Although I’ve spent my entire product management career working on B2C products, I’ve recently become obsessed with product-led growth, a B2B growth strategy. So far, I've written two Persian articles on the topic, and I plan to continue exploring it.
During my exploration, I've encountered seven myths that often lead to common PLG pitfalls. If you want to avoid these pitfalls, keep reading.
Myth 1: PLG is Only About Tactics and Tools
Some people assume that adopting a PLG (Product-Led Growth) strategy means implementing business tactics like freemium or reverse trials. Some companies consider themselves product-led simply by relying on data analysis tools. However, what truly matters is the purpose behind employing a tactic or tool.
Noah Weiss, the CPO of Slack, openly acknowledged that their generous freemium model was a mistake. They assumed that if users used Slack long enough, they would eventually convert to paid plans. However, they discovered that users were not even aware that a paid version was available.
This case exemplifies how the mere existence of a certain feature or the utilization of a particular tactic may falter, especially when you lose sight of how it contributes to the execution of PLG.
Myth 2: Product Sense Works
Product sense is something you should not count on during the PLG implementation journey, especially as a substitute to data analysis. Hila Qu, a respected growth guru, firmly believes that PLG is essentially DLG (data-led growth). With PLG, you exchange your product for a broader reach while also gathering valuable usage data. This notion underscores the central role of data in PLG.
When it comes to leveraging product-led sales, the significance of data analysis becomes even more apparent. PLS relies on leads discovered through the analysis of usage data. Furthermore, alongside data analysis, real customer discovery and experimentation are fundamental components of PLG.
Myth 3: PLG is Solely a Product Decision
PLG places the product at its core. However, the decision to fully embrace a product-led approach could not be solely entrusted to the discretion of those in product roles. This becomes particularly crucial when a company heavily relies on a sales-driven strategy and employs a top-down approach. In such a scenario, obtaining complete buy-in is imperative because transitioning to a product-led approach is an incremental process that impacts various facets of the organization, notably marketing and sales.
The transition to a product-led approach typically commences with the establishment of a growth team and a restructuring of the company's framework. This shift gradually reshapes the dynamics between the sales and product teams. Sales professionals may find themselves in need of acquiring entirely new skill sets to effectively adapt to these changes.
Myth 4: PLG Yields Quick Results
Expecting quick results is a mistake. Whether you are a startup or a sales-led enterprise, it's important to have a realistic perspective on the timeline for expected results.
When some companies notice the gradual progress of PLG, they lose conviction. Eventually, they shift their focus from PLG toward pursuing million-dollar enterprise deals. However, these enticing deals can divert the company's attention away from PLG and toward traditional sales methods.
Companies that are accustomed to a sales-oriented approach should not underestimate the time and effort required to transition to PLG. As mentioned in the previous section, PLG involves different units and teams within the organization. Therefore, it's essential to design a migration strategy and allocate the necessary time and resources accordingly.
Myth 5: PLG is a Universal B2B SaaS Strategy
SaaS companies vary in the extent to which they can benefit from PLG. Some of them offer products that are inherently PLG-friendly. An effortless onboarding experience either already exists or can be tailored for them. Additionally, they either possess or can achieve a short time-to-value. This means that their users can swiftly discover how these products can be beneficial to them.
On the opposite end of the spectrum, there are only a handful of complex products that provide a less intuitive onboarding experience. As customers become more acquainted with new technologies and specific solutions become more widespread, some of these products may gradually find PLG to be a suitable fit, at least to some degree.
Ideally, PLG-friendly products should incorporate a built-in viral component that propels their distribution. Take, for instance, PLG-empowered legends such as Figma, Zoom, Miro, or Dropbox. Their users actively contribute to their growth model through virality or user-generated content (UGC).
Myth 6: PLG Competes with Traditional Sales
If the traditional top-down approach is working well for your company, that's perfectly fine. There's no need to view PLG as a competitor; you can continue with your current strategy. However, it's worth exploring how you can synergize the strengths of PLG with your existing methods.
Elena Verna, a renowned PLG adviser, recommends that every sales-led company consider incorporating some product-assisted tactics. These tactics have the potential to enhance both your sales and marketing efforts, ultimately leading to increased revenue. Additionally, they can make the transition to PLG smoother when the need arises.
It's worth noting that in today's competitive landscape, most companies will eventually explore or even embrace PLG, as there will be PLG-enabled competitors striving to gain an advantage.
Myth 7: PLG Guarantees Product Success
PLG is not about establishing product-market fit. It’s a growth strategy that exposes your product to a wider range of users. You cannot shorten the time-to-value if there is no value to capture at all.
If you are considering implementing PLG or PLS (product-led sales), ensure that the decision is based on valid signals and strong intuition, not just speculations.
Adopting PLG as a growth strategy is a company-wide decision that requires considering several reservations, such as the stage of your product or its PLG-compatibility level. You should make sure you have a realistic view on the possible payoffs and how its implementation cost is offset in the long run. Also, make sure not to overlook the fact that PLG may require your organization to shift its mindset.
Lastly, I want to express my gratitude to experts like Elena Verna, Wes Bush, Hila Qu, and others in the field of Product-Led Growth. This post is based on insights I've gathered from their talks, posts, and contributions. Their expertise has shaped the myths discussed here, making this article a valuable resource for those interested in Product-Led Growth.