Growth, Sales, and a New Era of B2B

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

Martin Casado

Growth, Sales, and a New Era of B2B

Something is Happening

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.©2019 Andreessen Horowitz. All rights reserved.

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B2BGrowthSales

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.©2019 Andreessen Horowitz. All rights reserved.

✓ Less money to create a startup

✓ Plays to the founder’s strength of product

✓ Incumbents have no defense strategy

✓ Startups can come from anywhere

Growth + Sales

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B2B Growth Sales

B2BGrowthSales

A Cross Vertical Trend

User Authentication

Survey Software

Storage & Content Collaboration

Open Source

Team Collaboration

Cloud Services

Dev/DevOps Tools

Video Conferencing

Design Tools

APIs

Content Enrichment

New Categories

Consumer Companies

PRODUCT & MARKETING DRIVEN

Enterprise Companies

VALUE & SALES DRIVEN

Marketing Led

Brand Matters

Unit Economics Defined by Growth

Sales Led

Product Simplicity Matters

Enterprise Companies Consumer Companies

Relationships Matter

Unit Economics Defined by Sales

Product Value Matters

Marketing Led

Brand Matters

Unit Economics Defined by Growth

Sales Led

Relationships Matter

Unit Economics Defined by Sales

Product Simplicity Matters Product Value Matters

Enterprise Companies Consumer Companies

Marketing Led

Brand Matters

Unit Economics Defined by Growth

Sales Led

Relationships Matter

Unit Economics Defined by Sales

Product Simplicity Matters Product Value Matters

Enterprise Companies Consumer Companies

Marketing Led

Brand Matters

Unit Economics Defined by Growth

Sales Led

Relationships Matter

Unit Economics Defined by Sales

Product Simplicity Matters Product Value Matters

Enterprise Companies Consumer Companies

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.©2019 Andreessen Horowitz. All rights reserved.

CONSUMER ENTERPRISE

The VC Perspective

Investing in ConsumerUSERS ARE FICKLE.

WILL PEOPLE LOVE IT?

Investing in ConsumerUSERS ARE FICKLE.

WILL PEOPLE LOVE IT?

“THE GRAPH IS SMARTER THAN YOUR THEORY”

Investing in Consumer

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.©2019 Andreessen Horowitz. All rights reserved.

Investing in Enterprise

WILL IT WORK?

BUYERS ARE PREDICTABLE.

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

In Enterprise, Sales/Technical Team

Invest Early

In Consumer, Product/Design Team Invest After Traction

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© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

Growth + Sales

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B2B Growth Sales

B2BGrowthSales: The Modern

Enterprise Startup

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

B2BGrowthSales: The Modern

Enterprise Startup

Startup focused on simple use

case

Gets bottoms up adoption

Becomes a well known brand

Overlays sales Products grows in

complexity and value

1Buying software is a

daily ritual everyone does. 2There are more

users who have budget (e.g. marketing, HR).

Why Now?

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

SurveyMonkey’s Organic Adoption to 60M Aggregate Registrations

SUCCESS STORIES OF THE BOTTOM UP MOTIONC

UM

ULA

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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

LAUNCH 10 Languages 21 Currencies

ACQUIRE

LAUNCH Unlimited Annual Subscription

LAUNCH Audience

PARTNER NBC News

LAUNCH Apple App

ACQUIRE

LAUNCH Android App

PARTNER Fortune

ACQUIRE

INTEGRATIONS Marketo • Microsoft • Google

PARTNER The Washington Post

INTEGRATIONS Salesforce • Oracle • Slack

LAUNCH Enterprise • CX • Engage • Apply

SurveyMonkey Genius

PARTNERS CNBC • The New York Times

INTEGRATIONS Stripe • Workplace

LAUNCH Customer360

If we are unable to continue to increase adoption of our products through our self-serve model, our business, results of operations, and financial condition may be adversely affected. Historically, our business model has been driven by organic adoption and viral growth, particularly from conversion of our free users to paid, with approximately 80% of our new individual paying users coming to us. We are currently expanding our sales force, which has historically been limited.”

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

Dropbox Relies on Bottoms Up Marketing Through $1.1B+ Revenue

SUCCESS STORIES OF THE BOTTOM UP MOTIONOur lack of a significant outbound sales force may limit the potential growth of our business. Historically, our business model has been driven by organic adoption and viral growth, with more than 90% of our revenue generated from self-serve channels. As a result, we do not have a significant outbound sales force, which has enabled us to be more efficient with our sales and marketing spend.”

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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Founded

Public Launch

iPhone App

Android App

Dropbox Teams APIs

Released

1st Shareable

Link

Dropbox Business

Dropbox Integrations Salesforce • Microsoft • HP

Commenting Dropbox Badge

Infrastructure Optimization Completed

Dropbox Professional Dropbox Paper

Smart Sync500M+ Registered Users 180+ Countries $1.1B+ GAAP Revenue 11M+ Total Paying Users

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

Growth MotionExample: Cloud-based, simple product engaging single user

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Sales MotionExample: On-prem, complex product

built to attract large enterprise

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The Two Motions: Growth + Sales

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

Two Motions: Many Times the Operational Complexity

Growth + Sales

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B2B Growth Sales

!

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

Bottoms Up Growth with No Sales

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GrowthSales

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

Sales with No Bottoms Up Growth

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© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

Growth Engine Doesn’t Lead to the Correct Buyer

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© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

Bottoms Up Growth Cannibalizes Sales

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© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

Sales Gets Ahead of Growth Engine

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© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

Sales Ruins Purity of Bottoms Up Growth Function

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Product Considerations

Start simple. End complicated.

Move from horizontal to

vertical.

Analytics and growth levers should be in

product.

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.©2019 Andreessen Horowitz. All rights reserved.

© 2017 Andreessen Horowitz | Proprietary & confidential, all rights reserved worldwide.

Thank you.