Is it product? Is it the business? Is it marketing?
If you’re into tech, digital marketing, and revenue operations, or have just been actively interested in the digital world for the past 2 years, I’m sure you’ve read all about growth, growth loops, and product-led growth (PLG).
It all sounds very logical: SaaS companies were becoming unicorns like it’s Diablo 3 because useful products were being generated and the competition was fierce. Therefore… product was FORCED to be fast, two steps ahead, and push the company’s revenue based on brute force growth. I love it, it's survival of the fittest, but I wonder if it's a phase that should live on or one that we should re-adapt.
First, look at these two stats:
SaaS funding increases from 38 to 94B USD from 2020–2021 (Silicon Valley Bank)
End-user spending grows constantly every year
In my opinion, these graphs are the very basic representation of PLG’s hype. I’m saying these numbers enable product to say, “Hey, we got the investment, we transformed it into incremental revenue so we should definitely be leading the boat from now on.”
I’m a true believer of growth, it’s what I do at Digital Growth and what I’ve been doing for more than 8 years without knowing it was called that.
It was about understanding your data, segmenting your customers, and your fresh leads. A constant alignment of marketing with sales and customer support in such a way that the customer’s real needs were the main growth driver and the company’s ability to transform that into actionable data that generated sales strategies and expansion was what brought incremental revenue to the table.
Long story short, the difference between 2020 (US spending of $38B vs $94B) and 2022, is that while product teams are much more empowered (and they should feel powerful! They’re the wizards behind the works!), I’ve seen way too many obstacles to success, including:
- Very young and inexperienced developers.
- A market that is constantly looking for more, encouraging high rotation rates at the workplace which leads to unresolved code that’s built in silos by people that might have completely different coding skills and don’t understand each other’s logic.
- A product team that develops amazing things that are cool but aren’t really in the market or client’s best interest.
The number of SaaS companies that are developing products has exponentially grown since 2020, which logically creates chaos in terms of hiring, education opportunities, and stability.
Aside from everything that I’ve seen happen in the industry, I remember one CPO, whose name I’ll keep to myself, told me that his biggest struggle was that every two weeks they’d have developers quitting for new jobs and there was nobody able to continue it. It became a series of loopholes with unresolved and unprioritized work that didn’t let his team move forward correctly.
Finally, what happens in these types of situations is that you have products with many new features that were suggested by a team of experts that don’t have marketing and business knowledge, but who are moving so fast that they force everybody to run at full speed without asking why.
What numbers matter the most?
So, with all this, what I’m trying to say is… if you’re behind a company’s revenue strategy, which data should you be looking at to make decisions?
Is it going to be product usage and release frequency? Or will it be customer and demand-centric needs? If you ask me, the order of importance for a company to be truly successful will always be customer>marketing & sales>product.
Does that mean that product has to wait until everything happens in customer, marketing, and sales before pitching in? Not at all. My ideal vision is a lot simpler:
Customer = sales & marketing = product
(My best attempt at making them all look equally important amongst each other)
Everybody working for each other is, in my opinion, the surest way to get it right.
- No silos.
- No pushing without communication.
- No plans without concrete data-based results.
- No superstars. It’s about the teamwork.
What do you think? Should product lead PLG, or should it be something else?