How to achieve hypergrowth in your business and career | Carilu Dietrich (Atlassian)

1. 0:00 – 4:28

   Carilu’s background

   1. CDCarilu Dietrich0:00

      In order to get hypergrowth, you have to have organic inbound and viral word of mouth. You can't pay enough to grow at those rates and have a viable company. The biggest thing is an amazing product that people love to use, right? I mean, ChatGPT is the most hypergrown (laughs) product that we've seen in history potentially, because people are so excited to use it and it's working in interesting ways. And then I think the third thing is really riding the lightning, I would call it. Hypergrowth companies go through the stages of growth that would take other companies five years or 10 years, right? They're, they're going from 10 to 50, they're going to, from 50 to 100, they're going from 100 to 200. They're, they're jumping, and so they really need to kind of keep hiring 2X and 3X leaders who have seen the next stage of growth, because it's gonna be here before you know it. (instrumental music)

   2. LRLenny Rachitsky0:55

      Welcome to Lenny's podcast where I interview world-class product leaders and growth experts to learn from their hard won experiences building and growing today's most successful products. Today my guest is Kerry-Lou Deitrick. Kerry-Lou is a former CMO, and has advised the CEOs and CMOs of hypergrowth B2B companies like Segment, Miro, 1Password, Bill.com, Productboard, Sprout Social, Weights & Biases, and most notably was head of marketing at Atlassian through their IPO. In today's episode, we cover what hypergrowth companies have in common, how to make big changes to your growth strategy to unlock new channels of growth, why CEOs don't trust CMOs and why most CMOs get fired, also why most CPOs get fired, plus the benefits of waiting a long time to hire your first salesperson, bundling strategy, and a ton of incredibly insightful career advice. A huge thank you to Elena Verna for suggesting Kerry-Lou for the podcast. And with that, I bring you Kerry-Lou Deitrick after a short word from our sponsors. This episode is brought to you by rows.com. The world runs on spreadsheets. You probably have a tab open with a spreadsheet right now, but the spreadsheet product you're using today was designed decades ago, and it shows. They live in silos away from your business data, they weren't made to be used on a phone, and if you want to do even the simplest automation, you have to figure out complex scripts that are a nightmare to maintain. Rows is different. It combines a modern spreadsheet editor, data integrations with APIs and your business tools, and a slick sharing experience that turns any spreadsheet into a beautiful, interactive website that you'll be proud to share. If you're writing a report on a growth experiment, you can use Rows to do your analysis on data straight from BigQuery or Snowflake. If you're deep diving on marketing, you can import reports straight from Google Analytics, Facebook Ads, or Twitter. Or if you're working with sales, you can natively plug Stripe, Salesforce, or HubSpot directly into Rows. And when you're done, you can share your work as a beautiful spreadsheet that's easy to read and embed charts, tables, and calculators into Notion, Confluence, or anywhere on the web. I've already moved some of my favorite spreadsheet templates to Rows. Go to rows.com/lenny to check them out. That's rows.com/lenny. This episode is brought to you by Braintrust, where the world's most innovative companies go to find talent fast so that they can innovate faster. Let's be honest, it's a lot of work to build a company and if you want to stay ahead of the game, you need to be able to hire the right talent quickly and confidently. Braintrust is the first decentralized talent network where you can find, hire and manage high quality contractors in engineering, design and product for a fraction of the cost of agencies. Braintrust charges a flat rate of only 10%, unlike agency fees of up to 70%, so you can make your budget go four times further. Plus, they're the only network that takes 0% of what the talent makes, so they're able to track and retain the world's best tech talent. Take it from DoorDash, Airbnb, Plaid, and hundreds of other high growth startups that have shaved their hiring process from months to weeks at less than a quarter of the cost by hiring through Braintrust's network of 20,000 high quality, vetted candidates ready to work. Whether you're looking to fill in gaps, upscale your staff, or build a team for that dream project that finally got funded, contact Braintrust and you'll get matched with three candidates in just 48 hours. Visit usebraintrust.com/lenny or find them in my show notes for today's episode. That's usebraintrust.com/lenny for when you need talent yesterday.

2. 4:28 – 7:15

   Habits and behaviors that will help you reach an executive role

   1. LRLenny Rachitsky4:29

      (instrumental music) Kerry-Lou, welcome to the podcast.

   2. CDCarilu Dietrich4:33

      Thanks, Lenny. Happy to be here.

   3. LRLenny Rachitsky4:35

      You've had this incredible career. You've worked at all these incredible companies. I'd love to just dissect what you have found to be most important and effective in building a career long-term, just like broadly, and then specifically if you're trying to get to an executive role someday, what have you found to be some more important habits, behaviors, tactics, lessons?

   4. CDCarilu Dietrich4:55

      I'll start by saying that everyone has their own calculus about the trade-offs they want to make on pursuing their career and the sacrifices they might need to make versus the other things in their life, their family, their hobbies, their passions. And so I, I think the executive track isn't for everyone 'cause there are a lot of trade-offs. Because I think that some of the most important aspects of getting to the executive suite are kind of working harder, learning more, pushing yourself, taking on more responsibilities and opportunities, maybe even in the white space that aren't, you know, aren't your job or aren't in your regular time. Um, when I was young in my career, I decided I wanted to be a CMO and at the job where I had decided I wanted to be the CMO, I worked like two hours later than everyone else on the team and I had this thought in my brain that like two hours every day for five years would get me, like, how many more years of experience than someone else? And I could do that when I was young and I didn't have kids and I was willing to make those sacrifices. But you look at a lot of the top CMOs and they have sacrificed a lot of things to like read all of the books,And like, again, if I go back to that first job, I was a PR manager and we went through a tough phase and we lost a head of product right before the major launch of, like, a major product. So I volunteered to moonlight in the product department and run the beta and do release engineering and taking on other responsibilities gave me insights into other departments that made me more successful early in my career and later on. And the same thing happens as you're growing, right? Like, if a department head leaves and you can spend extra time doing your own job and being the interim for this other function, you can really show the top executives that you have the appetite and the skill to take on more responsibility. So, I think learning as much as you can about your expertise, working really hard and taking on more responsibilities, and having a great attitude and a strategic mind are probably what I think helps people get to the C-suite on kind of the personal level. And then I have a whole other set, another set of five things that are like what specific ways you need to train your mind.

3. 7:15 – 8:15

   Why there is no substitute for working hard

   1. CDCarilu Dietrich7:15

   2. LRLenny Rachitsky7:15

      I know there's kind of this, like, backlash against working really hard that happened for a while, but, um, I'm on the same boat as you. Just success will come from working really hard, and sometimes that's sucks, but that's usually how it, how it goes.

   3. CDCarilu Dietrich7:27

      I think there's ebbs and flows in your life maybe. You know, you're gonna have a baby here soon.

   4. LRLenny Rachitsky7:32

      Mm-hmm.

   5. CDCarilu Dietrich7:32

      Congratulations.

   6. LRLenny Rachitsky7:33

      Thank you.

   7. CDCarilu Dietrich7:33

      And so maybe you take your foot off, um, the gas for a little bit. But really, like, there's no shortcuts. There's no short cuts to knowing a lot. Like, one of the people I admire most is Tomas Tungs who was with Redpoint and now started his own VC firm. And I was talking to him about his blog and he was like, "I just wake up like 5:00 or 6:00 A- AM every morning and write three to four blogs a week for 10 years." (laughs) Damn. Like, that is self-discipline and, like, insight and drive. And so yeah, no shortcuts, I think. You know, you look at Denise Pearson, or Pearson at, um, Snowflake, and she's worked really hard to get there. So, the five things I think you need to do to get to the C-suite

4. 8:15 – 10:39

   5 things you need to do to get to the C-suite

   1. CDCarilu Dietrich8:15

      that are, like, not kind of personal side are, you need to think about how your responsibilities tie to revenue. Like, you need to think and talk in the terms of the CEO and the board. And that can be tricky when you're junior 'cause you don't have exposure to it, but getting a, like, strong handle on finance and how the finances of the business work and how the revenue of the business works. I went on a tour of the Tesla factory with my daughter's, um, field trip a couple weeks ago, and the guy who was giving us the tour was like, "So I delivered and stocked all these different parts at the plant, and then I would write, take a list, and after work every night, I'd go to each part of the plant and try to figure out what they were working on and what the challenges and opportunities were. And that's how I moved up." And so it's just, like, understanding how the whole thing works together because if you wanna be in the C-suite, it's a job about how the system works. So, I really encourage tours of duty between different departments. I told you about my tour of duty in product. Um, I thought CMOs had to do every function, so I took a tour of duty in every function in marketing, but really getting a sense for other departments. The next thing is the relationships, so building really strong relationships with people by doing good work and helping them. And then the last thing, I think, is the quality of the companies you work for. So, your career and your ability to transcend, which is really moving faster than other people to get bigger jobs, is fairly dependent on the momentum of your company. So, I was a leader at Oracle for five years and my team grew from like five to seven over five years. And I was a leader at Atlassian for four years and my team grew from 15 to 100. And, and so if you pick the right company with the right momentum, you have a better chance of getting higher level experiences and accelerated career growth. And then, I guess, one little footnote. If you pick great companies, great people work for those companies and go out and work at other companies and also give you opportunities. So, I ended up at Atlassian kind of in a stroke of good luck 'cause I'd worked for Jay Simons, the, um, CRO at two company, and the president, at two companies before. And so the quality of the first company, Plumtree, really helped propel my whole

5. 10:39 – 12:42

   Choosing the right company for accelerated career growth

   1. CDCarilu Dietrich10:39

      career.

   2. LRLenny Rachitsky10:40

      There's so many things I wanna double-click on there. The last piece I, it's the advice I always give people when they're early in their career, is to go, go find a company that's gonna do super well. Like, that one experience is gonna transform your entire career, having the logo on your resume, the people you meet, the experience you get just financially. But that begs the question, how do you find that? How do you pick, how do you pick a company? I think in your advising today, you've come, you joined later where it's a little more obvious. "Okay, they're doing great." Do you have any advice or lessons about how to identify earlier where to go work and how to be lucky and succe- and in that pick?

   3. CDCarilu Dietrich11:16

      Isn't that the billion-dollar question?

   4. LRLenny Rachitsky11:18

      (laughs)

   5. CDCarilu Dietrich11:18

      Uh, so I worked for-

   6. LRLenny Rachitsky11:19

      For investing too.

   7. CDCarilu Dietrich11:20

      Yeah, I worked at Atlassian, which was phenomenal. Then I worked for Classy, which was a company that helped nonprofits, um, raise money. When-

   8. LRLenny Rachitsky11:29

      I've used that product.

   9. CDCarilu Dietrich11:30

      Um, thank you. And they were, we were acquired by GoFundMe, and it was fine, but it was no Atlassian. And then I've spent the next five years trying to figure out how do you pick your next Atlassian. So, my advice would be for people earlier in their careers, it's easy to pick the winners if you go work for a big company that's a winner. Like, I would love to work for Tesla or AWS or, gosh, right this second, I would di- kill for a job at, um, OpenAI, right? You know some of the big companies that are successful. Salesforce has totally been a career maker to so many top executives. So early in your career working for big name, high momentum companies-You know, I think you- you can't, like, wimp out. Like, you've gotta want it and go for it. And maybe you, like, apply year after year and you meet people and you try for it early in your company. Later in your career, I think, w- you know, what you just said, taking later stage versus earlier stage gives you a better view of their momentum. I actually have a Post-It note, grab it here, about what I look for, 10 parts of what-

   10. LRLenny Rachitsky12:34

       Oh, wow.

   11. CDCarilu Dietrich12:34

       ... would evaluate to see if-

   12. LRLenny Rachitsky12:35

       You just, you just have that Post-It note around?

   13. CDCarilu Dietrich12:37

       I do.

   14. LRLenny Rachitsky12:37

       That's amazing.

   15. CDCarilu Dietrich12:37

       It's, it's one of five Post-It notes on my, on my, um, board.

6. 12:42 – 14:41

   Criteria for assessing a phenomenal company

   1. CDCarilu Dietrich12:42

   2. LRLenny Rachitsky12:42

      Okay, I wanna hear what the rest are too, but keep going.

   3. CDCarilu Dietrich12:44

      Because I have to look at it for advisory, right? Like, I can, I only take eight to 10 clients. I'm always full and so it, it has to be, like, a phenomenal company. So how do I know if it's a phenomenal company? Here's my list. Rule of 40, right? Which is your profitability and your costs together. The quality of the investors, like are they really top tier investors or are they kind of like mid-tier or some you've never heard of? Investors do a lot of due diligence, but you also wanna look at their most recent rounds because they could have s- phenomenal early stage and have slowed down. I think like the later the size, the, like, more reliable 'cause they've just made it farther. Their net promoter score or their customer satisfaction, like do people really rabidly love this product or is it like meh? Their net dollar retention, which is how fast is their revenue growing. And I, I should have it on my Post-It note, but like Snowflake was the benchmark. I think they were growing at like 142%.

   4. LRLenny Rachitsky13:44

      I s- I think at one point it was 180, it was whatever.

   5. CDCarilu Dietrich13:46

      Was it a hundred... Yeah, that sounds right, 180, 165. I had to like... Like most, you know, net dollar retention, if you have a customer and you, you know, they just renew with the same dollar rate, it would be a hundred. So 180 is like almost doubling just their customers. So they didn't even need new customers to almost double their business. A phenomenal net dollar retention means it's a really strong, healthy business. I look at their growth rate last year, their burn rate, are they gonna run out of money? And then ideally, are they, like, number one in their market? Do they have a Forrester or a Gartner Magic Quadrant? Like, people tell you if they're number one. And then the last thing is I look at their Glassdoor, like, is it just a bad place to work and are people unhappy, because they don't actually survive as long as companies where people are happier, if-

   6. LRLenny Rachitsky14:34

      I love this list. You should turn it into a blog post. There's another idea for you. Can you share what the other Post-Its are around you, e- even broadly?

7. 14:41 – 16:05

   Asking better questions and making decisions with energy

   1. LRLenny Rachitsky14:41

   2. CDCarilu Dietrich14:41

      I can. Um, one says, "More Yoda, less Wonder Woman."

   3. LRLenny Rachitsky14:46

      Ooh.

   4. CDCarilu Dietrich14:46

      Which basically is like ask better questions. The second one is-

   5. LRLenny Rachitsky14:51

      And backwards. Ask them backwards too.

   6. CDCarilu Dietrich14:52

      Yeah, right. Um, yeah, ask them backwards. Which is funny because the other Yoda thing I have up is, here wait, "Do or do not, there is no try." Backwards. I have another one that says, "Hell yes or no." Like when opportunities come to you and you're like, "Oh, should I do this or should I not do this?" You know, you only have so much time in your life and so if it's not like a, something that really, like, excites you and gives you energy, it's tough to be at the best at it. And so, hell yes or no. And then the last one is, "Worrying is wasted energy." Because I think, you know, we live in this economic pressure cooker and there's a lot of fear and uncertainty, but we just need to take that fear and uncertainty and like thank it for giving us urgency and then make the list of like what can we control now and what should we do next.

   7. LRLenny Rachitsky15:50

      That's actually a perfect segue to my next question. And by the way, that was amazing. I'm glad that I asked about your Post-Its. Uh, that's, uh, that's a whole, uh, life philosophy right there in Post-Its.

   8. CDCarilu Dietrich16:00

      Yeah. I should do a BeReal. (laughs) This is what it looks like in this side. These are all the Post-Its.

8. 16:05 – 19:25

   Advice for finding a job during a recession

   1. CDCarilu Dietrich16:05

   2. LRLenny Rachitsky16:05

      Okay, so the question is around we're kind of, I don't know if we're technically in a recession, but maybe we're on the verge of recession. The market's not great and a lot of people are being laid off or have been laid off or are worried about being laid off or just graduating college and looking for jobs. And I'm curious if you have advice on, for people trying to find a job in this market or just generally trying to accelerate their career. What is your advice for just how to deal with this environment while also trying to advance your career?

   3. CDCarilu Dietrich16:32

      I'd like to take it in two parts. One is if you're unemployed and one is if you're in a job. So if you're unemployed, it's tough. It's a tough time, there's a lot of supply. And so I think you just really need endurance and grit and the sticker worrying is wasted energy (laughs) because you will get another job. It's just gonna be a little bit more of a bumpy ride than some other years. And the best executives I know have had down periods in their careers where they were out of work for a while, or they were fired by a CEO who this or that. And what they have in common is endurance. They're just, like, back in the ring. And so I think it's important to not lose endurance. It's also important not to settle on a crappy job or a crappy company. Each job you have prepares you for the next job and each logo you have prepares you for the next job. So, you know, I've spent a lot of my career trying to also chase waves. You know, my first job was, I, in college I was in nonprofit and then I wrote a book on the giving programs of the top 50 tech companies and I realized that tech companies had a bunch of money, in 1999, and were giving it away to charities. And I wanted to go into tech 'cause that's where the, like, growth and money was and I thought I could give it back to the world and good but I could be inside the bubble. And then within tech I moved my way to B2B and within B2B I moved my way to SaaS and within SaaS I've moved my way into, like, dev tools and collaboration and now AI. Like, there's this book called The Millionaire Next Door which talks about how the very best, um...... antique store makes, like, one or two percent profit and the very worst oil and gas company makes 35% profit. And we know that, like, some of the worst software companies make 65% profit. So, like, picking your industry will propel your career and picking the right company will propel your career, and then doing a good job, uh, will propel your career. So I think that's, like, there's no magic bullet to getting a job but working your network, sticking with it, and continuing to grow your skills are the three most important things.

   4. LRLenny Rachitsky18:43

      Big part of this conclusion is don't feel like your career needs to slow down in this period.

   5. CDCarilu Dietrich18:48

      And I think if you're in a job... Like, some of my greatest career growth came in the economic downturns, in the 2000s, in the 2008, because other people take their foot off the gas and you can put your foot down if you're willing to, like, learn more, pitch yourself into new roles or new responsibilities that no one's covering at your company. Like, when they don't hire tons of people for everything, there's lots of open projects where you can raise your hand and grow. You just can't be as focused on title and salary right now. You're kind of, like, building up value that you'll be able to monetize on the other end of this recession or

9. 19:25 – 24:06

   The importance of quality products and sustained brand advertising

   1. CDCarilu Dietrich19:25

      downturn.

   2. LRLenny Rachitsky19:26

      Let's segue to chatting about growth, and I thought it'd be fun to start with your story of running some very expensive ad campaigns. I know the founders are always kind of flirting with this idea of buying a bunch of billboards, running TV ads, maybe subway ads and bus ads, and you've done a lot of that and you've spent a lot of money doing that, and it's particularly non-digital sort of advertising. And so I'm curious what you've learned from your, uh, experience and approach to this sort of marketing and spend.

   3. CDCarilu Dietrich19:53

      Yes. I've spent hundreds of millions of dollars on it actually. I ran awareness, global awareness advertising for Oracle, and did all of the airports, and the front page of the Wall Street Journal, and the back page of The Economist, and take over in the middle of Salesforce in Downtown San Francisco, and, you know, we did the Iron Man movie sponsorships, and the sports teams and arena sponsorships. Um, and then-

   4. LRLenny Rachitsky20:16

      This all sounds very expensive.

   5. CDCarilu Dietrich20:17

      Super expensive. And then at Atlassian to a l- lesser degree, you know, we spent several million dollars on different awareness campaigns to get HipChat noticed or to associate Jira with the Atlassian brand. And, you know, advertising is sexy and super expensive for the benefits, right? It's a multi-year benefit of awareness. People have to see things many times, and it has to really resonate with them. And so my advice to founders is that the most important thing is the quality of your product. You know, Oracle spent a ton of money and people still didn't like us in a lot of ways 'cause they had poor experiences-

   6. LRLenny Rachitsky20:56

      (laughs)

   7. CDCarilu Dietrich20:56

      ... with the salespeople or they didn't like Larry or the product had kind of languished since it had been acquired by the company. So your product has to really be fantastic, and then also to, to do good brand advertising, it has to be sustained over a long period of time. So Oracle had the front page of the Wall Street Journal, back page of The Economist, this boring advertising template with the red bar, but it made it memorable. We would do market tests and two or three or 10 times more people would recognize the Oracle brand without the, the logo because of the consistency versus SAP or, or IBM.

   8. LRLenny Rachitsky21:35

      Hm.

   9. CDCarilu Dietrich21:35

      So you really need to be thoughtful about spending consistently over a longer period of time, and a smaller amount on a fewer number of things can be really effective. So Snowflake, for instance has always gotten credit for doing a billboard on 101, and people think they do lots of advertising, but for many years it was only the billboard on 101.

   10. LRLenny Rachitsky21:55

       Mm-hmm.

   11. CDCarilu Dietrich21:56

       It was just sustained and strategic.

   12. LRLenny Rachitsky21:59

       So I guess two things that I take away from that is, one, you can spend a lot of money and if your product's not actually incredible, it's not really gonna do much? And correct me if I'm wrong. And then two is, sometimes just, like, one very targeted spend is worth a lot more than just kind of blanketing a bunch of ads?

   13. CDCarilu Dietrich22:16

       Absolutely. I was telling you a story that at Atlassian we did a big advertising campaign on our HipChat product, which was head-to-head with Slack and it was an Office Space spoof with Bill Lumbergh, but the product had some uptime issues and some feature issues and Slack pulled ahead and the advertising wasn't what would have made it or break, broken the product. It's really the product experience and the advertising just amplifies.

   14. LRLenny Rachitsky22:42

       I think you also shared with me around the ad- this HipChat ad that's maybe my favorite billboard ever and I don't even know why looking back, but it's, it made me laugh so hard. Back in the day it was, like, this meme of some, like, I don't know, early meme stick figure guy of... saying, "Why you no use HipChat?"

   15. CDCarilu Dietrich22:58

       Mm-hmm.

   16. LRLenny Rachitsky22:58

       Looking back I'm like, "Okay, that's... I don't know how funny." But I think in the moment that was, like, a really popular meme and it really stuck with me and so-

   17. CDCarilu Dietrich23:04

       Well, if you think about the best advertising, it's something that has, like, a little twist of, like, humor or personality or truth that, that sticks in your brain. So yes, that was successful advertising and kudos to my team 'cause of course I don't write it myself as the head of marketing. But yeah, I mean, and some of my other favorite ads are also others that highlight the customer. So New Relic did an advertising campaign around data nerds when data nerds were not, like, really popular. They were still nerds. And it... You know, they have these tattoos that said, "Nerd life." And they featured customers on billboards, like, talking about, you know, they're w- I love cool data nerds. Um, and some of those campaigns that really stand out have something that's funny, unexpected, and then, like, true to the, to the product.

   18. LRLenny Rachitsky23:54

       I remember those. One of the ads featured our, uh, our CTO at Airbnb, Mike Curtis, and everyone was very excited to see his face on the billboards.

   19. CDCarilu Dietrich24:02

       Yeah. Salesforce has done a great job with those over the years too, really highlighting the customers.

10. 24:06 – 28:14

    Lessons from successful hypergrowth companies

    1. LRLenny Rachitsky24:07

       So zooming out a little bit, you specialize working with companies that are going through hypergrowth.And you've worked with companies like Miro, Segment, Bill.com, which I don't- I don't know if people know, is just, like, a massive, massive business. And also 1Password. (clears throat) And on the topic of 1Password, interestingly, I didn't realize how big and how fast 1Password has been growing. And just last week, I saw this report from Okta, where they have all this interesting data about which products people are using, and they put out this report showing which companies... This kind of quadrant of which c- which products are getting the most new customers, and then on a different axis, which companies are getting the most, uh, users per new customer. And there's these six companies in this kind of upper quadrant. Figma, Miro, Snowflake, Sentry, HubSpot and 1Password, which blew my mind. And interestingly, you work with two of them.

    2. CDCarilu Dietrich24:55

       Mm-hmm.

    3. LRLenny Rachitsky24:56

       And so, all that to say, what have you noticed about what is most in common with companies that are going through hypergrowth? Like, what is most in common in terms of what has contributed to them being that successful?

    4. CDCarilu Dietrich25:08

       The biggest thing is an amazing product that people love to use, right? I mean, ChatGPT is the most hypergrown (laughs) product that we've seen in history, potentially, because people are so excited to use it and it's working in interesting ways. So, you know, Miro whiteboards were the number one most uploaded asset in Jira forever, because people all get together and they write their ideas on a whiteboard and then they need to, like, remember it and iterate on it. And that, that... Like, bringing that concept to life just hit a chord that people wanted to use. And when one person uses it, another person uses it. 1Password, similarly. Uh, I've, I've been a 1Password user for more than 10 years.

    5. LRLenny Rachitsky25:47

       Mm-hmm.

    6. CDCarilu Dietrich25:47

       We used it at, at Atlassian-

    7. LRLenny Rachitsky25:49

       Same.

    8. CDCarilu Dietrich25:49

       ... as a corporate, and then I... And then they have the family plan, so I used it at home, and then my dad got elderly, so I had, you know, a family that I was the administrator for, and then I go into different companies and, you know, you bring it with you. And, uh, one of the other companies I advise is Productboard. And I became an advisor of Productboard because 1Password's CPO brought it, you know... Had it at another company, brought it into 1Password, rolled it out company-wide to get alignment and visibility on the product roadmap. So, hypergrowth companies, in order to get hypergrowth, you have to have organic inbound and viral word of mouth. You can't pay enough to grow at those rates and have a viable company, e- especially in this, you know, economic efficiency market. So, has to be an amazing product, has to have some viral activity. So like, we just talked about Miro or Atlassian. You know, you could have an individual person use it, and then they say like, "Hey, I'm gonna present at this meeting with Miro. Come join me on my board." Or, you know, "I'm... I've got these confluence pages we've set up as a, a wiki about these engineering topics, and I want your team to kind of collaborate on them." So those natural points where your users are selling to other people is, is way more efficient than having salespeople that have to sell to, to other people. And then, I think the third thing is really riding the lightning, I would call it. So, hypergrowth companies go through the stages of growth that would take other companies five years or 10 years, right? They're, they're going from 10 to 50, they're going to... From 50 to 100, they're going from 100 to 200. They're, they're jumping, and so they really need to kind of keep hiring 2X and 3X leaders who have seen the next stage of growth, and then the people inside can be homegrown talent, but it's tricky to keep up. And so, you know, my whole business is based on people who are trying to be homegrown leaders but the... Don't know what the next stage of growth looked like. And so h- a lot of hypergrowth companies hire ahead, hire advisors. You know, leaders need to really think about mentors and friendships with people who know what great looks like at the next scale, because it's gonna be here before you know it. And so, I would say those things. Amazing product, viral movement, and company that can ride the lightning.

11. 28:14 – 31:31

    Is word of mouth a necessary growth lever?

    1. CDCarilu Dietrich28:14

    2. LRLenny Rachitsky28:14

       I imagine founders listening to this that don't have insane virality or huge word of mouth are, like, "I- is there no path to being a really successful company?" And then I think about companies that did succeed with other channels, like say, paid or SEO, and so I guess the question for you is, do you need to grow in this environment, I guess, primarily through word of mouth, organic virality sort of growth engines, or do you still see opportunity for companies to grow other ways, say, p- get paid or SEO, uh, or sales eventually?

    3. CDCarilu Dietrich28:51

       For sure, all of the things are important. I think what I wanted to say first as, as you were talking was that it's easy to look at a company after they've been viral-

    4. LRLenny Rachitsky29:00

       Yeah.

    5. CDCarilu Dietrich29:00

       ... and be like, "Oh, that's amazing." Like, I would like to start a newsletter. I have, it's carilou.com. Lenny has a newsletter. How can I ever grow like Lenny's virality? But Lenny started with, like, one blog and then another, and the consistency... And, like, when I look back at Atlassian, people would be like, "Oh, it must have been so easy to go from 100 to 500 million," right? And, and it never felt easy. Like, it was a slog to do exactly what you're talking about. New features, listen to customers, strong SEO. Actually, SEO was the number one marketing motion that we used, and SCM. We spent probably about 20... You know, between 15 and 25% of our leads from paid search marketing at the time. You know, now I have a ton of customers that are pretty deep into account-based marketing. You know, look, getting to virality and getting to hypergrowth is not a magic bullet. It's consistency, customer obsession, incremental improvements across all parts of the business. So, I think founders just need to, like, double down on having a product that's differentiated and does something that their customers really love, and each incremental step is a s- is a step forward.

    6. LRLenny Rachitsky30:16

       This episode is brought to you by Coda. You've heard me talk about how Coda is the dock that brings it all together, and how it can help your team run smoother and be more efficient. I know this firsthand because Coda does that for me. I use Coda every day to wrangle my newsletter content calendar, my interview notes for podcasts, and to coordinate my sponsors. More recently, I actually wrote a whole post on how Coda's product team operates, and within that post, they shared a dozen templates that they use internally to run their product team, including managing their roadmap, their OKR process, getting internal feedback, and essentially, their whole product development process is done within Coda. If your team's work is spread out across different documents and spreadsheets and a stack of workflow tools, that's why you need Coda. Coda puts data in one centralized location regardless of format, eliminating roadblocks that can slow your team down. Coda allows your team to operate on the same information and collaborate in one place. Take advantage of this special limited time offer just for startups. Sign up today at coda.io/lenny and get a $1,000 startup credit on your first statement. That's coda.io/lenny to sign up, and get a startup credit of $1,000. Coda.io/lenny.

12. 31:31 – 35:28

    How to accelerate word-of-mouth marketing

    1. LRLenny Rachitsky31:32

       Say that you, as a company, are seeing word of mouth and some virality, and you wanna think about accelerating that, leaning into word of mouth. Obviously, you want everyone to be, like, talking about how awesome you are, sharing with all their friends. Is there anything that you've seen as, like, a good way to lean into word of mouth and accelerate it?

    2. CDCarilu Dietrich31:49

       I think there's two or three things. One is really empowering the people in your company to be thought leaders. So early days, Atlassian's founders were on all the developer boards, and in fact, I remember, you know, we were maybe 150 million or $200 million, and Scott Farquhar, the CEO, was still participating and, like, going back and forth in different dev forums when I was like, "I don't know. Should we elevate your status? Like should we have evangelists and engineers that do this?" And we did, right? I think, you know, and you look, one of my clients now is Weights & Biases, the ML Ops company helping lots of different AI companies with their ML models and they have really thoughtful technical people who know more and write more on the blog and engage with their community, and that creates a word of mouth because they're providing both a product and concepts in learning. That's one of the HubSpot secrets, was all of their, like, really thoughtful helpful content, certifications for marketers. So I think, you know, kind of going back to summarize, word of mouth can be driven by thought leadership, which is hiring the right people to, like, really be deeply engaged as super experts, having a really strong content strategy that's either in communities that already exist, online communities, open source communities, and then third, I would say building your own community. So no one sells your product better than your own happy customers. And if I go way back to the very beginning of my career, I worked on a marketing team where I owned demand gen just for net new prospects and a peer-owned demand gen just for existing customer upsell, and we would have different field events, and the- the existing customer ones were, like, smaller than if we'd invited the prospects and had, like, more buzz, and the prospect ones were very salesy. Whereas if we brought them together and you had customers talking to each other and prospects listening, everyone had a better time. So, you know, Atlassian, one of our secrets was this amazing user group community where we just paid for beer and a pizza and we'd facilitate local in-city leaders and people would meet up and talk about our products and talk about development generally and grow their careers and grow their network. So, I think those are the three: the right people, the right content, and the right communities.

    3. LRLenny Rachitsky34:11

       As you were talking, I was reminded, I was just chatting with the founder of Gusto about their journey early on, and he said that for the first, uh, I don't know, 200 customers, he sat there with them running payroll, watching how they react to every step of the payroll process and how they feel at every moment, and that was a big part of what helped them build the product that people actually, you know, continue using and love and stick with, and if it wasn't in person, it was on a phone call, and, you know, it's like the epitome of doing things don't scale. Just, like, for hundreds of new customers watching them use your product, pretty wild.

    4. CDCarilu Dietrich34:44

       I mean, that's the secret. That's the secret sauce, right? And I've heard some early stage startup advisors say that you should build processes that don't scale first because when you're in the super early stage, seed A, under 10 million, you've really got to- to go deep at that stage. And in fact, you know, I see that that's one of the problems that companies experience as they get much bigger, when product managers can't meet with customers or they get limited customers or maybe they come only meet with a junior user and not the... Or, you know, only the administrator and not lots of the users. So that- that insight into the, like, daily struggles and experience of your customers, it's harder to get as you get bigger, I think.

13. 35:28 – 39:54

    Atlassian’s product-led growth strategy and delayed sales team hiring

    1. CDCarilu Dietrich35:29

    2. LRLenny Rachitsky35:29

       I wanna drill, uh, into Atlassian. You've brought them up a couple times, and you were- you were at Atlassian for a long time. You were there kind of from early days of growth to IPO, and one of the most interesting elements of Atlassian and something that comes up a lot on this podcast is product led growth. And Atlassian, I think, is one of the most classic examples of a product led growth company, and from what I understand, you all- y'all waited a long time to hire your first salesperson, and so my question is what did you learn from that experience about when is the right time to start leaning into sales and hiring sales and what are kind of, like, the trade-offs of waiting longer or doing it earlier?

    3. CDCarilu Dietrich36:04

       Atlassian was a super unique company and a super unique point in time because the founders never took outside money except for one late stage financing to kind of, um-... buy out some early employees, that-

    4. LRLenny Rachitsky36:18

       Wow.

    5. CDCarilu Dietrich36:19

       ... to, to give them liquidity. So we never had VCs or private equity that had a voting share that was significant that could overrule the founders.

    6. LRLenny Rachitsky36:28

       Mm-hmm.

    7. CDCarilu Dietrich36:28

       So the founders were going through this experiment that turned out to be really successful, where they took all the money they would have spent on a sales org and plowed it into engineering and product. I'm gonna pull up a slide here that tells the Atlassian story about the ratio of the sales and marketing to the, to the, um, product and engineering.

    8. LRLenny Rachitsky36:46

       Amazing. And by the way, uh, check this out on YouTube if you're, uh, listening to this, and check out this slide.

    9. CDCarilu Dietrich36:53

       So this is a representative sample of, of what we did in Atlassian's history and what ratio still exists today, even several years later-

    10. LRLenny Rachitsky37:02

        Hmm.

    11. CDCarilu Dietrich37:02

        ... where we spend way less on sales and marketing. Marketing, we spent less than other marketers, and also we had almost no sales org or a sales org that was really focused on renewals or now, you know, an assisting sales org that's focused more on enterprise. But relative to other companies, a much smaller, much more efficient sales org. And we took all that money and put it into product. And so here we're spending two times, three times as many dollars in R&D as many other, uh, companies that we benchmark against to make a product that really sold itself.

    12. LRLenny Rachitsky37:37

        It's interesting. So I'm looking at this slide, and again, if you're listening, sh- check this out on YouTube 'cause it's pretty crazy, this slide of just, like, bar chart of spend in sales and marketing and R&D, and Atlassian is, like, the very lowest amount of spend in sales and marketing and the highest spend in product, and it's interesting that it's from 2020, so it's not even, like, in the early days. It's, like, still today basically.

    13. CDCarilu Dietrich37:59

        Right. I'm gonna close this down and, and keep telling you a little bit more about it-

    14. LRLenny Rachitsky38:03

        Sounds great.

    15. CDCarilu Dietrich38:03

        ... because there are some unique things that people can take now and incorporate. So the real strategy in sales, sales is the most expensive vehicle, right? Expensive people that spend a lot of time, and so what you wanna do is try to, you know, this... The Atlassian model was to sell only to people who were already customers really. Like, if several people or a couple groups had purchased, we'd help them with their renewals, and now, in kind of the, the later incarnations of our sales orgs at Atlassian, it helps a lot more with, like, larger enterprise companies who need enterprise deals or does more cross-sell and upsell, but doesn't really do prospecting. Net new prospecting is a really expensive way to, to get new customers. And so, you know, we see different trends coming now with companies because almost no one can do pure product-led growth because your investors want to see accelerated growth, and most people believe that adding an SDR or adding an AE will add a, like, predictable amount of revenue. And so it's difficult 'cause product-led growth and, and sales have to, to co- co-exist, but the whole transition in marketing that's happening to account-based marketing and intent-based signals is trying to do some of what we were doing in Atlassian, only to engage salespeople with customers that are actually likely to buy. And if you look at other hypergrowth companies, Airtable, Mural, both of those I know from the inside have had strategies where the salespeople really only engage after some threshold has been hit of number of users that have already been paying for the product on their credit card. But sometimes it's a high number, like 20, 40 people at an account have to be engaged before a salesperson engages.

14. 39:54 – 43:04

    When to hire your first salesperson

    1. CDCarilu Dietrich39:54

    2. LRLenny Rachitsky39:54

       Based on that, what is it you would recommend to founders these days that maybe are product-led and just, like, self-service, free MEAM-y oriented? Do you kind of take this experience and be, like, wait as long as you can to hire your first salesperson, or is there just kind of... I know it's very specific to this situation, but what kind of advice do you generally give?

    3. CDCarilu Dietrich40:12

       You and I are both, like, fans of Elena-

    4. LRLenny Rachitsky40:15

       Mm-hmm. Mm-hmm.

    5. CDCarilu Dietrich40:15

       ... um, who was just on your podcast earlier-

    6. LRLenny Rachitsky40:17

       Mm-hmm.

    7. CDCarilu Dietrich40:17

       ... um, this month. You know, product-led growth depends so much on your product and your, your buying market, right? There's some buying markets that are less likely to use salespeople, and you need to go in from the beginning. HR might be one, right? Whereas a lot of the hypergrowth companies in the dev tool space can use product-led growth 'cause developers both hate salespeople and really love to research themselves. So you see, like, Vercel, you know, taking off because people engage and, and kind of self- self-sell. So I would recommend that people, uh, get closer to their customers and read the signals. Like if your product is good enough that people can get time to value in a couple of days instead of weeks or months, you can have a product-led growth motion. If your product needs to be put in context and customized and assisted, you know, sales teams sometimes are expensive services arms to cover over product issues and help customers buy it until it's fixed. Or if you're in a market where your buyer just really doesn't buy online with research and a demo, then, then you need to, to have salespeople. But I would say try not to hire too fast and too far ahead in sales and inside sales because it seems like it's gonna add revenue, but it actually is a huge cost and a, and a huge drain on the business if the product isn't getting that kind of resonance.

    8. LRLenny Rachitsky41:46

       I just had a conversation with the founder of Retool for this series that I'm working on, and he said it... He basically found the same thing you found, where they thought it could be a product-led experience where you're building internal tools using their product, but it turned out nobody really understood how to do it themselves and it took a lot of handholding to make it work, and so they became sales-led from the beginning even though it feels like a tool that would be, has a lot of potential to be product-led and self-service.

    9. CDCarilu Dietrich42:11

       I think the other hybrid I'm starting to see is people who turn their SDR, sales development reps, into kind of-... sales engineers researchers. So instead of having a salesperson who's like, "Would you like to s- have a meeting with another salesperson?" the first touch for customers that are maybe, like, kicking the tires or trying a product-led growth is a person who can help guide them on the, the, the path. And I like this hybrid nature because basically it extends product-led growth, but helps people, in this case where you're talking, where the product itself isn't so intuitive that you can get all the way to the, the buying by itself.

    10. LRLenny Rachitsky42:51

        It also sounds more fun to talk to a sales engineer than a salesperson.

    11. CDCarilu Dietrich42:55

        I know. I always wanted to be a sales engineer. I was a salesperson and I was ... I crushed on the sales engineering team who knew everything and could draw all the architectures.

    12. LRLenny Rachitsky43:03

        Oh, wow. I

15. 43:04 – 47:01

    Common growth levers and roadblocks

    1. LRLenny Rachitsky43:04

       didn't know that.

    2. CDCarilu Dietrich43:05

       Yeah.

    3. LRLenny Rachitsky43:05

       A couple more questions around this stuff. So you've worked for a lot of different companies, and you kind of come in and help them figure out ways to grow faster, unlock growth opportunities. What do you find often gets most in the way of making big changes to the way they approach growth and approach different growth channels? And maybe on the flip side, what do you find is most essential to making big changes at a company around how they think about growth?

    4. CDCarilu Dietrich43:29

       I mean, the big growth levers are pretty consistent across companies. You know, you start with one product and you have a different ... a couple choices on how the go-to-market works, product-led growth or sales assisted. You get a little bit bigger and you add an incremental product, or you'll start to add new segments. You're gonna focus on a vertical like finance or, or you're gonna go global, or you're gonna add new sales channels like a partner channel. And what I've seen with the big growth levers is that it can't ever be an individual department's goal without being a cross-company strategy goal if it's really gonna make a difference. So for instance, I mean, you've talked about it in your newsletter and on your podcast, but growth isn't just, like, a person in the engineering team that, like, hacks by themselves. It really has to be funded and, and thoughtfully constructed so that there's the right content and experience and product features and virality features once a- someone's a customer to continue to drive growth. And similarly, lots of companies right now are trying to move upmarket because the economy has created so much pressure on SMB that, you know, they're gonna try to move to enterprise, or they've ... they're trying not to sell as much just to tech companies 'cause tech companies are under pressure, and so they wanna move to different parts. But the biggest issue is when that's not ... It ... Sometimes the marketers get blamed or sales gets blamed, like, "We don't have enough leads," but really, it's a company strategy problem where the company hasn't decided, "Hey, we're gonna all move in this direction, and if we're gonna sell to enterprise, marketing's gonna bring in leads, product's gonna have a roadmap and some meaningful features to enterprise, customer research is gonna start thinking about them. We're gonna hire some customer support people who know how enterprises work. You know, we're gonna hire some salespeople who sell differently to enterprises than to SMB." But the big growth lete- levers are strategy problems, not individual departmental problems.

    5. LRLenny Rachitsky45:26

       And what do you find needs to happen for that to change? Is that, like, CEO needs to be like, "Here's what we're doing. Everyone get on board," or, or something else?

    6. CDCarilu Dietrich45:35

       I think it can come either way in the C-suite, right? Like, sometimes when I'm supporting junior marketers ... So m- so my job, I advise hypergrowth CEOs and CMOs of companies like 30 million to 500 million. Often, if I'm advising, like, a 30 to 100 million dollar company with a more junior marketer, with a CEO who's often a first-time founder who doesn't necessarily know if the marketer's good or not, hasn't done run marketing before, doesn't know if they should trust what the marketer's saying. So often the marketer is saying like, "Hey, we're having problems because, you know, the company's not delivering on this promise you want us to sell," and sometimes the CEO doesn't know if they can trust it, that, uh, judgment. A- and so in that case, someone like me who's an advisor comes in and is like, "It's all right. It's not a marketing problem. It's a company strategy problem. Let's have an offsite and build some OKRs where we all go after enterprise and we win it together." You'll see at bigger companies or, or when a, a new C- CMO comes in that's more senior or seasoned, they'll have the social capital to push back into the executive suite. Or a new head of engineering who will say, "Look, I know you wanna move ahead faster, but we actually have to catch up on this technical debt," and they'll push back and get, get that strategic space that they need. So it can either come from the CEO or it can come from the C-suite really coming together to, to solve those problems instead of kind of like pushing them under the rug.

16. 47:01 – 49:00

    How to build trust between CEOs and CMOs

    1. CDCarilu Dietrich47:01

    2. LRLenny Rachitsky47:01

       You touched on this nuance that a lot of times there's not a lot of trust between the marketing head and the CEO, and I'm curious what you find helps build that trust.

    3. CDCarilu Dietrich47:13

       There's a couple things that are really critical for senior marketers, and I actually have a blog coming up and a- uh, based on a podcast I've recorded about why CMOs mostly get fired.

    4. LRLenny Rachitsky47:25

       Mm-hmm.

    5. CDCarilu Dietrich47:25

       And the issues are generally, one, that the CEO, CMO isn't focused enough on the revenue. So some CMOs get focused more on kind of like the pipeline or the awareness, and the CEO doesn't feel like they really have a partner in driving the revenue, or they don't feel like the CMO really has a handle on what will drive the revenue. So marketing's tough 'cause it's a big spend category, and lots of the spend doesn't convert in-quarter. Some of it doesn't convert in-year, right? Like advertising campaigns, some take multiple quarters. So it's really important for CMOs to have a handle on the metrics, a solid prediction of, like, what will ... what growth levers they can use, and to be able to talk in the terms of the CEO and the board. And I, I think that that's the biggest gap that I generally see, and then of course there's a whole bunch of table stake stuff, like they have to be running their business well, they're ... You know, they have to be a good leader that people want to work for.They have to hire a great team that elevates them and the company. They have to be, like, thoughtful and strategic about the market space that the company's in. You know, they're not just, like, working the levers in the factory, they're thinking like, "What new markets should we enter? What new growth areas should we employ?" Like we just talked about. "What new companies should we acquire?" You know, they, they also need to be thinking ahead. And I think being good on metrics, good on strategy, and good on, on market helps CMOs spar with CEOs in a way that builds trust.

17. 49:00 – 52:55

    Challenges of C-suite roles in startups

    1. LRLenny Rachitsky49:00

       It's interesting that you say... That blog post you titled Most... Why C... Most CMOs Get Fired, and it connects with something Casey Winters noted, that most CPOs also get fired, chief product officers, that they just... Like, I, I forget the quote, but it's something like, "The most you can hope for is a couple swings at the bat before you get fired." As a CPO, why do you think (laughs) these are... This is so common for these kind of chief, C-suite roles, uh, at startups to, uh, not work out?

    2. CDCarilu Dietrich49:26

       They're incredibly hard jobs, right? The chief product officer and the chief marketing officer are both strategy jobs with difficult-to-measure results because some of them are direct and some of them are indirect, and I think both of them get swept up when a company's not performing well too, right? Like, if company's not performing well, you can kind of swap out the head of product and the next one will be more strategic and deliver faster. And in fact, you know, I've worked... In one of the roles, the CFO was really after my chief product officer, and ultimately got him fired, because he wanted to move everything offshore and develop faster and he didn't wanna re-platform and he didn't wanna deal with the technical debt, and the CFO was sure that, that it was the CPO's fault. And then they got rid of the CPO, and the CFO tried his plan and it didn't work, and then you bring someone in who's like, "No, that guy had the right plan." (laughs) So, you know, both of them are tough jobs, and they require a high bar of excellence, a high connection of trust, and then I think just endurance to keep going and find the next role where you're really a fit and the company really has momentum.

    3. LRLenny Rachitsky50:36

       And it also reminds me, I was just talking to, I think it was Canva, where their first engineering hire is now their CTO still, and their first marketing hire is their CMO still, so does work out on occasion.

    4. CDCarilu Dietrich50:48

       It works out on occasion. And in fact, I've been playing around with a 10-part series about those CMOs, um, and the CMO world, 'cause there's, there's a b- about 10 to 15 CMOs who have started when it's really small and grown all the way, and they're the ones we really wanna learn from, and I know a lot of them and, and really admire their work and have learned so much.

    5. LRLenny Rachitsky51:09

       You should absolutely do that. That sounds very cool. You talked about how you work with companies from 30 million to 500 million. What is it about that stage that's unique, and what happens, like, after 500 million, and what's the difference before, say, 30 million? I know it's not-

    6. CDCarilu Dietrich51:21

       Mm-hmm.

    7. LRLenny Rachitsky51:21

       ... like an exact number, but how do you think about-

    8. CDCarilu Dietrich51:23

       Yeah.

    9. LRLenny Rachitsky51:23

       ... that range?

    10. CDCarilu Dietrich51:24

        It's not an exact number. My bottom number is because there's this early stage of product market fit where the founder and the company are trying to figure out who their real ideal customer profile is and can they sell to them consistently. So I've worked for some early stage startups where we've tried lots of different things, but they're not repeatable. Like, you can't scale it, but it's like, "This product works for this. This product works for this too, and it works for this." But those are all kind of unique cases, studies. And so I like, and my skill is in helping people scale. And so if they've already found product market fit and they've gotten some funding or, you know, they're bootstrapped but have, like, enough funding to, to really be trying to build out marketing and a marketing team, that's when I know what each stage looks like. So I know what $30 million great teams look like, and 50 million and 100 million and 150 million and 200 million. Um, my ride at Atlassian was from about 100 to 500. And then over 500, you know, the, the act of going public, being a early stage public company, I know what that all looks like. And then, you know, beyond that there's public company consultants, I think more, that do kind of more specific things. I more help the CE- CMO and CEO structure for the next stage of growth because they're going through it so fast they haven't hired someone yet who's already seen it.

    11. LRLenny Rachitsky52:51

        Got it. One very nuanced question I wanna ask you is about

18. 52:55 – 57:17

    Bundling strategies

    1. LRLenny Rachitsky52:55

       bundling.

    2. CDCarilu Dietrich52:55

       Mm-hmm.

    3. LRLenny Rachitsky52:56

       So there's HipChat and Slack kind of ate their lunch, not necessarily through bundling, but just like, there's Slack and then Slack kind of... I don't know if it's true, but it feels like Microsoft Teams is eating their lunch with bundling. And I'm curious, what do you think of bundling as a strategy to win long term and also how do you compete against, say, a Microsoft that may one day bundle your product for free and you might be in big trouble?

    4. CDCarilu Dietrich53:22

       I think it's two separate questions, so let me take them separately. The first is, what do I think about bundling? So small and medium-sized companies will go from being a single product company to a multi-product company in order to progress because you need a diversified financial model, because you need to be able to sell new products into your customer base who should already be friendly to you if they like your products, um, and because you need to really, uh, expand your total addressable market to get to be a billion dollar or two billion dollar company. So I, I believe in bundling as a growth strategy. Specifically for product-led growth companies, bundling is not a great land strategy. So at Atlassian, we had a number of products and experimented with different bundled lands, and it really slowed down the product-led growth motion. So we ended up going back to land with a single product, high velocity, single person uses it quickly, starts to get value, and then come in with s- with, with other things. So from that perspective-... product-led growth. Bundling is not very effective. Bundling for a sales-led motion is pretty effective when you're at the right stage of growth. And then, as far as the question of competing against Microsoft, you know, there's these two parts of the philosophies: a best of breed and an all-in-one. And Oracle was an all-in-one, and Microsoft is an all-in-one. You can buy all the things, and your CFO can get a discount by spending a whole bunch of money on a bunch of things. But in the all-in-one, some of the pieces aren't as good as the best of breed. And so Slack, for a long time, was the best of breed. People were willing to pay more because they thought it was markedly better than the other instant messaging options. But, you know, there's shifts between best of breed and all-in-one in economic winds. So right now, CFOs are putting the squeeze, "Is Slack really that much better than Microsoft if the Microsoft one is free with all of our other purchases?" It's tough. It's tough to go head-to-head with a powerful, big investing, all-in-one competitor. The only way to win is to be the best and have a product that's so much better that it's worth the extra money.

    5. LRLenny Rachitsky55:37

       Interesting. So essentially, in a tough environment, bundling is really, really eff- is most effective almost. And then this other interesting point about NPLG, you wanna stay focused on one specific pain point. What is it that Atlassian tried to do? Did they try to pitch, like, all your product planning products in one suite? Is that kinda what, what you tried?

    6. CDCarilu Dietrich55:58

       Well, so Jira was the, um, issue tracking.

    7. LRLenny Rachitsky56:01

       Mm-hmm.

    8. CDCarilu Dietrich56:02

       And then we also had Confluence-

    9. LRLenny Rachitsky56:03

       Mm-hmm.

    10. CDCarilu Dietrich56:03

        ... which was the wiki page. So let's say there was a business bundle that could've been HipChat, Confluence, and Jira, or there were developer combinations that could've been Jira, BitBucket, and, and maybe Confluence too for an engineering team. Basically, if you have to evaluate multiple products to purchase something, it's not a fast and easy online self-service buy, because you, you, you're like, "Oh, do I need all three products? Can I break them apart? Do they all work? Are each of them best of breed?" Whereas if you're like, "I need issue tracking. I'm gonna buy Jira. This looks good. I've tried it out. I'm ready to go," that can happen in seven days. Whereas if you add in multiple products, it takes more days and just leads to fewer conversions.

    11. LRLenny Rachitsky56:52

        That makes absolute sense. I can see someone thinking the complete opposite and then now realizing, "Oh, I see. I see why this isn't working. This is not-"

    12. CDCarilu Dietrich56:58

        You should always test it.

    13. LRLenny Rachitsky57:01

        Mm-hmm.

    14. CDCarilu Dietrich57:01

        Right? I mean, like, the secret to product-led growth is can you test it. And so, you know, we tested everything. We tried bundles, we didn't try bundles, we tried different things in the bundles, we tried different days. Data-led insights are better than anything any pundit sh- would say on a podcast.

    15. LRLenny Rachitsky57:16

        Mm.

19. 57:17 – 1:07:19

    Lightning round

    1. LRLenny Rachitsky57:17

       Amazing. Well, with that, we've reached our very exciting lightning round. Are you ready?

    2. CDCarilu Dietrich57:22

       I'm ready.

    3. LRLenny Rachitsky57:23

       Okay. (laughs) What are two or three books that you've recommended most to other people?

    4. CDCarilu Dietrich57:28

       The number one book is a life book called the Tao Te Ching, the Stephen Mitchell translation. And the Tao Te Ching is a philosophy about the flow of life, and I love it. I've carried the pocket guide with me for 25 years. The second one is business focused, Never Split the Difference, which is a great book about negotiating, written by a former CIA hostage negotiator, which also helps me with negotiations at work and with my children. So, that's a great book.

    5. LRLenny Rachitsky57:57

       I actually, I've been trying to read that book on audio, and I'm... What, what's, like, something you've taken away from it? 'Cause the stories are so interesting, and, uh, I'm always like, "What should I actually do in my day-to-day life?" What, like, stuck with you?

    6. CDCarilu Dietrich58:08

       It's kind of the obvious thing that I wasn't good at, is that you just really wanna put yourself so deeply in the shoes of the other person that you can figure out what makes a win for both of you, right? Basically, he says, like, you can't win a negotiation by strong-arming what you want. You really got to get to a win-win, which is probably every, uh, negotiation book every, ever. But he texturizes it so much. So I just felt like I was really able to... And, and he actually has... In my last office, we moved last year, I actually had the CliffsNotes of his book printed out and posted on my wall, 'cause he had a series of questions to help you get deeper and deeper into the mindset behind people. And, and Connected but Not Connected, the, um, book, How To Win Friends and Influence People, that's like the 1932 bestseller, is basically that. Like, people don't want to hear about you. They want you to be thinking about them, and then you can make friends with them, or you can negotiate with them, or you can get your hostage back. (laughs)

    7. LRLenny Rachitsky59:08

       I read, uh, How To Win Friends and Influence People when I was very young, and, uh, specifically, that chapter's about there's no better sound in the world tha- than, uh, to someone than their name.

    8. CDCarilu Dietrich59:18

       Mm-hmm.

    9. LRLenny Rachitsky59:18

       Carrie Lou.

    10. CDCarilu Dietrich59:19

        It's true. Thank you. You said it correctly.

    11. LRLenny Rachitsky59:21

        (laughs) Okay, moving on. Favorite recent movie or TV show?

    12. CDCarilu Dietrich59:26

        My favorite movie is Everything Everywhere All At Once. It's basically a sci-fi about all the different ways your life could turn out if you made different choices, and it was really a mind-bender that made me think about all the different ways tiny decisions had changed my life, but then also an appreciation for the life that you have. You know, at the end, not... It doesn't ruin the story, but she has this love of what she has, even though it's not as good or as different as some of the other options.

    13. LRLenny Rachitsky59:57

        I love it.

    14. CDCarilu Dietrich59:58

        So I bought, I bought this poster. I don't think you can see it on the back, but it says, "Gratitude-"

    15. LRLenny Rachitsky1:00:03

        Oh, yeah.

    16. CDCarilu Dietrich1:00:03

        "... turns what we have into enough."

    17. LRLenny Rachitsky1:00:06

        Aw, very Buddhist.

    18. CDCarilu Dietrich1:00:08

        Yeah, I like it. Read the Tao Te Ching.

    19. LRLenny Rachitsky1:00:10

        Uh, not a Post-It, but art. Another, another, uh, teaching from Carrie Lou. I think this needs to be a second newsletter of yours, uh, just life advice.

    20. CDCarilu Dietrich1:00:20

        (laughs) Oh, which is funny, I've been thinking about that one. It would be called the Tao of Hypergrowth.

    21. LRLenny Rachitsky1:00:24

        (laughs) Oh, my God, I love that.

    22. CDCarilu Dietrich1:00:26

        And actually, I was thinking about doing it and taking actual clips from the Tao Te Ching and doing, like, textual analysis about how it applies to our life.I've been thinking about this actual podcast for a while, 'cause I used to want to do the... I mean, blog the Tao of Parenthood. Because basically parenting, you, like, try to control and, like, fix all the things you didn't do right in your life. But actually it's the act of, like, providing freedom that lets them go out and explore and then come back to your way of being. So I don't know. I... Like the Tao Te Ching, I love it.

    23. LRLenny Rachitsky1:00:58

        I see so many opportunities. You gotta stop what you're doing and just write all these things.

    24. CDCarilu Dietrich1:01:02

        I know.

    25. LRLenny Rachitsky1:01:03

        Yes. Okay.

    26. CDCarilu Dietrich1:01:03

        But I love the hypergrowth cus- customers and clients.

    27. LRLenny Rachitsky1:01:06

        All right, next question. What is a favorite interview question that you like to ask?

    28. CDCarilu Dietrich1:01:10

        So this is a little heavy, but it actually is my favorite. It's, how many people have you fired? And tell me about each of the experiences. So the reason I ask this question is 'cause generally I'm managing teams of managers, and, uh, generally I need people who have managed many people for a longer period of time, or even if they're junior managers. How long and how many people they've managed is indicated by how many people they fired. 'Cause if you've never fired anyone, then you haven't managed very many people for very long, unfortunately. And firing people is the hardest part of a leader's career. So how they talk about it, like, you know, their compassion and, like, their need to, like, drive the business and, like, the circumstances, like was it layoffs? How, how did that work? Did you have to performance manage someone out? How did it work? Did you just have to restructure the team 'cause of business goals? How did it work? Gives you a lot of insight into their experience and their humanity in a way that they're not prepared for. So you really get the real story, um, and get a sense for what they would be like as a leader under a lot of pressure and difficult situations.

    29. LRLenny Rachitsky1:02:17

        I've never heard that one before and I love it. Reminds me of a episode with Matt Michari where we talk about how to lay people off really successfully and elegantly.

    30. CDCarilu Dietrich1:02:25

        Mm-hmm. It's hard.

Episode duration: 1:07:19