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Product Management — 08.26.2020

Where to Start with Product-Led Growth Transformation

Christian Beck, Executive Partner, Growth Strategy & Design

If you’re founding a tech company today, there’s a good chance you’re familiar with product-led growth (PLG) and ready to build your product with that in mind. If not, you’re probably thinking “I just want to grow like Slack did” or “I want people to start using my product without a lot of hand-holding.” In either case, you’re lucky because you are founding a tech company from the new digital product playbook.

But, most product leaders and CEOs don’t have it that easy and instead are embarking on the process of product-led growth transformation. This is critical because product-led growth–while fairly straightforward in its value and benefit to growing efficiently–is challenging when you have years of growing and building product in sales, marketing, or even founder-led growth models.

As product leaders ask me where to start, I have found that existing content around product-led growth skips the transformation part and right to the part where you’re set up to succeed and optimize. In this article, I want to break down product-led growth transformation and highlight areas where to start as you transition your product.

Support your team’s product led growth education

Don’t assume that because you are aware of PLG and its benefits, others on your team are, too. PLG is as transformative as movements like Agile Development, or even methodologies like Pragmatic Marketing were over the past decade. This is a sea change. You don’t need to shoulder the burden of educating your team. A few areas to start:

  • Business Leaders – I recommend subscribing to Tomasz Tunguz’s newsletter because while he rarely mentions PLG, he highlights the business effects and strategy behind it frequently.
  • Product Leaders – OpenView has led the charge on PLG for several years and highlights case studies well.
  • Practitioners – Reforge provides amazing classes and I highly recommend checking out their growth series.

I’ll also plug our Better Product podcast where we cover this topic quite a bit. Start with our PLG series.

Assess your team

PLG varies from industry to industry but there are few constants you’ll need to have in place to be successful.

Key product functions

First, design and product management is a critical component. There is no way to be successful without first ensuring you have those roles identified. You may have them in-house or use a trusted outside partner, but in either case, you cannot adopt true product-led growth without them.

  • Product Management – This is the role that ultimately owns PLG and will ensure that growth projects tie to a higher business strategy. For example, if you have a goal to increase account growth in Q2, the PM team will help determine what feature sets play a part in that goal.
  • Product Design – This role will have strong impact both on brand and product marketing, and user experience (UX). First, brand will do some of the heavy lifting for setting the right expectations for customers. They should be excited and understand clearly what your product does before first use. UX design will take over from there. They ensure a user knows clearly how to get started with your product, how to upgrade, and sees value quickly.

Pre-existing roles

You will also have to work with marketing, sales, and sometimes services which will likely fall outside your product team. This is one of the biggest transformational challenges because PLG has the phrase “product-led” in it, rather than sales or marketing-led. But in PLG organizations, these roles are as critical as before, but with different seats on the bus.

  • Marketing – You’ll want to have someone from that team working alongside product to ensure how prospects become buyers, and how MQL’s can tie into PQL’S (product-qualified leads).
  • Sales – Moves from the beginning of the process, to later in the customer lifecycle. They will have less responsibility for sourced deals, and become more responsible for growing accounts and converting free tiers.
  • Services – Part of what customer services does should disappear if it hasn’t already: setup. Unless you are building a product that works with highly complex data or integrates with entrenched enterprise software, your product should not need a human to get someone started (this is where UX shines). Much like sales, services should be used for expanding and growing accounts. If you look at a common B2B pricing page, services are what comes in under the “Contact for details” option.

Find a starting point

As you continue on the PLG transformation journey, you will eventually have key metrics tied to the product team, with revenue goals to match. But as you’ve educated and assessed your team, your PLG readiness will vary. On top of that, you’ll have to transform product and R&D spend, and reallocate resources in ways the company has never done before. Realistically assigning revenue goals to product could take six months or even years to achieve and that’s ok. Here are a few ways to think about where to start:

  • Revamp user onboarding. There is no such thing as a PLG company that requires a tutorial or customer support to get started. If you’ve procrastinated on this, now’s the time to take it seriously. You can go lightweight and use onboarding tools like App Cues. But your goal should be to revamp the journey from finding out about your product to usage so that you minimize drop-off and customer support messages.
  • Set your product up to use metrics. Much like marketing needs Google Analytics and referral tracking codes, you’re going to need the same thing in the product as well. Early on, you need it to establish benchmarks like where do users spend the most time? How often are they giving up on a task? Later, you will use tools like Pendo to optimize your product.
  • Establish achievable goals. You don’t need to assign revenue responsibility to your product team today, but you should know how product goals will track to business goals. And with a clear assessment of your PLG readiness, you can establish goals that are reasonable. For example, if you have a lot of support calls, you may simply want to decrease customer support messages. Or if you aren’t converting free trials, experiment with upsell notifications in the product.
  • Carve out a growth team. Mature companies like Pinterest have independent growth teams, but to start, you can build a growth team by borrowing time from sales, marketing, product and design. For example, if you set a goal for a percentage of users to onboard themselves, that’s a great project for a cross-collaboration amongst those teams to execute.

If going SaaS or in the cloud was the way to win over the past 15 years, going product-led growth is the way to win over the next five. And products that aren’t built this way from scratch face a particularly daunting challenge changing old habits and revamping existing processes. If you don’t adopt product-led growth, the upstarts will–and do so quickly. Now is the time to begin your transformation.


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