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Ask HN: Why do tools like customer.io abandon self-serve after their Series A?

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Re: Ask HN: Why do tools like customer.io abandon self-serve after their Series A?

#11

Post by alessandroetc »

chrisfrantz wrote: post #5

PLG is hard. Very few companies can actually do it well. It demands an excellent product bar, compounding growth and both of those teams actually work with each other instead of against. Series A starts the treadmill. Now you have compounding growth requirements and you can’t afford to retool product when things slow down. So you shut down onboarding because conversion rates are always better when users are being han…

yeah, i guess the treadmill of growth expectations just climbs so much that it doesn't even make sense to think about the small fish coming in from freemium.

it's just odd to me because it should take 0 effort to manage a freemium pipeline as there's no human in the loop. but ¯\_(ツ)_/¯

Re: Ask HN: Why do tools like customer.io abandon self-serve after their Series A?

#12

Post by scarranca »

chrisfrantz wrote: post #5

PLG is hard. Very few companies can actually do it well. It demands an excellent product bar, compounding growth and both of those teams actually work with each other instead of against. Series A starts the treadmill. Now you have compounding growth requirements and you can’t afford to retool product when things slow down. So you shut down onboarding because conversion rates are always better when users are being han…

[flagged]

Re: Ask HN: Why do tools like customer.io abandon self-serve after their Series A?

#13

Post by Nicholas_C »

There are so many reasons to do this but a big one is that investors/buyers are laser focused on retention metrics and companies with a lot of PLG customers have worse retention metrics since those customers are smaller and tend to start/churn more often. Another one is that it's unfortunately just more efficient to go upmarket after enterprise customers and let your PLG motion die on the vine.

Re: Ask HN: Why do tools like customer.io abandon self-serve after their Series A?

#15

Post by sshussain270 »

mooreds wrote: post #3

Incentives matter. Early stage founders have one set of incentives: finding product-market fit. Founders who bootstrap have another set of incentives: making customers happy. Founders who take VC money have two sets of incentives: making customers happy and making investors money in a reasonable timeframe, which means certain amounts of growth. These incentives are sometimes aligned but can be at odds.

Well explained! The reason investors invest is because they want to see returnand that comes from growth, so founders' incentives change.
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