Klaviyo: 7.5 Go-To-Market Learnings From Their Success

You've probably never heard of Klaviyo unless you are a Shopify customer or in the e-commerce space. I didn't know much about them either and totally looked up how to pronounce their name (more on that later.) So what's so special about Klaviyo? Klaviyo filed their S-1 to go public last Friday - As Tomasz Tunguz said in his newsletter "one of the first software companies to do so since the beginning of the economic downturn in late 2022. It’s a marvel of business with strong growth, great efficiency & the potential to reignite interest in SaaS IPOs." I dove into their S-1 to see what all the fuss is about and learn why they achieved such incredible results. What I found was pretty awesome from a go-to-market standpoint. Very cool combination of growth strategies. First before I jump into the learns, here is what they have achieved so far: - Almost $500m in revenue in 2022, growing 60%ish year over year - Profitable as of June 2023The company raised $455m in venture capital, but has used only $15m - Cost of acquisition payback period of only 14 months - 119% Net Dollar Retention - When the company spends $1 in sales & marketing expense, Klaviyo produces $1.03 in gross profit next year. - Lots of strong competitors such as: Adobe, Salesforce, Mailchimp, and Braze but still growing like crazy So how did they do it? I take a deep dive into 7ish go-to-market learnings I found from Klaviyo on this week's GTM News show. Here is summary of the learnings: 1. Great product that has an cute market need (yeah, I get it no brainer but shouldn't be discounted) 2. Growing market & focused on one vertical to start (e-commerce & retail) 3. Demonstrated impact through their version of ROI: Klaviyo at scale (KAV) 4. "Maniacally" focused on easy self service expansion 5. Crushed one GTM motion (PLG) and then went up market naturally (enterprise customers came to them) 6. Strategic Partnership with Shopify: ecosystem growth but didn't rely on Shopify to drive all the growth 7. Partner-led: over 5,000 agencies/consultants referred customers in 2022 (!!) 7.5. A good name is everything? I don't know about that. Can't tell if their name is brilliantly random/unique or it doesn't matter. And oh, they completely made it up. - What a cool company. I love to see companies create a great product, do awesome marketing, and get to profitability without blowing a ton of money along the way. What do you think of Klaviyo? P.s. S-1 and other public information are the only metrics or "benchmarks" I really trust these days. So much of the success metrics and benchmarks are lacking context. By law S-1s have to be overly transparent and share all the negatives and risk factors.