In this episode, he discusses the value of community for Founders and Execs and how it was crucial to the success and growth of Alteryx as a company.
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The Community-Led Show #7: TL; DL
Alteryx is a computer software company that provides products used for data science and analytics. Their software is designed to make advanced analytics accessible to any data worker.
Dean Stoecker says the company has managed to perfect the democratization of data science, analytics, and analytics automation — and their huge success is all thanks to the power of community.
“Clayton Christensen used to talk about disruptive innovation, and he said that it’s really about taking old practices and liberating them across new user communities. At Alteryx we did that. We took a complex area of data science and analytics and we simply brought it to the people in the line of business who otherwise would have drowned in Excel and hated their jobs.”
Dean and his team believed that in order to elevate their customer's skill sets — especially with a sophisticated and powerful platform like Alteryx — they had to have new means to upskill them, and community became a really critical component in that build-out.
For Dean, the idea of community started with his first email back in 1990.
“I've always been a social being, and I've always known that allowing people to talk, share ideas, and evolve their capabilities was imperative for us at Alteryx,” he says. “I think the lesson for executives is that it's not an overnight success. You have to evolve your way to greatness in community.”
Alteryx started in 1997, although the platform was released in 2006. In 2008, Dean had gone to a couple of customer meetings and found that they were using their product wrong.
“I was embarrassed for myself,” he says. “I was embarrassed for the company because we hadn't trained them. We hadn't shown them what the product could do. We didn't communicate its benefits or its ability to change their lives or make their jobs easier.”
So in 2008, Dean started a customer-centricity effort by implementing customer-first initiatives and starting a customer conference.
“Community to me is having both face-to-face and virtual. Our first attempts at it were with our Inspire Conference. With our first one, even before 2008, we struggled to figure out how to get people together, I think we had 90 attendees at that one,” says Dean.
In just a few years, they went from 90 to 20,000 attendees at their events, and this was about two years before they even officially started a community. To cement their community success, their next step was to start user groups.
“We decided to start user groups so that our customers who attend the Inspire Conference could feel and share their excitement all year-round.
“We put together quarterly user group meetings around the world, I think we got it up to 30 or 40 cities and we started putting 40, 50, 60, 100 people, each quarter in each of these meetings. Through these, we started programs to put users into leadership categories called ‘ACEs’ — the black belt of our platform,” he says.
By 2014, he knew that they had to start something different because in-person meet-ups just weren’t sustainable.
“We were growing so fast and couldn't scale linearly with support, marketing or product,” he says. “We didn’t have the means to communicate with the people and allow the community to communicate with each other in meaningful ways.”
In 2015, Alteryx finally launched their community.
Their very first community leader? None other than our very own Brian Oblinger.
“We brought Brian in to build out the first version of community and I had it report to me,” says Dean. “I made Community report at the executive level because I knew that it had to have the messaging from the highest level in the organization so that employees, our customers, and our partners knew that this was serious stuff, that we meant business.”
“Having a community wasn't just about getting together once a year or once a quarter, or naming ACEs, it was about putting together an environment where people could ideate, share ideas, and give us feedback. To me, it was the beginning of something very special and I think software companies need to pay attention to community if they're serious about some measure of customer-centered behavior in their organizations,” he says.
The value of having a community cannot be overstated, and Dean knew this from the start.
He tells Alex and Brian that he had Community report to him so that the rest of the company knew that they would have to adjust their behaviors and their ability to think differently about what it means to have customer=centric behaviors.
“There are a lot of companies who see community as a cost center and don't really get value out of it. There's risk in doing this but for me, the biggest challenge was our products team. I told them we have a sophisticated platform, it's got 260+ building blocks that you can build out any analytic capability on. That’s billions of combinations and no one's ever going to learn this thing if we don't give them a frictionless environment to share and communicate with each other,” he says.
Dean told his team that the way they’re going to do that is by embedding community in the product.
Dean believes that executives need to isolate their own KPIs and try to figure out what they have to do to achieve those.
“Almost the entire 24-year journey for me at Alteryx was about having limited but very critical KPIs for myself,” he says.”The first was Net Promoter Scores (NPS) coming from associates. If our associates are engaged, then customers are going to be engaged.
“My second KPI was NPS coming from customers. Customer trust defines the integrity of your company and if they don't trust you, it's going to come out in very negative NPS scores. I would argue that we've got probably twice the industry average for commercial B2B enterprise software plays in terms of our NPS scores.”
His third KPI was the economic one. For him, this was where people missed the boat when it came to community.
“The third KPI was about the net expansion of revenue. That’s a cumulative measure of your current customers, including churn, but also how much additional product gets purchased. So to maintain considerably higher than industry SaaS industry net expansion numbers, I had to have a different path to get there.
“Customers don't want to call up tech support and ask questions — they want to actually talk to experts who are in their field, that maybe are in the same geographical area or maybe they're in the exact same vertical with the same use case as them. They want to chat with those people. Not that tech support is bad, because you have to have tech support, but you want tech support to be handling really tough challenges.
“So one of the economic benefits beyond net expansion is just ticket deflection. If you build the community right, you should see no less than 80% ticket deflection and in our case, north of 90% ticket deflection,” he says.
As we touch on in the show, we've got a whole host of things available on our Community-Led site. There, you'll find the Community-Led Growth Model, The 2022 Community-Led Report, and the Community-Led Assessment.
Carrie Melissa Jones