The future of growth belongs to product driven companies. At HubSpot, we realized this a few years ago, which is why we disrupted our own business model before anyone else could.
At the time, HubSpot was still growing 30%-40% per year on the shoulders of our original marketing and sales driven inbound marketing model. Despite the success, we consciously chose to upend what had been working by launching our first freemium products in 2014.
Market dynamics and consumer behavior have been changing – increasingly consumers expect to use software and extract value from it before buying. To stay relevant over the long term we needed to adapt, or risk “getting our lunch eaten.”
We entered the world of freemium in 2014 with Sidekick, a sales automation product, and HubSpot CRM. In 2016, we rebranded Sidekick as HubSpot sales and deepened our commitment to becoming a product-first company, launching Customer Hub, a freemium product for customer success, in 2017.
Product is the Future of Growth
Over the past 24 months, I’ve been dedicated to building out product driven growth at HubSpot – acquiring users into our freemium products and working with product and engineering to upgrade them to paying users.
What do I mean when I say product driven growth?
I’m talking about using in-product levers to grow, in place of or in conjunction with external marketing and sales channels. When people can try your product for free, they experience the value of your product before making the decision to pay. This turns more people into happy users, creating more opportunity for them to tell their friends, who in turn tell their friends. This can trigger virality and widen the top of your funnel.
In a new reality where Google and Facebook are the only two platforms that offer opportunities for user acquisition at scale, product driven growth allows you to decrease customer acquisition cost by reducing dependence on paid marketing, and sales for B2B products.
Because it’s scalable and cheaper, product driven growth is how the biggest products have grown so large so quickly. It’s also how new products will win in the future.
How HubSpot Experimented Its Way Into Freemium Growth
The first step in adding freemium to our go-to market strategy was setting the overarching vision of where we wanted to go. Then, our goal was to run experiments to iterate towards the vision or inform how we needed to evolve the vision.
We set our sights on providing companies from big to small with the right tools to grow. We wanted customers to be able to get started with our marketing, sales, and customer success products for free, and upgrade to different packages as their needs grew. Navigating the associated shift to product driven growth (while still growing 30-40% a year!), hasn’t been easy. But it has brought valuable learnings, which I’ll share with you in this post.
I’ll walk you through the process our growth team used to experiment our way into higher and higher impact growth opportunities for HubSpot’s freemium products. I’ll detail the initiatives that drove step-change improvements to our funnel, rather than just small percentage gains, and the principles we used to arrive at those initiatives.
Here’s the high level process that worked for our growth team:
- Get wins on the board to build trust with leadership and other teams, such as product and engineering.
- Prioritize growth experiments you can execute quickly to demonstrate results.
- Once you start to see a high-level of test failures or non-results, move on to tackle more complex growth opportunities (take big swings).
- Eventually, tell your CEO you want to test pricing 😉 (take even bigger swings)
If you already work in growth, this process of getting quick wins and laddering up should be familiar. Where I’ll add value, is through transparently sharing how the growth team at a public company like HubSpot actually executed this process, applying it to build a freemium businesses, and the learnings and results that came out of it all.
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