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What is Product Led Growth

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manav chugh

Jul 15

What is Product-Led Growth?

Product-led Growth is a mystery at times. So what is Product-Led Growth?

Traditionally, as confessed by many product people, decisions in the organization were taken using a top-down approach. Investors and executives were the only ones who decided what is to be built in terms of the product roadmap, what value the features will provide and they were the only group in the whole organization who understood what is being sold. Product success was based on functionality but no thought or effort was put into the user experience. Why spend time, money, resources on creating value improving user experience?

Photo by Markus Spiske on Unsplash

Fast-forward 30 years, now many organizations use the “Product-Led Growth” term. There seems to be a mystery around this term and its application. The software sales process model as compared to the times I talked above, doesn’t mean selling the product down an organization but ensures a new customer, unassisted by sales (software sales team do not be worried), is able to get around the product and see immediate value quickly enough to determine how much they want to pay and how long do they want to hire the product to solve the problem.

So what is Product-Led Growth?

VC firm Openview defines product-led growth (PLG) as “a go-to-market strategy that relies on product usage as the primary driver of acquisition, conversion, and expansion.”

In simple terms, create a great product, let users try out the product or part of it. If it helps them or generates some value, they’ll possibly spread the word about it to their colleagues, in their organization. So let the users (not decision-makers) fall in love with the product and it will spread by itself. Users should be able to get around the product, make their own experiences based on the product. This does not require whitepapers, no long demos, and users can play around with the product for themselves.

There are many tools developed by organizations, we use on a daily basis that is based on being product-led and drive exponential growth, and others look to replicate their success. Some being Slack, Dropbox, Calendly to name a few. Today’s product leaders and teams make sure about delivering high-value experiences at every stage of the product journey. You don’t need a Marketing team to pay for advertisements on different platforms and you don’t need a huge Sales team to sell the product. All you need is a product that’s really, really great. The idea is, create a product that relies on the idea that if a product is good, it’ll drop on the market and grow on its own.

How do organizations do this? Product-led growth is not as simple as offering your product for free, so you would have heard about free trials, freemium versions. Many organizations use this process to create emphasis on products to provide instant gratification to the end-users, but it is easier said than done. It requires an organizational shift. It requires getting everyone on board which means, it’s critical to get stakeholders to shift their mindsets. Each team must leverage the underlying product to hit their individual goals. Being product-led means putting your product at the center of your organization.

Closing Remark

A product-led philosophy is more than just a term. That’s because the entire way that users interact with products is evolving, and their expectations from products are changing. Companies have to step up and provide these engaging product experiences to stay competitive.

Sales, engineering, design, product managers, customer success, and support each have different roles, but each prioritizes how to support the product as the most sustainable growth engine.


What is Product Led Growth was originally published in Dynatrace Engineering on Medium, where people are continuing the conversation by highlighting and responding to this story.

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author

manav chugh