A B2B SaaS marketing strategy from zero to one with Paul Sebastien, CMO at Offensive Security
In a crowded B2B tech category, how can your brand stand out?
On this episode of the FINITE podcast, Paul Sebastien, CMO at Offensive Security, talks about how Udemy for Business was built from the ground up and how he overcame the challenges by his SaaS marketing strategy.
This episode covers:
- Paul and his journey at Udemy
- What is Udemy?
- How did Udemy for Business start?
- How did Udemy find his USP?
- What is the key to finding an early traction point?
- How do crypto, blockchain, FTS, and other technologies impact B2B marketing?
- Advice on how to be prepared for the future of B2B marketing
Listen to the full episode here:
And check out more of the FINITE B2B marketing podcast here!
Full transcript
Alex (00:06):
Hello everyone. And welcome back to the FINITE podcast. Today, we’re talking about building a B2B tech marketing strategy from zero to one with a guest who’s been there and done it themselves a few times before, whom was the GM and co-creator of Udemy for business. When they pivoted towards a SaaS subscription business focused model and how to position go to market and enter a category from zero.
Paul is also a bit of a futurist. So we’re going to hear his take on how B2B tech marketing may look in the future, including considering influences like crypto and blockchain and how they may impact the role and the world of B2B marketing. I hope you enjoy.
FINITE (00:43):
The FINITE community is kindly supported by The Marketing Practice, a global integrated B2B marketing agency that brings together all the skills you need to design and run account-based marketing, demand generation channel, and customer marketing programs. Head to themarketingpractice.com to learn more.
Alex (01:03):
Hello Paul and welcome to the FINITE podcast.
Paul (01:06):
Alex. Great to be here. Thanks for having me on.
Alex (01:08):
I’m looking forward to talking. You have fascinating background, a lot of experience spanning the B2B tech world. We’re going to be talking about a particular chapter of that. But before we do that, I’ll let you give us the rundown of everything you’ve been involved in.
We’re going to be talking more about the Udemy side of things when we get there. But I’ll let you tell us a bit about everything you’ve been up to and a bit about your current role as well.
Paul and his journey at Udemy
Paul (01:32):
Yeah great. Well, I’ll spare the listeners, the long circuitous history spending back 300 years actually. But, in short, I have been a CMO and a GM both in Silicon valley. Also spent some time up at Microsoft up in Seattle for many years. So kind of there and back again was here during the.com 1.0 period. They are at early stage companies, I notably was a co-founder of beatnik with Thomas Dolby way back in the day. We did some of the early internet audio for the web and built that company up and almost IPO during that time. And then of course the.com crash happened.
Went up to Microsoft and I served in a variety of roles actually on the B2B side, and on the B2C side. So it was actually on the X-Box early team. They’re working on a variety of different projects.
Paul (02:20):
They’re related to the Xbox platform. Then also spend time over on the Windows server tools group. They’re on the marketing front. And I think there was kind of a classic matrix B2B marketing organisation experience there. So that was a very, very different kind of role.
And then back down to the valley where I went into kind of the heart of mobile at Tapulous later acquired by Disney. And then from there, I really focused on my CMO roles. So CMO at SugarSync, CMO at a company acquired by T-Mobile, I’ve been through several acquisitions. So I think acquisitions have been the theme where I’ve gone to an early stage company and then it got acquired. And that’s been both a really good thing, but also a very disruptive thing personally. Because when it happens after a fairly short period of time, you find yourself saying: Hey, do I want to hang my hat at this thing?
Paul (03:09):
Do I want to move on? And there were also some geographical factors I didn’t want to move back up to Seattle, for example, at the time and so on. So kind of bringing this forward from there, I joined Udemy as a GM in the early Udemy days to help. You basically incept there, a BBB, a SaaS business, and all, and I’m happy to speak about that.
For me, that was a really, really exciting and pretty seminal role that was a lot of fun and a lot of unique challenges I think will be relevant for the podcast listeners here. And most recently I’m the GM and CMO at OffSec. It’s technically offensive security, affectionately known as OffSec in the cybersecurity space. I’ve been there almost three years now building the go to market.
Paul (03:54):
And that has been a fascinating role, not just because of cybersecurity, but also taking what was a fairly organic kind of home grown, organically grown company. And as part of a PE investment coming in, and really figuring out along with new CEO and executive team, how to go and take this thing apply sales, marketing, and strategy to figure out how to go after an entirely new go to market in a very, very crowded, complicated space.
So that’s been sort of a theme in my background, especially in recent years where I love tackling sort of big, hairy problems where it’s sort of not just a standard linear sort of next step scaling, but actually having to figure out complicated positioning, differentiation, go to market strategy, that kind of stuff. Something that I find I really, really love and happy to talk about here.
What is Udemy?
Alex (04:46):
Awesome. Let’s talk about the Udemy story. I think a lot of our listeners will know what Udemy is, but for those that don’t. Do you want to give us a quick 30 second intro to Udemy as a business?
Paul (04:57):
Udemy, as a company. They just recently IPO, as many people know, and it’s really impressive. I think what that early founding team, the vision, just the tenacity of building both a B2C and then it’s worth later a B2B business around online learning, using a very unique marketplace model.
So unlike other companies in the online learning space where you can buy courses who basically either create or curate the creation of their own core content, Udemy uniquely leveraged a marketplace model and kind of a flywheel to kind of crowdsource the creation of content serve as very, very much the marketplace in the middle. And provide the tools and the platform and all of that stuff that goes into a marketplace flywheel.
And I think they have executed so well on that over many, many, many years recently. Up until now with the IPO, just a huge success story.
Paul (05:52):
Overall I’m very lucky. I feel very, very honored and lucky to have come back in the earlier days there to be part of creating a B2B go to market. And basically at the time it was a B2C only business, where you basically would come as a consumer buy courses. We hope that people would come back the next month and buy more courses. That was the business.
And that of course is still a massive business for you to make, which is scale. But there was no B2B business. There was no SaaS business. There was no sort of subscription offering.
And the thesis was very much like: Hey, isn’t there an opportunity here that despite the marketplace model? Despite the fact that we don’t own and control our own content, is there a way to leverage this content in a B2B context?
Paul (06:40):
And importantly, can we leverage the tool set? Is there a way to do something in this broader sort of space that at the time was a lot of MOOCs? So these big open sort of platforms for learning the tools, the piping, the ability to have analytics around what people are doing when they’re taking these courses, all that stuff. So it was really sort of a thesis around: Hey, despite the challenges of being a marketplace.
And having really only a B2C presence, can we create something that would be interesting for businesses, for organisations and both on the tool side, meaning on the sort of platform side of it, but also on the content side. And so to me that was just an incredibly challenging and interesting problem. Not just go to market, but positioning differentiation.
Paul (07:27):
How do you kind of carve out a unique hill in an incredibly crowded category? So you had all these existing companies in that space on the enterprise side and had years and years and years of market domination providing enterprise learning management solutions for companies. And then you had tons of those smaller companies as well, and open source stuff and free content out there.
So it really was a very messy and complicated market space on the B2B side. And when I came in, there were really only a couple people on that team and they had sort of created this very, very early kind of MVP. I think it was Udemy for organisations at the time. And you had a lot of the sort of top of funnel from around the world. People saying: Hey, we want this sort of white label MOOCs like solution.
Paul (08:14):
We want to basically have a lightweight white label LMS. And there was no other real business model around that. But anyway, I thought: Hey, there’s gotta be more to it than this. And so I get very, very lucky to work with some really talented people during that time period and under a great CVO as well, to figure out what we could do, both for the product side, from marketing.
It was very much a marketing heavy thing as well, because the big challenge there was not just sort of creating something or creating a product around it or a spinoff of the existing Udemy platform, but it was actually, how do you let the market know, how do you go after companies and say: Hey, this company, Udemy that you know of as a B2C company for buying courses, cheaply actually has this very robust, buttoned up LMS like solution.
Paul (09:03):
And it has this content library. So figuring out all that stuff was really the challenge. So just to kind of shorten the story there, it was a multi-factorial challenge between marketing product, product market fit. And how do you execute on that? And so I was brought in as GM, actually, not CMO. And so I actually owned all up that new line of business.
It was really like creating a company inside of an existing company. We had very, very little resources. We didn’t have much budget assigned to it. So it was a very much startup like experience inside this existing startup. And that was fascinating. So I’ll pause there.
Alex (09:43):
And so Udemy recently, IPO for close to a full billion dollar valuation. And so where was Udemy at when in terms of size head count? Just to give everyone a sense of kind of scale. And when Udemy for business first came on the radar.
How did Udemy of Business started?
Paul (10:02):
I joined when it was around 40 some people all in, I mean, as a company. And it was actually in a much smaller office than when I even started a few weeks after that. We already had moved offices or were about to. So it was growing rapidly at the time.
There was no B2B offering, you know, again at the time. So we had sort of zero revenue, and hadn’t been built yet. Most recently, I think about a year ago, the B2B division announced that they crossed a hundred million ARR, which was a really impressive to see, and again, a huge credit and kudos to the team after me that took it and scaled it from there and executed on that so well. That’s incredibly impressive. And that took many, many years.
Paul (10:45):
So at the time period, it was a very, very small company and again, zero budget, zero revenue start. It was very much how do we create something from nothing really going from zero to one?
And my goal was we have to get some points on the board. We have to figure out how we can get an MVP of something of this thing. Let’s define what the offering is and strategically let’s figure out what unique hill can we own. Where does Udemy has been intrinsic core strengths in its DNA that can be leveraged to stand out in this incredibly crowded market?
And I just love that problem. And for me, just the way that my brain works, I love tackling problems like that. I love strategy differentiation, trying to figure out a unique hill, it’s very much kind of a 4P exercise in many ways, but it sort of combines what I love about marketing with just overall business and go to market strategy.
Paul (11:41):
So that’s the kind of problem I just love. And again, got to work with some great people. So I don’t want to take full credit for this. There were a lot of great ideas already brewing, but I think what it really needed was how do you meaningfully package this up and say: We’re going to do this. We’re going to change the name to Udemy for business.
Here’s what the public persona needs to be of this. Here’s how we have to walk and talk. When we go after enterprises. Here’s what the value prop is when we go after these high-growth startups, how can the strategy work in terms of getting points on the board? Who do you go after first? So all of that stuff was a lot of fun to figure out and incredibly challenging and what we found, and what ended up working.
Paul (12:24):
And I would credit some degree of luck to this. Is that going after a high-growth startups, especially ones already in Silicon valley, what that did for us is that we were able to say: Okay, we have a very unique value prop around specific things that our tool can do. So our sort of MVP of this LMS that we had can solve for it, actually we could leverage the course creation tools, for example, to let companies create their own content. That was somewhat unique in the marketplace as part of a kind of combined offering that had content and tools.
We also, and this was something that I really enjoyed, helping to come up with was, how could we have sort of, imagine a Netflix like library and the cloud of content that is really the best of the best from the main that Udemy marketplace curated for companies specifically.
Paul (13:12):
So how could you take the best of the best courses across a range of topics and part of the value prop there was, can you actually update this library frequently? So that companies always are getting the latest, greatest, best content that the market is determining is the best.
So we could leverage all of the marketplace dynamics of the marketplace model to say, users are finding X, Y, or Z courses around say the HR training or certain technical training to be the best. How can we actually go out and do arena arrangements with those content creators and basically do an opt-in program where we actually say: Hey, are you willing to opt into this program for B2B, you’ll be able to make more money. And as a side note, we have to figure all of that out. That was incredibly complicated.
Paul (13:58):
And I had some great people on my team who worked hard to figure that problem out, because again, they were creating the content, not us, and it was very, very different from Lynda.com at the time and other competitors who are creating their own content.
So that was really thorny and hairy to figure out, but approach was working backwards from the customer. How do you work back to a customer need to say, if I’m one of these high growth companies right here in the valley, what do I want that I can’t get from one of these other companies?
And we had to really focus like a laser on that because they could choose from any number of these other competitors out there. Why would they choose this fledgling sort of nascent thing from you to me that was known for B2C content only.
Paul (14:40):
So that was incredibly hard to do. And then working backwards from the customer pain point, again, as something that I think not enough B2B marketers really, really think through it. There’s a lot of this sort of self-thinking from the inside thinking.
Well, if we offer this and we do that, and we create this as opposed to working backwards from customer pain points and needs, which sounds obvious, but I don’t think enough people do that really thoughtfully and really talk to customers and say: What aren’t you getting that you need? What would you like? And so we had some great discussions at these little mini events that we would hold at the office with customers and say: What do you need? What’s not working for you. And that will help inform this sort of first packaging and pricing and offering that we had.
Paul (15:31):
And the high-growth companies who joined on early with that did for us is that, let us go after large sort of older stodgier enterprises and say: Hey, if you want to be more like these high growth companies that you’re seeing in the press all the time. These are sort of the darlings of the media. You should use Udemy. And that was a really effective strategy, actually getting these large enterprises who otherwise would never pay attention to something like you doing for business at the time, to be willing to adopt something as new and sort of MVP like as you’d be for business at the time, because they knew that these high-growth companies through customer evidence and customer testimonials were using us.
And that ended up giving us sort of a barbell business at the time where you had a bunch of these high-growth sort of smaller companies on one side of the barbell and then large enterprises on the other side. And the two were mutually reinforcing because people would see you have some large enterprise customers now. It’s validated. And so we would really like a flywheel.
We just kept building on this customer validation on both sides of the bar bell to get more and more adjacent companies in their respective categories. And that build the early product market fit. And those first kind of key customer logos that really got the whole flywheel going. So that’s how we did it.
FINITE (16:46):
The FINITE community and podcasts are kindly supported by 93x, the digital marketing agency working exclusively with ambitious fast growth B2B technology companies visit 93x.agency to find out how they partner with marketing teams in B2B technology companies to drive growth.
Alex (17:05):
How much of the success do you think came down to the fact that you had this extensive content creation side of it? Because you referenced earlier the learning management system (LMS) kind of category as competition, but for most businesses and LMS was something that they purchased, but then had to figure out the content side. Whereas Udemy, you already worked and had content on the marketplace side. Was that a big part of the USP?
What was the big part of Udemy’s USP?
Paul (17:34):
It’s a great question. So the USP was actually very much dependent on the customer and the size of customer. We found actually that large enterprises were often more attracted to the LMS capabilities and the ability to create your own content, especially companies save in the financial sector who had an interest in being able to easily create and share sort of internal training securely and safely.So one of things we had to invest in pretty early on, which was incredibly painful with SOC2.
So we have to do some of this sort of enterprise security related work to be able to say to enterprises, you can actually create your own content with our tool set internally, share it and train your global employees without travel. It was the whole proposition of being able to quickly disseminate training and information with our toolset and avoid having to do these in-person, you know, travel and meetups and trainings and things like that.
Paul (18:32):
That was incredibly powerful for large enterprises. Whereas on the high-growth technology companies side, they tended to be more interested in the content and the idea of with this Udemy thing, you literally, we can turn this thing on with a lick. It’s one link. To my team members for a very good per seat per month price to have access to this Netflix like library of the best of the best relevant courses that we want our people to be able to take both from sort of an HR benefit standpoint, but also for specific training. So, they had needs around specific HR training and compliance, but they also wanted to, for example, in some cases train their technical teams with certain content.
There was other sort of overall business level training in there. And we try to curate the right sort of mix based on that those customer inputs that would serve the most frequently demanded needs all in one library that you can just access with a quick link.
Paul (19:29):
So, at the time, especially unlike these older solutions in the market, we were very modern and very simple and very pain-free. And this is something again that I think is under leveraged in B2B is you have to think about the customer pain of adoption.
Like how easy can you make it for the customer to adopt your solution? How quick can that sale be where you say: Hey, look, if we do this deal, it’s very simple. It’s per seat it’s per month. And you get everything and it’s just all access to via a link. That was at the time, very, very powerful as a value prop, especially to these high-growth companies that were moving and growing so fast. The last thing they want to deal was installing complicated systems, right? And software and content and procuring everything. So that was something that we found was key.
Paul (20:19):
So we really worked hard to make it as painless as possible to deploy and especially on the hydro small companies side, that was a critical selling point. I would say that that plus the content library or the main selling points were the strongest parts of the USP.
But again, very different on the enterprise side, where there was more actually willingness to have complexity and time to adopt it, but they really wanted to know that A, it was secure and B what could the toolset do.
So that’s sort of a lesson in building your products so that you can right size for the customer need and that your customers. It’s not just personas. There could be very, very different needs across company sizes and types of companies that if you architect your product in the right way, you can solve both sort of bookends of that.
Paul (21:11):
And then the middle takes care of itself. This is a concept actually that is leveraged also in UI and usability, that if you take care of the extremes, the middle takes care of itself. And that’s something that I thought was appropriate here in this case as well, that if we could solve this sort of imagine the oldest stodginess financial from enterprise on one end of the book, and then the most sort of high-growth dynamic company here on the other side, then we really, really had something that could scale. So that was our focus. And what about that?
Alex (21:45):
I think it’s really interesting that you found those types of companies early on and that they were kind of your early tractions is. I think a big challenge with any product that people are building that could be used by pretty much any business. Like any Udemy for businesses is applicable to any business, even where you’re two people, thousands of people. And that makes marketing much harder, much harder to find that early traction point that early messaging positioning. And I assume now, maybe you have some insights into kind of the type of businesses using Udemy for business, but I imagine it’s a bit of everything. How key was that kind of initial focus on just a certain type of business and doubling down there at least to get that early traction?
What is the key to finding an early traction point?
Paul (22:26):
That actually really hits the nail on the head. That was incredibly important. And what I didn’t mention earlier is that actually within these kinds of companies, there were definitely pain points that again, we gleaned from working backwards from the customer need.
Again, I can’t emphasise that enough, that the conversations we had with these sort of HR leaders and buyers and decision makers in these companies really informed what we needed to double down on in terms of the value prop. And some of those things were very, very much around unique types of content and needs that they had for the stage of the business. So for example, these high-growth startups, many of them at the time had a need for introducing HR training. Even things like sexual harassment training, we would do think really? Something like that?
Paul (23:17):
You would want to use with this. Well, it turns out yes, they actually did because they were reaching a certain size of company where to comply. They have to actually start to introduce that. But the last thing they wanted to do, if you’re a really hip sort of high-growth company here in the valley, where everyone, you know, is under the age of 24, you’re not going to show them a harassment training video that was shot in the eighties. With people in ties. That’s just laughable.
So we thought, okay, interesting, well, they’ve got this need for this. So we actually went out on our marketplace and we found sort of the best sort of modern and very humorous sort of versions of training, like that pain points where they use certain kinds of courses and we actually put those in the library and we validated that.
Paul (24:05):
So we would kind of validate that thesis by saying: Hey, is this working? And it turns out, yes, it was. So we would then start to use that as part of our USP in the sales process. And we would hit like a laser those kinds of companies that were at that same stage. We’ll kind of use that intelligence to go after more companies like that, in that stage and use, for example, the needs for certain types of content like that as part of the selling point.
But it was very much a sort of a flywheel of getting customer input throughout the process, too. So in the sales discovery process, you glean so much from talking to prospective customers and here too. I see some of my peers and I talk about this.
Paul (24:49):
It’s still hard. You know, we don’t spend enough time, I think. To really listen to customers during the sales prospecting process. And when you’re trying to do discovery with prospects that you can circle back and really weave that Intel back into not only your value prop, but even the product.
And I think that’s just incredibly important. So we had very, very much kind of a real time process for taking that customer feedback and saying, Hey guys, let’s double down on this, or we’ve got to have more content like this, or we’re hearing there’s this weird need for angular JavaScript training, for example, on the tech team’s side of the time. Let’s double down on that. So there were certain types of content that we actually use as part of the value prop at the time, there were even parts of the tool.
Paul (25:39):
So parts of the sort of evolving LMS product there that were important as well, even things around usability. We tried to really listen to the customers and factor those things in where possible, but it’s challenging. I mean, you were really trying to build the airplane in flight. And, we didn’t have a lot of resources. It was a lot of shared resources internally.
So we sort of felt like the second fiddle very much. I think internally at the time, and everyone was incredibly supportive, but it was hard. We had to beg, borrow and steal for resources to get those things implemented, right. And, or to go and get the kind of content that we needed for our library, because other people in the company were so focused on the main part of business at the time. So that made it challenging. And of course fun.
Alex (26:26):
What a journey we’ve nearly out of time. But I want to wrap up just with your thoughts on an area that’s a passionate view and that you do some, some work in, in the world of crypto and blockchain and all these exciting technologies that are coming our way. And I guess by the day, adoption seems to be on the, and more and more exciting businesses in these spaces.
I’m interested, obviously from a marketing perspective, I wondered whether you had any thoughts on how crypto, blockchain and FTS, all of these technologies may impact a lot of B2B marketing. I haven’t quite connected the dots fully myself yet, but you may have some ideas.
How do crypto, blockchain, FTS, and other technologies impact B2B marketing?
Paul (27:00):
Yeah, that’s a great question. Well, I’m very, very passionate, and kind of a long time, crypto enthusiasts, user advocate. I’ll sort of spare you all the details there, but I, for a long time have believed that the world will soon be moving towards an increasingly decentralised state, especially when it comes to the financial world.
And I think it actually, of course, it goes far far beyond that, the implications for this upcoming decentralisation and tokenisation right of value where we start to move off of the existing sort of simplistic world of Fiat money and compensation and equity. And we move into a far more sophisticated and sort of flexible and open world of tokenisation of value.
And it really, I think moving to an atomic level of tokenisation of value, the implications for everything, for products, for how marketplaces work, how we do marketing, as marketers, how we exchange value just will be transformed.
Paul (28:08):
It will take some time, but it’s starting to happen. And in some areas it will happen faster than others. And so I think as you know, to sort of right-size it to B2B marketing. It’s not clear what the implications are yet. I think it, you can’t pretend that sort of B2B sales B2B marketing will be sort of untouched by this transformation. We have to remember.
And this is something that I think is really, really important that when you zoom out, people in the B2B context are still consumers. There are still humans that have regular sort of consumer like purchase behavior. They are emotional animals, just like everybody else. I think we tend to try to bucket and partition and, people and context around.
Well, this is a B2B marketing thing, or I’m doing B2B marketing now, therefore it can’t be consumer like, or that I have to do it in a certain way because it’s B2B.
Paul (29:05):
I think that, you know, we’ve seen that even in the last five years, that the consumerisation of B2B has been profound and what that has done more than ever is blurred the lines. And you realise that when you do B2B marketing, you’re still marketing to humans. And those humans have infinite choice. They are using as can both in their consumer life and their business life, a broad set of tools.
They have very, very clear pain points and aspirations that transcend B2B. And so if you imagine that the worlds of becoming decentralised and tokenisation will be increasingly the way that people are compensated or are motivated to attain value. Then there will be huge changes to how we do B2B marketing, as well as consumer marketing, meaning that we will have to understand deeply how to motivate a purchase.
When say it is no longer just about someone paying money, paying dollars to buy a product or a service, but there may be now a stake, right.
Paul (30:06):
There may be a joint mutual stake involved that really is completely different from how we have marketed and sold things to date because the customer becomes part of the process. They actually may come to you and say, I want to stake in what you’re doing.
That’s a complete reverse of the existing model. And you’re starting to see that already on this sort of defy side, I would say with consumers, but imagine a world where your customers actually become incentivised to become part of your offering in some way, and vice versa that flips the entire model on its head. Where, how can you think about as a B2B marketer?
How can I create something where my customers want to naturally become part of my offering my club, the world, because they want a stake in it. They get some value by participating in that.
Advice on how to be prepared for the future of B2B marketing
Paul (31:01):
And the value of course, is all done via tokenisation. So these are kind of very foreign concepts. It really kind of going down the rabbit hole to understand what this may mean. But it literally, I really am convinced that that it’s coming. And I think that this broader sort of wave will eventually change how we buy and sell and market products, even in the B2B context.
And so I would advise to marketers now get up to speed on blockchain, understand the fundamental tenants of what’s happening in defy, because these core concepts around how value is exchanged and incentivisation and having a stake in something I think are coming like a steam train. I think they’re coming at us.
And the people who will have a leg up in understanding this and how to leverage these concepts earlier than others will, I think be the ones that will be ahead of the curve.
So, you know, I can talk for hours about this. There’s a lot more to it, but I think just at the simplest level, it’s time now to learn about this stuff, because it may indeed change how you think about marketing, your product, your service, even in a B2B context.
Alex (32:18):
Great advice. I think you’ve inspired me to do some bedtime reading this evening, so I know what I’m going to be Googling around, but it isn’t there yet. The word is developing quickly. Thank you for joining. Thank you for sharing everything. It’s been a pleasure talking, an interesting, fascinating journey that you’ve been on. So yeah. Thanks again for your time.
Paul (32:37):
Thanks so much.
FINITE (32:40):
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