Product-led growth insights from unexpected sources

Boma Tai-Osagbemi, Associate Director of Product Management at HelloFresh, gave this presentation at the Product-Led Summit Las Vegas.

Good morning, everyone. It's great being the first up here. So we'll be talking about product-led growth insights from unexpected sources. And it's half a keynote and half a rant about things that have kind of annoyed me about products that I have looked at.

And this is based on my experience because I have been a founder. I have worked in health tech and fintech and have been the solutions engineer. And you'll see that a lot of that involves doing lots of product research and trying to find solutions for different problems that you might have internally.

I currently work at HelloFresh, where I lead the global order management teams. Let's get going.

I look for inspiration outside technology, and it's really simple if you think about the notion of product-led growth and product management. It's fairly new in technology, right? The first mention of product management was probably in the 1930s. By P&G, we owe a lot of our theory or knowledge to the folks in marketing. And like business strategy, in technology, product management is fairly new compared to engineering and all the other disciplines that exist in the tech space.

So it gives you an opportunity to take a step back and kind of look around to see if there are other things that we can learn from people who are not in the core technology space. It also gives the opportunity to break out of that groupthink mentality where we're all trying to build the Uber of X but for Y, and stuff like that.

Pillars of PLG

So what's product-led growth anyway? Depending on who you ask, who you talk to, and how much coffee or wine they've had, you get different answers to it. It's built around four pillars:

Product
Distribution
Feedback
Monetization.

I have made it a continuous cycle because it starts and ends nowhere. You have to go round and round to deliver value and to be able to build a product that's defensible in the market.

But what's the biggest and most important idea in product-led growth? It's really simple. If I came up here with a cupcake, and I said to you, this is the world's tastiest cupcake, what would be the first question you ask? How would I know? You'd like to taste it, and you'd like to know what's in it. But for some reason, in technology, we tend to forget that idea every now and then. We try to do other things to get customers without actually getting them to taste the cupcake or products.

Your goal as a product manager, as someone who runs a business, would be to reduce the distance between when a customer is aware of your products and when they try out your product. This is a very old idea. It's a scene that goes back to the 1700s or so. So product idea and product-led growth is a fairly old idea. And there's a lot to learn still learn from it.

Where to seek inspiration

Now I suggest other areas to look for productive-led growth and inspirations for things that we can do in our commoditized and semi-commoditized markets. It asks the simple question of how do I differentiate something that looks like everything else? And markets that face this dilemma tend to put their products at the front of the experience because they have no other avenue or no other opportunity.

I'd suggest we look at food and beverage, look at retail, look at the automobile, and cosmetics industries, and see how they drive growth. Right now, this is the generic marketing funnel, conversion funnel; call it whatever you want. The question is, what parts does a great product manager play in this funnel?

So you start from awareness all the way to adoption and reference. And as a product manager, your primary goal, I'd argue, should be to get people to adoption. Right now, all the way along this funnel, there are lots of fun metrics that we can measure. But I'll argue that most of them are useless. If they don't drive adoption, there's no point.

Getting over the hump

I have divided this into three parts. So broadly, awareness, interest evaluation, but let's call it discovery. And then, trial. I have made it a black box and have called it the chasm at this point in time. And then you have conversion and retention. And the hardest thing to do is to get a prospect or a customer over that hump. And everything you do should be to drive people over that hump.

Now, which part does a great product manager play in this? People might argue that discovery is the remit of the product marketers and the folks next door. But I argue that as a product manager, you want to be part of every part of this conversion funnel and realize how the features that you create affect the whole cycle.

So you think about awareness from how you conduct market research. It helps you define the metrics you should be measuring and the kinds of features that you should deploy to defend your product in the market, all the way to trial adoption, how you set up your pricing, your distribution, and all of that.

Loss aversion

Now, I'd like to share a couple of large and overarching ideas around product-led growth. One is the notion of loss aversion. This wasn't created by me. A much smarter guy who won the Nobel Prize for Economics came up with this. It basically argues that people are more motivated by, or they're more afraid of, the risk involved in losing the thing than the incremental gain in risk.

Understand that every product that you create and every customer you're trying to drive through your conversion funnel is going through this, and they have something to lose. And depending on where you are, for example, the B2B customers, you might think, what does an IT manager have to lose? You're proposing a solution to a market. You have your proposal solution internally, and you essentially have your reputation, so you're risking your job.

If an IT manager goes to propose a solution that kind of tanks, well, his appraisal might not look too great in the next quarter. If you look at the SaaS scenario, where it's a single-person founder, he's risking his money. It might be his livelihood - he's putting his credit card in there, right? And he's taking a risk every time he's researching your product and signing up.

As a product person, you have to always think about it from that point of view. What's my customer risking? Or what's the product of the prospect risking? And how can I help them overcome that?

The flow of friction

This is going to show that I’m a bit of a physics nerd, but follow me for a second here. There’s this idea of laminar flow and gravity. Water flows smoothly. That's laminar flow, right? When the water is disturbed, then you have turbulent flow, and it flows slower. I'd argue that as a product person, as a business person, your primary goal is to ensure that laminar flow happens through your product.