What the Heck is Product-Led Growth?

Every few years, a new buzzword pops up in the digital marketing space and gets everyone all excited. A few I’ve seen in my time include “digital marketing,” “conversational marketing,” “growth hacking” and “viral loops,” but there’s another hyped-up phrase making the rounds these days:

Product-led growth. 

Blogs are going up on the subject, and influencers are rushing to put their own spin on it. But what is product-led growth, really? Is it something you need to be paying attention to? Do you need to drop everything to start focusing on it? I’ll attempt to answer these and other questions in this article.

So What is Product-Led Growth?

Several SaaS insiders have attempted to add their own definitions to the concept. Here’s one from OpenView Partners (aka, the people driving the excitement behind the idea): 

“Product Led Growth (PLG) is a go-to-market strategy that relies on product usage as the primary driver of acquisition, conversion and expansion.” 

Another definition comes from The Product-Led Growth Collective (who, based on the name of their organization, have clearly bought into the concept and are running with it):

“Product-led growth (PLG) is a business methodology in which user acquisition, expansion, conversion, and retention are all driven primarily by the product itself. It creates company-wide alignment across teams—from engineering to sales and marketing—around the product as the largest source of sustainable, scalable business growth.” 

New Breed Marketing defines product-led growth this way:

“PLG is a go-to-market strategy that relies on the value of a company’s product to enable them to attain rapid growth. The principle is that as users gain value from interacting with a product they will begin to weave it into the way they operate day-to-day. As more people at the company use the product, it becomes integral to the business as a whole.” 

One final definition comes from Wes Bush, author of Product-Led Growth:

“Product-Led Growth is a go-to-market strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers.” 

Is Product-Led Growth Really New?

All of those definitions sound great, but here’s the thing. When I look at them closely, I don’t see a whole new paradigm, the way it seems some people are trying to define “product-led growth.” To me, these and other descriptions are all just talking about, “what it takes to have a strong product-based company.”

Consider the part of New Breed Marketing’s definition that reads: “PLG is a go-to-market strategy that relies on the value of a company’s product to enable them to attain rapid growth.” 

A product that isn’t valuable isn’t going to attain rapid growth. A product that doesn’t get used isn’t going to earn widespread adoption. Sure, you can prop up numbers temporarily with different referral and advertising schemes, but that’s not really growth. Products have to offer true value to grow at scale, but then it isn’t the product that’s driving the growth. It’s the value that has the impact – and that’s true of every other product or service out there that’s successful.

Take Dropbox as an example. A decade ago, it was using product to generate leads and drive business – even though there was no such thing as “product-led growth.”

So even if it’s not a new concept, I still see opportunities for the SaaS world to benefit. More focus on product means better full funnel accountability, while companies that invest more time and effort on product can put less into sales and marketing. And I appreciate that the idea of product-led growth lets product be involved in these marketing and promotion efforts – rather than siloing it away from sales and marketing conversations.

But let’s not kid ourselves. “Using your product as the main vehicle to acquire, activate, and retain customers,” isn’t some dramatically different way of doing business. That’s just building a strong product that’s attuned to the needs of its market.

The Key Components of a Product-Led Growth Approach

So, if product-led growth is basically the same thing as building a good product, what key components need to be present to fuel the success of this model – regardless of what you want to call it?

In my opinion, building a strong product requires the following considerations:

Minimizing Friction

I could be charitable and say that people are busy. They don’t always have the time to sort through features or knowledgebase documentation to discover your product’s value if you don’t make it obvious for them.

But really, we’re often just lazy. We want things spelled out for us, and we want to know how whether or not a particular product is going to work for us as quickly as possible. 

That’s where minimizing friction comes into play. Friction inhibits usage – and it certainly limits adoption within organizations. Here are a few of the ways it manifests in product:

• An overly complex sign-up process
• A lack of onboarding and/or activation training to get new users up-to-speed quickly
• Asking users to do too much, too quickly
• Unnecessary features or steps 
• Limitations that prevent multiple users within an organization from collaborating effectively

These aren’t the only kinds of friction affecting product, and they don’t apply universally. Building customer teams and deploying analytics tools that can identify points of friction within customer usage patterns can help identify where these issues could be limiting your product’s growth.

Demonstrating Value Early On

Failing to demonstrate value early on contributes to friction, but minimizing friction isn’t the only reason you should care about proving your value upfront. A positive initial experience is also crucial to both converting new customers and building the kind of word-of-mouth that gets them to refer others to you.

I wrote about this recently in another article, but at my company Mailshake, we had to make a choice about the kind of onboarding process new users would go through. 

Because the app is used to send automated email sequences, we could have focused first on teaching people how to write really great sales emails. But not only were users not signing up for a copywriting course, focusing on that need would have helped us produce users who were good writers – not necessarily users who’d actually sent a campaign and seen results from it. 

For new Mailshake users to find value in the product early on, we had to get them across the first hurdle – in our case, of setting up and sending their first campaign – as quickly as possible. Not only did that mean making sure the only actions users took as part of our onboarding flow were aligned with this goal, it meant making the product easy enough to use that unnecessary complexity didn’t get in their way. 

The bottom line: if you can make a product easy to use and make its appeal instantly obvious, it’s highly likely to succeed, whether you call that product-led growth or not.

Using Features and Product to Drive Demand

Kyle Poyar, VP of Market Strategy at OpenView, emphasizes the role features play in driving product-led growth in a post on the company’s website: 

“Companies with a PLG strategy – think Slack, Expensify, Atlassian, and Dropbox – rely on product features and usage as their primary drivers of customer acquisition, retention and expansion. It’s through this strategy that companies are able to grow faster and with less cash. They forgo spending large sums on traditional marketing and sales activities. Instead, they rely on the products themselves to supply a pipeline of satisfied users to convert to paying customers.”

To me, this veers slightly too close to an “if you build it, they will come” mentality to truly stand on its own. Having great features won’t do a thing for your company’s growth if people don’t know you have them (or, if they aren’t able to access and use them efficiently).

But I do appreciate the idea that, by understanding the features your customers need that may be missing from the market, you can manufacture demand by delivering a solution that fills these gaps.

The challenge for SaaS companies, however, is that discovering exactly what customers need and serving it up to them on a silver platter isn’t as easy as it sounds. Different users have different needs and different workflows. Which customers or needs will the product you develop support? Will you even be able to get meaningful insights from your customers about what they need if the solution you envision creating isn’t something that exists yet?

It’s an oversimplification to say that features and product alone can drive demand. But being proactive about soliciting customer input and mapping their insights to in-app actions should give you some clue as to needs they have that your product may succeed by meeting.

A powerful product-led growth strategy is to announce new features using a changelog, a centralized place within your site or product where visitors and users can check the latest developments and how they can benefit from them. This is not only a way to drive demand and generate new leads, but most importantly, a means to engage existing customers and increase feature adoption.

Layering Sales and Marketing onto Product Usage

Finally, I mentioned earlier that one thing I like about the idea of product-led growth is the potential it has to change marketing conversations. 

In the past, many sales and marketing teams have operated independently from product and customer groups. I’m glad to see the prevailing wisdom changing to recognize that these siloes don’t really serve anybody, as I’ve been in plenty of situations before where sales and marketing seem to be telling a very different story than their products can deliver on.

Stop me if this sounds familiar. You read about an app’s benefits on its website or talk through them with a company’s sales rep. But when you actually get into the product, what you’re seeing doesn’t really match up with what you’ve been told to expect. 

It’s a recipe for user frustration, but it’s also really common when sales, marketing and product teams aren’t aligned. But thanks to today’s technology, sales and marketing teams have a tremendous opportunity to leverage data produced by product to better time key sales conversations or offerings. 

For instance, marketers today can trigger an upsell offer when users take specific actions in app, while sales can be notified to reach out and offer personalized onboarding when a second user with the same company email address signs on.

I can’t say for sure whether this truly constitutes “product-led growth,” as sales and marketing are still playing active roles (even if they’re taking their cues from product). I can’t even confidently say that product-led growth is its own discipline, or whether it’s simply a new name being applied to long-standing industry best practices.

What I can say, however, is that product-driven companies have an opportunity to allow the value their solutions provide to play a more active role in everything from development decisions to marketing campaigns. When products are deliberately built to provide obvious, accessible value, everybody wins.

Examples of Product-Led Growth Companies

Dropbox is a famous example of a company founded on PLG principles, but it’s not a very useful one Realistically, the likes of Dropbox and Slack are the top 1% of product-led growth companies. Most likely, you’re not going to be able to recreate them, so their learnings aren’t necessarily transferable to your own product.

However, there are lots of examples of “real” companies that offer tons of insights on how to do PLG effectively, like:

1. Calendly

We’ve all seen Calendly at some point. It’s a fantastic example of a genuinely viral product, because every time someone uses it, they’re also promoting it.

Calendly solves a problem that literally everyone who schedules meetings has encountered at one time or another. And because there are virtually zero barriers to entry, it’s basically a no-brainer for invitees to sign up themselves. That’s how you start a viral loop.

What Can We Learn From Them?

Calendly is one of the best examples you can find of a company that started with the customer’s pain in mind. Everyone knows scheduling meetings is horrible. Calendly created a simple solution, and now it has eight million monthly users.

But importantly, understanding customer needs isn’t something you can do once, then forget about. Thinking about customer needs should be a priority during the early stages of product development lifecycle. Calendly knows this, so it introduced a weekly process in which almost every piece of customer feedback is collected and resolved. That’s a painstaking task, but it helps the Calendly team stay on top of their audience’s needs.

“I don’t mean ask customers what features will satisfy them – that’s an endless and thankless dark path,” explains Calendly’s VP of Product and Design Oji Udezue. “Instead, focus on core needs and use the team’s ingenuity to find solutions consistent with your vision.”

2. SurveyMonkey

SurveyMonkey is hardly a new rising star on the tech scene. The company was founded back in 1999, but is still enjoying double-digit year-on-year growth in revenue and paid users thanks to its PLG approach.

Similar to Calendly, virality is at the heart of SurveyMonkey’s success. Also similar is the fact that virality is hard-coded in the brand’s product – every time you share a survey with your audience, they see the words “Powered by SurveyMonkey” at the bottom. They see how easy it is to use, and importantly, they’ve already become users just through the simple act of completing your survey.

What Can We Learn From Them?

SurveyMonkey has never been afraid to disrupt its own model. It certainly helps that its whole product is literally a readymade feedback tool – if its customers didn’t like surveys, they wouldn’t be customers in the first place.

One of its key findings was that customers simply weren’t exploring the full range of functionality offered by SurveyMonkey. In fact, when users were asked what new features they most wanted to see, the vast majority of suggestions referenced features that already existed.

Significantly, customers indicated they’d be willing to pay more for access to these features. To reiterate: these were features they already had access to! This suggested an issue around education, and also demonstrated a big opportunity for SurveyMonkey to update its pricing.

3. Mailshake

As you may already know, Mailshake is one of my companies. When we started out, we wanted to make adoption of our product as friction-free as possible.

We made our price ridiculously low to begin with, starting out at $9, which quickly got us a base of 10,000 users. We introduced a lifetime deal that was also insanely cheap; that helped us acquire another 6,000 customers.

Now, we weren’t actually making any money from all those customers. In fact, keeping them was unprofitable! But all that word-of-mouth marketing helped us acquire a bunch of new customers, even now that our pricing has increased.

What Can We Learn From Them?

Calendly and SurveyMonkey both have virality built into their product. Every time someone sends you a meeting request or a survey, those brands are front and center.

That’s just not the case with Mailshake. In fact, the opposite is true: you don’t want people to know you’re using our tool to send email, because it’s meant to look like a one-on-one conversation, not an outreach campaign.

Despite that, word of marketing still works super well for us – in fact, it’s the source of 50% of our new customers.

4. Zoom 

Remember when Skype was the go-to video call software, and how all of a sudden, you started using Zoom instead? Zoom is a perfect example of how product-led growth can drive adoption and revenues at an incredible pace. 

Zoom is a virtual conferencing platform that naturally lends itself to product-led growth. Someone sends you an invitation to chat on Zoom, you connect within a few seconds, and then the next time you need to call someone, you set up your own Zoom meeting. 

What Can We Learn From Them?

Zoom has gone up against some of the biggest names in tech and earned a 39.8% share of the video conferencing market. Competing with giants like Microsoft, Cisco, Adobe, and Google, it’s now the leading platform on the market, and product-led growth has been a big part of its story. 

Frictionless entry has been key to this. You simply click a link, put in your code, and get 40 minutes of free video conferencing. When you make things this simple for people, they’re going to keep using it and introduce new people to it as they go, and that’s exactly what happened with Zoom.

5. Zapier 

From its inception in 2011, Zapier has grown to over 3 million subscribers in 2020 with revenues of over $50 million a year. 

The software connects different apps across the internet. For example, when you get an attachment sent to you in Gmail, it automatically copies the attachment to Dropbox and alerts you about a new Dropbox file in Slack. 

Zapier has thousands of integrations, allowing you to connect apps in different ways and create your own workflows. This solves a common problem in the modern world – we have so many different apps and subscriptions, but how do we link them all together?

What Can We Learn From Them?

Zapier has followed the product-led growth handbook to a T. 

Rather than focusing on big advertising campaigns and acquiring an influx of new users all at once, it’s built its user base one person at a time. 

Every staff member does customer support, bringing marketing, sales, and the product together, which has helped create the frictionless experience users need. The product solves a common problem people have, and the experience is clean and simple, so when one person starts using it, it often results in entire teams and businesses adopting it as well. 

6. Dropbox

Dropbox is one of the best examples of product led creation there is. In under a decade, Dropbox achieved a whopping $1 billion in sales. Its growth is thanks mostly to the product — which is arguably the best solution of its kind.

It’s hard to run into a business person in 2021 that doesn’t use Dropbox at least occasionally. You can store gigabytes or even terabytes of files in the cloud easier than ever before, and access them anywhere. It’s a great tool for teams who need to grant access to large files to various people in the organization.

Their product-led approach contained two primary aspects. Firstly, Dropbox provides excellent utility in an insanely user-friendly UI. Secondly, some features in Dropbox are designed to make the product go viral. You can share a referral page that pays you whenever someone new signs up for Dropbox.

7. Slack

Slack hardly needs an introduction. I mention it all the time as a valuable resource for teams, and I’m not the only one. So it’s no surprise that they reached a valuation of $7 billion in just 5 years.

A big part of their product led growth strategy is their freemium model. They make it incredibly easy to start using the product no matter your budget. This low barrier to usage helped propel it to the top of the project management game.

But you don’t get there without a great product backing it up. The interface is intuitive and really..well..pretty. It just works, and it looks great doing it. 

You can share files, chat, and plan tasks for the entire team. You can even divide different conversations into channels to keep things organized. Slack is an excellent demonstration of the importance of spending more time on actually building a quality product.

8. DocuSign

Another poster child for this concept of product led growth is DocuSign. There’s a good chance you or someone in your HR department has used it repeatedly. Faxing is a thing of the past. So is manually printing out documents to sign, scan, and send back to the recipient.

DocuSign automates digital document signing, so all you need to do is type out your signature. It even moves the field of focus to the right places by detecting where signatures are required. Free accounts make its growth incredibly viral, as there’s essentially no reason not to use it. Though it is not your only option. There are a number of best alternatives to DocuSign that can perform similar functions.

Tips to Get Started On Product Led Growth

So now that you know what product led growth is, and have some examples to reference…how do you actually apply it to your own product? Let’s take a look at 3 key tips to get you started on the right path:

• Start With The Stuff Under the Hood – The code and the design of your product is what makes it valuable. Novel concept, I know. But from a product perspective, it’s really that simple — obsess over making your product insanely useful.

• Build Viral Elements Into Your Product – Can you offer $5 per download via referral, or $50? Or, if you have a complex B2B product that enterprises can use, maybe you can cut them a 20% recurring monthly discount. Aside from making a great product, hard cold cash is the best incentive.

• Identify a Few Key Users Who Are Influencers – There are bound to be a small handful of people who can help your product take off big time. Finding, say, 5 influencers with a giant network and social following could create more growth than the next 500 users combined.

Resources for Product-Led Growth

If you’re considering a product-led growth strategy for your business, there are lots of great resources that you should check out. 

Product-Led Growth Influencers

Wes Bush 

Wes Bush is the founder of ProductLed and author of Product-Led Growth: How to Build a Product That Sells Itself. He’s positioned himself as the face of product-led growth and offers useful frameworks for businesses looking to adopt this marketing strategy. 

Despina Exadaktylou

Product-Led Growth Hub founder Despina Exadaktylou is a leading name in product-led growth and uses her PLG Academy to build the next generation of PLG disciples. As an expert in onboarding, Exadaktylou shares original research for people considering this strategy.

Kieran Flanagan 

HubSpot is an amazing resource for anything marketing, and that includes product-led growth. Flanagan runs TheGrowthTLDR podcast with Scott Tousley, focusing on how companies switch from sales-led marketing to product-led and achieve rapid growth.

Kyle Poyar 

Kyle Poyar is VP of Growth at Open View and is a great source of information on pricing and freemium sales strategies. Adopting the right pricing plans is an important part of product-led growth, and Poyar is a leading voice in this area. 

Books on Product-Led Growth 

• Product-Led Growth: How to Build a Product That Sells Itself – Wes Bush 
• Mastering Product Experience (in SaaS): How to Deliver Personalized Product Experiences with a Product-led Strategy First Edition – Nick Bonfiglio
• Obviously Awesome: How to Nail Product Positioning so Customers Get It, Buy It, Love It – April Dunford
• Escaping the Build Trap: How Effective Product Management Creates Real Value – Melissa Perry
• Strategize: Product Strategy and Product Roadmap Practices for the Digital Age – Roman Pichler

Product-Led Growth Courses

• Product Led Growth Hub Certification Programs 
• ProductLed Pro Courses
• CXL Optimization Agency “Foundations of Product-Led SaaS Growth”
• Udemy “Product Led Growth 2021”

What do you think? Do you see product-led growth as being a unique discipline or is it more akin to slapping a new coat of paint on an existing practice? Share your thoughts in the comments below: 

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