Here’s a contrarian viewpoint that was posted recently.
I get that there’s an enormous amount of frustration from the tech, marketing intelligentsia, and operators whenever a buzzword is overused. Everyone wants to monopolize the word. They want to capitalize on the frenzy of the new thing.
But, there’s originality to the concept and that is worth exploring. Let’s start by recognizing the fact that we always build on the shoulders of giants. The PLG (product-led growth) movement is no different. We can trace some of its origins initially to the movement of growth hacking, which was a spinoff movement from the growth story of social networks such as Facebook and Linkedin.
Products go viral – lessons in innovation by the social networks
When social networks were first launched, there was a laser focus on customer acquisition. The growth rate targets were unheard of, and the ambition was audacious. This meant traditional thinking couldn’t work, so achieving the goals needs some unconventional techniques. One of the most important things they focused on was ensuring users on the product brought in more users – that was the origin of viral marketing. Leveraging products to create self-fulfilling and repeating loops to draw attention and provide instant gratification was the overarching theme. This worked for a while, but as people got smarter, virality got harder.
These viral loops also meant there could be no time lags between analyzing the data, decision making, and quickly responding to change. The products and systems around it, such as marketing, analytics, and distribution, were custom built. In short, they were invented. It had to be because there was never such an onslaught of new users into an ecosystem. There were more internet users in the world of Web 2.0 on social and other products for more time than ever before.
Web 2.0 transposed to B2B SaaS
While all of this was happening, it’s important to note the B2B world had not yet moved to this level of sophistication. Far from it, they were learning the act of delivering products and services from a cloud, calling it the beginnings of SaaS. Traditional B2B companies originally catered to the customers in the few hundreds, and only big companies could count their customers in the thousands. When there were just a few customers, the marketing, sales, and customer service could work linearly. But, there was a limit to growth, and the process was slow. Nobody cared as long as it was all profitable.
SaaS changed all that. Today it’s pretty common to find SaaS products with thousands of customers (e.g. Datadog, a cloud monitoring service, that has more than 13K customers). With such a great number of customers, the marketing funnel, the sales process, customer service, and success teams have had to rewire themselves. Just the sheer numbers were overwhelming. Do note the importance of volume. A decade ago, when SaaS was just taking off there were very few self-serve, try-before-you-buy model B2B companies, maybe even a handful. Today those numbers have exploded and are growing exponentially.
Also, there’s not enough traditional sales and marketing talent globally that a single company could hire to serve its customer base. The alternative is to focus on the one thing that could scale quite easily and infinitely, and that is the product itself.
The Web 2.0 technique of using the product to drive the loops of the virtuous cycle of customer acquisition is a focal point now. This is the new go-to-market motion they’d like to have. There is a catch, though. Traditional enterprise software and the B2B world was and still is a world of data silos. There are many companies that would like to be the systems of records and platforms. This also means there are not enough open APIs (changing quickly now), not enough actionability in data, and there’s not an easy way to draw insights and be proactive.
Product-led growth and multi-dimensional data
SaaS Product-led growth is a solution representation to this problem set. B2B SaaS companies would like to move fast. They’d like to automate their top funnel and want their marketing to have insights. Further, they want to be proactive and let the products bring in more users. They’d like to see the Sales team have insights into customer product usage. It helps them to upsell meaningfully and retain these customers. All of this is impossible without retooling their existing software. This creates a vacuum and entry point for companies catering to these companies.
Product-led growth motion is a solution set that uniquely caters to this problem space. Product-led growth addresses this vacuum of data silos and gathering insights and efficiency in response. It’s important to recognize that product-led growth doesn’t just cater to the self-serve model of SaaS. This PLG model extends from early revenue to sophisticated use cases that involve sales teams too. So, the model prevails over the lifecycle of the customer.
We are building Glance with a similar intention. We stitch the data silos, provide collective insights and route it to the right action points, be it CRM, marketing platforms, and or customer success tools. Our goal is to help SaaS companies implement product-led growth motion in less than a day.