What Product Led Growth can teach us about how to work
Exploring how PLG principles can enhance how we operate
Recently I’ve been learning about Product Led Growth (PLG). This is a go-to-market approach where the product is the main tool used to drive customer acquisition and growth, as opposed to more traditional sales and marketing channels. PLG is going through a hype cycle at the moment. Learnings from leading companies whose early GTM motions were defined by this approach (Figma, Slack, Airtable etc), are being discussed on many a podcast or Twitter thread. Having absorbed a lot of these, what I found most interesting was that PLG is as much a mode of operating as it is a product building methodology. There are core principles involved which can be applied to how we work more broadly. This article isn’t an overview of PLG (I recommend checking out Amplitude’s overview on this topic, or listening to the 20VC Growth series if you want to learn more), but rather examines how PLG principles may enhance our work when applied to other domains.
Below I dive into three PLG principles referenced by multiple experts I’ve read or listened too over the last few weeks.
1.Experimentation as the default operating mode
With PLG you are going to be wrong. Frequently. You need to be ok with that.
Growth teams work on the basis of hypotheses, experimenting with various aspects of the user experience until they find a pattern which optimises growth at a higher rate. They may have prior experience that can help them decide the best course of action (and sometimes this same experience can hinder them). Ultimately they don’t know what is or isn’t going to work until they test it in the wild. While Growth teams tend to operate in a very structured manner, running experiments where each input is considered and each outcome quantified and analysed, this logic-oriented style is also somewhat freeing.
The embedded culture of experimentation and the high frequency of iterations helps avoid analysis paralysis or perfectionism which plagues many organisations, preventing them from taking timely action. If a test fails, you try again. Failure is part of the course. Learning is extracted from it and improved upon for the next attempt.
Experimentation isn’t always appropriate. I’d rather my accountant didn’t experiment with how they adhere to financial legislation. However, there are many teams that could benefit from adopting a more experiment oriented mindset. I’m convinced if teams and leaders felt more empowered to say “I don’t know, let’s try it”, companies would gain more momentum. This is particularly powerful in industries where speed is a competitive advantage. An experimental (test + measure) lens can be applied to a variety of use cases. Anything from meeting cadences, to sales pitches, to auto-approving annual leave. Framing changes as experiments enables teams to implement and role back changes in short time frames, while having the added benefit of protecting egos. It moves conversations from “I was wrong” to “the experiment provided this conclusion”, focusing on objective facts not individual flaws.
2.Provide immediate value, even if you don’t receive immediate reward
For a PLG approach to work, users must receive day zero value i.e. the product must immediately be valuable to them. PLG led companies tend to offer a portion of their products for free. It can be years before a user converts to a paid tier. Some never do. Obviously it’s unsustainable for a company to provide services for free indefinitely, however, there is a lot that can be learned from this philosophy of providing immediate user value and reaping the rewards at a later date.
Hubspot built an enormously successful business providing GTM content for free. They built a brand based on the knowledge they provided and allowed users to immediately put it into practice through the use of their free tools. Hubspot are now a $13bn company.
There are many areas in a business which this invest-now-receive-reward-later approach can be applied, especially when it comes to people. Investing in a great onboarding experience provides immediate value to a new joiner, however, the company won’t feel the effects of this until several weeks in. A coaching session will likely provide an employee with some insight, however, it is the repeated coaching that will turn the employee into a star player. Weekly management training sessions might seem time consuming but an investment in upskilling all managers will likely led to happier, more productive teams in the long term. What aspects of your business if invested in today could reap long term rewards?
3.The limits of automation are emotional not technical
Most PLG led companies eventually hire a sales and marketing team. It is a necessity for those who want to sell to Enterprise customers. Usually there is no technical reason why a large organisation couldn’t buy software off the shelf (assuming you’ve got a sliding scale pricing page that’s amenable and they have a legal team who aren’t too concerned about vendors).
When a buyer engages with a sales person they aren’t just looking to negotiate a price. They are looking for an educator, someone who can solve their problems without them having to do much of the thinking, someone who can help champion a change in their organisation and perhaps help embed that change too. They are looking for someone to make them feel at ease about the risk, someone to calm their qualms about making a financial investment, and about potentially putting their reputation on the line. If you’ve ever tried to implement new software in a large organisation you’ll know that signing the contract can be the easiest part. Driving adoption can be the challenge because 1) people tend to resist change and 2) people don’t all operate in the same way. A human touch is needed.
When working, particularly in fast paced environments, it can be tempting to want to streamline everything. We cancel meetings to make decisions async. Slackbots direct people to Notion pages where policies are outlined. We get things done and worry about those who were not consulted later. Sometimes this is the best approach to take. I’d argue that that’s possibly the case most of the time. However, sometimes it’s worth taking the slower option, particularly when it comes to building relationships. Sacrifice efficiency every so often by having the meeting instead of sending the email to ensure greater buy-in. Don’t cancel the 1:1 every time “there is nothing to discuss” and occasionally go for coffee instead. There are likely areas of your work that could be optimised by the occasional human intervention, even if a more automated approach is available. Try it. The outcomes may be far greater than you expected.
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