‘Measure Everything’—Pendo’s Todd Olson on Becoming a Product-Led Organization
In The Product-Led Organization, Todd packages his years of experience to help companies uncover ways to leverage their products in a way that allows them to offload a lot of what used to be manual-only tasks and business processes. It’s an essential read.
To kick off season 10 of the OV BUILD Podcast, Todd joined host Blake Bartlett to discuss what exactly “product led” means, how a product-led strategy extends way beyond acquisition, and how the less-is-more concept can make a big difference.
Listen to the episode below or scroll down to read the rest of this story.
No humans required
The simplest way to define product led is “no humans required.”
This is the polar opposite of the recently popularized “white glove” or “concierge” experience, which puts humans—not a product—at the center of the customer experience. More to the point, a white-glove experience falls apart without humans.
Related read: What is product led growth?
A product-led experience, on the other hand, is one in which 100% of the customer interactions take place with a digital interface. Todd offered Tesla as an outstanding example—despite the fact that buying a car usually involves a lot of back and forth between a buyer and seller, Tesla has reimagined the process to require very little human interaction.
The product-led approach to growth has many benefits, but Todd and Blake named convenience, scalability and resilience as the top three.
- Always on. Always convenient. The product-led experience is available to prospects and customers 365 days a year, 24 hours a day. They can engage with it on their terms. Like so many of the other things we like best in our lives (Netflix, Spotify, etc.), it enables on-demand, at-our-fingertips interaction.
- Easier to manage and highly scalable. Product led growth harnesses the power of digital platforms and automation to replicate and scale the optimal experience without having to hire, train or manage additional staff. It offers push-button scalability. It also helps improve quality control since the experience is centralized and can be updated almost instantaneously in response to customer and market inputs.
- More adaptable and resilient. Finally, self-service models make it easier for organizations to pivot quickly when needed. COVID-19 created disruption across all industries, but product-led organizations were better equipped to adapt to the new reality quickly and efficiently. This resilience is a critical element in their ability to maintain their businesses and beat out the competition. If you put your product at the center of your experience, it doesn’t matter what kind of disruptions happen. Your customers and prospects can continue to have the exact same experience, whether they’re moving through your acquisition funnel or customers looking for ongoing support.
Not just for acquisition
Speaking of support, Todd and Blake also discussed an often misunderstood aspect of the product-led organization. Many people assume that the product-led approach is primarily intended to automate acquisition. In fact, the product-led experience can enhance and strengthen the entire customer journey.
Take onboarding, for instance. This significant process, which is usually owned by customer success, can be automated with product-led strategies that make sure the customer is on a path to realize value from the product. Using the product, you can make sure users engage and get things set up properly.
And this isn’t a one-time process. While initial onboarding is crucial to short- and long-term user success, it’s equally important to provide strong onboarding down the road for new hires.
“New users come in all the time, and they often get nothing in the way of onboarding,” said Todd. “They get dropped into a subscription with a bunch of unfamiliar stuff and are left to fend for themselves.”
“The most advanced companies I’ve talked with focus on creating in-product proof points that demonstrate to customers that they’re getting the value they anticipated.”
An automated, product-led approach to onboarding ensures that each user gets the best experience. At the other end of the experience, a product-led experience can also have an important positive influence on renewal.
“The most advanced companies I’ve talked with focus on creating in-product proof points that demonstrate to customers that they’re getting the value they anticipated,” said Todd. “It’s a really powerful idea.”
Basically, if you want a customer to stick around, you need to provide visibility into not only how they use your product, but also how that usage translates into value. If you do this well and consistently, renewal becomes a non-event—it just happens naturally.
Optimally, you want to be providing these proof points in an ongoing way that’s part of the product experience rather than relying on a traditional QBR presentation to make your case. We’re used to getting constant, proactive feedback from the products we use.
“I’m an avid Peloton user,” said Todd. “My Peloton gives me really active feedback that I can look at every single day that I ride. And I can not only see this data, I know how it translates into better health. That same kind of experience can be applied to B2B software.”
Less is more
One of the most intriguing ideas Todd shared was the concept of “addition through subtraction.” Adopting the less-is-more mindset is important to an organization’s success with a product-led approach.
As Todd explained, this is about shifting focus from shipping features and endless innovation to making roadmap choices based on what will actually deliver a better experience.
“We should celebrate removing features more often,” Todd said. “Getting rid of a feature that confuses users and is painful to maintain can have just as much, if not more, of a positive impact on the experience as adding some new bell or whistle.”
“Getting rid of a feature that confuses users and is painful to maintain can have just as much, if not more, of a positive impact on the experience as adding some new bell or whistle.”
Strategically eliminating “anchor” features that drag your whole product down can make a huge difference. One way to start embracing this idea is to pause when the team wants to add something and ask if there’s something you can remove instead.
Todd offered a word of caution about falling into the trap of adding specific features to win specific deals. “One of the risks of human-led sales cycles—and the reason enterprise software gets a bad rap—is that people tend to inflate product features in order to check more of the boxes in arbitrary matrices in order to win deals. When this happens, users lose,” he said. “We need to start rejecting that antiquated mindset as an industry and focus more on really understanding and working on the jobs that need to be done, the problems that need to be solved, and how seamless and efficient a product can become.”
Cross-functional for the win
We’ve been seeing a trend toward more hybrid and cross-functional teams in the SaaS space. This is especially relevant for product-led organizations in which product led growth teams often include marketers, product people, engineers, tech writers and others.
The power of the cross-functional approach is that instead of being driven by one function, it’s driven by a shared “North Star” metric that’s tied to a specific business challenge. Everyone rallies around that single goal, and they’re able to apply all their different perspectives, skills and knowledge to the challenge.
“Be cognizant of the size of each cross-functional team. Optimally, you want to build two-pizza teams.”
Another strength of cross-functional teams is that they allow for a really strong and dedicated focus on specific business processes like onboarding. The cross-functional team is able to examine every aspect of the problem from all different angles in order to come up with the most effective, efficient and comprehensive solution.
Todd gave another word of caution in relation to building cross-functional teams. “Be cognizant of the size of each cross-functional team. Optimally, you want to build two-pizza teams,” he said. “If your team gets too massive, it becomes impossible to reach consensus on the team’s goals and mandates.”
So, while it’s a major advantage to have access to so many different perspectives, you need to be able to manage and align the conversation if you want to achieve your objectives.
Starting point: Measure everything
So where should a team should start if they want to become a product-led organization? Todd’s answer: “Measure everything.”
“Step one is to make the leap from a gut- or instinct-driven organization to a data-driven organization,” he explained. “Measure every aspect of your product experience, understand your baselines and where you want to go, set some goals.”
Looking at the data is how the Pendo team made the decision to launch a free version of their product. “We’ve been working on this for a while, and we’re really excited because we already have a lot of interest in it,” Todd said. “Our goal is to get Pendo into the hands of small teams and small companies to help them become more data-driven and grow from there. This project has been my favorite announcement.”
Even though Todd has written the book on product-led organizations, he looks at this as just the beginning. “Ultimately, I’m a builder. That’s what I like to do. In many ways, we’re all just experimenting and learning. I don’t have all the answers, but I do think there’s a lot of good ideas in the book. The most exciting thing for me is that this is just the start of the conversation, not the end of it.”
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Savvy companies are turning their attention to in-product behaviors to measure key PLG metrics like activation and product qualified leads.