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7-min read
November 9, 2022

Communities of Practice: Inside Pendo’s Mind the Product Acquisition

When Joe Chernov joined Pendo, he’d never marketed to the company’s primary user base before.

Pendo, as the Chief Marketing Officer, describes it, is “software that makes your software better.” Though it can be used by folks in a variety of roles, the product adoption platform — which helps Product teams understand usage patterns and guide users to more successful outcomes — usually resides within the realm of Product Managers.

For Joe, this was uncharted territory. “I had never marketed to Product Managers before, so when I entered Pendo there was this sort of wave of new information, new brands, new communities all coming at me,” he says. But there was one that stood out: Mind the Product.

The 12-year-old community is the world’s largest product community, boasting 150,000 members across the globe. It was MTP that helped Joe understand Product Managers: the nuances of their role, their pain points, and just how tricky it can be to be the “mortar between two bricks”.

Despite having a product community of their own, ProductCraft, Pendo acquired Mind the Product in February 2022.

“We did an extraordinary job with our own community, but Mind the Product was simply much bigger,” Joe says. “There was much more member-to-member activity, member-to-member engagement, it was stickier. We look at our ProductCraft community as the proof of concept we needed to go on to acquire Mind the Product.”

There was a purity to MTP, he adds. “The team was solely focused on the community, and so they were sort of impervious to the temptation of trying to monetize through selling software.”

Here, Joe unpacks the decision to acquire Mind the Product, the value Pendo sees in community, and offers some advice for other companies looking to partner with established communities.

Product Managers need community

Joe Chernov: Product people are in a tough role. They're stuck in between — they are technical but they're not necessarily engineers. They are business-minded but they don't run a line of business. So product people are almost like an API between the Research & Development team and the Go-to-Market team. It’s one of those essential roles that is like the mortar between two bricks.

And that can be a lonely role, because they manage by influence, not control. They have a limited span of control, but an enormous amount of influence. Roles like these benefit so much from having a community. There's nuance to the role, it's as much art as it is science. Having a community of other people in that role to draw on helps them navigate that nuance.

The business value of connections

Joe: Every year, we have our user conference Pendomonium. Our CEO, Todd [Olson], is a brilliant guy. He's an engineer and he helped write the code for Pendo. You would think that he would measure marketing by leads in, deals out. But instead, his measure was, ‘How many people seemed excited?’. He really eyeball-tests it, despite the fact that he's a super technical guy.

One of the ways we measure Pendomonium is by anecdote. And the anecdotes that draw him in are our customers talking about how they've made friends for life at Pendemonium, and we totally get those messages at the end of these events.

So yes, user conferences lose money when you just look at ticket sales plus sponsorships, subtracted from the overall cost. But to him, we make up for it and then some not only when our customers network with other customers, but when they build lifelong friendships with other customers.

Yes, we provide the environment for that to happen, but imagine how challenging your role is when you are responsible for the product. But have very, very limited resources, you don’t generally have a huge budget, you don't have control over our R&D, you don't have control over the line of business — how the heck do you make that happen? That's what we’re trying to tap into with Pendemonium and it’s the main driving force in Mind the Product.

An evolutionary leap forward

Joe: We did a really great job at creating a community called ProductCraft. We had annual events, we have an online community, we have an editorial hub. But ultimately, I’m measured by how much pipeline I create for Sales and that requires a large, engaged audience, especially when you’re not explicitly trying to sell to them. And Mind the Product was simply much bigger. There was much more member-to-member activity, member-to-member engagement, it was stickier. We look at our ProductCraft community as the proof of concept we needed to go on to acquire Mind the Product. That group was solely focused on the community, and so they were sort of impervious to the temptation of trying to monetize through selling software. There was a purity to it.

We learned a lot from building our own community — we learned that it's immensely valuable — but Mind the Product allowed us to take an evolutionary leap forward in terms of the scope of the community.

Quantifying the value of community

Joe: Everybody has a different way that they would quantify [community] value. You know, it's not like we're buying revenue from another software company and we could just attach a number to it.

What we looked at is the rising cost of demand creation overall, the rising cost of getting somebody that click on an ad, and we said, one of the ways you drive down that rising cost is brand awareness. The more people know you, the less work that ad has to do to get somebody to take action. And then we asked, do we think people will know us more if we and Mind the Product are one and the same? So there was just an obvious yes. Then we looked at the size of the community, we looked at the breadth and we're like yes, of course, people are going to know us more.

The more scientific — and I'm using air quotes here —  part to this is how much does it cost us to acquire a new name in our database? And how much does it cost us to acquire an engaged new name in our database? Obviously, the latter's more expensive. And now we were to apply those costs to the Mind the Product database just in clinical terms  — what's it worth to us?

Community x Marketing

Joe: For any community, the fastest way to destroy it is to attach marketing KPIs to it. Because you join a community to frankly escape being given biased information by marketers. You want real information from real people.

Now that doesn't mean that there's little value in community or you can’t quantify the value in communities — we look at traffic referred to Pendo by ProductCraft as our most valuable traffic. It is more valuable than organic search traffic. If somebody discovers our community and then finds Pendo — if they convert they're going to become a customer. So it's softer, it doesn't make for the best slide in a board presentation, because there are a couple of mental leaps you need to take. But we know that we're planting in fertile soil.

The thing I learned from the Mind the Product acquisition is that marketers have a temptation to stripmine. And communities have a temptation to fertilize soil. And those temptations are each far more intense than I realized.

I thought it was somewhat like we had a bias — marketers had a bias to try to convert and communities had a bias to try to protect the purity of those relationships. But it's far more than a bias, and so the divide in mindset was greater than I expected going in on both ends.

Now I actually think that's a natural and healthy tension. There should be a bias in marketing to figure out how we can help sell more software. There should be a bias and community that says ‘not at the expense of the member experience.’

I think that the two sides continue to take steps closer to one another. So that's been a little bit of a bridge right, how do we protect that community, but at the same time see how we might be able to deliver enterprise value to Pendo. And that's been a bit of a dance.

Giving community space to thrive

Joe: My advice for SaaS companies looking to acquire a community: leaving it alone is a really good strategy. If you acquire a community or find a clever way to partner with the community, first do no harm. First, leave it alone, let it sit for a while, and let the team acclimate. Community members hear that their community was acquired by a company and they’re like, ‘All right well there goes the neighborhood.’ You tilted the pinball machine and you have to let it set before you can play another game.

But it's not just community members — it’s the team too. I underestimated this adjustment. Their world changed pretty dramatically. Here are people that had one mission and suddenly there's an entirely new mission. And understanding how their mission fits into the larger one takes more time than I realized, and it takes better communication than I delivered initially.

And so I think that's the easier part to overlook. Most folks will realize that the community needs some protection and the community needs to be left alone, but so do the people that built it.

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Kirsti Buick
November 9, 2022

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