Product-Led Growth — What it’s all about?

In 2008, Brian and Joe rented out their three air mattresses and made a profit of $80 per head. For the friends, this didn’t seem like a bad idea for a startup. In fact, it’s a great idea. So, they decided to build a website and invited people to list theirs on the website too. This is how they started Airbnb (It was called Airbed and Breakfast then). Though it may sound breezy now, it was not a cakewalk then. Even after a lot of people listing and pulling up decent traffic to the website, there was a huge gap between the number of people visiting the website and the number of bookings they got.

Brian and Joe wanted to solve this. So they grabbed their cameras, went to each one of the NYC listings, clicked pictures themselves, brushed them a little, and uploaded them on the website. What they saw on the other side were terrific results. So later, they hired photographers and paid them to take pictures of the owner’s listings. It worked, their strategy worked, people started booking on a large number, and the rest is history.

If you look deep into it, what they did was not just smart but also scalable. Scalability is the most important problem businesses don’t have but still try to solve.

This applies to today’s topic, Product-Led growth because it focuses on the product as the primary source of scalable and sustainable business growth.

Saying that, we are unboxing many interesting things about Product-Led growth from our conversation with Ashwin Gupta, the Co-founder of Reslash, a virtual space company that is changing the landscape of how we spend time and interact in a virtual first world.

What is Product-Led growth?

To start with, say you have built a product. Then, when your ideal customer profile comes in and uses the product, they should be able to understand the value proposition of the product, believe that this product will solve my problem, and flare with curiosity to start using the product.

And once they start using the product, you should be able to nudge them in the right direction whenever they come across any friction points.

Ask yourself these questions: Are you able to reduce the time it takes to solve their problem the older way? Are you able to provide them with the solution in the fastest time possible?

And while you are doing this, at a certain point in time, they should be convinced enough of the product’s value to the extent that they are interested in paying for the product itself.

Is Product-led taking off recently?

I don’t feel it is taking off recently. In the SaaS world, from Skype to Dropbox to many more, there have always been companies where the product has played a very significant role. In fact, Dropbox, the SaaS legend recognized as the Poster child of Product-Led growth, used PLG to hit $10B in 10 years.

Sales-led vs. Product-Led growth

What happens with typical sales-led growth is, you have a salesperson to whom the leads will be passed on and will take care of the sales. If you want to sell beyond SMB, you talk to them, figure out what they want, and give them whatever it takes to make them understand the value of the product, which will eventually lead to your five-figure deals. The problem with this is that it comes with a cost. It is almost impossible to control the quality of the touchpoints(wherever the customer is interacting with your product), and the scalability becomes arduous.

Here’s where Product-Led growth comes to the rescue.

  • Your prospects don’t have to rely on people to start using your product (scalability is solved)
  • You build your product so well that you are able to increase the quality of the touchpoints with your product and provide a better and consistent customer experience(quality of the touchpoints is solved) and
  • The PLG can open up a flywheel where the product takes care of most sales, marketing, and customer success, leading to lower customer acquisition costs and shorter sales cycles. (cost is solved).

However, PLG cannot be a standalone solution to all the problems. And to solve that, companies have started making the sales and customer success roles as strategic as possible because there will always be something that we cannot solve by automation.

In Product-Led growth, we are trying to provide value as fast as possible, which is the opposite of sales-led growth, where you want to build relationships between the prospect and the salesperson to get the conversation going in the right direction.

Before we get into deciding which one to go for, the very first thing you need to think about is how do you make them realize that this product is worth buying? Then, you will give them clear visibility on the business outcome they can expect with all the information they need.

Let’s take the example of SpaceX. Your intention is not to take them on a trip to Mars right when they visit your website. You want to convince them that is something you can trust. How will you do that? You will provide them with all the information they need by telling them that you have the technology, it’s safe to use, you have done your tests, you have taken people to Mars.

This way, you make people trust your business.

The same applies to our case, and you can have a salesperson who can carry out this whole process for you or offer them freemium/free trial versions where your product does the job for you.

Or you can combine both, where someone comes in and starts using your product for free but is not able to hit the milestones. Now, you bring in a human to solve that and customize the flow, what we call the combination of sales-led and product-led.

So from a business standpoint, I don’t think it is an either-or. It is always somewhere in the middle. But deciding on what is best for you depends on the customers, and for you to figure that out, you need to have metrics and keep on tracking them till it makes sense to you.

Product-Led growth example

I feel Webflow is doing a fantastic job. Anyone without coding knowledge can create a website easily. Talking about Webflow’s PLG, you don’t have to pay anything while you design your website. When you are ready to host it with your domain name, you can go ahead and choose the paid plan. Webflow made it easy for designers to discover the product, signup, and suggest to the teams. It made it simple for anyone to try it with its free templates and video tutorials.

The Future of Product-Led growth

As technology gets more advanced, we will be solving more complex problems, where the product has to play an important role. But anyway, we need to keep the customers at the center, and the product should provide the best customer experience.

If that is not being achieved, maybe something else is the answer and not product-led growth. So, Product-led growth would be an essential aspect of any successful business story but will not be the only thing.

Product-led growth might eat all the human touchpoints that you have in B2B businesses in the coming years. But that could still take time. Meanwhile, you need to figure out who is doing the best job in different touchpoints and optimizing it. You may also reach a point where you can automate all the points, and that’s absolutely fine. This means you can grow your business at an incredible pace, and you are able to do it at scale while keeping your costs low. That’s the Holy Grail.

Further reading

6 Product-led growth examples
5 Companies doing Product-Led growth rightProduct-Led growth strategies for Product managers

What the heck is Product-Led growth?



-- aims to make Product Management and Development Simpler & Smarter. We write about Product Management, Product Design, Product Development, and startups.

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