From Open-Source to Enterprise: How Vercel Built a Product-Led Motion on top of NextJS

This post by François Dufour is part of our series on Product-Led Growth Playbooks. There, we share insights and advice from leaders who have built successful PLG businesses that target developers and their teams.

Vercel is the company behind NextJS, the popular React framework. Its platform lets developers build and deploy frontend applications faster, streamlining the entire process of designing, shipping, and hosting websites for companies like The Washington Post, Auth0 and Uber.

It’s one thing - and it’s FAR from easy - to have a very successful open-source project. But scaling its monetization, while staying authentic to your developer-first roots, is a whole other ball game.

Kevin Van Gundy, Chief Revenue Officer at Vercel, agreed to share some of their playbooks with me. He covered:

• How they engage open-source users to market and sell their commercial offering
• How they designed their Go-to-Market and staffed up to leverage their open-source momentum

Let’s dive in.

Segmentation And Starter Kits: How Vercel Engages The Right Users Of NextJS

NextJS is so popular that it counts more users than a Sales team could reasonably engage. And frankly, most developers prefer to understand and evaluate products without interacting with a salesperson. Only after they’ve done their initial learning and evaluation, in a self-serve fashion, do they want to engage with a salesperson to complete the procurement phase of the buying cycle.

The key part for Vercel is identifying who to reach out to, when, and with what message...at scale.

To do that, Vercel identified the verticals in which the value of NextJS and it’s commercial offering was most blatant. They then offer both content and resources to engage developers in those specific verticals.

“We know developers like to build with a product before they buy it— so we focus on actionable content, like starter kits, code that developers can clone and deploy themselves. This gives developers the tools to experience the solutions to their problems first-hand.”

First: Identify your winning verticals

Look at your customer base by company and understand what segments your product appeals to, which spend the most, and what they’re trying to do with your product.

For Vercel, their first target verticals were Media/Publishing and Ecommerce. Companies that will easily see the value in the performance of the Vercel platform. The better these websites perform, the easier it is for them to drive ad-revenue or purchases.

Second: Understand the metrics that matter most to these verticals

How can you reach out and offer to help if you don’t understand what matters to them? Speed, latency, yield, exit rates, etc. Develop your content around the metrics your customers are accountable to-- arm your marketing, DevRel, Sales and Success teams with these insights.  

Third: Create content for these target verticals

When Vercel identified ecommerce and advertiser-backed media companies as critical verticals, they defined and presented their product in terms of what it could do for each specific vertical. They built starter kits in the form of deployable code that NextJS users could download and experiment with.

Ecommerce developers for example could simply clone a git repo, add their ecommerce provider like Shopify, select their CMS provider, layer on their NextJS frontend and get started.

“These starter kits allow our users to start on third base. Most projects begin with the same 3 weeks of building out plumbing before they’re able to start actually solving a problem or evaluating a toolchain. We helped them skip the boring, difficult parts and tried to give them everything they needed to make an informed decision as fast as possible.”

Fourth: Automate your nurturing

Vercel believes heavily in automation being key to success. Their marketing team has worked hard to build data pipelines that allow them to identify the right customers at the right stage. Certain events will trigger Vercel’s automated nurture flows, promotions, or flag an individual for individualized outreach from a salesperson. For example, if someone fits their ideal customer profile, as soon as they start working with Vercel, they will automatically receive an email, offering additional assistance from Vercel’s team as well as helpful resources. If that customer engages and replies to the email, a product advocate will follow up, schedule a discovery call, and start developing that relationship.

How Vercel Defined Its Commercial Product Lineup. From Free Self-Serve To Enterprise

Vercel set up their product tiers by thinking about what a successful user of each tier would look like:

• Free Tier: success for a free-tier user is falling in love with the “Next.js and Vercel” way of making software. They asked themselves the question: “how can we give as much away to the individual developer as possible?” Aptly called “Hobby”, a developer can keep this personal account forever, even when moving from company to company. Note that the free tier is not the open-source project (NextJS is separate), but a cloud-based and free commercial edition of Vercel.
• Pro Tier: success for a Pro-Tier user is getting from idea to deployment as fast as humanly possible. “How do we enable small teams or single departments to build and deploy great websites without needing to interact with the Vercel team?”
• Enterprise Tier: success for an Enterprise customer is developing “end-to-end” with Vercel and NextJS. Vercel builds their enterprise product with the world’s largest websites in mind. “How do we empower large websites and engineering organizations to build innovative experiences for their customers? How do we set them up for success both from a technology and process standpoint?”  

How Vercel Organized Their Sales, Solutions, and Success Teams

So, you’ve identified and nurtured high potential prospects from your user base. What comes next?

This is where helpful humans come in. Vercel is able to make the most of their momentum with specialized teams and Sales motions.

Vercel built out a Sales team of technical Account Executives and Sales Engineers to work alongside developers and explain how Vercel can help. They also describe the process, the offering and its benefits. The team was coached to focus on teaching the how and why of Vercel not solely on executing transactions. In its early days, capturing logos and customer stories was more important than new revenue.

A Solutions Engineering Team focuses exclusively on building one-to-many tools that make developers’ lives easier, such as git repos and starter kits. These tools show the power of the product without any intervention needed from Sales or Support.

Vercel’s Customer Success Team is well known in the NextJS community. They’re seemingly always online, very helpful, and deeply knowledgeable. The customer success leaders are highly experienced engineers who can identify, address, and solve customer problems. Instead of saying “go check your logs, here’s a link to the docs, go away” they can say to customers, “send over your code and we’ll solve that for you.” There’s a massive difference in the power of those responses. But as you can imagine their time is precious and limited. So Vercel relies on two gatekeepers to select who gets access to them: lead scoring and a proper qualification by AEs.

“Instead of saying “go check your logs, here’s a link to the docs, go away” they can say to customers, “send over your code and we’ll solve that for you.””

Kevin can see that impact in net revenue and growth rates exploding after their Customer Success team meets with customers. Given that track record, Vercel gives customer success leaders the agency and freedom to hire the folks they see as ideal fits for the team.

The Key Performance Indicators That An “Open-Source to Enterprise” CRO Should Track

Of course, as a SaaS CRO, Kevin focuses on ARR the most, as well as the other “SaaS usual suspects”: ARR, NDR, LTV/CAC, Magic Number, etc.

But to track his product-led performance from open source usage to revenue, Kevin also focuses on these 2 metric categories:

Open Source Usage

Depending on the product this may vary, but ideally, you want to identify a metric that represents ongoing usage of your open source project and new joiners to your open source community. Consider this the very very top of your funnel, your “TAM” within that given period.

Team Adoption

Vercel knows that production hosting is only a small part of the value they provide to customers. A successful customer is one that not only hosts on Vercel, but integrates Vercel into their daily workflow. As such, they track specific milestones in the formation of a team on Vercel. First, when an account goes from an individual developer to at least a pair. Second, when an account grows beyond a single dev team. When your commercial product adoption moves from an individual to a couple of close peers, to a team, then you can really identify and influence an upsell opportunity.

Two Common Mistakes When Setting Up And Scaling PLG

Kevin mentioned the following common mistakes he’s seen PLG companies make:

Not investing enough, early on, in the quality of your data

Knowing who your customer is quite obviously incredibly important. The first GTM hire Kevin made was a Head of Revenue Operations. In PLG, RevOps and automation are your lifeblood. By setting up the right onboarding flow, getting the data you need, and using tools like Clearbit or ZoomInfo to augment that, you can tailor your nurture and prioritize your Sales motions to your customers more easily.

Not matching Sales hires to company maturity

“There’s a time in your company where it's OK to have developer happiness as your leading sales metric. The trick to early-stage GTM is knowing where along the continuum of adoption and monetization you should be for a given phase of growth." In the earliest phases, it can help you land those key first design partners. But, as your company scales, you could be leaving money on the table. Hire different types of Sales reps based on the maturity of your company. When you’re first starting out, hire AEs who just love technology. They’ll evangelize the vision of your product, even before it’s fully mature. But, when you start moving upmarket and landing enterprise clients, you’ll likely need to hire more experienced Account Managers to grow that relationship across many stakeholders.

Learning As A Sales Leader In A Developer-Focused Company

Sales leaders in developer-focused companies simply can’t afford not to know about how their product fits together within a developer’s ecosystem. They should be able to clearly map how those technological building blocks fit together.

“I built up my technical skills by sitting on my ego and asking lots of questions, no matter how basic. I tried to self-serve as much as I could but when I got stuck, I wasn’t ashamed to raise my hand. Over time, I learned enough to actually understand my customers in a real way.”

When, with a career shift from finance and consulting, Kevin joined Neo4j, a graph database platform, he quickly understood that gaining technical skills was going to be table stakes for him to be successful. So he built up his technical skills by asking lots of questions. “Early in my career, I repeatedly asked engineers to walk me through the most basic parts of our platform and how to operate it. What a terminal was, how to download Java, how to start the database, how to write a basic query, and so forth. I tried to self-serve as much as I could but when I got stuck, I wasn’t ashamed to raise my hand. Over time, I learned enough to actually understand my customers in a real way and because of that I could help them enunciate the value of our products back to their organizations.”

The technical knowledge he gained has had an outsized impact on his career, allowing him to speak more authentically with developers and better assist customers with their problems. No surprise he quickly rose to the role of CRO at an ultra-growth company.

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