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The PLG Prism

How to disperse the light throughout your organization.

Patrick Thompson �Co-founder Iteratively | @patrickt010

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🤯 Is your organization ready?

👑 Getting started with product led

👷‍♀️ How to prove the value

Key takeaways

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What is PLG?

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Product led growth (PLG) is an end user-focused growth model that relies on the product itself as the primary driver of customer acquisition, conversion and expansion.

Blake Bartlett - Partner at OpenView

Product Led Growth

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—————

Sales

Product

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Self-Service, Transactional or Enterprise?

Complexity

Price

low

high

Self-service

Transactional

☠️

Enterprise

high

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So, what is the criteria for PLG to succeed?

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Product-market conditions are right
Your product offers a uniquely valuable solution
User can realize significant, ongoing value quickly and easily
Your product delivers real value before the paywall
Your product can serve as an acquisition channel
Your marketing funnels lead to product engagement
Your product has a built-in network effect
You have product champions who drive internal adoption

Product Led Growth

Openview lists the following as some of the criteria that must be met to successfully adopt a product led strategy.

- The product-market conditions are right. Product led growth strategies succeed when: you have low marginal costs for each user, users have direct buying power or influence, and existing solutions do not meet their needs

- Your product offers a uniquely valuable solution that can help an individual achieve their tasks more effectively

- The user is able to realize significant, ongoing value quickly and easily

- Your product delivers real value before the paywall

- Your product has features and functionalities that allow it to serve as an acquisition channel for marketing, selling, and onboarding new users. I gave another talk around viral loops that might be helpful here if you’re interested in learning more about this.

- Your marketing funnels lead to product engagement, versus jumping on a call with a sales team

- Your product has a built-in network effect

- Lastly, you have product champions who drive internal adoption

While you don’t need all these criteria to succeed the more you have checked the better positioned you are in.

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Scaling Atlassian

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🤯 Is your organization ready?

👑 Getting started with product led

👷‍♀️ How to prove the value

Key takeaways

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#1 Growth model

Understand how your business grows.

Build trust in data.

While firstly it starts by understanding how your business grows.

While you might already be tracking the standard SaaS metrics like LTV, CAC, and MRR.

It’s paramount to codify your companies growth model. The inputs to this our retention, engagement, and acquisition — the output is growth.

For you to be able to effectively determine the outcome that PLG is going to have on your business you need to understand what levers you have at your disposal. For example, how will a 10% lift in activation impact the growth of the business. This will help you prioritize potential areas of investment.

In order for you to be able to make these conclusions, you need to understand how your customers are using your products, what features are driving retention, what active usage looks like, typical time to value, and you need to be able to make use of this data to drive decisions, and understand if the changes you’re implementing are having a positive (or negative) impact on the business.

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#2 Storytime

Start with the customer.

Backed by research.

Recruit champions.

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#1 Storytime

Start with the customer.

Make sure you understand how your business grows.

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#3 Build a team

Cross-functional.

Regular check ins with stakeholders.

Once you understand your growth model and organizational buy-in from the awesome storytelling you’ve done and an agreed upon expected outcome defined with leadership, the next thing is to make sure you have a team in place that can execute. I recommend a new team here — specifically because it requires a different type of thinking than folks who work in product.

This team should be responsible for connecting customers to the value, while the product team is responsible for value creation. While I might not choose to call this a Growth team, and instead focus this team around a particular mission, an input into our growth model. Typically the type of work this teams does could be anything from self-service onboarding, pricing & packaging, product education, virality & expansion, you name it… So it’s important that this team is cross-functional and includes resources from marketing, product, and engineering to be able to execute autonomously. The goal here being to get more folks to experience the value and become a product qualified lead.

Depending on your business you might eventually hand these leads off to a sales or customer success team. So it’s worth having regular check ins as these teams have a wealth of knowledge about the customer and their related pain points, and to ensure a smooth hand off.

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🤯 Is your organization ready?

👑 Getting started with product led

👷‍♀️ How to prove the value

Key takeaways

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#1 Measure

Think like a scientist.

Question
Hypothesis
Experiment
Observation
Analysis

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#2 Communicate

Set realistic expectations and timelines.

Evangelize the process, e.g. broundbags, monthly updates, etc.

No surprises.

And now that we can measure our work — being able to communicate the results is really important. We want to make sure there are no surprises and that we’re bringing people along the journey with us. I recommend creating a learning encyclopedia of all your experiments and their results — this is super helpful to understand not only the contribution of the team but starts to create a catalog of things that others might be able to utilize internally.

And because this is likely a new way of working for many folks I’d recommend setting clear expectations and timelines. You’re evangelizing a process, you’re likely to hit speed bumps and make mistakes that’s fine just own them. At Atlassian, we had a monthly team meeting where we’d communicate our learnings and answered any questions that folks had. This made it easy to coordinate and align with the other stakeholders internally.

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#3 Celebrate the wins

This will help us transform the culture over time and give us the proof points that we need to double down on product-led.

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Sales

Product

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@patrickt010

patrick@iterative.ly