How to make a strong case for Product-led Growth (PLG)
So much has been written about product-led growth (PLG) and among the thousands of words extolling its virtues, a lot of praise is rightfully heaped onto its potential benefits. The ultimate economic benefit of PLG is highly efficient and exponential growth, driven by a cost-effective self-service business model - where the product itself creates a flywheel for growth.
It all makes sense on paper, it reads well but in every conversation I have about PLG with founders and CXOs, a few big questions seem to be on their minds:
"How do I know if PLG is right for you in the real world?"
"And what are some common traps to avoid as I get started?"
These are two of the most common and heaviest questions I hear from founders every week, across different types of startups and scale-ups, whether horizontal or vertical SaaS.
Note - a previous article gets into origins of PLG as well as how to logically think through it before getting started. But here's a quick primer on how founders and CXOs can methodically start thinking through the first two questions.
Let's start with the first question. There are three areas that can help you validate whether PLG is right for you:
Product
Your product - can be quickly adopted with minimal human assistance or intervention.
The internal experience of your product's features encourages users to share its work-product or benefits with others in their own team or adjacent teams.
Your product's benefit can be quickly realized through onboarding and the person using your product can easily use most if not all your features within a matter of days.
Persona
The persona responsible for buying your product can act quickly and wants a self-service way to try and buy.
The persona who will benefit from your product is inclined to do their own research online and doesn't need multiple conversations with humans before deciding to try your product.
The persona who has the most pain and will get the most value out of your product doesn't have to convince ten other people or departments just to try it out.
Ops
Your company has built or is willing to invest in commerce systems that allow anyone to try and buy you with speed and ease.
Your company can implement telemetry and instrumentation to analyze your PLG funnel in a disciplined and rigorous way.
Your company is willing to invest in a (small but mighty) scrum of team-members focused on product-led growth end to end.
If you find that PLG is right for you, it's natural to get very excited and enthusiastic to dive right into it! But founders and CXOs are equally concerned about not falling into traps as they invest their time and energy. So here are a few common myths and misconceptions:
Missing the forest for the trees - many founders or CXOs come to PLG from a very specific angle. For example, a lot of the founders I speak with are very concerned about churn (as they should be!) and this is the trigger for PLG. But sometimes this misses the bigger picture, where churn is a symptom of a larger root cause that they may never truly understand from a narrow vantage point.
'Growing hacking' or growth experiments is mostly PLG - Similarly, sometimes founders are focused on getting to the 'next level' of growth. Over time, they and other senior leaders develop a set of ideas that sit in a backlog, waiting to be tested. While it's good to collectively gather ideas, a scattershot crowd-sourced approach to hacking away to drive growth doesn't work because it's not based on a common view of a buyer journey or end-to-end funnel hypotheses.
Launching a trial or freemium model and leaving users alone - Many product or marketing leaders sometimes believe that once you launch a trial experience or a free version, and you have a landing page, content, etc. your work is mostly done. In fact, your work is just beginning because getting PLG right means you can't abandon users along the buyer journey.
PLG is a product initiative so we should let PMs deal with it - There's a reason that PLG is 'product-led' and not just product-only. In fact, PLG is a 'whole body' challenge, this means it's a multi-faceted system that spans your entire company - from product to marketing (and even sales), all the way to finance, legal, customer support as well.
PLG is a simple Yes or No decision - Adopting PLG is neither a binary decision nor a single-track approach. There's a PLG continuum where it can not only coexist with other GTM motions (whether mid-market high velocity or enterprise ABM) and you can also achieve progress in an iterative agile way.
You don't need marketing with PLG - unfortunately if you build it, they will not come. PLG doesn't exist in a 'field of dreams' world where the product simply sells itself. You need to show AND tell. You need a strong marketing team that can get users excited by inspiring and educating them to sign up for your product. And then you can balance that with in-product nudges and loops to guide the user towards committing to you in the long term. Both need to be tightly aligned and and work in harmony.