Product-Led Growth

Common Misconceptions of Product-Led Growth

The software market is continually evolving, and we are entering the phase of the end user. The process for buying and using software has fundamentally shifted. We can all start using a new business software with a few clicks, and are empowered to find a product that solves our own problems. That ability to find and start using software is the foundation of product-led growth.

According to Blake Bartlett of OpenView Ventures, a venture capital firm widely recognized as the leaders in PLG, product-led growth is defined as a go-to-market strategy that relies on the product to drive customer acquisition, conversion, and expansion.

Product-led growth is defined as a go-to-market strategy that relies on the product to drive customer acquisition, conversion, and expansion.

Many well-known startups have touted PLG as their strategy for rapid growth while still remaining capital efficient. But product-led growth has often been viewed a luxury strategy only available to B2C companies or specific industries.

The Better Product Podcast team set out to understand the true meaning of the term product-led growth, what it means for companies to be product-led, and if PLG was an opportunity available to all tech companies regardless of size, maturity, or industry.

Let’s break down the common objections to product-led growth and how you can introduce these strategies into your own organization.

Misconception #1: Product-led growth means that the product team is in charge

Product-led growth has less to do with the product team and more to do with the product itself. PLG strategies focus on how other teams are using the product to better enable their own work. Brian Crofts, Chief Product Officer at Pendo, explained it best during his interview with the Better Product Podcast:

“To be a product-led company means that your prospects are able to experience the value of a product before they even talk with the sales rep. It means that if you are using the product, you can accomplish all kinds of important jobs and you don’t need to reach out to a customer success manager or technical support. If you’re in marketing, you’re relying on the product so much that you’re enabling people to market it for you, to talk about it and share stories. So it all comes back to having an amazing product, but it’s how the rest of the business leverages that amazing product to accomplish their goals.”

Product-led growth puts the onus on the product team to first deliver the amazing product, but only because of the tangible business outcomes that come with having that amazing product. If product-led growth is applied correctly, it makes other teams’ jobs easier and more effective, while also creating a more seamless and empowering experience for the customer.

Misconception #2: Product-led growth doesn’t work in my industry

This is an objection commonly heard in the midwest, where tech startups are often focused on specialized industries with more entrenched practices, or where the buying decisions are in the hands of one executive.

Product-led growth strategies turn the traditional buying process on its head. Although they might be your buyers, you need to look beyond the executive — who is your actual end user? How do they think about or describe their own pain? How does your product solve that user’s pain? By orienting to the end user and then addressing their unique needs, you will get your foot in the door and start delivering value immediately, which will act as a built-in case study when that organization is ready to make a purchase decision. As Katie Lukes, Principal Product Manager at Innovatemap, explains:

“It does come down to really understanding those end users and what their lives are like. So if there’s something about that end user’s job that is difficult that you can automate or help them with in a more independent way, something they can use independent of their work software to help make their lives easier, you’re getting your name in their heads so that when the time comes for the bigger use case they’ll think of you, discuss you with their teams and with their supervisors.”

Misconception #3: My product is too early stage, too immature

5-10 years ago the concept of MVP — minimum viable product — took hold and became the go-to strategy for early stage companies to get some version of their product in front of the user, gather feedback, and constantly iterate in real-time. It allowed startups to get to market quicker, adapt to user needs, and avoid rework and loss of money and time.

What some early stage companies might not realize, however, is that MVP and product-led growth actually complement each other. When you’re trying to sell an MVP, it can difficult to cold call and “ROI calculator” that product because the buyer (usually an executive) needs more than the MVP to make a decision. But selling an MVP to an end user works. That end user is looking for a quick solution to a specific, pronounced pain point — use your MVP to hyper-focus on that pain point, then progressively build more features out until you get to a platform. As Blake Bartlett says:

“You can kind of boil the frog, so to speak, on the product, getting direct, tactile feedback from the end user right out of the gate because they’re actually using your product. They’re not waiting for the real version to be ready like an executive might.”

By using product-led go-to-market strategies and appealing to the end user, you are able get the product ready piece by piece and hone in on the specific pains of your users before you even have to talk to an executive level buyer.

Misconception #4: My company is too established to transition to product-led growth

It can seem like an intimidating path to walk down, especially if your organization has entrenched sales and marketing-led strategies, but if you truly want to make the transition it is possible at any stage. As Blake Bartlett explains, product-led growth is a multi-disciplinary approach that requires every team to get on board.

The first step in the transition is what Bartlett calls “the three PIs.” This stands for product persona pain identification. Map out the flow from the executive who buys your product, down the organization, to the person actually using it. Document a dual track flow of the executive vs. end user adoption process, and then orient the team toward the pain your end user has in their day to day workflow that your product will address.

You need to include marketing, design, sales, customer success, and leadership in this process, because (as covered in misconception #1) product-led growth involves the entire team. But despite the strategies of the past, your organization can adopt a culture that is all about the user, making their lives easier, and solving their problems with your tool.

Product-led growth is an overall organizing framework that encompasses a wide variety of go-to-market strategies, and it is not a one-and-done solution to all your product problems. At its core, PLG is about demonstrating value first and asking for something later. It is about giving end users what they need in that moment without getting in their way. It is about enabling teams across your organization to do their jobs better and more efficiently, and making your product do a lot of the work for them. The obsessive focus on the end user is the linchpin of PLG, but once you build that culture your organization, regardless of stage, size, or industry, is ready for product-led growth.

If you’re looking for more content around product-led growth, tune in to our series on the Better Product Podcast.

Ready to go?

Join thousands of product professionals from digital product companies around the world.