The evolution of the B2B go-to-market tech stack: a few areas to watch
If you’ve read my previous post, you’ll know that there are a number of external trends and factors impacting B2B go-to-market strategies — from digital self-serve to data-driven processes and an increasing focus on efficiency.
As leaders try to stay one step ahead of these new trends, what are the ‘must have’ categories and tools for a go-to-market tech stack?
This topic could be as long as a piece of string, so for the purpose of this article we’ll be looking only at RevOps, Product Led Sales and Community Management.
The rise of Revenue Operations (RevOps)
RevOps can mean a lot of things. The definition is blurry because the role is new. In the past, RevOps was mainly about sales and marketing enablement and belonged to Sales and Marketing Ops. Today RevOps is switching to revenue operations management and is becoming increasingly managerial and strategic. As a result, a new category of dedicated RevOps professionals is emerging in Europe — and implementing slick, data driven processes is becoming a fundamental to the role. And with new responsibilities… come new tools!
While Financial Planning and Analysis (FP&A) is more for CFOs, Go-to-market Intelligence is for RevOps. Before making any major changes, RevOps need an overview of each funnel’s KPIs (marketing, sales, customer success), to be able to forecast GTM scenarios and ultimately help with operations management and headcount planning. We’ve seen a few early stage companies building dashboards to monitor cross-functional, best practice KPIs including revenue efficiency and sales productivity.
Sales commission software helps RevOps, Sales Ops, and Heads of Sales with implementing the right compensation plan, automate commissions calculations, paying sales reps the right amount at the right time, as well as motivating sales reps by giving them transparency and visibility on their current and future commissions. Big US players already exist — CaptivateIQ is now valued $1.25bn and raised from Tier 1 Us VCs. The opportunity remains relatively untapped in Europe, but as the market is more fragmented — with different languages and different sales incentives — the challenge comes with scaling across the continent.
Then comes pipeline management, where we are seeing 2 types of tools:
- Pipeline generation tools, collecting customer data from various sources and highlighting the most interesting leads. Hightouch and Census are US-based companies sitting on top of the data warehouse and using Reverse ETL to fuel CRMs and other tools with relevant customer data. We are also seeing other companies providing an additional layer of prediction analysis by sharing targeted signals to sales and customer success teams. Others will ultimately try to replace existing customer engagement tools.
- Pipeline conversion tools, giving sales reps an overview of their pipeline, how it changes over time and recommendation to convert specific leads. Clari was valued at $2.6bn at its last round and People.ai reached a $1.1bn valuation in August. Both are US-based and aimed to become revenue platforms.
Lastly, sales intelligence and coaching tools aim to improve the performance of sales tramps by providing actionable insights, guidance and support through data analysis and best practice. Examples include giant Gong valued at $7.25bn at its Series E round, which could face competition in the near future with the emergence of Generative AI. Interesting space to keep an eye on!
We are seeing successful companies in the space coming out of the US and believe there is just as much room for disruption and $bn businesses in Europe — particularly with the emergence of new technologies such as Generative AI and our GDPR edge.
Product-Led Sales
Is Product-Led Growth (PLG) a philosophy? A buzzword? To the sceptics out there — it is a real thing. Adopting a PLG strategy means moving the customer journey further into the product and removing human interactions. PLG has been here for a decade but with the pandemic we have seen accelerated digital transformations fuelling the adoption of PLG strategies from B2B companies of all sizes.
So what does a Product Led Sales journey look like? Typically, the prospect will sign up to use the tool via free trial or freemium option. Once signed up, users become Product Qualified Leads, and Product Led Sales comes into action. It ends once the user has converted to a paid version, is onboarding and starts advocating the product.
And it works. The average PLG company is worth double the public SaaS index. They scale faster, with 83% of public SaaS companies that achieve $100m ARR in their first five years using product-led models.
With buyers becoming increasingly self-educated, wanting to test the product first, more companies are effectively turning to PLG. 2/3 of companies already offer some sort of free trial; 91% of SaaS-based subscription businesses plan to increase their investment in PLG strategies, and 47% plan to double their investment in PLG.
We are seeing 2 categories of tools.
- At PQL stage, there are interesting pipeline generation and conversion tools dedicated to PLG companies based on product usage. Some help drive customers to conversion with website personalisation, such as Mutiny in the US or Userled in the UK. Others help Sales reps manage their pipeline with product usage signals and include PLG CRMs like Endgame, Correlated and Pocus. We are also seeing AI-powered embedded sales chatbots driven by new innovations in Generative AI.
- When the PQL becomes a customer, now the goal is to get them onboarded, satisfied and engaged. We are seeing onboarding tools customised for each visitor — but also a new generation of customer success tools trying to disrupt Zendesk or Intercom with embedded and automated customer support based on product usage and powered by AI.
Dedicated tools for community managers
The importance of the community has grown significantly — and PLG has been a strong driver. Communities tend to be centred around an industry or a product, and help with lead generation, brand loyalty, customer success and product feedback. As a result, the role of community manager has become very important — particularly with the rise of virtual communities and events fuelled by remote working. We are seeing an increased number of B2B communities and users. Github gained 16m users in 2021, reaching 75m total developers on the platform, and Discord reached 300m users in 2020 vs. 130m in 2018.
Community managers need to be empowered with data-driven insights to help them make the most of their communities, track engagement and leads, measure how they help with conversion and upsell, and ultimately share the ROI of those communities.
The space is still pretty early and as Common Room’s CEO put it: “There are no existing “incumbent solutions” that compete with Common Room, but there are several similar startups. Our space is very early”. Targeting specific industries might allow a stronger PMF and larger budgets — for example, we are actually seeing companies targeting developer tools or web3 companies.
We at Balderton are a multi-stage firm investing in early and growth stage. We raised a $600m fund dedicated to early-stage investments and another vehicle of $680m to invest in growth-stage companies. We are actively investing in Europe and we can support founders at every stage of their journey so feel free to reach out if you’re building in the space!
