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This post by François Dufour is part of our series on Product-Led Growth and Developer Marketing Playbooks. There, we share insights and advice from leaders who have built successful businesses.
Jeff Yoshimura, whom we interviewed about how to build an effective developer-focused product-led growth team, kindly introduced me to Kelley Hilborn. They worked together at Elastic where Kelley now leads DevRel, Community, and Startup programs. Kelley has tremendous and deep experience in all three.
In this article, we cover how companies targeting developers should approach building a program to drive adoption with startups when the goal is ultimately to have them become successful paying customers. Kelley has run very successful startup programs for cloud hosting and application platforms at Softlayer and IBM, and is now building one at Elastic.
Startup programs are programs offered to startups or growing companies with discounted or free services. They are a special kind of opportunity for companies that fit certain criteria to use a paid product for a period of time for a heavily discounted rate or free.
The benefit for the vendor is that the startups use the product in a time of growth, become reliant on it, and use it to fuel long-term success. Startups can also provide valuable feedback to help assess new directions, features, and product plans. Vendors can offer support to startups as they grow beyond just the tool itself– they can offer guidance, advice, and resources to help them grow.
According to Kelley, the best types of products for such programs are essential developer tools– especially infrastructure– that carry high switching costs. The goal is to become a product that becomes integral to the business’s long-term success.
“When thinking about implementing a startup program, you have to consider if your product is going to be integral to the startup’s success. Are they going to want to keep using it as they grow and scale?”
Cloud computing platforms (e.g. compute, database, and hosting services) are great candidates. The teams using these tools rely on them for critical workloads, train themselves on how to use them, and pick additional software that’s compatible. At some point, it is very difficult for them to switch to something else as the migration costs (financial, educational, and human) become massive.
Products with a much lower switching cost (for example email APIs) are not the best candidates. In these instances, a developer may benefit from free credits until the number of email credits is depleted and then simply switch to another provider. If you fall into this category, you can still have a successful startup program, but you’ll have to be much more strategic. Paul Ford and his team at Sendgrid (now Twilio) ran a world-class program despite some of these challenges.
There are a number of ways you can structure your startup program. Kelley has seen a few that work well. “Programs are almost always time-based, money-based, or a combination of both,” he said.”
The typical options:
Kelley reminds leaders to structure the program around their goal, which is to give startups enough of a taste so that they’ll stick around as customers.
“You don’t want to give away your product for free for life. Your goal is to help them be so successful that they can’t imagine a world where they wouldn’t sign on to be customers.”
When starting a startup program, you need to make sure that you’re offering it to the most qualified. That is, you want to offer support to those who are good candidates for getting value out of your product.
Most companies will want to select startups for their programs based on their age and ARR. Startups up to 3 or 5 years old with ARR of <$1M is typical. When it comes to finding these startups, use the incubators and their knowledge for the right matching, especially for the startups you will support with your time and advice
According to Kelley, you can either run a survey with automated provisioning or have live discussions with prospects to determine who would be a good fit. You can also use these strategies in tandem– begin with a survey and then have live conversations with those who fit your criteria.
Automated qualifications and provisioning do come with risks– your software could be used to do harm and you don’t have an idea of what customers are doing.
“The problem with automation is that you don’t get the gratification and fun that comes with knowing your program members. Even if you have an automated program, you still should make every effort to connect with those in the startup program.”
When it comes to measuring KPIs, you’ll need to have a good mix between quality and quantity. You need to onboard a fair amount of companies to be successful, but then you also need to assess how long they stay and eventually how much revenue they bring into the business.
“When it comes to KPIs, measurement is straightforward. You should measure the number of startups you bring on, the number that are successful with your product, and how much revenue they bring.”
At some point, startups will graduate from the program and will need to be introduced to Sales. But before you make this transition, make sure they are successful with the product.
“Sales is the ultimate expert in selling, so I leave that to them. It’s my job, however, to share some context: this startup has been with us for one year and is seeing this level of success from the product. I might suggest we ease the transition and make sure they’re successful before trying to upsell them on more products.”
Kelley recommends that every startup program provide global coverage– with ideally multiple people per region. You might have 3 - 6 team members per region, then go up from there based on your growth.
“We’ve done a lot of our efforts in person with accelerators,” said Kelley. “That requires having a fair amount of people in each region”
In terms of roles, Kelley believes having someone to manage all the partnerships with accelerators is key. It’s also essential to have developers– system administrators, especially– who can get the startups up and running with our products. You also need business development that helps connect startups with our resources, as well as executive buy-in.
You don’t need full-time people for each role initially, but you need to think about the people who will play these roles.
Kelley has seen a lot of success from partnering with incubators and accelerators, as they have a massive connection with startups who are good fits for startup programs. Partnering with accelerators - like any other partnership - can go a long way if there is mutual interest. It’s a win-win model when you invest in the partnership.
“The biggest value they provide is one of scouting: it’s tough for startups to get into these incubators. If they make it in, that means there is a higher chance the startup will succeed. Some will also be invaluable to finding diversity and reaching underserved communities.”
YCombinator is the most famous, but Kelley has a number of other favorites. He also noted that it’s not just accelerators but also educational resources, coworking spaces, and others that have access to this community. He’s had success with MassChallenge, StartCo, TechStars, F6S, Dev.to, and many others.
As someone who’s been working in startup programs for a long time, Kelley has seen a number of programs that have been particularly successful and inspiring.
A startup program requires a lot of different teams, but Kelley recommends that it lives within DevRel. Depending on the company, DevRel can be in marketing, product, or engineering.
No matter the team you choose, it’s important to have a service mindset. You want to provide guidance to developers– that means making intros, providing mentorship, and leading them through your product so that they get the most possible value.
When it comes to startup programs, it can be tempting to focus on encouraging them to graduate to become paying customers. But, according to Kelley, startup programs are about giving first. The most successful programs are full of individuals that give time and expertise long before selling. They help startups with the product, but they also help open up their networks, connect them with others, and offer advice.
“Be authentic and honest always. Don’t offer to help if you don’t have the intention or ability to do so.”
Thanks so much, Kelley, for sharing all these great tips, tools, and techniques, and congratulations on building such high-impact startup programs.
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