“How can I make my organization more product-led?” 🤔
I’ve been asked this a few times by product people who feel they are focusing on the wrong problems, or perhaps solving them in the wrong way and don’t know how to get buy-in and autonomy to change. I’ve lived through this pain and had plenty of conversations with those still living through it.
I’ve also softened my original position, which was evangelical about being product-led.
Books like Inspired: How to Create Tech Products Customers Love by Marty Cagan helped shine a light on how SaaS products could be built. But he also takes a very fire and brimstone approach. You’re either doing product, or you’re a feature factory – black and white.
In reality, there’s a lot of gray, and you can carve out parts of your business to be more product-led than others.
In this article I’m going to:
Read on. 👇
Why do you want to be product-led?
First, what do people mean when they say they want to become more product-led?” I asked ten product marketers and they said:
1) Making product the growth engine, or “Product-led growth”, meaning acquisition, retention, and monetization strategies that are fueled by your product. Let’s look at Slack as an example:
- Acquisition: Inviting coworkers to your Slack channel creates user-generated growth.
- Retention: Usage of features (Slackbot, channels, etc.) builds habits for retention.
- Monetization: A freemium product, along with usage-based monetization and transparent self-serve plan pricing.
2) Adopt product principles into ways of working. There were a few, but the top four themes were:
- Focus on the end user first and deliver value before extracting value.
- Use data to make decisions and define what success looks like.
- Learn faster, build in iterative cycles, and focus on outcomes.
- Give cross-functional teams the skills required to meet an outcome.
3) Both – They want product-led principles and think PLG is the best way to get it.
Why is this important?
- People want more autonomy over the opportunities and solutions they work on.
- They feel this is the way the industry is trending and want product-led skills in their career.
- They want to work on a product that has an “impact” and believe this is the best way to build and scale a product.
If you’ve read Drive: The Surprising Truth About What Motivates Us by Daniel Pink, you’ll recognize the common threads of autonomy, mastery, and purpose in the sentiments above.
The blockers to becoming product-led and how to overcome them
Product running as an agency
Product running as an agency is sometimes referred to as a feature factory. This is when product teams get feature requests from potential customers. Often these are requirements for signing a deal, sometimes even with a timeline for when it’s delivered.
Many companies start this way, and pre-product market fit, it’s a great model for understanding customer needs while generating money. But ultimately if the company doesn’t pivot from this model early it can lead to inflexible solutions.
As you discover more about the problem and your customers, you’ll come up with better ways to solve the problem for a wider audience. Custom one-off solutions limit your product’s flexibility and create tech debt by forcing you to maintain several systems. Ultimately, this limits your product team’s autonomy and slows the company down.
When sales or customers ask for new features, try…
- Turning calls into product discovery calls. Use calls to understand the underlying problem. Who else has this problem? And how else could we solve it? For example, can you solve this with third-party product integrations?
- Pushing back. You’d be surprised how many “must haves” are actually “nice to haves,” and the customer may still sign.
- Recognizing when you’re not a good fit for the customer. Ask if they’d be willing to stay in touch and test prototypes when they’re ready. Then reach out when you have something and look to close them at a later date.
Sales won’t like this 👆 so you need to be in a financial position to justify the decision. You’ll also need to outline the cost of this extra work – not only the costs to build, but also the opportunity cost and the cost to maintain.
4. Last resort – If due to financial pressure you have to sign them now, try not to be specific about the solution, just the problem that needs to be solved. Try to be date-agnostic, but if they require a delivery date, overestimate it to get as long a time horizon as possible.
This will give you ultimate flexibility in how you allocate resources to solve the problem while giving you more time to talk to others with similar issues so you create a more well-rounded solution.
The target customer wants to be “sold.”
Some customers, for example, enterprise buyers, want to talk to someone before they purchase. Done well, this is a great method for getting high-value customers. However it doesn’t mean you need to become “sales-led” everywhere, it just means you have a sale-led monetization strategy for a target customer who expects that.
Check out this matrix from Elana Verna on examples of being product-led, sales-led, and marketing-led for each step in the acquire, retain, and monetize customer journey. The trick here is to remember you can adopt multiple strategies even when some of your customers want to be sold.
When you’re currently running sales-led everywhere, try:
- Adopting a product-led sales approach, where the product helps with adoption and retention, but uses sales for monetization. This is sometimes also referred to as “bottom-up sales” – where the end users explore and validate the product. They then become internal champions that help sell it to the budget holder within the business. Again Elana brings the goods with this post.
It’s technically hard to offer self-serve sign-up
Being product-led is easier when you have a large customer base and a larger pool of insights to draw on. One of the lowest friction ways to get a large customer base is to let people try the product without having to talk to anyone. However, depending on how your product is built, for many B2B companies, this can be challenging.
When you can’t be product-led with acquisition, try…
- Focusing on being product-led for activation.
There are always opportunities to work on building out the core habits of your product, particularly if you suffer from churn, which often comes from poor activation during onboarding. Activation is easy to measure in a leading way, which will help get you buy-in for further investment (more on data for buy-in next).
2. Create a secondary product that can be product-led and use it for lead generation.
Clearbit does this very well with its tools. Just make sure the value of the secondary product is aligned with your core product, to ensure leads are high quality.
3. Build self-serve acquisition into the product.
If the total addressable market is large enough to support the opportunity cost, bite the bullet and prioritize building self-serve acquisition into the product. Use growth modeling to justify the opportunity to external stakeholders, and make sure sales is onside by promoting the product-led sales approach mentioned above.
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Lack of data, so the HIPPO decides
If you don’t have customer data to make decisions then it’s hard to understand what’s working and what isn’t. In these situations, the HIPPO (highest-paid person’s opinion) makes the calls.
And without data, can we blame them?
Customer data is required to make better product decisions, measure outcomes, and ultimately gain trust from leadership, which enables more autonomy.
Regardless of your setup, you likely have access to customer data already, but not all data is created equal. People put stock in both numbers and stories, so make sure to use your customer interviews and competitive intelligence.
Also, hard numbers are only useful in making decisions if the metrics are leading indicators of success. For example, if you only have revenue as a data point, it can be hard to see if the activation work you’ve just released is having an impact.
When you don’t have the right data, try…
- Testing your assumptions as cheaply as possible. Get multiple people interacting with customers each week through customer interviews, prototypes, paid ads, landing pages, surveys, etc. There are a plethora of cheap and quick ways to get some qual data, and the more people involved the more they will buy into the findings (and the more you will reduce your own bias).
- Getting familiar with Google Analytics. The new GA4 might need some dev work to help set up, but it’s not too hard and there’s plenty of data in there to help build a case.
- Using FullStory. It’s relatively easy to implement, but if you don’t have the funds for that Microsoft Clarity is free (but much more manual to get insights out of).
- Manually running SQL against the database. If you don’t have someone who knows SQL, you might have to learn it. DataCamp has a good free course. Half the challenge here is not just learning SQL, but learning your database structure. Often, it’s a mess, so get a dev to walk you through it, and be smart about the questions you’re asking – there’s a time cost to this process.
- Investing in a tool like Amplitude. Self-serve usage analytics, coupled with split testing capabilities, give you that next level of granular detail to both identify and validate opportunities, as well as measure success. It’s a game changer and will help change opinions on the journey to being product-led.
Lack of trust in a product-led team.
Perhaps the biggest hurdle is the cultural change involved in getting stakeholders to champion being more product-led. People who are used to making decisions will now be challenged, and potential customers lost in efforts to build more scalable solutions. Ultimately this comes down to risk mitigation – both the risk of getting it wrong and the opportunity cost of what people could have done instead.
When you don’t have trust in trying product-led, first:
- Share the benefits of PLG – Identify key stakeholders and make sure they understand the potential benefits of being product-led. This is where I would focus more on PLG as opposed to product-led principles, as it’s more likely to align with the vocabulary and metrics the leader cares about. This article summarises PLG quite well but in a nutshell PLG companies have:
- Faster acquisition = more scale.
- Faster adoption = more retention.
- Lower customer acquisition costs.
- A greater ability to attract and retain top talent.
2. Make their goals your goals – Ideally company and department strategies are well communicated, but if they aren’t, you may need to start conversations and get alignment on what metrics your key decision-makers care about.
The North Star workshop is a great tool to enable collaboration in these discussions. Regardless of the end goal, you need a metric that you can measure in a leading way, as well as agreement from your key stakeholders.
3. Make the ask small – We all have limited resources, and the more you ask for, the more you put the project at risk of ending prematurely. Treat this like an MVP to get greater buy-in for a more holistic change. Use the above metric to pitch a project, time-box it to 6 months, and limit the team size to a product designer and two full-stack engineers, with a part-time data analyst if you can’t self-serve.
4. Pick the right time and people – people who have experience in the parts of the product you’re likely to work on, and make sure they’re passionate about making it work. Sell them on the opportunity space, the new way of working, and the extra autonomy they’ll have in this project. Stealing top talent from other teams may impact those teams' deliverables, this is why it’s essential to make sure your team is small and time-boxed.
If you’re struggling to get the players you want, another option is to pick a time of year when teams are less busy. For example, some devs might be willing to work over December and January while other teams are disrupted by the holidays.
5. Showcase success – When you get your team, make sure you celebrate their successes early and often. Keep coming back to the predefined metrics and sharing your learnings. The more you communicate the team’s wins during this trial period, the more likely you’ll get wider buy-in when the project is over.
The main points to take away:
- It’s ok to be more product-led in some areas while staying sales-led in others.
- Identify your blockers to becoming more product-led right now, and brainstorm some ideas to overcome them.
- Product-led growth is a great enabler of product-led principles. In particular, self-service acquisition coupled with product data tracking is a great recipe for teams to quickly and autonomously deliver value that’s aligned with the end user.
- Change takes time, and a small team working on a time-boxed product-led project can be the catalyst for broader change in the organization.
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