Why I Wrote the Book On Product Led Growth
Editor’s Note: This article covers one chapter from the book on “Product-Led Growth: How to Build a Product That Sells Itself” written by Wes Bush, founder of Product-Led Institute.
History tells us that “how” you sell is just as important as “what” you sell. Just like Blockbuster couldn’t compete with Netflix by selling the same digital content, you need to decide “when,” not “if,” you’ll need to innovate on the way you sell.
One of the main reasons I decided to write the book on product led growth was because I witnessed first-hand the power of Product Led Growth. It all started in a cold, gusty winter in Waterloo, Ontario (a.k.a. the tech capital of Canada). In one cozy loft, over 50 hard workers plugged away on their laptops side-by-side on long plywood tables. Everyone was passionate about video.
Inside this startup, it was common for everyone to use video to communicate with their family, friends, co-workers, customers and even prospects. At the time, this behavior was considered a bit weird, but video was quickly becoming a thing for businesses around the world—it was an exciting time. As a result, smart investors wanted to pour money into video companies to accelerate their growth and ride the wave of demand.
Since gaining access to capital wasn’t an issue for this software company, the team was “blessed” with the opportunity to put some serious marketing firepower into promoting its new video hosting technology to the masses.
I was one of those marketers. I spent a small fortune on countless acquisition channels. I was laser-focused on generating leads. But after spending a stupid amount of cash, I began asking some hard “whys” about customer acquisition—like why did I invest $300,000 promoting a whitepaper?
Obviously, the outcome was to generate leads for a hungry sales team. But why a whitepaper in the first place? We were using the same-old marketing playbook that everyone else did: create content; use landing pages to capture leads; and nurture those leads with automated emails until, one day, they converted into paying customers (or unsubscribed). Sound familiar?
It wasn’t until I helped launch a freemium product that soared to over 100,000 users in less than a year that I realized something was wrong with the old marketing playbook. By making it easy for people to experience the value of our product, we transformed it into a powerful customer acquisition model.
This one experience reinforced something I have long believed: Truly great software companies are built to be product-led. You don’t have to be a genius to come to this conclusion. In our day-to-day lives, we expect to try products before we buy them. Whether you’re contemplating perfume, a new shirt, or even a pair of sunglasses—you want to try it before you buy.
Trying a product is and always will be an essential part of the buying process. When it comes to software, consumers demand the same experience. Companies that embrace product led growth align their business model with an undeniable consumer trend that is not going anywhere.
As the SaaS industry evolves, I believe there will be two types of companies:
- Sales-led companies represent the old way. It’s complex, unnecessary, expensive, and all about telling consumers how the product will benefit them. These companies want to take you from Point A to Point B in their sales cycle.
- Product-led companies flip the traditional sales model on its head. Instead of helping buyers go through a long, drawn-out sales cycle, they give the buyer the “keys” to their product. The company, in turn, focuses on helping the buyer improve their life. Upgrading to a paid plan becomes a no-brainer.
Today, a strong brand and social proof are no longer enough to build trust with the modern buyer. You need to let people try before they buy. Product led growth is how you turn that approach into an executable business strategy.
To sell to the modern buyer, you need to decide: Are you going to be product-led? Or will you be disrupted?
If you’d like to learn more about how to build a product-led business, make sure to check out the book on Product-Led Growth.
How did the team at SurveyMonkey know it was time to revamp their pricing strategy? We’re exploring which signals tipped them off and how they made it a success.