The evolution of product-led growth may seem to be a recent trend at software companies, but the underlying concepts have been in full force for years.
Being product-led is a path to success: we’ve seen consistently that product-led companies achieve faster growth once they achieve scale. Companies like Slack, Zoom, Calendly, Hubspot, and Dropbox are often mentioned as examples. But there are thousands of others that have achieved faster growth through similar methods.
I’ve had the fortune of working on teams launching some of the early SaaS products going back almost 20 years. All of them baked product-led growth into their business models.
In this article, I’ll give you some examples of product-led growth from my own experience. And I’ll additionally provide a few thoughts on where it’s all heading.
But first I’ll quickly explain what I mean when I say “product-led”. To me, it means that the company is thinking product-first and is focused on the customer experience. It means they use the product itself to drive growth through new sales and expansion revenue.
In my experience, the best companies build the business model to help the product achieve faster growth without adding a commensurate number of salespeople to the mix. Rather than the previous generation of software companies with high friction sales models, in a product-led company the customers themselves foster the growth.
My Experience with GoToMeeting: Growth Built-In
In 2004 I helped launch GoToMeeting, one of the earliest web-based products with a SaaS model. The product was acquired by Citrix, and later by LogMeIn. I was on the team conducting market validation and I led the early customer discovery interviews. I then wrote the product requirements that outlined the features, value propositions, and business model.
We took our learnings from launching two earlier products at the same company and created a model integrating several characteristics that, while we didn’t call it product-led at the time, clearly were product-led. These characteristics helped create a wildly successful product and a model for future companies:
- Self-service model. Customers could use the free trial and purchase one or a few licenses with a credit card. We experimented zealously and continued to optimize the purchase flow and experience. While this seems like a no-brainer for so many software companies today, at the time it was an uncommon approach and helped our rapid growth.
- Easy to get started. The product was easy to get up and running without any training.
- Viral licensing model. Participants could join the meetings for free. This allowed viral awareness within organizations because it was so easy to get started. This then fostered growth as participants decided to host their own meetings and purchased a license.
- Customer-focused pricing model. Our “all you can meet” pricing model was innovative at the time and was so appealing to customers who were used to the unfriendly meeting models such as per-participant / per-minute
Product-Led Growth at ProductPlan
My company ProductPlan launched our product roadmap platform in 2013 and we baked in product-led growth from the very beginning. In our early market validation, we discovered that product managers wanted to try the product on their own before buying. For that reason, we launched with a completely self-service model and didn’t hire our first salesperson until years later in 2016.
Here are some of the characteristics of ProductPlan that make us product-led.
- Educational focus with inbound marketing. Our low-key educational approach to content allows product managers to learn about us through high-quality articles, books, webinars, and other content. They choose to engage with a trial when they are ready.
- Fully-functional Free Trial. Product managers can sign up for a free trial without a credit card and get access to all the features in our entry-level plan.
- Easy to get started. Product managers could build (or import) their first roadmap in minutes – our interface is laser-focused on getting started fast. We deliver value in minutes, even before purchasing the product.
- Self-service purchasing model. Since we launched in 2013, customers have been able to purchase licenses without contacting us. This makes it possible for product managers and others in larger organizations to “go rogue,” and purchase ProductPlan (sometimes using their own credit card). This approach helps plant the seeds within an organization for future growth.
- Free viewer licenses. When a product manager shares their roadmap for free to others (including executives), awareness within other teams grows – they are then inspired to purchase their licenses to create and edit their own roadmaps.
- Easy to add more licenses. For our basic plan customers can add more licenses without contacting us – as awareness grows internally it’s easy to add a license so new people can get started immediately.
- Network effect. As adoption grows within an organization, the value of ProductPlan increases. As more product teams adopt the solution, we’re seen as a platform and the need for standardization across the organization becomes important. The standardization included in our enterprise plans evolves to be a requirement. These features provide even more value for larger organizations and an upgrade path for additional recurring revenue for us.
I’m not saying that we’ve nailed product-led growth. We have a lot more to learn and do. And our model continues to evolve. Today we have an enterprise account management team and more options for trying the product, including coordinated team trials, but our core product-led approach is still there.
Core Principles Going Forward
What I’ve described so far are a few basics from my experience that companies can adopt to become more product-led. My opinion is that we can focus on a couple of core principles to become more product-led in our companies. A couple of my favorite products can provide some insight.
The first core principle is to deliver an outstandingly positive user experience. A great example of this is Slack. Like many of you, we’re a customer, and it was their thoughtful focus on creating a simple and fun way for our team to communicate that created rapid and enthusiastic adoption.
The other core principle is some kind of viral growth built into the business model – often accelerated by existing customers. I’ve been a customer of Calendly’s meeting scheduling tool for a while now because it makes it so easy to find meeting times. I chiefly use it for scheduling calls with customers. It’s the virality of their product that fascinates me—every time I send an invitation to someone to find a meeting time, I’m essentially sending an email to a new prospective customer for them. The product doesn’t need an overly aesthetic UI to have product-led growth. It’s so easy to get started that this product gains fast adoption.
For those of us in the software world, most of us want to evolve to be product-led. By looking at these examples you hopefully are inspired to build growth levers into your product and business model. Have other examples? I’d love to hear what you think.