When I worked at Atlassian, we acquire Trello for $400M in cash but it never filled the vacuum Jira left open. It's great for engineers but not for marketers, salespeople, or other knowledge workers. Asana figured out how to occupy that gap and now they're going public because of it. Reason enough to tear apart how they did.
Asana's revenue grew by 86% from 2018 to 2019 - almost double!
What's fascinating me about the company is what they call "the work graph." Facebook mapped a graph of personal relationships, Linkedin the graph of professional relationships, and Asana goes a step deeper and builds a graph for work that gets done. This can be in the form of projects, tasks, goals, people, files, ... Pretty much anything that goes into a project.
The goal of a graph is to understand things better. It's a map. As such, Asana helps knowledge workers, leaders, and managers understand how work gets done and what needs to get done to reach a certain goal.
Asana's mission to map work and make it more efficient is one of the reasons they achieve Product-Market Fit but not the only one.
Land & Expand = Freemium + self-service + sales
Asana's S1 offers a flawless definition of the Land & Expand model:
Our hybrid self-service and direct sales model allows us to efficiently reach teams everywhere and then rapidly expand the use of our platform within their organizations. A majority of our paying customers initially adopt our platform through self-service and free trials. Once adopted, customers can expand through self-service or with the assistance of our direct sales team, which is focused on promoting new use cases of Asana. As customers realize the productivity benefits we provide, our platform often becomes critical to managing their work and achieving their objectives, which drives further adoption and expansion opportunities.https://www.sec.gov/Archives/edgar/data/1477720/000119312520228462/d855753ds1.htm
Land & Expand is the most friendly SaaS growth strategy, in my opinion. Startups commonly start with strong product-led growth and Word of Mouth when they see decent Product-Market Fit (PMF). Then, when they see this slowing down, they add a direct-sales team that targets accounts that are most likely to expand and build on more channels. Land & Expand scales with the company and doesn't demand a lot of upfront investment - just strong PMF.
Every startup in hyper-growth knows its value threshold: the point at which customers understand Core Product Value. Slack, for example, knows that 2,000 messages increase retention significantly. For Jira, it's a certain number of closed tickets. Facebook found out it's 7 friends made in 10 days. So, I thought to myself that there has to be something for Asana, too.
And, in fact, they mention in the S1 that "The core tenet of our platform is to bring clarity, transparency, and accountability to the process of getting work done."
After more digging, I found a hint: "An activated account represents an organization or individual that has collaborated with another user." But I never found out how collaboration is measured.
A core staple of Atlassian's growth is champions that bring products from company to company over their career (I guess I'm one myself bringing Confluence to G2). Asana systematized that play with a dedicated ambassador program.
Small efforts are usually enough for such a product: swag, meetings with the team, in-depth training. People mostly care that they have been chosen, are part of a special circle, and get extra benefits.
Apart from the elegant execution of the Land & Expand playbook and product champions, Asana made one strategic move that drove a lot of growth: an open API. The API allowed other products to integrate with Asana and led to the huge marketplaces of apps. It turned from a point solution to a platform.
Building platforms is extremely important nowadays because there are so many SaaS solutions out there. So, you either build a platform or integrate with one. Almost all hyper-growth startups need to build platforms. As Asana wants to be the operating system for work (my words), it's important to make it play nice with other applications.
Asana's brand is built well and to me, a major driver of growth. In fact, all successful Land & Expand companies build successful brands in the process because they get such a high degree of referrals (expand).
Only part of Asana's brand was built through actual marketing activities. A large chunk comes from providing a first-class experience. The stickiness of the product creates brand awareness and consciousness.
"We will continue to build our brand through customer experience and broader engagement, marketing, and industry and analyst education. In 2018, we were recognized by Forrester as a Leader in Collaborative Work Management Tools for the Enterprise based on a range of criteria, including the highest scores possible in customer satisfaction and pace of innovation criteria."
Relatively high investments in R&D are another trademark of successful Land & Expand companies. As Tom Tunguz pointed out very well, Asana's R&D spending is even higher (63%) than Atlassian's (44%) or Slack's (39%). As a Land & Expand company, you can afford it - and you must. The product is your main growth driver. Stop innovating and you stop growing.
The pricing structure is very important for Land & Expand to work because it's all about low friction and price ads a lot of friction. You want a pricing model that's structured around Core Product Value and a low barrier of entry. So, you either make the product so valuable that users overcome pricing friction or reduce the price. In best case, both.
Asana's pricing has three basic tiers: premium, business, and enterprise and scales by the number of seats, which makes the most sense for a product that revolves around teams. The larger your team, the more you pay. And this makes sense because team size is often correlated with the size and maturity of a company. Larger companies have larger teams and bigger bank accounts.
Customers also get more (valuable) features when upgrading from one tier to the next. And again, it makes sense: you need more tools to manage a larger team. Asana's value scales with team size and price. It's very fine-tuned.
In today's world, it's important to know your competitors to understand how to position yourself. You don't just compete with similar products, you compete with similar solutions. Reed Hastings figured that out pretty well when he said that Netflix competes with Sleep. Well, Asana competes not just with Jira, Monday, or Trello. It also competes with Spreadsheet and Slack - anything that helps you get work done.
They point that out specifically in their S1:
Asana's advantage is its flexibility and simplicity. It's very easy to get started. Together with the freemium tier, the barrier for entry is really low. It's a good trait to have when you compete with free spreadsheets.
Tech Bound wouldn't be Tech Bound with a little stint into SEO. To be fair, SEO is not the main driver of Asana's growth but a nice accelerator.
Asana's landing pages rank really well for key terms like "task management software", "team calendar", "workflow management", and many others.
How do they do it?
First, the content is very structured and covers the "what is", "why is it important", and key benefits.
Second, the landing pages are very clean, make it easy to digest the information and find what you're looking for.
Third, as you can tell from the URL, the landing pages are clearly optimized. Wayback Machine shows that the Work Management landing page used to be the "work tracking" landing page but no one looks for "work tracking".
These landing pages are linked from blog articles (example: https://blog.asana.com/2017/11/cracking-the-code-6-steps-to-achieving-your-company-goals/) in a classic Topic Cluster fashion. This way, PageRank flows from blog articles (which are more likely to get links) to landing pages. This is the model I outline in The best internal linking structure depends on your business model.
Asana also started their own publication, called wavelength (on a subdomain but well). When you scroll to the bottom of the homepage, you find a nice tile area of core issues the publication covers: mastering productivity, managing and leading teams, managing yourself, etc.
This is a great example of a fantastic user experience that extends across the product. I can immediately find the content I'm looking for. Good experiences create returning users and engagement. I'm not sure Asana found Content-Market Fit but it definitely gets some points right.
Asana is a best practice for Land & Expand, brand building, and low friction. The company has a ton of potential in expansion within big enterprise accounts, at least judging from the outside.
Potential growth levers are optimizing and growing their integrations marketplace, creating stronger integrations, and building more growth loops on top of their product-led growth and direct sales team.