How to design a high-impact growth org for a PLG startup — Webflow & Dropbox’s Melissa Tan
Episode 96

How to design a high-impact growth org for a PLG startup — Webflow & Dropbox’s Melissa Tan

Our guest today is Melissa Tan, GM of Self-Service and Head of Growth at Webflow and formerly Head of Growth and Monetization for Dropbox Business.

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Our guest today is Melissa Tan, GM of Self-Service and Head of Growth at Webflow and formerly Head of Growth and Monetization for Dropbox Business.

In today’s conversation, she unpacks the nuances between the two PLG businesses and how growth strategy changes for a more complex product like Webflow, including: 

You can email us questions directly at [email protected] or follow us on Twitter @firstround and @brettberson.  

Brett Berson: Well, thanks so much for joining us.

Melissa Tan: Yeah, I'm excited.

Brett Berson: Maybe to set the stage for the conversation, we could start by talking about kind of comparing and contrasting your experiences working on growth at first Dropbox and now Webflow. What are some of the things that you've seen are quite similar and maybe what are the differences and what have you learned from those differences?

Melissa Tan: I would say, you know, some of the similarities are, you know, the sense that both have really strong bottoms up adoption, both Dropbox and Webflow. Once users activate, there's just a lot of strong pull, lots of word of mouth, and they've both been really conducive to, um, this self-serve motion, this bottom up self-serve motion that's become really popular over the last couple of years.

That said, there are also a lot of differences, so, Dropbox in many ways was an early pioneer in product led growth. We had a freemium product that funneled tons leads to our paid consumer and B2B businesses. But back then it wasn't even called plg. So in many ways we were kind of creating our own playbook.

We grew a ton from just product virality, you know, the fact that it's a collaboration tool. We also had a wildly successful referral program. We dabbled a lot in partnerships. So at one point Dropbox partnered with Samsung where it came pre-installed on a lot of Samsung devices. And that was also, um, how Dropbox grew.

But we didn't really have this programmatic motion until our team started in 2014, and this was already quite late stage in Dropbox's journey. We were well over a hundred million in a r r. And so our playbook looked a lot like thinking about given Dropbox's volume. building, this high volume experiment machine where we would launch hundreds of experiments in a given year.

And this landed very consistent impact across our entire funnel and helped to reac accelerate growth leading up to Dropbox's i p o Web flow's Journey has been very different in the sense that we started our growth team here much earlier. Stage PLG now is much better understood, and many companies now are thinking about how they can drive growth more programmatically.

Um, and one of the main differences is even though Webflow has a lot of pull and that strong bottom of adoption, it doesn't have the same network effects and virality. in the sense that it's not a collaboration tool, right? So you're not necessarily gonna share your Webflow, um, website with somebody else, um, outside your company.

Or let's say you're a marketer building a Webflow website, you're not necessarily gonna share it with someone on sales. It's not a wall to wall tool. Um, And it's also, you know, not everyone has a need to build a website, so it's very different in terms of use case. There's a lot less volume than what we had when we were at Dropbox and, and the product is also a lot more complex.

So whereas at Dropbox it was really building this experiment machine at Webflow, our team has gone through the journey of really understanding deeply where our growth team can influence the user journey. And as a result, we've ended up working on a lot of levers that are less traditional for a growth team to take on going after bigger swings.

One of the things that jumped to mind as you were sort of just describing that is this idea of product complexity. Um, and I guess the other part of that is activation energy. When you think about somebody setting up a Dropbox account, it seems pretty different than what it takes to get someone to maybe create their first site with Webflow, the amount of effort, education, all sorts of other things.

Brett Berson: So how does that express itself in the way that you've built the growth function or how you think about executing on growth at Webflow versus Dropbox? I.

Melissa Tan: Yeah, that was definitely one of the key nuances there where if you know how to use your desktop, you'll know how to use Dropbox. Whereas at Webflow, Webflow in many ways is a visual interface for coding. And so understanding concepts like the box model and c s s definitely help in your learning journey at Webflow.

And the other key difference here is when you have a longer journey for driving activation at Webflow, activation doesn't happen in one session. It's typically you're learning the product over multiple sessions. We've taken a different approach for understanding. How to drive activation versus, um, you know, other areas of growth where you have a finite point in time.

So for example, if you think about conversion and the checkout flow at that moment, someone's gonna either convert or not convert at Webflow. That activation journey takes multiple sessions. And so one of the things we did early on is we realized that the user research we did needed to be very specific.

We invested in doing what's called a user diary study where we followed user over their activation journey over a two week period. We asked them to screen record their, each session they had and talk out loud as they were learning the product. And this was super helpful for our team to ha to identify the specific insights of what was happening within that user journey.

That's like one piece that really helped us. The other things that we've realized as a team is that when you have a really complex product, not limiting yourself to just traditional product growth experiments of just, you know, an onboarding tutorial, the stuff you do needs to be a, taking much bigger swings.

And so our team has actually even done work to think through how we can simplify the product itself. So we're actually building features in the product, which is very different from other growth teams, which is just building on top of something the product team has already shipped. Um, and so I think the two biggest differences here is, you know, for companies that have, are working on growth where the user needs multiple sessions, getting the user re research that is really specific and gives you insights.

And the other one is you might need to take bigger swings rather than just kind of locally optimizing something that already exists.

Brett Berson: Can you talk more about the process of, of user diary study, like how it was set up, and then maybe some of the key insights that came out of it.

Melissa Tan: Yeah. Um, the way we set up the user diary study at Webflow, we noticed that it takes, mult takes multiple sessions for users. So what we did is we recruited users that had the need to build a website and that fit our core I c p. We, um, asked them over a two week period to essentially screen record every time they were using the product.

We didn't force people to keep coming back, so you would also see natural drop off if users after one or two sessions gave up. So we did actually have some drop off in, in our user diary study. Um, and then we also interviewed users. Um, this time for our specific one, we did it at the end. You also could interview users throughout if you'd like, and that's how we conducted our study.

We found a ton of insights of just, so I would say the reason the dire study is really helpful is the learning journey at Webflow is non-linear. It's not like you sequentially need to learn certain steps to understand the product. And so we actually found what of the different pathways users learn, where do they reach hiccups?

Um, people talk a lot about aha moments. We were, we talked about Naha moments. It was like death by a thousand paper cuts at Webflow. David Hong on the team came up with that term and from the diary study we were like, okay, wow. There's a lot of areas where users are just getting stuck. We found non-intuitive insights that made sense in H sense in hindsight.

So for example, users would get even more frustrated if they started off of a template and then weren't able to figure out how to edit the template because they thought they were closer to figuring it out. And that was even more frustrating for them to be like, okay, I found this template. Oh wait, I paid for it.

I don't know how to edit it. So we got very specific insights, um, that we otherwise, you know, we actually did conduct user research at Webflow previously, but when you ask users to recall a previous experience, it's really challenging because, you know, you're really relying on them to remember every single session and all these things.

And so we were able to directly see in these user diary studies what's happening. Um, and as a result of that, we ended up prioritizing a few things. One of them was, there's one area in the product called layout where all users were consistently kind of getting hung up on. And so we decided we need to figure out how to teach users how to use this.

And actually we're working on simplifying layout. Um, as a result of the diary study, uh, we also realized, okay, um, we need to provide a bit more structure. Even though it's a non-linear journey, let's provide a little bit more structure in how we teach users the product. So we've also launched checklists within the onboarding journey that are different by starting from a blank site versus starting from a template.

And that's also been successful.

Brett Berson: What was your pro. Process of digesting all of the feedback that came out of that and then turning it into some sort of roadmap. What, how did you figure out what to prioritize in what order?

Melissa Tan: Yeah, we essentially, um, went through this synthesis because there were multiple users we had recruited. Not everyone had the same user journey. So we started to compile all the major themes. Here are the themes of where users are getting hung up. Um, these are the problems that we need to solve. These are just consistent problems.

And we started it from a very, you know, this very PM framework, but what are the problems we need to solve within the product? Quantifying and or I guess prioritizing the impact, prioritizing these problems by, The volume of users we saw and like the impact we thought it would have, right? And impact can be measured in many ways.

Here we looked at how frustrated users were getting, um, and then also looking at the converse. If a user figures something out and once they find something out, if it's an unlock, how can we help guide users to those unlocks? So we took a very, you know, standard PM approach of just looking at the different problems we wanted to solve, starting to prioritize those.

And then while we were running the diary study, because that took time, we actually were also building experiments in the product itself. These smaller experiments to test various hypotheses. And the things you can test for here are like what mode of education do users prefer? Checklist, interactive tutorial, do videos in the product help.

And so as you're also doing user research, I also think another great way to learn is just. You know, shipping low lift experiments that are easy to get out of the door, that are proving outta hypothesis, hypothesis. Um, so the, that's essentially how we took the synthesis. We also shared it broadly across the organization and that also ended up being, um, really helpful for other people on product to just even understand, oh, this is where users are getting hung up.

Just like building that user empathy too, in terms of realizing, wow, our product can be really complex or, and just seeing users through the videos. I think there's something just really real about that, that is very different from reading a synthesis.

Brett Berson: So maybe kind of going up a click. If you think about other companies who have a more complex product, who have more friction to get to that activation moment, are there a handful of things given what you figured out that you would recommend they think about or action on as it relates to growth given that specific shape of product?

Melissa Tan: The higher level takeaways I'd have for other companies trying to solve this journey is, you know, really, I mean this is like maybe growth 1 0 1, but really looking at the data first. Where are there clear drop off points? And for us, we've realized that activation is just an early engagement within the product, is the biggest opportunity.

Something that we did try at Webflow early on was we also ran monetization experiments. That were kind of these typical no-brainer experiments that have worked at many other companies that all of us had worked at. They were wildly successful. They didn't work at Webflow, and the reason they didn't is we realized that's not the point of influence within web flow's journey.

If you haven't learned the product, you are either gonna be ready to monetize or not. And so really identifying where your points of influence are are really important. So if you have a more complex product finding, what are those moments in the product where people are making key decisions? That's one.

The second one are what are key unlocks during the onboarding journey and how can you help point people to those key unlocks early on? And the third one is really thinking about are there points in your product where if you encourage users to do something, it gets people more invested?

One interesting insight from us is we actually found that. If users add their domain early on, they were more likely to activate. And our hypothesis here is that they already were thinking about, okay, I have this website I've already thought through my domain. And so there are actual psychological things you can do in your onboarding flow if you have a very complex product.

You also need to think about what is a trade off for like, uh, getting a user to an insight. It's almost like being really methodical about the journey. How do you get users to an insight? How do you get them to a benefit and kind of encourage them to continue the steps of activating onto your product.

Brett Berson: So you, you just mentioned this a little bit, but if you think about, uh, points of influence these unlocks or getting someone unblocked or getting someone more invested, can you share some stories or things that have worked for you sort of along those three? Uh,

Melissa Tan: Yeah. One that was interesting that I refer to is users adding a domain. So something that was really interesting is we launched a checklist for how to start from building from a blank site. And in the checklist, one of the actions is to actually, uh, add a domain and publish. And what we found is that that drove activation as well as monetization.

And so, I mean, it, it made a lot of sense. Hindsight's 2020, but at the time we were like, oh wow. People, once they add a domain and they monetize, they feel this urgency. That they need to figure out the product in a way that, Hey, you didn't pay webflow anything. You didn't add a domain, you don't feel as invested in the website.

So that was definitely, uh, one very specific example for us. Um, another thing that we then did, and this is something many growth teams do, is we took that learning, we said, okay, how do we use a checklist on templates? So learning a template is also very different.

Let's, um, also add a, a checklist to the template. Um, adding videos within the onboarding journey, which like we've invested a lot in videos, uh, our education team has where y we teach users Webflow. And so being able to embed videos has worked really well, especially because it's nice to be able to see those videos side by side.

Um, and then I would say there's a couple of bigger bets that. The verdict is still out on how they'll perform, but I'm quite bullish on them and one of them is this investment in layout and just making the product easier to use. We are ging that in a couple of months. And then the other one is actually leveraging ai.

So you know, we, a lot of companies now are thinking about how to incorporate ai. Our team is definitely because of our context on the user journey. We've been very passionate about thinking through where AI can help in the learning journey, whether that's, you know, through assistive AI or search or et cetera.

That's the other one where I'm quite bullish on that is also not something a growth team might traditionally take on. And so our team is actually very actively involved in web flow's strategy for ai.

Brett Berson: You mentioned this a little bit as we've been talking, but I'd be really interested to hear what you figured out in terms of goal setting or setting metrics in the context of growth. Maybe your kind of broader philosophy or things that have worked or not, or maybe areas you've changed your mind about.

Melissa Tan: my overall thinking here on setting metrics is the growth team should be set up so that each PM or each pod has clear metrics they're driving and these metrics need to be. Uh, essentially leading metrics that are movable. And so a great example here is when I joined Webflow, we did have an activation metric, but it took users about four weeks to get to.

And it was, um, this concept of you've built a website and you've got 10 views. That was a clear success metric that meant you are more likely to retain. The problem is because the metric takes four weeks to get to a team can't move quickly to move that metric. Let's say we ship an experiment in early January.

If it takes four weeks to get to fruition, let's say we need to run the experiment for a month, that means we can't make a call till two months later. And so my overall philosophy here is the metrics the team is driving needs to be something that can move. It needs to ideally be something that you can measure pretty quickly.

And so one of the first things we did is we tried to break down that activation metric into something we could make a call on within one week. and this is something I've seen an evolution on too, where people will break out activation to an aha moment and then a habit moment and really thinking about micro conversions within the journey.

that is definitely one thing that was very relevant at Webflow. The other thing that I. feel pretty passionate about is in terms of a growth team owning metrics. There does need to be a regular cadence, I believe, for all growth teams to be syncing on the weekly metrics every week. So, um, you know, each team is driving certain KPIs as you are starting the week.

I, we always start the week by looking at the last week's metrics and the different trends, aligning on different initiatives that the growth teams are working on. Learnings from those and making sure we're just thinking about the user journey very cohesively. And so that's the other thing that we did at Dropbox that was really successful and we started to do here at Webflow, which is just looking at the metrics very closely.

In general, I think growth teams need to be very results oriented, so it's the, you know, you, you can't hide behind the metrics. It's important to be looking at those metrics very regularly. Um, and that should be driving, that should be how you measure success ultimately.

Brett Berson: Do you run that metrics meeting in any specific way?

Melissa Tan: We essentially, um, the way we run the metrics meeting here, and it looks similar at Dropbox, is everyone working on growth and in this case, self-serve at Webflow meets at the start of the week. Um, and that is like growth marketing. They might be driving, you know, whatever your channels are, SEO, paid, et cetera.

It's, you know, lifecycle marketing, which is like email maybe if you do anything in app. And then product growth. If you have a product growth team, it starts with just looking at the overall metrics of the funnel, right? So looking at signups, you know, new customers brought in, looking at by segment. So you might have priority segments that you are paying closer attention to, looking at activation rates.

Um, monetization, expansion, whatever the team's driving retention. And that is the basis point to then discuss certain trends that we're seeing as a team. Not all trends are explainable. There's times when, you know, there might be in the summer, there tends to be seasonality or there's some weekly fluctuation, but usually there's action items coming outta that meeting to better understand certain trends.

For example, if you're seeing that a certain segment that is a priority segment is going up, trying to see is it, is it tied to some campaigns we ran on growth marketing. What comes out of that too is teams will end up talking about the initiatives they're driving, and that's like the, the second part of the meeting, which is initiative reviews.

We usually do async, everyone fills out bullets of the main things that are happening with links to specs or more detailed write-ups. People are also sharing learnings like, Hey, this messaging worked really well, or We just did a homepage test and this was a key learning. And that helps, you know, the team identify, oh, like let's try to test that learning as well.

Um, or like, let's say, you know, growth marketing is trying a new initiative for certain segment, we might identify, we should be collaborating closely on that and certain teams might start meeting more regularly to collaborate. Um, and so that's the, essentially the how it's structured first looking at metrics and then the second part of that is talking about initiatives.

And then there's often follow ups that come outta that meeting.

Brett Berson: When you think about goal setting or metrics, do you think about long-term versus short-term, and is there some optimal percentage? Or maybe put slightly differently when you think about some of the unintended consequences of metrics. One of them might be that you are only short-term oriented as a growth team.

Um, and so how do you combat that or think about that?

Melissa Tan: Yeah, it's definitely a, a good question. We, I found that for that weekly sync, looking at an eight week period is a nice balance to not get so overly myopic and just looking at the week to week trends. And then as a team, we always do a step back for the quarter, for example, um, there's also a different meeting that we do with the leaders of the growth team.

And essentially our exec team at Webflow, where we do look at year over year growth trends. We look at that every week where we're looking at more long, both the short term and the long term. And sometimes in those meetings we look at longer term trends and identify, Hey, this is a longer term trend as a team, we need to keep a pulse on that.

Or maybe we wanna it, it also helps inform, you know, essentially what we might wanna work on for the quarter, or, you know, an annual planning. And so that's how I found there to be a good balance, which is the working group looks at a shorter, timeline. they also are doing like quarterly planning, quarterly look backs.

But then there is that other meeting, which is just a deeper dive that's like run by finance, essentially a deeper dive into our metrics, um, to make sure we have all our bases covered.

Brett Berson: Can you talk more about that meeting structure, kind of the team lead and e staff meeting?

Melissa Tan: Yeah, so this one at Webflow, um, essentially is we do the team meeting essentially Tuesday morning, and it almost is like prep for that other meeting because it's a very detailed review of what we see on the team. Then Tuesday afternoon or Wednesday, we typically meet with, at Webflow here we meet with our exec stakeholder on Selfer, which is our cmo, Shane.

Um, and we look, finance runs this meeting. We look at all the, the metrics. Um, there's also like stakeholders for biz ops, uh, finance, et cetera. And that meeting essentially is a, more detailed readout. That's like maybe what you would expect to see in like a board deck, right? Um, it includes metrics that team can't necessarily control as levers.

Uh, but you should keep a track of, I'll give an example. One of them is a s p average selling price week to week. The team isn't necessarily running experiments to drive a s p, but it's a metric you wanna monitor. Um, and so this is like a more detailed financial readout of what's happening in the business.

Also, looking at how we're tracking to target, we do that in the team meeting, but this one is just looking more holistically as a company. Um, and we did something similar at Dropbox as well, where we did the team meeting. And then at Dropbox we did that review with our coo. Um, and then we did a monthly, we did this at Dropbox and well flow, we do a monthly readout.

Also. The monthly readout is with e-staff. Um, and that is like also a very detailed financial deep dive.

Brett Berson: What about the number of metrics? You know, you talked about a, a couple things there. One of the ideas, leading metrics and things that you can take action on very quickly is like one kind of idea. What about the number of metrics for a given individual team, broad function, and what you figured out there?

Melissa Tan: really what I would say is when you're thinking about metrics for a team, ideally you have one North star metric, maybe two, you, you really can't be trying to optimize for too many things and it sometimes it's at the team level, sometimes it's at the, and often like every individual needs to know what their KPIs are.

That's for sure. I'll give an example of how we thought about it at Webflow. So, you know, We have an activation PM and this person is basically accountable for the activation rates at Webflow. We have also a monetization PM that's looking at conversion rates. Once someone signs up for free, what is that conversion rate to paid?

Um, and then there's also times when you have more, I would call it like quarterly goals. So we also work on pricing and packaging here at Webflow, and we'll have a goal around not owning a kpi, but saying, Hey, one of our goals is to drive. Um, you know, we did a pricing change last year, so we're trying to think through maintaining a certain, uh, ARPA or a s p, um, and or reaching a certain milestone by the end of the quarter.

That's, um, an example of how we think about more initiative based goals. And then growth marketing will have people on different channels and they have goals both on driving specific customer growth by channel and then also essentially staying within a certain CAC boundary. Um, And so I would say each person needs to have like, I would say max two goals.

At the, as a company though, you're looking at a broader set of metrics, um, that might even be cut by segment or are things just to make sure you're not kind of missing the bigger picture.

Brett Berson: So, and, and you mentioned this a little bit for Webflow, but if you go back to Dropbox, what, when you think about the growth teams broad, either North Star metric or few metrics that you always came back to, what were those and what was sort of the rationale behind them?

Melissa Tan: Yeah, at Dropbox they were slightly different. One of them was, and I ran the B2B growth team, so every most purchases at Drop for Dropbox business starts with a free trial start. That's where we point many users to start a free trial. And so one of the North Star metrics was just free trials, and we did just volume of free trials.

We didn't say percent free to paid. That's because Dropbox had such a massive free user base, hundreds of millions. So if the team is trying to drive certain conversion rates, it would be really small conversion rates. So we found that our goal should be free trials. That was one. And there were multiple PMs working on driving free trials.

Second metric was what we called trial to purchase. This is of the free trials, what percent convert to paid, and that is what the onboarding pm or the activation PM was trying to drive with it, which is within that 30 day period. how can we help users increase their livelihood of Ping for Dropbox business at the end of it?

Um, we also had a team focus on expansions. So at Dropbox, most expansions come from seat growth, and so this is a team thinking through how to drive seat growth and owning a specific expansion rate. Um, and then there was also retention. So thinking through, at the end of a monthly or annual cycle, um, you know, the percent retained, um, of, of the user base.

And so we broke it down very specifically by funnel into what each, uh, either PM or each team could drive.

Brett Berson: In the case of Dropbox, when you think about those metrics, what's the process to sort of land on those and was it intuitively obvious or was there a lot of iteration to sort of land on these are the things that are gonna govern the business set priorities, that type of stuff.

Melissa Tan: The metrics by the time we started, I think part of it was because Dropbox was already pretty mature, where some of them were very obvious. Free trials, for example, that was obvious. Trial to purchase was also obvious, just because if everyone starts a free trial, we wanna make sure they convert at the end of 30 days.

The ones that were more nuanced, I would say were expansion, which is, um, and even as I was leaving the company, I don't think we fully had a handle. It was harder for us to drive sea growth than we realized. And so figuring out what is something that. You know, obviously we know what's better for the business, but what is something the team can actually drive and what is a good quarterly goal for the team was something that we went back and forth on.

and then the other thing that we set that I hadn't mentioned is we broke down retention further by saying we also had a goal on driving a percent mix of annual conversions. That helps with retention. That just increases L T V. And so we also would break down and have specific quarterly goals on things that maybe we were trying to focus on as a company.

Brett Berson: Why was it harder to drive seat growth than you thought it was gonna be? That's pretty interesting.

Melissa Tan: it is. The reason why is maybe similar to that nugget at Webflow, realizing where the points of influence are. What we found at Dropbox was we had this hypothesis that, oh, if we. Make it, make, make you aware of other people in your organization that are a freezer. Um, she share the same domain. Are you more likely to add that person to your team or not?

And what we found is that people either have the budget and we also would look at like account sharing for example. We'd be, oh, that team looks like they're sharing an account. Maybe they both wanna purchase. What we found is either you have the budget and you're already adding who you need to the team, or you don't have the budget, you don't wanna add more people.

Um, and we did make some improvements, like incrementally with helping drive. Awareness of other people you might wanna add. But what we found is it's not necessarily like a point of influence when you're thinking about, especially Dropbox tends to be more of a, either a wall to wall solution or a team.

Like let's say you have the design team on Dropbox, you're just gonna add everyone, the design team. And so we found it just wasn't necessarily a point of influence, um, within the journey, the way that conversion or retention might be.

Brett Berson: Something I think we didn't talk about, although you mentioned it, is, is when you think about the idea of points of influence, how is a team or individual or org Do you discover those?

Melissa Tan: A lot of it is, I would say that comes through the qualitative piece and user research. This happens all the time in growth where you see, look at the data and you're like, oh, that's an obvious opportunity. Or you think theoretically like, oh, if we could drive, Seat growth, average seat from X to Y, that would be great for the business.

So you start usually from the data, then you do user research. And that's always like where you find so many interesting things. Um, and that's how, how I, how we found that at Dropbox is we actually would run experiments initially. We then would reach out to certain users and say, Hey, we actually noticed that you have a ton of non-paid users on your domain.

Why, why don't you add them? Or, you know, we noticed that, you know, um, we just would reach out to user to for an interview and we'd ask them more. And that's where we found out, okay, people have the budget or they don't, they want to or they don't. Um, similarly at Webflow, I think just gaining that context on the product journey made us realize that's why our monetization experience weren't working 

Like you either learn the product, you don't, you get over that hurdle. And so I, I find that that comes from talking to users. directly and, and actually just getting their perspective.

Brett Berson: So you shared a little bit about the higher level metrics at Dropbox, and you touched on this a little bit, but I'd be interested to hear more about the very top level growth goals at Webflow and how you landed on those. I.

Melissa Tan: Yeah. The top level growth goals At Webflow, we essentially, um, I mean at, at the highest level at Dropbox Webflow, we look at arr, we typically break it down by new a R in existing ar. So how much are you bringing in from new business? How much is your existing essentially expanding? And then look at things net of contraction and turn.

Um, at the team level, the main North Star metric is driving. Uh, we've gone back and forth on growth marketing. At one point the team was driving customer growth. Then we realized, oh, we have this. PM now working on monetization, we should actually have that team work on what we called qualified signup. So we spent some time identifying a qualified signup.

Um, and then we realized actually that um, you know, we're still going through this evolution, but then we now have the growth team working actually on just driving paid customer growth because we've realized product growth isn't really gonna focus too much on driving conversion because of, you know, what I mentioned on that not being a point of influence.

So growth marketing team is driving, uh, new customer growth. And then product growth is definitely looking at activation rates. Um, that is super important. We look at it also by segment. So how do certain segments, um, activate and what does that weekly trend look like?

 we as a business are also. Looking at things, obviously like retention and expansion, but those are not areas yet that the product growth team is working on. And so as a team, we, we look at them, but we aren't actively talking about them every week. 

Brett Berson: why is that?

Melissa Tan: there are a few reasons. One of 'em is when you think about expansion at Webflow, the way we've set up our pricing and packaging, it mostly comes from either adding new sites and or adding new seats. And similar to the learning at Dropbox, I don't think that's an point of influence for our growth team.

Either you need to build more sites or you don't like helping users realize you can build a site. Probably was not gonna move the needle probably with no users. So definitely, you know, expansion's not necessarily a a point of influence. Retention is an interesting one. Um, I have found though, that to drive retention, there's basically.

Two really important points. One is early activation or just activation. There's a lot of steep drop off in a retention curve in the first, like, call it three months. That's already being covered by our work on activation. And so that's why we actually are just looking at activation. The other point of influence I have seen is at that moment of churn, trying to offer a discount or something like that.

Um, or driving more annual, plans. That's another way to drive retention. Um, we've also like talking about points of influence. We did try some of those best practices on showing savings from annual plans, but again, we realize that's not a point of influence if you're still early in your journey, you just don't wanna sign up for an annual plan.

And so I would say we are definitely gonna come back to thinking about these areas, but right now, early activation is just such a key opportunity and so clear for us as a growth team that that's where we're spending a lot of focus.

Brett Berson: So, switching gears slightly, moving away from goal setting in and something we haven't yet talked a lot about, which is org design. How do you think about setting up a growth org? Maybe we could go all the way back to, you know, you're a founder and you're thinking about building this function for the first time.

Maybe where to begin and then kind of early, mid, and late stage, kind of maybe some of the mistakes you've made or things you've figured out as it relates to what's the right optimal org design.

Melissa Tan: When it comes to org design, I would say, you know, sta talking about the really early stages when you're just getting off the ground. I think everyone should be thinking about growth. You might not need a dedicated growth person, similar to how you may not add a PM until much later. It's really like the founders and the early team, they're thinking about how to get their first initial users.

They're thinking about. You know, why are users not activating or how do we improve activating onto the product? And then, you know, how do you bring users back to the product? And so it's something everyone does. I would say the right time to hire a growth person is either you realize that you just don't have the expertise in the team.

You're trying to do the certain things, but you're just, um, kind of hitting a wall or there's just a bandwidth issue. It's like there's everyone's, there's just like no one has a bandwidth. And at that point, you can bring, um, someone external or even bring in a contractor in terms of who to bring in for that first hire.

I, I think depending on who you have on the team can help determine who you bring in as your first growth hire. Um, and you know, something I see quite a lot is that there's a founder that has a passion for growth and an knack for it.

You know, this is kind of web flow's journey. Bryant, one of the co-founders, really had a knack for growth and he scaled that initial team. The founder also tends to have a lot of intuition on what the product is, who the user is, so they're able to drive that strategic guidance and they have influence.

So they're able to also, um, help get resources that a growth team might need, um, help kind of set the right expectation in terms of what a growth team is able to accomplish in a certain time period. And so in terms of going back to that question of org structure, I definitely think there needs to be an exact stakeholder at the founder level for growth.

At the early stages, and ideally you have that first growth person report into a founder or someone on the exec team that has that influence, 

Brett Berson: can you share a little bit about kind of successful archetypes or backgrounds of those first growth hires? And obviously it's context dependent on where the founding team spikes, but I'm curious like what are the backgrounds of those people that would be successful? If a founder says, we're making our first hire, what should we be looking for in the person specifically, what are some of the things that come to mind?

Melissa Tan: Yeah, it definitely depends on the context, butI would say that the main things you're looking for are actually more on the attributes. There's a couple things that are important on growth. One is it's very analytical, especially if your goal is to drive acquisition early on, I often call it like your portfolio manager.

You're kind of thinking about where are you gonna put your eggs in the basket, how are you gonna divide those eggs, et cetera. And so someone that's super analytical is important. But then the other thing is they need to be super user centric too. That's I think where maybe some companies go wrong is growth tends to sound very data oriented, but being able to deeply understand the user and also being that channel to share back what you're seeing from growth experience back to the company and even influence the product roadmap, et cetera, I think is what is a key unlock at the early stages.

So you're looking for someone that's data-centric, but also user-centric. In terms of like how experienced they need to be? I get this question a lot. I think it just really depends on what you're looking for and whether you want to scale an org and find a more senior person. I personally think it's less about experience.

I think someone that maybe has done growth before is great, but you're really looking for a first principles thinker and you always compare someone with like, let's say an advisor or external resources, and that ends up being a good combination, especially if you're trying to do something for the first time.

I actually think that sometimes if you bring a super experienced person, they might try to apply a playbook that they've seen work well and they're not able to maybe be as adaptable or see around corners the way someone with really this learner mindset might have.


Brett Berson: So wanted to switch gears and maybe spend our last little bit of time talking about pricing and packaging, which I feel like is one of those topics that is probably underexplored and, and people are never quite satisfied with what they landed on. And I think, you know what's interesting is Webflow has a pretty complicated pricing structure.

Um, and so maybe you could talk about your thoughts on pricing, some of the things you figured out. And maybe how that has gotten applied at Webflow.

Melissa Tan: Yeah. Um, I mean web flow's pricing journey is probably not too uncommon. It's probably the journey many go on, which is you determine pricing and packaging early on. And as you evolve your product roadmap, you end up kind of layering on top of what you determine until you reach a point where're like, okay, this thing's not scaling anymore.

We need to take a step back and actually think long term, what is our go to market strategy, product strategy, et cetera. And so I think the biggest learning for me has been, you know, very early on you never know exactly what will end up being your core segment, for example. Or you never know what's gonna come up in your journey early on.

But I do think it's important to think, do the hard work of thinking through is this pricing structure scaling at each different milestone, right? Is this the pricing structure that's gonna take you to 10 million, to 50 million to a hundred million, et cetera? And so more tactically at Webflow, what we've done is we've done too many things.

We're, um, really investing in really understanding where we want to go in the next three years, both from a product and go to market perspective. This helps us really think through making the right decisions today. There was a time where we would be coming up with different monetization proposals of things on the product roadmap.

And then we realized, well, if we don't know where we're going, We wanna make sure PR pricing is something that's kind of hard to change down the road. We wanna make sure we're not going down any one way doors. And so being really thoughtful about where we're going in the next three years, what that means for our monetization strategy.

The second thing is really investing in our pricing governance and figuring out what is the right sequencing for making pricing decisions. Something that I see quite a lot is a company will determine the product roadmap and then close to launch, they're like, okay, how do we price this? And what we've realized at Webflow is that's just the wrong, that's like kind of backwards.

Like you need to understand, um, from the start, is there a willingness to pay for what we're building? Who are we building for? Like if this is an enterprise feature during the product development cycle, we should be talking to enterprise customers, right? And so really having more of that go-to-market lens, even from a product perspective is also something we've been moving more towards at Webflow.

Brett Berson: I wanted to take both of the things that you just shared in turn, but the last one, pricing, governance. What does that actually look like in practice?

Melissa Tan: pricing governance at Webflow. We have set this up a certain way. I don't know if it's like the right way. We're still fine tuning, but one thing we realized was an opportunity was having more of product involved in thinking about monetization of their features.

You know, if you maybe asked the PM How should we price this? If they wanna drive adoption, they'll be like, it should be $0. And we realized like, we don't, we want PMs to actually think more about who they're building for and like be part of engaging on, you know, driving the go to market at the company.

And so, Our pricing governance essentially has basically a final decision maker at the exec level of who's gonna make the final call. There's a pricing council, and that includes all of the members involved in contributing to the pricing decision at Webflow. That includes sales, it includes marketing, includes our founders, product finance, and then there is the core working group that is actually thinking about both monetization of upcoming features as well as the overall, where is pricing going at Webflow pricing of features because you are always shipping things.

That is something that we've spent a lot of time making sure we improve. And that change there has been to identify who is the core driver on a pricing proposal at Webflow. The core drivers are three main stakeholders. One of them is the core feature, PM as they're building a feature. The PM is, it's just close to what it is.

It's close to how users, it's resonating with users. One learning is that we've built a few features in the past where we realized what we ended up building didn't quite have the same monetization potential we thought at the start of launch and only the PM through, you know, working on this feature, collecting feedback where they like, I actually don't think we should price it at X.

We should price it at Y. And so that PM's gonna have a ton of context. PMM is also important, um, at Webflow. And then the third one is someone from the pricing team. And so we have a pricing team here at Webflow. They are helping think about the holistic. Pricing journey and they have insight into the full roadmap of what's launching and how, you know, what are our pricing principles, um, like should it be an add-on?

Should it be baked into the current pricing, you know, enterprise versus self-serve. The pricing team can kind of think about overall framework. Um, and so this team brings proposals to the pricing council and essentially, you know, another evolution is because there are so many stakeholders in the pricing council, we have a final decision maker in this case.

It's Shane, the c m o, on, uh, ultimately making a call on pricing.

Brett Berson: Can you talk more about the pricing council and sort of how you landed on that and actually pragmatically how it works. I think you were just starting to sort of articulate maybe the PM that's owning it, the pricing team all come together and bring something to this council that then gets approved by the C M O.

But maybe you could expand on that a little bit or give an example of what it actually looks like.

Melissa Tan: Yeah, so what it looks like is there's that core working group, which is the pm, the pricing team and pmm. They're working on an initial proposal that they have in a Google Doc. Often they're even bringing certain people along the way. And the way we structure this is because the pricing council is so busy, they each have kind of a proxy that is also more actively involved before they even see a proposal.

So, you know, someone on, you know, our, our sales leader has one of their team members also kind of helping. Sign off on the proposal before it even gets to pricing council. So by the time it gets to pricing council, if it's non-controversial, we actually have a Slack and it's just sent Async on Slack. Um, if it is something that has quite a lot of back and forth, um, and actually that's where we determine whether we need to meet is on Slack.

We'll say, Hey, let's talk about this. We're not aligned. Um, we then set up a live meeting where we talk about the key points where there's not an agreement or we need to pull more data. Um, and so that ends up being a live meeting. It doesn't always include everyone on pricing council if it's just like these two people, you know, need to align or need to pull more data.

That's what, that's what that looks like. We streamlined it quite a lot. We used to always meet. Now we're at a point where we kind of understand. What our pricing principles are, what the data is that needs to be pulled. So the proposal is like a standard format that always has the same structure. Um, and so many things now go through Async review.

Brett Berson: You've mentioned a few times the idea of pricing principles that the pricing team comes up with. Wh what are some examples of those and maybe how do they actually work?

Melissa Tan: The pricing principles. We have gone back and forth a bit on, some of them are essentially like pretty obvious, but I think good to have for prosperity, which is we obviously want our pricing to be fair and competitive with the market. For us, a principal is offering things if we can at taste for free to drive adoption early on.

But as users are getting more value, monetizing that value, that's a principle. the other principle we have here at Webflow is as we even think about pricing changes, making sure we're offering grace to existing users. And so being really thoughtful about how we execute on pricing change is definitely a principle.

Um, the fourth one is really thinking about taking a segmented approach, which is being really mindful about pricing when it comes to enterprise versus, you know, we have a lot of freelancers on the Webflow platform versus, you know, businesses. Um, and so those are examples of some principles that can help ground you as you're thinking about.

You know, I think that one of the bigger ones is just understanding what your goal is with pricing. So at Dropbox for example, we had really large competitors like the Googles and Microsofts. So early on we said, we are not gonna be sitting at the bottom tier, we're gonna be sitting at the higher tier. We don't wanna, like Google's offering Google Drive for free, so we just can't compete.

And so that was like a pricing principle we had above flow. Ours is just like, let's drive adoption initially, let's make sure we're competitive. Once you're getting value though, we wanna make sure to monetize that.

Brett Berson: How did you land on those principles? Was there some sort of process? Are they adjusted a lot? Are they kind of evergreen?

Melissa Tan: They have evolved quite a lot, and to be honest, I think it was important for us when we started to help come up with a proposal template, but now that we have that proposal template, the principles are like a given, like the ones I even described. They even sound very high level. I think it helps ground everyone as we're getting started.

And then it also helps ground folks once we are at a contentious point in not being able to decide on something, to go back to that principle to be like, Hey, remember we talked about offering things for a taste of free and then monetizing that value. I would say it's nice to refer back to, but over time the proposal template for us at least at Webflow, has been more helpful because it's a lot more robust.

Brett Berson: I thought it was really interesting that you sort of mentioned the idea that a lot of PMs think about pricing as an afterthought. and a lot of what you figured out is that having those folks spend time and care about that makes a big difference. if you want your product org to be much more pricing oriented, is the highest leverage thing you can do, sort of this idea of having a structured proposal where they are required to explain their rationale?

Or is there anything else that would help an org get everyone more aligned around the value of pricing?

Melissa Tan: I think the, the process helps, and what we do is be actually even at the. Cause we also have a product development, uh, process. What we have is even the, in the product process that you should be thinking about monetization at the very start of the product journey. I think part of it is process to reinforce it, but really what's important is reinforcing it through how we work and what we say our product principles are, right?

Like a process is enforced is a more like a guarder or the how behind it. What's really important is the why and that all PMs are bought into the fact that it's really important to think about monetization of their features. And sometimes with these proposals, it's quite a lot of work for PMs actually to be help, like essentially facilitating, pulling the data to be looking at the competitors, et cetera.

And so, I think process itself and having it documented is not enough. It's really. PMs themselves being really bought into, getting excited about thinking about monetization of their proposals and getting really excited about really having that point of view on who they're building for and the why.

Um, or what I mean by that is who they're building for and kind of connecting all the dots and, and I actually think for a lot of our PMs, it's exciting. I, in the past I think it was more of an afterthought and even PMs were not involved. To now think as someone that's like thinking about your feature end-to-end and also be, to be thinking about monetization, I think is a interesting evolution at Webflow that, um, it's just, you know, important to make sure that everyone is bought into it and they understand the why behind it.

Brett Berson: So before you talked about pricing governance, you mentioned the idea of long range planning for the business and how pricing fits into that. I was really interested to hear about that in a more specific way. I, I think intellectually it makes sense, like where do we want to be in two, three, or five years?

But I'd be interested in learning more about how, thinking about pricing and that timeline actually works.

Melissa Tan: I would say the way that, um, I totally agree, it, it does sound, it makes sense in theory. The main thing that, that benefits from a pricing perspective is really understanding, you know, often, especially as you're scaling and get thinking about, You know, getting to 200 million a r, 500 million ar, usually you need to keep thinking about what else, right?

And that might mean moving up market. In many companies it means moving up market. That might mean going after a certain segment. It also means making really difficult trade off decisions. If you're moving up market, that might mean something in terms of like where you're investing the product and you know, whether you're still like what that means for some other user segments in your, in your customer base.

And to make those hard decisions, you need to know where you're going. So what I mean by that is, at a point in time you are probably going to gate things to just enterprise, and these might be admin and security controls. And even though they make sense that like they have more enterprise potential, there's always a argument to be said that, oh well maybe some users in the s and b.

segment would appreciate this. And so to make those hard decisions from a pricing perspective, you kind of need to know like what are the priority segments? Also, what is a product roadmap? So the other thing that's important is if you're looking at pricing proposals, just as individual things, you'll miss the bigger picture.

It also gives you the ability to also say, we don't care to monetize X because the bigger thing to monetize is Y and driving adoption of X helps then drive adoption monetization of Y. And so the long range planning of your product roadmap also helps you figure out what decisions you'll make this year from a pricing perspective on your roadmap.

Um, I don't know if that answered your question directly, but those are kind of the implications of how that overlaps with product. And I guess the key inputs there are what is your segment mix Look over time. And also even doing the ar projections of what you're gonna get from certain segments, I find to be helpful.

And then also what is the more detailed product roadmap over time? 

Brett Berson: What do you find still tricky about pricing? Even after spending a lot of time thinking about it and working on it.

Melissa Tan: I definitely think the other element of pricing that is difficult is thinking about launching a pricing change, especially once you have a large user base. So I mentioned that common evolution of setting pricing and then kind of reaching this come to Jesus moment and you're like, okay, we actually need to change our pricing if we need to, if we wanna scale.

Um, I would say like for us, it's also been a learning to figure out how to roll out. Pricing changes here at Webflow in a way that lands well with, with the community and with our user base. that's definitely one. You know, I think alignment on the pricing proposals, even though I talked a lot about our progress, there continues to be, it's just always gonna be, you know, if, if it's not contentious within the company, I think there's actually something wrong in the sense that like, you know, these aren't easy decisions to make.

 and so that I think will continue to be something that we need to be really rigorous about, which is being really thoughtful about how we monetize things and aligning across all stakeholders in the company.

Brett Berson: On that point on rolling. Pricing changes out. Are there things that you've landed on that you think tend to work there? Even if it's not a solved problem?

Melissa Tan: Yeah, the, I have a lot of thoughts here. I think the biggest thing is first when you're launching a pricing change, especially. If you, some users will experience an effective price increase, just acknowledging that you need to brace yourself, that some users are not gonna be happy and that you might lose a certain segment of users.

Um, that's just likely gonna happen. I don't think you can have your cake and eat it too. And I actually think if you launch a pricing change and you don't get some type of reaction, maybe you're like not taking a big enough swing depending on what you're optimizing for. So first, just having the right expectations is important.

I've seen a lot of companies pull back on pricing changes really quickly because I think they weren't sure is this normal, is it's not. You know, that's the first part. I would say that on top of that, there's a couple of best practices. One of them is any effective price increase should be paired with delivering more value to the users.

Um, and that should be part of your communication, right? You shouldn't just launch a pricing change in a vacuum. It should come, ideally come with when you're also launching additional features or explaining how you've launched a bunch of features over the last few years and haven't done a pricing change since then.

The second one is really deeply understanding how your change will impact your users and how they'll react. So, you know, depending on what you change in your pricing, there's a world where some users might get an X percent increase and then others might get like a multiplier increase, right? And you should be running all the numbers ahead of time to know exactly whatever user and cohort of users will experience and think ahead.

Do you wanna apply some grace period? Do you, how do you wanna actually treat users that might get some type, something like a two X or 10 x increase? Which, which does happen with some pricing changes. Um, and so really like. Doing all the planning and forecasting ahead. The third one is really testing your messaging with members of your community ahead of the launch.

This is something that I don't think maybe all companies do, but it's a great way to test the waters on how it's gonna land, especially if you have really active members of the community that you can bring in and making sure you don't get the messaging completely wrong that you got the pricing research wrong and the price points are.

Totally invalid. You know, these members care a lot about your ability to survive and scale as a business. And so they'll give you your honest thoughts. And when I've seen that when it comes to launching the price change, they'll also come to your defense in the forums cuz you know, there's always a group of users that are not, not happy, right?

Um, nobody likes a price increase. Um, and the fourth one is just partnering with customer facing teams throughout the pricing project. So even as you're thinking about pricing, doing a lot of initial validation with customer support, with sales, et cetera, they have so much context. And then as you prepare for the launch, making sure they fully understand the pricing, change, the why, et cetera.

These folks are gonna be on the front lines when it comes to answering questions from our users, et cetera. Um, and then they're also a great feedback loop during the launch day. Like, you know, a webflow, we, we did a pricing change last year. There was kind of a. Like this Slack channel where we shared all, everything we were hearing from the community, from Twitter, et cetera.

Um, it's a great way to build that feedback loop.

Brett Berson: Are there things you've you look for that makes you feel confident that a price change was successful? Other than maybe obvious things like revenue growth or those type of things, or? How do you anchor yourself? Because when you, oftentimes, when you make a price change that makes things more expensive, you are gonna make people frustrated.

So there's, there's often a lot of negative feedback coming in early on.

Melissa Tan: Yeah, I would say there's two parts to that question. One is how do you know is right from a metrics perspective? I think one thing that's helpful is really modeling out what success looks like and setting that up ahead of time. Um, making sure that you're also looking at things over a long period. I think right after a price change, you're gonna definitely see.

Changes in your numbers the week after. So what you're looking for is one or two months later, what, what do the metrics look like? And depending on where your goals work, you might wanna look at things like conversion by segment, you know, ARPA by segment, mix shift if you change things, um, in the packaging.

And the second part is the qualitative signals. This one's more challenging, I'd say. It's just harder to quantify. And, you know, I, I do think you're gonna see, depending, you know, esp a company like a Dropbox or Web, you're gonna see stuff on Twitter. People will email the founders, um, that's for sure. Just take that as a given.

And so I think it's less about the quantitative piece. I think it's figuring out who to get signal from. So this is maybe something we've been better at at Webflow, which is. If you are hearing a lot of feedback from segments that you didn't mean that you thought your pricing wasn't gonna impact, that's like a signal, right?

That like maybe it wasn't, you increased prices too much, you didn't get it quite right. If it's just someone that you actually don't know who they are, there's been times when users have written in, we realize they don't even have a paid plan. Like that's the thing that I think takes some time to figure out, which is like, who are you gonna listen to?

And so it's really important to kind of have that like council and that community that is gonna be really honest with you. That's probably my biggest advice there, um, is like not quantity when it comes to the user sentiment, but like who you're listening to.

Brett Berson: Awesome. Well, thanks so much for such a great conversation.

Melissa Tan: Yeah. Thanks so much Brett. This is fun.