Marketing to enterprise without losing your developer-marketing soul
Insights from Carilu Dietrich, advisor, author of Hypergrowth Leadership, CMO, and former marketing leader at Atlassian and Oracle
Carilu is a former CMO, most notably the head of marketing who took Atlassian public. She now advises hypergrowth companies like 1Password, Bill.com, Weights & Biases, Chronosphere (and many more) and helps CEOs and CMOs to uplevel their GTM efforts. She also has a fantastic newsletter on hypergrowth leadership that you should check out if you don’t already subscribe!
Today we zoom in on how to get a company on board with “enterprise style” marketing efforts when the DNA of the company has been developer-oriented for many years. What does it take to make this leap? This includes:
How to get a company on board with “enterprise style” marketing efforts when the DNA of the company has been developer-oriented for many years.
Marketing growth levers, the surprising ones that work and the obvious ones that don’t work as well as everybody thinks they should
How many “marketing problems” are in fact cross-company, strategic problems that need to be tackled
And, most interesting, how to pick a company to work for. One of my favorite quotes: “You can be a good executor at a crappy company and a good executor at a great company and have wildly different results.”
Let’s talk about when a company has found excellent product-market fit with developers but the path forward is sales-led and enterprise-heavy.
What do you do when the company’s existing GTM DNA is reactive to anything that feels like “sales” or “marketing,” but it’s clear from the market that this is what the company needs in order to grow?
It's all about audience marketing, you have to customize marketing for different audiences. Developers hate bullshit. You have to tailor your marketing to them. Business stakeholders want to hear more above value. You have to tailor some of your marketing to them. As companies get bigger, sometimes developers can’t make the decision by themselves - you have to identify the champion, technical influencers and budget approvers - all of those stakeholders care about different things.
The disadvantage is that it’s much more expensive to customize for different buyers and buyer journeys. But in an enterprise sales motion, the more individuals you have engaged at a prospect company, the higher percentage chance of close you have, the faster the deal closes and generally, the contract value is higher as well. 6Sense has published some of their own data on this.
What do you do when you need to convince a founder that you need to run more enterprise-oriented marketing tactics? Let’s say they feel fully allergic to what you’re putting forward for the executive audience.
The whole who-do-you-market-to question does end up with the founders. You need to try different things to figure out what works for your founder, your audience, and your market. At Atlassian, our founders wanted to do “enterprise” differently. We were successful for a long time without a massive sales force, through focusing on effective PLG for enterprises.
One of the reasons we were able to do something way different than common practice was because we were bootstrapped and could make our own decisions, we didn’t have to do whatever our VC told us. The Atlassian founders kept strongly focused on the PLG motion and cost savings for many years against the counsel from their board that they needed to get into more traditional Enterprise selling faster. Turns out it was wildly successful and there are different ways to sell to enterprises.
The challenge with taking venture money is that it’s an investment category that's supposed to have outsized growth and outsized returns. Which means they push you for growth that's outsized. And outsized growth means beyond your capacity to generate it organically. So you may end up spending a lot of money on paid advertising. You develop the product much faster than the market is paying you for it. Founders can get pushed into building out Enterprise sales faster than the leads they have to feed the salespeople. Sales will start poaching from PLG and both motions become more expensive / less efficient.
When you do all of those things you're trying to get this faster growth rate, so if a founder is being pushed into enterprise by their board or by their investors to grow revenue then you as a marketing leader don’t have to win them over - they’ll get pushed there by their board.
If you believe that you're losing deals because the developers like it, but you're losing the business stakeholder during the sales cycle, then that evidence should be appearing in win loss reports.
How do you decide how much time to spend on the different audiences in an enterprise sale?
If you're moving from being pure PLG to layering in sales then there’s a business strategy for doing this well. I haven't really had to win over CEOs on this front, per se, but one of the tools I use frequently is an allocation model. To do this, you use explicit percentages to get alignment on how much time / effort / money you should spend on each audience. A 90/10, a 60/40 and a 70/30 model will be very different, but each might be right for your company at a different point in time.
Doing the allocation model lets you agree as a leadership and marketing team that you’ll spend, say, 65% of resources on developer led revenue and 35% on educating and reaching the executive buyer. Then you talk about how that plays out in terms of team members’ time, content, ad spend, etc.
Who are the critical internal stakeholders that need to be bought in as you're going through this shift to enterprise?
The biggest danger in shifting from PLG to sales-led growth is building the enterprise sales team too fast. Enterprise sales teams are like baby birds who are hungry and loud because they need quality leads to survive. Although, not really. Sometimes they're more like piranhas that want leads.
They need engaged leads to call on. If you don't have enough leads, they will cherry pick through the PLG funnel, which means that you're going to pay salespeople to close deals that may have closed in the product without a sales touch. This is really expensive. You’re suddenly running double funnels and not realizing the cost savings of PLG.,But it’s rational - the sales team needs enough food to eat!
Airtable early on had a smart model where they wouldn’t let sales people touch a deal until it had some amount of critical mass of usage at an organization - like 20 or 30 paid seats.
Atlassian was like this too in the early days - when sales got involved there were already large strongholds of usage. Sales would enter the company and help the buyer manage all of the licenses, expand to additional products and get more value out what they had.
As you can tell from these stories, it’s more efficient to do farming sales than hunting sales if you’re strong at PLG, but it takes diligence and willingness not to grow as fast as your VCs might want you to because you’re focused on the efficiency as well.
Talk to me about brand. How do you balance enterprise brand needs versus developer needs from a brand perspective?
Developers hate fluff…they are really savvy visually and love good brands that are entertaining, helpful and actually have a good product. They’re also often tuned in to sub-portions of pop culture, listen to diverse music, and appreciate good design - this is all brand-related and should be considered if this is your audience.
When I came into Atlassian, we were very “developer janky;” we used a lot of stick figures and gear metaphors. We were funny and relevant, but wanted to grow up and become more sophisticated without getting boring and generic.
The hard thing is that developers are looking for you to be interesting and authentic. As a result, they evaluate you on the quality of your insights. As we worked on the Atlassian brand, this meant bringing our smartest people forward with interesting ideas and having really practical, hands-on ways to help developers in the field, for instance at meetups and conferences. We did evolve the look and feel to be cleaner and more consistent, but the brand is much more than just the look and feel - it’s your content, your personality, and the experience of your actual product - it’s the culmination of everything. One of our brand values was “practical, with a wink.”
Tell me about one of the most surprising growth levers you’ve found?
One of the most successful growth campaigns we did at Atlassian unexpectedly related to a charity fundraiser! We offered $10 ‘starter licensing program‘ where teams of ten users or less could purchase our software for $10/month and then the revenue was donated to charity. We called it our Causium model (the mash-up of freemium with a ’cause’). It was meant to fundraise for a charity but ended up driving massive adoption and a huge influx of sticky subscribed users. Plus it generated more than $2.5 million in charitable donations for Room to Read!
Another side effort that drove a lot of unexpected awareness for Atlassian was an HR program we ran where we gave new hires a pre-cation before they started their new role. We gave them a generous travel voucher and encouraged them to take a vacation before their first day. It’s funny because this is less money than a signing bonus, and most people take two weeks between jobs, but the promotion took off and there was a PR explosion - it ended up being one of the biggest PR moments of that year. And, new hires came to work with a lot of goodwill feeling very pampered - the project overall created more goodwill and positive brand sentiment than a lot of much more expensive advertising campaigns..
The problem with viral marketing is that it’s hard to figure out what you can do that will actually be viral. Sometimes it happens unexpectedly.
On the more intentional side, Atlassian ran meetups around the world and got local customers to run them. Participants felt a lot of community connection, and the effort helped grow people’s careers by advancing their skills and expertise. Atlassian’s community was a huge part of our growth - people loved the products and took them from job to job with them, introducing us into new companies. There are a bunch of long-term growth levers like this one that are smart investments. PLG is one growth lever. Or a massive analytics and product growth team that constantly optimizes every step of user engagement, that’s a growth lever too. To grow well, and sustainably, over time you have to layer different growth levers up so that they are all continually contributing to company growth over time.
What's the flip side where people think something's going to help them grow but never really does?
Honestly, paid advertising.
Paid advertising is an amazing supplement to growth. It introduces you to new audiences, helps engage people who are thinking about your product, engages them in the sales funnel, and maybe keeps you top-of-mind over time. Perhaps it also makes you look bigger than you are. Paid advertising certainly has a place.
But, believing that you're going to buy your way to hypergrowth with paid advertising is a false narrative because any hypergrowth company has to have huge organic growth in order to achieve hypergrowth status.
Any hypergrowth company has something like 85-90% of growth driven by organic, inbound interest.
At Atlassian, we'd publish a new blog, and it would get 1k-2k views, but the longtail of blogs that we had published over time were getting tens of thousands to hundreds of thousands of views, in aggregate, over time.
Paid advertising feels good because you can control it - but not only is it way more expensive, it also converts at at least half the rate of organic interest, or lower.
Ceci: I think what you’re pointing to is that as a marketer, you can’t market your way out of around product market fit.
Yes. You can’t get around product-market fit - marketing cannot out-market an average product. I listened to some VC talk about this recently - can you market an average product until it catches up, or not market a fantastic product? Especially in developer land, they use products quickly and are bright and aggressive about learning, so product market fit wins.
I’ve heard you speak about how major growth levers are strategy problems at the company level, not departmental. Do you have any stories around marketing being accountable to growth without the rest of the company truly buying into the strategy?
Marketing is where your product strategy, ICP strategy, vision, and messaging hit the market first. The main problems in marketing are:
Not enough leads
Leads aren’t converting
And marketers get fired when these two problems occur. The last couple of years have been a big exclamation point because almost all marketing departments didn't have enough leads and almost all sales departments weren't closing enough revenue, and it wasn't necessarily because all marketers and sales reps suddenly sucked! We know there's a macro trend where people were not buying as much because budgets were tight.
The same thing happens when
There’s a product that’s just not that good
Or, the sale doesn't close- you're good enough to be on the short list, but aren’t number 1 - this could be for a variety of reasons. Perhaps your product doesn’t scale well, have enough features, have enough customer examples or support is bad – these are cross-department issues, not just marketing issues.
Sometimes you're not saying anything innovative and customers would rather go elsewhere. This is a marketing + CEO + company strategy combination issue.
Your product is “cool for any audience.” This can work for some exceptional products, but is generally really hard for marketing and sales to successd. I was advising an early AI startup that was trying to reach any individual with any use case at work. It wasn’t anchored in a strong use cases - so we couldn’t get traction with any segment of particular buyers. If you’re too diffuse, it’s hard to resonate.
Here’s a great example of this. I was at Atalassian running marketing when you were at Slack and we bought Hipchat. Hipchat had a higher user count than Slack, but Slack came from behind, surpassed us and ate our lunch until we sold the whole product and user base to Slack.
HipChat was one of our top strategic priorities because we were trying to be not just for developers, not just Jira and Bitbucket, but for all business users. So we bought this product that was cool, and spent ALL of this money on an amazing Office Space themed advertising campaign which got the front page of Ad Week for the creative. We drove lots of people into the product, but then the product had a couple of downtime issues and some quirks which created some negative word of mouth, and over time, Slack totally beat us. So - given this experience, was it marketing’s fault? Did we not advertise sufficiently? No - the problem was the context of our product in that market, with changing market dynamics. Marketing couldn't overcome that.
Our product downtime caused some of the issues, but Slack also was able to delight users more than us in a few areas:he Slack brand voice and tone was so funny, there were excellent integrations, and the core user base loved the product, driving a ton of word-of-mouth growth..
How are you thinking about AI in the advising work you’re doing right now? What do you hear yourself recommending frequently?
There are two parts to AI right now as a marketer:
How does your product tell an AI story?
And how does the company itself use AI to be more productive?
These are two totally different workstreams.
I spend a lot of time with every client looking at the roadmap to figure out when we’ll have a product that is not a me-too, and that will have a real and impactful story to share in the AI space.
I also see this coming conflict between established companies and new companies. When we moved on-prem to cloud, cloud-native companies sprang up and there was a changing of the guard. We’re at the beginning of this with AI - older companies are trying to adapt fast and the new companies are starting as small but viable threats because they don't carry old processes and structures and even services.
How do you find your next Atlassian, Slack or Stripe?
I think after all this time in tech, picking the company you work for is the single most important decision you make. You have to work really hard at all of them and you're going to encounter lots of challenges at all of them. Some are going to be part of a market moment that's that pulls the company along, and some simply aren’t.
What’s extra challenging about this is that many of us are not trained as bankers or VCs. If you’re a sales person, a marketer, or developer - you may not have learned as much about evaluating the market potential and strength of the company as much as you’ve learned about doing your job well. But so much of the success of a company is based on market dynamics, strategy and market approach…not just successful execution. You can be a good executer at a crappy company and a good executor at a great company and have wildly different results.
I think it's particularly hard to do right now in this market, there aren’t as many rainbows and unicorns right now, so it's hard to understand who's breaking out outside of OpenAI. Many companies can get strong initial growth, but they may stall out when they try to break out - many products are more of a feature than a market maker. I’ve written a little about my journey to evaluate the strength of a company- here’s my 10 most important metrics to for evaluating a company list.
Huge thanks to Carilu for joining us today! You can follow Carilu on LinkedIn or check out her great newsletter on hypergrowth leadership!