This morning I got to work, opened Slack, shared some files with DropBox, booked in a meeting using Calendly, attended that meeting via Zoom and then created a quick feedback form on SurveyMonkey to give the attendees of that meeting.
What links all of these tasks?
I have never spoken to a representative of any of those companies, yet I used their products without thinking about it, all before 11am.
This is for a fairly simple, obvious reason. Their products work.
There is also a reason why they work, because they are product-led companies.
Key differentiators
No aggressive sales person reached out to me and got me on a demo, offering me a discount if I signed up before the end of the quarter.
No clever marketing campaign swayed my decision. I use those products because they do exactly what I want them to do, with ease.
The reason I use these products is the same reason why you've also heard of them, they have all benefited from product-led growth.
What is Product-led growth?
Product-led growth is when a product’s grown through acquiring, engaging and retaining customers due to the quality of the product, rather than the quality of the company’s marketing and sales teams.
Of course, marketing and sales are important. But being product-led means an emphasis on retention and activation, rather than solely on acquisition.
The primary reason an organization such as Slack is now part and parcel of our daily lives is because it offers a fantastic user experience, which is why we didn't leave it after signing in once.
"Everything to do with the business focusses around the product. Being product-led means understanding what our users want from us as a business, how we can identify that using data, how that data informs the product roadmap and ultimately how that product roadmap leads to us delivering new features and improvements to the product we're building."
-Paul Roach, Co-Founder and Chief Product Officer, Zumo
How did they achieve this?
On the face of it, I was given a free trial of Slack, loved it and so stuck with it.
That is a very basic way of seeing a product-led company in action. I was able to try out the product, for a decent length of time, before committing to a purchase.
The work in the background that led to this, we'll get to later.
Why am I allowed to do this?
Because the whole organization is aligned around the product.
Rather than having a sales team absolutely furious they're giving away a lot of product for free, they are in line with the process. The product is going to sell itself because it's a great product, meaning it’s going to convert prospects into customers.
Marketing get to tell even better stories using a tip from screenwriting, show and don't tell! Also, the product should have a viral effect and do the job of marketing itself, through word of mouth.
Marketing's role will be focussed around the product launch and positioning, SEO and community maintenance.
The product is going to generate demand, rather than marketing having to generate demand for the product.
Beyond B2B
B2C companies were on the product-led growth wave before their SaaS and B2B counterparts.
Airbnb, Waze and Venmo are all examples of companies that have embraced the product above all else.
This translates directly to putting the user experience first.
"Google may have 44 million robotic cars on the road - but Waze has 44 million users, and they make Waze's maps better by using them."
-Noam Bardin, Chief Executive Officer, Waze
Airbnb relies on its customers for both the supply and demand of the product, as they provide the accommodation on one side and the visitors themselves on the other.
Product is the protagonist in a product-led company. Whether it's a tool for communicating with your colleagues or a marketplace for renting a cheap apartment for a weekend getaway, they have to be great.
Getting behind the approach
Transforming an organization to become product-led is no easy feat. Some companies describe themselves as being in a transitionary period with being product-led the end destination.
This may mean changing the entire sales funnel, onboarding process and feature cycle.
To truly achieve product-led growth, the company must align behind the key metric of retention.
Slack maintain the belief that "retention increases everything else."
In a simple version of their growth model, the funnel relies upon acquisition, monetization and then virality.
This means frictionless onboarding, allowing users to get value as quick as possible. Retaining those customers rather than losing them to churn.
Then comes the important part of pricing. It has to be apparent that the user is on a freemium package, with a very obvious paywall. None of those 'free trial for 30 days then you have to cancel or we start taking cash' tricks!
It also entails making the product easily shareable, with incentives for recommending others to make the most of the viral factor.
"Being product-led means that the thing that you're ultimately selling, the thing that is solving somebody's problem, the thing that you're differentiating on is the thing you produce. It isn't an afterthought, or a channel, it is the thing that is out there solving peoples problems."
-David Wascha, Chief Product and Technology Officer, Zoopla
Summary
Product-led growth is a trend that’s showing no signs of stopping, as end users are more involved in the buying process than ever.
In an instant world, where we have access to entertainment, food and socialization with the touch of a button, product has to keep up.
Be it B2B or B2C, users have to love your product or they will find something else.
Aligning your whole organization around the product, in its development, launch and entire strategy could be the most important decision your business ever makes.
Don't be late!
