Have you come across the term Product led growth. I have been using it loosely for over some months now. I finally got some time to take a deeper dive into it. Below is my perspective that is built over the things that are out there. 

While discussing startup ideas, we tend to talk about the GTM strategy that is unique and frugal. And, PLG seems to be a unique and cost-effective GTM strategy. 

The definition that I found most logical is by Open Partners:

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

PLG sounds so much as the focus on product, focus on the user, use the product at the core of your growth strategy. All of the products that have done well in a market do this already. Is it a mouthful concept that we already know about or it can add some value to a growth strategy?

Before getting deeper into what it means, let’s look at the changing context in our workspaces. 

As we want our teams to be autonomous wherein they are enabled to take decisions to produce outcomes, there is a shift happening in the way software products for work are bought.

The decision to buy the right tool/software is becoming bottom-up, wherein the end-user is given the flexibility to choose the tool to produce the outcome. The decision-making criteria is now personal productivity—will this product actually help me day-to-day.

End-users are finding products on their own to tell their bosses which one to buy.

Back in the day when the software was more of an on-premise solution, the sales cycle were also different with different stakeholders. The Director of Technology / CIO were the decision-makers to buy new technology.

Then came the time when we started putting our software on the cloud. On-prem became on-demand that brought in substantial cost advantage to producers as they could plan, build, maintain a single version of the code that gets rented by the customers rather than buying a version and putting on their datacenters. With this emerged a new buyer that was not the head of the technology but driven by ROI and KPI about the function he belonged to. Saas business grew with marketing lead growth as a distribution model.

Now, with technology getting more democratised, engineering teams are delivering first-time value with the power of APIs and other modular tools. That has lead to affordability and accessibility of software that has fully democratized purchasing down to the end-user. As we say, the future is already here. In my opinion, we are on the cusp of this change. 

Another point to consider here is, this works for certain personal use categories such as meeting scheduling software, and it may not work for categories where teams need to collaborate with others. 

That is true, and categories such as CRO, CRM & marketing automation may have to adopt a hybrid approach to meet market expectations. 

A hybrid approach is when the end-user gets a flavor of the value in a limited time, and the decision to buy is still proven with ROI and long-term effect to a business. 

In the second part of the last decade, we could manage with only delivering value to the end-users by content strategy (likes of Hubspot). We still continue to work with growth via marketing systems of content strategy, but we also work with systems over our products that will help us deliver first-time value to the end-users.

The above way, where the growth team is working to build a system over the core product to deliver first-time value to the end-user, along with the marketing-lead growth, is the hybrid growth strategy. 

We might feel that this is a strategy for businesses that cater to Individuals, startups, small-medium enterprises, and not enterprises. And yes that is correct but the only point to consider here is that most enterprises want to function like startups. So eventually, we will have many SMEs running under enterprises that will take their decentralised decisions. 

Create systems over the core product that exposes the product to more and more customers by product design itself. 

Some existing behaviors and the way we do things create natural advantages for certain product categories. For example, Calendly functions in a space that has this intrinsic advantage to expose the product to every other one who decides to meet online.  But not every space has such obvious advantages.