19:40] Mikkel: Yeah, exactly.
[00:19:40] Toni: there was also like some, uh, the, the thing is like, oh, okay. AB testing on the website. That makes sense. Let's totally do that. Yeah. And then there is for the sales side, so. Did these guys see the pricing or did
[00:19:52] Mikkel: they see
[00:19:53] Toni: or did they not see the pricing?
[00:19:55] And also some, you know, we are laughing
[00:19:57] Mikkel: Yeah. Yeah. But that
[00:19:58] Toni: we all also things like, um, where someone was visiting the website, uh, the pricing, and then basically kind of discussing those with the colleague and then the colleague visited, and guess what?
[00:20:08] Mikkel: Yeah, please.
[00:20:09] Toni: any prices.
[00:20:11] Mikkel: Hey, check out this. Like, no, but that's the thing. Oh man.
[00:20:14] Toni: Yeah. Uh, but that's a learning executed real quick.
[00:20:17] And also, I mean, I gotta say this was, um, successful in the sense of finally we could stop all the ongoing permanent discussions about pricing. I still remember we had lots of negative feedback on all of our Facebook ads because we didn't show pricing and so forth. And, uh, and now we knew like, yeah, well for, for a good reason.
[00:20:36] Mikkel: Yeah, yeah, yeah. I mean, you could obviously have continued different, uh, permutations of testing. I don't think it's always gonna be the case.
[00:20:43] Toni: no, but also, you know, someone might listen and be like, well, maybe those were the 20% that you really didn't want to have. Maybe this was good. Maybe this was adding efficiency. Could have been, I don't know.
[00:20:52] We, we didn't, we didn't dare to go further that route. Right. Yeah. Okay. I'm going to do something that is actually not rapid experimentation. I am realizing now
[00:21:06] Mikkel: Great.
[00:21:07] Toni: It's actually a little bit more on the continuous improvement side, but it's a cool story. Experimentation. Well, but, but it's, it's pretty cool.
[00:21:14] So that's why we wanted to add it here anyway, it's the, um, uh, we call it AB testing with humans. Yeah. Um, so sounds, I don't know, weird. It sounds fitting for Toni the German, but otherwise it sounds pretty weird. Um, no. So the, the idea is obviously when you have a website, for example, right? You, uh, some kind of software product.
[00:21:37] It's, uh, by now very normal that you do ab split testing, right? One, one group sees one message, the other group sees another. Um, for example, if you're on Facebook, uh, crazy, okay, Facebook, I don't know, whatever, TikTok, I guess they, they apparently have, um, thousands of experiments running at the same time and they only expose it to 1% of the audience.
[00:21:59] And that's significant enough for them to then, you know, roll out. Um, and, uh, the thing is, You usually can't do that with humans, uh, especially in sales because it would just be crazy to try and do that and say like, okay, you guys say that and you guys said this, and. Uh, how do you monitor that? How do you roll it out?
[00:22:19] How do you enforce it, and how do you then collect, you know, the results? And, um, I recruited something pretty awesome from a company at that point called Main Street Halve. They were then later acquired by, I think, GoDaddy. Um, and they had, um, a team, and I don't get the magnitude right, but let's just say a hundred.
[00:22:39] Guys and, and ladies obviously, uh, call, calling full circle s and b. Yeah. Um, so basically AE, not SDRs, um, I think they had to make a hundred calls a day or something like this. Um, and basically the, uh, demo and everything was fully scripted. Like the whole thing was scripted. Yeah. So really liked the closest you can get to a rubo call, you know, the closest.
[00:23:03] And so what they did, and they were like really successful with this whole thing, what they did is out of the 120 folks, they basically created one part or two parts or whatever of uh, 12, uh, uh, a team of lab lab.
[00:23:18] Mikkel: guys.
[00:23:19] Toni: They basically created 10% of the whole thing was a laboratory. Um, and as we discussed last time, you know, everything was extremely documented, so everything was scripted.
[00:23:29] Yeah. Um, and then how do you roll out the ab split test while you change the script? Yeah. Um, and then for every day they did it by day, you know, they called the play. Okay, so today we are gonna change this part of the script. Yeah. You know, into this direction. The idea behind it is X, Y, and Z, and that's how we wanted to deliver it.
[00:23:49] And then they went off, each of them did a hundred calls, you know, had, I don't know, thousand of conversations that day or
[00:23:56] Mikkel: Mm-hmm.
[00:23:57] Toni: And when they then saw a. And when they then saw a significant increase in, um, in whatever conversion, whatever,
[00:24:08] Mikkel: yeah.
[00:24:08] Toni: They were like, okay, this piece works. Uh, we're gonna roll it out to the rest of the floor tomorrow.
[00:24:13] Mikkel: Yeah,
[00:24:14] Toni: absolutely insane. But it worked insanely good. Yeah. Um, so basically they were able to iterate and iterate and iterate and they could do the testing. Without putting all the chips on the table and say like, Hey, you know, we gonna change everything now. Uh, that could do it in the, in the corner over there and then roll it out to the other people. Now, is that, uh, rapid experimentation, how we're currently defining it? Maybe not. Is it continuous improvement?
[00:24:41] Maybe something in between, but it's just also a cool story we wanted, uh, wanted to
[00:24:45] Mikkel: but I think it's also something that means you can protect. So if you have a sales set motion, you are in effect competing most likely with other. And they also use scripts. So there's this constant, you know, whenever someone sees a new way to open the conversation, it's gonna take about two weeks.
[00:25:02] Then every SaaS company tries the same exact thing. But I, but I think the cool thing is you, you maintain the position and kind of continuously improve. So you could, it's, it's the same story for, uh, a marketing team running AB testing on a website where it makes sense to run continu. To keep on optimizing.
[00:25:20] And the same, by the way, for a, a product, you, you would consider the same. Right.
[00:25:25] Toni: Okay. Last example we had, um, this is again, out of PLG world this time, um, this time more, more successfully, I would actually say, so this was, um, not at Falcon was a plan A, um, and, uh, this was a fully sales lead motion, but for a thousand dollars a.
[00:25:47] Or $3,000 a year. So how does that work? Well, it kind of didn't work. It worked because the inbounds we got were like, so, uh, ready to buy. Uh, we had like 40 to 50% conversion rates. That's and like one week sales cycle. That's why it worked. Um, but when you hit those numbers, then they was like, well, wait a minute.
[00:26:08] Do we actually need a salesperson here? Um, and we were listening into some of the calls and it was.
[00:26:14] Mikkel: all,
[00:26:15] Toni: It was all like how to questions, you know, how do I set up schedule and how do I set up the, I dunno, punch clock or something that, how do I do all of these things? It was not the, why should I buy this conversation?
[00:26:27] It was how do I use the tool because in my head I already have the tool in front of me,
[00:26:31] Mikkel: Yeah, yeah.
[00:26:32] Toni: And then we were thinking like, well wait a minute. Um, if that's true, we could, from a pure optimization perspective, number one, but also from a, maybe people don't wanna talk to salespeople perspective, which is totally the case.
[00:26:43] Uh, maybe can take the salesperson out of it and make it a, you know, product led growth. Motion, obviously lots of, um, people against it because it was a sales led shop. so what, how do we do it? Well, number one, again, we didn't get any product resources because No. Um, and, um, also, you know, I was the coo.
[00:27:04] I also wanted to keep hitting my target, so I was also like, I'm not so super sure. and so what we ended up doing is, we got, um, in this case it was Intercom, another, you know, web chat tool, uh, integrated into the product. and uh, then we had someone super junior, but super awesome from the team. Uh, built, um, these, uh, WalkMe likes.
[00:27:27] Yeah, like things in through intercom. I forgot what they're called. Uh, sequences or product tours, something like this. Um, And, you know, this then led to, you know, our first basic assumptions. So what, what, okay, you landed this thing, what do we need to do first? and then we built this thing out. and, uh, that was cool.
[00:27:45] I was there, it worked. And then the next thing, so where, where we gonna, we're gonna try this actually. and basically what we then did is we had, uh, sales teams in, uh, the uk. We had sales teams in the Nordics. We had sales teams in, uh, Germany.
[00:28:00] Mikkel: in DACH
[00:28:01] Toni: German speaking region and we basically deployed, um, this, um, intercom product to a bot, uh, in almost all the other regions that didn't have sales coverage.
[00:28:13] Mikkel: Yeah.
[00:28:15] Toni: You
[00:28:15] Mikkel: no argument against it.
[00:28:16] Toni: There was very little argument. I mean, we had like a, a mini team in France. So we waited with that. But you know, basically kind of, that's what we did. Um, and, uh, and it worked. You know, we suddenly had people signing up and suddenly kind of started working. Um, we, the first thing we wanted to prove was not that someone is sliding their credit card, but rather that they're coming in and using and creating this aha moment and this habit of using it and so forth.
[00:28:42] and then once we, once we created that, um, then we at least had a basis to, to improve from, right. And. It became an extremely strategic asset in the end because, uh, while we were being acquired by Xero, they were complete PLG shop basically. And they were like, what do you have all of those salespeople for? And this this weird experiment you're running over there in the corner. that will be one of the reasons we are buying this in the end. So should please show us, prove to us that you can make this work. I'm maybe pushing a little bit further up than it was, but it was in that direction. Um, and, um, uh, and then, you know, we started rolling it out and, you know, I left at some point and.
[00:29:23] It, uh, I'm not a hundred percent sure how it worked out, but it was extremely successful. That's, that's what I can say. Was it successful in the sense of like 10 millions a year or was it just, you know, 2 million? It was extremely successful kind of in the overall scheme of things. Right. And, and it started with, you know, uh, basically trying to have, uh, no friction and going for the easy, easiest piece to prove.
[00:29:43] And then after that it's an improvement game versus a zero to one game.
[00:29:48] Mikkel: Yeah. So, um, rapid experimentation in some different shapes and forms we've covered through, or at least run through. Now, some of the, the things we have done, some of the things we have seen, I at least think, what I've noticed is it also changes a bunch of things for the team.
[00:30:06] Toni: I've
[00:30:06] Mikkel: I've noticed people become more engaged because it's all of a sudden easier to actually bring ideas through, like, and actually learn from them. And you, you don't always know. People always have these, you know, this is my idea, I really like it.
[00:30:19] Let's, let's please implement it. But as soon as you use the words test, use the word test, everything changes for a lot of people internally, which is really powerful. Um, it indicates that you are gonna figure out whether it works or not, and. Whether you're gonna keep doing it or not. Yep. You know, so I think, um, that's, that's one upside.
[00:30:36] And then obviously you will get learnings from it. Just like with this plan day story, you will get some early signals that this could work. Let's keep,
[00:30:45] Toni: I also think so, I mean we, we've been talking previously about, you know, reducing risk Yeah. And having two big bats. They kind of add risk to your plan and everything. But I think it's even, you know, now that we've talked through this, uh, um, I
[00:30:59] Mikkel: are done,
[00:31:00] Toni: no, but the, the other angle is actually also it reduces risk even for the more incremental, uh, uh, stakeholders, um, of.
[00:31:08] Mikkel: a
[00:31:09] Toni: Business unit or the team or something like this, right? Because when we did this plan day thing and I was responsible for the whole number, I didn't feel like, sure, let's be gungho and push this ruined, you know, have everyone.
[00:31:22] You know, now needs to go through plg instead, it helped me to actually, okay, you know, some proof points here. I can start seeing how this thing is gonna come together. So now we can use those proof points to roll it out on the next step and then roll it out to the next step and so forth. It's really a, how can we not be stupid about trying something new here?
[00:31:43] Um, and I think, um, the other piece then around that is, you, you, you are sometimes, sometimes stuck in this chicken egg problem. Yeah. Of, well, I can't get the proof points unless I get some of the resources to do it and back and forth. Right. And, um, I think what's extremely helpful in this way, it's also kind of a lean, uh, lean methodology here to a degree.
[00:32:05] Uh, try and find the, literally, The MVP of MVP for this thing. What do you really need to, to get to your next proof point? To feel comfortable to invest some more resources and, and how could you achieve that? Right. And then Falcon was basically landing page. Yeah. I mean literally that was kind of it. Sure there were some automations, mini automations, but that was it.
[00:32:27] You know, installing Drift on, uh, on the webpage, that wasn't a biggie. Uh, installing in, uh, Intercom, the product, I don't know, probably was difficult. I dunno, those product people, but it was still easy. Right. And we could still, well we also needed for the CS use case anyway later on. Um, and I think finding those, Easy ways to then try and play the political game a bit better.
[00:32:49] I think that's, that's a trick.
[00:32:50] Mikkel: And I think also if you're sitting in revenue operations and if you listen to the past episode with a 10% rule to double revenue, you know, you need to look at the full customer journey.
[00:33:00] And if you can improve seven things, yeah, 10%, then you're there. And I think introducing a framework of rapid experimentation, and there are plenty out there if you actually Google for it, it's gonna actually help you, uh, improve performance in the long run.
[00:33:14] Toni: That's it.
[00:33:15] Mikkel: Boom. Thank
[00:33:16] Toni: Mickel. This was fun again.
[00:33:18] Mikkel: So by the way, um, you, uh, I hear you're sending out a pretty.
[00:33:23] Toni: email. I'm sending. So first of all, join, uh, the revenue letter that I'm, that I'm penning myself with a little bit of help, but at, uh, growblocks.com/revenueletter/. and the next one will be, I'm actually not gonna mention the, the name where I got it from.
[00:33:39] Mikkel: Ooh. Teaser
[00:33:41] Toni: also not in the revenue letter is a big company. Oh, okay. Uh, they're doing a bunch of awesome
[00:33:45] Mikkel: So that was just for me internally
[00:33:47] Toni: Yes. Cool. Uh, wow.
[00:33:49] Mikkel: Oh, that's a good one.
[00:33:50] Toni: Um, basically, uh, talking a little bit about, uh, some of the early signs of maybe the recession is starting to wane.
[00:33:59] Mikkel: Ooh. So back to growth.
[00:34:01] Toni: Let's go back to, yeah.
[00:34:02] That's exactly what it is. No, but there are some, some early, early signs, not warning signs the opposite of that. Whereas like, it feels like the, the, the snow is melting, you know, little, little spring flowers are breaking through. Um,
[00:34:18] Mikkel: yeah, I get it.
[00:34:20] Toni: You know, the, the sun is breaking through the clouds. Yeah.
[00:34:23] The fall out ash
[00:34:27] Mikkel: No, the last sobi turns into dust.
[00:34:32] Toni: it. Okay. Thank you for listening.
[00:34:34] Mikkel: Yeah, thank you.