Why Is Everyone Talking About Product-Led Growth?

Adventuring at the Aha! onsite near Vail, CO | Photo by Zip Adventures

July 11, 2022

Why Is Everyone Talking About Product-Led Growth?

by Brian de Haaff

Five years ago I received a love note. It was not addressed to me directly — it was a love note about someone’s experience using our roadmap software. It was so unusual to see a person expressing passionate feelings, even deep appreciation for B2B enterprise software. We called the phenomenon “lovability” and it became a movement, inspiring our bestselling book of the same name. Today I think people might call it something else.

Product-led growth (PLG) — a strategy that relies on product usage as the main way to acquire, engage, and retain customers — is having a bit of a moment. But it is really nothing new.

PLG is just a new term for something quite old in the history of software. Think of the SaaS companies that grew super fast and quickly overtook much larger and established companies in their respective markets — Slack, Dropbox, Calendly, Stripe, Datadog, Shopify, and Zoom. (Many would thankfully add Aha! to that list too.) These organizations did not follow a traditional path to selling software and scaling their businesses.

So what did they do differently? Today people would point to PLG, but that concept did not even exist when many of the companies above became market leaders. (We in the world of technology are great at relabeling and remarketing old concepts.) These so-called PLG companies simply did what high-growth, high-pride companies have always done. They aligned the entire organization around the Complete Product Experience (CPE). The most successful ones prioritized value creation at every stage of conceiving, building, delivering, and maintaining products — from idea to market release and beyond.

This is why I find it disheartening to see folks look for shortcuts to success. It is not about a new term. Just like it is not about lowering the price or moving to a freemium model when product/market fit has not been realized. I once had a CFO ask if we could build a product that "just sells itself." The answer, of course, was no.

Nothing truly sells itself — even though people who describe PLG want to suggest that it is possible. You need to optimize every customer interaction point, invest in the team, and build repeatable processes for customers to quickly find value in what you offer and be willing to pay for that value. That burden is even higher for B2B software products, which require a collective buy-in from many users.

Products need people and methods — because software cannot do anything alone. We do not love bits of code, we love the experience of using a product in its entirety.

People have challenges for us to help solve. Customers buy and our job is to make that seamless. Every business should provide exactly what customers want and make it simple for them to buy it at scale. This is one reason that, beyond being a new name for an old method, I think PLG is a bit of a misnomer.

In software, the product often is the business — but the business is more than the product. And there is something better than the fantasy no-touch customer acquisition model or the high-contact pressure cooker of old-fashioned sales funnels. Success lies in between. Here are a few lessons that I think are universal to those who want to get it right (no matter how you label growth):

Trust everyone

Build something unique and trust that people will use it wisely. Do not fear competitors who trial your product. If you are confident in your vision and believe in what you are building, no one else will be able to do it like you do. If you are passionate about the category you are in, then do your part to improve it. Share your expertise to help everyone be better. Write content and provide free resources. Offer generous free trials. Your relationship with customers begins before they ever use your tool. The person reading that article today might be a champion of your product tomorrow. So get out of the way and remove barriers like gated content and registration pages.

Make it easy

Software can be used to streamline how customers use the product. Make it easy for people to try and buy when and find out how it works best for them. Many aspects can be automated to improve repeatability and scalability. Obviously a free trial is common for SaaS tools. But you can optimize the signup flow and onboarding. You can provide sample data, guided tours, templates, and live product demos to help people get started quickly. Remember that with a B2B SaaS product, some decision-makers may not have to or even want to trial the product at all. Imagine that person — is everything they need available self-serve, from pricing to policies? Can they easily purchase when ready?

Stand for service

I often remind people that the last "S" in SaaS stands for service. Connect the people behind the software with those who use it. You cannot understand the depth of a person's need or what problem they are truly trying to solve (and when) just by studying product usage data. This is why I always recommend pinpointing crucial moments within the trial period to intercept and engage users with real people. Remember that the value exchange of the service you provide should not be one-sided. Your ideal customer will have done some research, be urgent about finding a solution, and give a sense of when they will be ready to make a decision. The rest will likely waste your time.

Grow relationships

Customers who find value in your product and develop a genuine connection with your company will grow their usage steadily over time. One way we do this is through unbelievably fast support and specialized teams with deep experience who provide highly personalized consultative services. Our team live chats with users during product tutorials, often recognizing repeat attendees by name. And when those folks make career changes, they will bring Aha! software with them. The greatest sign of success is when you get notes from customers saying the first thing they did in their new job was to buy your software.

Add gifts

Value must be nurtured to grow. First, your product has to solve the customer’s problem exceptionally well. Then you can continually improve what you offer to keep solving that problem. (We deliver gifts to customers weekly.) Embrace building incrementally so that you can iterate and incorporate user feedback into the process. Over time, folks will reveal more ways that you could help — either through add-on functionality, services, or new products. They will clamor to try what you build next because they trust your track record. They may even say that they love you.

These concepts have powered software companies for the last few decades. They represent a better way to build a successful and sustainable software business.

There is one more concept that is fundamental to efficiently building what customers need. All of this requires discipline in estimating the value of what you put on your roadmap and plan to deliver. It also means that you need to hold yourself accountable by understanding what actual value customers gain from what you build. Remember that you will never have a product that sells itself, so you are not going to have a product that knows what to prioritize and can build itself either.

It is important to remember that concepts like PLG are referring to business growth strategies — not a product strategy. You still need smart people to lay out the direction of your product and what you will do to realize the vision for it. There is no substitute for bright people being involved at every stage of the customer's unique journey.

Ready to build better? Aha! is the world’s #1 product development software.

Brian de Haaff

Brian de Haaff

Brian seeks business and wilderness adventure. He is the co-founder and CEO of Aha! — the world’s #1 product development software — and the author of the bestseller Lovability and The Startup Adventure newsletter. Brian writes and speaks about product and company growth and the journey of pursuing a meaningful life.

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