Product-Led Growth for Startups

by Heather Hansson - Director of Product, Docket

While the term “product-led growth” is becoming a more widely-known business term outside of textbooks (thanks to pioneers like Slack and HubSpot), PLG is still a mystery for many companies when it comes to application and implementation. When they hear the words “product-led growth,” many sales-driven organizations become fearful that their product will sell them out of jobs (which is not true). Many well-established B2B companies envy the PLG model and try to find ways to adapt their product with mixed results. 

Though adding hooks and calls to action to a website or product can seem simple, the product may require additional changes to ensure a new customer, unassisted by sales, can find their way around and see immediate value quickly enough to determine how long they stay and how much they will pay.

The envy of them all is a startup with a fresh palette of opportunity. Building a product with a product-led mindset from the beginning can make it much more simple to plan and architect the product while setting expectations with investors. We’re not saying “simple” as in “easy,” but it’s a lot easier to build from scratch than it is to modify existing infrastructure, tracking, and reporting.  Starting with product-led growth in mind allows companies to avoid disruption to their goals, roadmap, current customers, and the various departments who will need to adjust to a different way of thinking when they inevitably make the switch to a PLG strategy.

So what does it mean when a startup is product-led and why is this so important? Sharing from my experience at Docket, a High Alpha Studio company, we will take a look at several important facets of a product-led company so you can set your startup team in the right direction.

Get Everyone On Board

Once the startup decides it’s going to follow a product led growth strategy, it’s critical to get stakeholders to shift their mindsets. The team, just as with any SaaS company, will be made up of combinations of product managers, designers, engineers, and marketers. However, it will be important to find those that have an understanding, and even better, experience, to see the product built in support of a product-led process. 

The product manager’s role needs to balance new product features with collaboration and communication tools that create viral opportunities.

The designer’s role is to ensure the first time user experience (FTUX) is easy, reduces churn, and provides hooks that create ongoing retention and upgrade opportunities.

The engineer’s role is to ensure the technology stack supports the product’s need for ease of use, communication strategy, and most importantly, tracking and reporting on clicks to help the team understand what is being used, how it is being used, and what isn’t being used.

The marketer’s role is to get people into the front door. Making sure the website and social channels have a solid story that helps drive product use while testing ideas through campaigns and messaging along with monitoring to identify product-market fit. 

Depending on many factors, like budget, type of solution, and speed of product development, this core team must work harmoniously together to discuss a tightly bound strategy that aligns from roadmap to handoff to launch, working together to observe, identify, and listen to each other as the product continues to morph and grow.

Make the Product Easy

If your team is used to creating requirements for a complex product that has layers of tools, workflows, and integrated systems, chances are a customer would find it difficult to take it for a drive after they are given the keys. This is one reason B2B companies quickly grow their sales teams, client success teams, and enterprise teams to help the customer navigate through the complexity of the product.

On the other side of the spectrum, a product-led team will look at every new product change and question whether it is easy to try and use.

The product must be easy to try: a key to product-led success is that a customer can get in and try the product with as little friction as possible. If you cannot tour the house, how can you know if the floor plan is sufficient, whether your furniture will fit, and how much the house has to offer? Put the key under the mat and let the customer walk in on their own, so they can poke around unencumbered to decide if your product is right for them. 

The product must be easy to use: another PLG success factor is that a customer must perceive value as quickly as possible. Once the customer is in the house, can they quickly find what they are looking for without complex tools or the need for human or robotic help (functional  value)? Can they immediately feel a sense of relief that the product will solve a problem they have that they can no longer live without (emotional value)? And can they immediately find a way to share their newfound genius through some display of results to their manager, peers, or customers (social value)?

Make the Product Viral

Making the product easy gets person A through the door, and will hopefully create  future revenue and/or upgrade opportunities with the right hooks. However, person A probably doesn’t pay the bills. How does person B, C, and D get in? If not from great marketing, hopefully person A introduces them.

Therefore, the product must be easy to invite others to. Creating easy triggers for a customer to share information, results, collaborative opportunities, as well as a straightforward invitation creates viral opportunities is a must for product-led companies. For instance, person A could send an informative report to person B, an invite to person C, or a message to person D, and next thing you know, three new users are in your product checking things out. Exponentially, this process triggers countless interactions inside and outside of your product, so it’s important to make these functions simple — and even habitual — so more and more people are drawn into your product as a result.

Be Customer (and Data) Driven

Startups tend to go all-in on their ideas, focusing solely on driving the ball forward to the endzone. The problem with that is that if they don’t realize the customer moved the endzone while their heads were down, they could be scoring a touchdown for the other team.

It’s critical that for every play made by your customers, your team pauses, asks questions, watches the data, and makes decisions based on what both the customers and the data are telling them. Each tool, product, or function you create should start very lean to test the waters. If it is too lean, let the customer tell you which direction to take it. If the data says it is being used in an unexpected way, ask the customers why. If the data shows it isn’t being used, don’t keep driving it until you find out why or don’t be afraid to shelve it.

Build iteratively to test, observe, listen, and continue to maximize your resources, retain customers, and grow a solid product.

Be Patient

Most importantly, a startup following a product-led growth model must learn to have patience, which starts from the top. It is the CEO’s responsibility to help investors and the team stick to the plan. It can be tempting to focus on those hefty enterprise contracts, but building a product solely around one company’s needs can result in a stifling of the creative process, with all attention and product development focused on a specific use case only. Stay the course, and with the right team and well-utilized resources, the reward of a customer-driven, product-led approach will shine through.