Feedback I’ve received since publishing Part One and Part Two of these PLG blog posts has reinforced some of my perceptions and raised some other observations. Let’s dig in.
First, whether it’s for a startup or a mature B2B company, achieving PLG isn’t like flipping a switch. Rather, it’s a journey that usually needs to be phased-in over time. In some cases, companies may not have products that naturally lend themselves to PLG. Or they might not have personnel who are willing and able to integrate PLG into their company’s culture and processes. Or perhaps the makeup of their user community means that it’s not readily convertible.
In many other cases, there are companies that have or will manage to speed up their PLG adoption journeys. They’re able to do so by utilizing their trial versions and current shipping products to build a foundational group of not-yet-paying but active users who are then more easily converted into paying customers.
Certainly, PLG achievement is easier for zero-stage startups with open source product offerings. Ditto for a company with a commercial product along with a product owner who has prior PLG experience. It starts with being open to the approach, making a commitment, and using management finesse to follow through. That’s what paves the way for establishing PLG principals and actualizing a PLG strategy.
Ultimately, any B2B software company can adopt the basic principles of PLG to:
Improve user experience, customer satisfaction, and enable direct, two-way communication between customers and the company’s software developers,
Boost engineering and product management efficiencies, and
Increase sales and marketing efficiencies.
Perhaps running go-to-market experiments that lead to making incremental improvements in your end-user community is the right, initial approach.
More generally, how can you determine if a PLG strategy is right for your company and product set? The following are end user, product and marketing characteristics of successful product-led growth companies that can serve as a checklist. If you are considering PLG as a strategy, how many boxes do you check off?
Your end user is:
Able to quickly and easily realize significant, ongoing value with minimum help from your company’s pre-sales personnel,
An influencer over buying decisions and/or has direct buying power,
Potentially a product champion who can drive internal adoption of your product and facilitate expansion, and
Potentially a member of an active community of product ‘super-users’ or connoisseurs.
And your product:
Has a large total addressable market (TAM),
Currently does not meet users’ needs or misses the mark in other ways,
Is easy to understand, evaluate, adopt, and integrate into existing systems via API or workflows,
Delivers real value before an invoice is presented,
Offers a uniquely valuable solution that is customizable and makes completion of daily tasks more efficient,
Has features with discernible value, and that translate into self-propelled marketing and sales momentum that, in turn, drive new end-user acquisition,
Is a platform that produces additional value as users connect to additional services.
You have product marketing and product management teams in place that confirm your product has:
A built-in network effect(s),
The ability to provide additional value by integrating user behavior and feedback, and have on-going monitoring,
Marketing activities (omnichannel marketing, digital/social marketing, etc.) strengths and maturity that can support demand gen and product engagement with PLG,
Low marginal costs per each end user,
A price list that scales as value is realized and usage increases,
A strong viral potential that leads end users to invite others into the community, and
High probability of finding product-market fit.
When you are considering adopting a PLG strategy, most of these characteristics should be present. Even when most of these traits are present, however, the transition to PLG doesn’t happen overnight. That said, in my estimation, the PLG approach will only continue to grow, and being last to the party is never a great look.