The Foundation of Koan: Engagement
From its inception, Koan was built to solve a collaboration problem: helping teams achieve their goals. Even the initial research and interviews at Koan had a heavy focus on team engagement and the behaviors that support it. The alignment problem is universal and huge, so we founded Koan to solve it.
But when the 2020 global pandemic hit, we were forced to adapt to challenging circumstances. The alignment software market is saturated, with all our competitors raising large amounts of capital, building huge sales teams, and spending tons of marketing dollars. To thrive, we had to approach the problem in a different way. We were going head to head with our competitors, but recognized that we couldn't beat our competitors at their own game. We needed to play to our strengths, which was Reflections. We discovered that when new users filled out a Reflection once, they became repeat users 92% of the time. This was our ‘ah-ha’ moment of realizing our GTM strategy was all wrong. Koan was better positioned for product-led growth.
Our product is highly sticky and we began to realize that once teams begin using Koan, they naturally tend to expand their usage throughout their organizations. This helped us to identify that we were selling the wrong way; we were selling to large organizations with top-down approaches, when indeed, our ideal customer was individual teams looking to make a difference internally from the bottom-up. In light of this, we sought to make the tool more accessible to the organizations that used us best and we transitioned to a product-led growth approach.
The Journey: Sales-led to Product-Led
“Product-Led Growth is defined as a go-to-market strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers.” - Wes Bush, ProductLed.com
The shift from a traditional, top-down sales-led approach to a bottom-up, product-led go-to-market strategy was no easy feat. And it was more than just recognizing the opportunity in the transition and launching our freemium product. Even though our product was built as a team-focused solution, we still had to shift our thinking and focus across every part of the organization. Here are some of the departmental and organizational shifts that our team went through to position us well for a successful transition.
Our Product mentality shifted
Being product-led means putting your product at the center of your organization. And our product team and engineers are obsessed with delivering high-value engaging experiences at every stage of the product journey. Product is woven into the fabric of how our company operates, with every product decision made with the end-user in mind.
Product experiences are an essential part of the buyer journey, and our priority is to build a tool that is engaging and actually enjoyable to use. Ultimately, our freemium strategy supports the engagement flywheel. We’ve removed friction at the sign-up stage and enabled everyone to leverage software to manage goals and status for free. Combined with the core functionality of pairing goals with reflection helps to create a regular habit that creates a highly engaging workflow and spreads to the entire organization. Allowing people to have time to form positive habits and realize the value of the tool has proven to be beneficial.
Virality plays a huge role within the platform and is supportive of our product-led growth momentum. For example, at Koan, our engineering team was using Notion to take notes and create databases. While working cross-functionally, they suggested that the other teams use it to ease collaboration. The easy-to-use platform soon became viral at Koan, where the entire organization adopted Notion, and now all departments use it to collaborate. The same can be said for Koan: our best product implementations were team deployments that grew virally within the broader organization - we just had to listen to the natural trend.
We are also very intentional with decisions around our roadmap and we work to ensure that customer impact is always leading our thinking. Before our product-led shift, there was tension on whether to build features that provided team value versus what enterprise buyers were saying they wanted. Even within our product roadmap, feature prioritization has shifted away from features that demo well to features that are self-served well. Features that demo well aren’t usually the things that help someone get started in a new app. Instead, we’ve prioritized work that simplifies onboarding and orientation.
Some recent product changes (beyond the unrestricted free tier) include:
- Simplifying configuration - we’re regularly focused on improving and simplifying the functionality of how users work together and achieve goals within teams.
- Integrating with customer workflows - Making sure that Koan can integrate with popular applications so that goals and status are a central part of our customer workflows.
- Improved sign-up and sign-in functionality - We’ve spent a lot of time improving a lot of the behind-the-scenes technology within the Koan app to help make it safer, faster, and easier to use. This includes simplifying the signup process and making it easier for most Koan organizations to access their accounts using "magic link" authentication.
Our Growth mentality shifted
Being a seed-stage, product-led startup forced us to be creative, test quickly, and adapt to positive signaling. One of the interesting changes we made within our team was to combine marketing, customer success, and sales into one team. Because we’re small, it was easy for us to make this switch, but it has also allowed us to actually have a more holistic view of our funnel, understand how users move throughout the product journey, and optimize based on what’s best for our customers. Here are some examples of how our growth team has evolved during our product-led journey.
Once we decided to pivot to product-led, we recognized that we had to lay a lot of the groundwork before we launched the free tier to support this motion. First and foremost, we reevaluated our target customer profile and identified key personas that we knew would be best suited for Koan. This included a shift from line-of-business executives to team managers.
Since we didn’t have the budget to compete with other competitors, we also had to reevaluate our top of funnel strategy and focus our energy on organic search, so users naturally find us to solve the problem, rather than us having to convince them they need to solve the problem with Koan. This also included expanding our content marketing and availability to support customers at all phases of their journey. Some examples of this include our OKR resources, OKR examples, and our Goal-Reflection loop.
With the new product-led strategy, our old high-touch, 1:1 model of customer success wouldn’t scale and doesn’t make sense for team-led growth inside of the product. We changed the efforts that we make to help activate and engage with users and better leverage our one-to-many communication. While continuing to support our large deployment customers while also enabling successful self-service support for our free tier users.
A big part of this is continually improving our product onboarding journey and providing a simple, user-friendly way for people to learn how to use the app and understand best practices. Through improved messaging, support resources, and video clips intended to support users taking positive first steps within the product, we have driven higher engagement and decreased time to value.
With our traditional sales-led environment, we targeted ideal customers, had both inbound and outbound sales motions, and then worked to qualify leads and sell them on why they should adopt Koan. This top-down, sales-driven approach to acquiring customers just wasn’t working for us.
To shift to a product-led sales approach, our priority was to create a frictionless experience for our users. There’s no qualification, evaluation or negotiation. With the Koan Free tier, users get to control their own destiny and decide if they want to buy.
Our Company mentality shifted
At the heart of Koan's business, we seek to inspire and nurture an inclusive culture - understanding that each person brings distinct experiences to the table. Embracing diversity enhances our work culture and helps to create an empowering environment, one that fosters innovation, economic growth, and new ideas. And this inclusion journey was partially the catalyst that sparked our decision to embrace a product-led growth strategy.
Some examples of how inclusivity plays a big role in our product-led journey:
- Our customers come from everywhere (technology, finance, healthcare, oil companies, churches, pot shops, and everyone in between) and building a product for them requires working on our product to make it more universial to every type of team.
- Building an internal team culture in which everyone has a voice, and how that translates to the customer voice/experience. This includes publishing our company handbook and goals publicly
- Building a platform where OKRs and status are a collaborative practice that foster autonomy, engagement, and trust. That means creating a UI/UX that defaults to transparent goals and builds upon users collaborating within the product.
Early success after the transition
We’ve officially shifted to product-led just over six months ago, and we’re seeing positive traction across the board. At the top of the funnel, we’ve more than doubled organic traffic and conversion rates, and seen an increase in active organizations up 82% YoY, as well as weekly active and weekly engaged users. We’ve also seen higher NPS feedback scores since shifting our approach. Product-led customers enjoy Koan much more than employees ordered to use it by a distant VP (which was commonplace under our previous sales motion). Ultimately, our unique product-led, bottom-up approach to alignment allows teams to be more focused, productive and happy.
Koan is a natural fit for product-led growth because it was built as a workflow to support team value and collaboration. We’re always continuing to evolve our journey and make decisions across our organization that support our customers. Koan is dedicated and focused on making an engaging tool that helps users be successful and work with purpose.
As always, if you have any questions about what we’ve covered in this post, feel free to send us a note or reach out on Intercom. And if you haven’t already signed up, get started managing your goals and reflections using Koan absolutely free.