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For some time, private investors and Wall Street have been betting on unprofitable startups who spend heavily on growth to scale, that is Growth at all costs.
A strategy gaining in popularity to achieve responsible scale is product-led growth (PLG)—think Slack, Calendly, Expensify, and Dropbox—companies that have shifted power from the buyer to the end-user. If you want to rise to meet the demands of today’s market while growing sustainably, PLG is the secret.
Minimizing the amount of time between developing a product and providing it to customers while maximizing the number of customers that come in contact with the product allows for fast and sustainable growth. When products solve a real problem for end-users, freemiums can lead to SaaS growth with an average of 7% free to paid conversion rate.
Zoom, a leader in video conferencing, is a household name today. But it started small, launching in a crowded space with bigger names like Cisco Webex and GoToMeeting. It did this by centring on customer needs and offering its key features for free.
If the first step to building a business that’s worth a billion dollars is to develop a product that solves a meaningful problem for the customer, step two is telling the world.
To do that, you need people who will advance the mission. As a company scales, articulating the company culture and vision becomes more important. When other people begin hiring instead of founders, the foundation of the company can get lost. Avoid this by hiring with intentionality around core company values. Your team members should all know and be able to list the company values at any moment.
The most successful, high-growth companies listen to their customers and value their opinions. Prioritizing customer relationships start by building and launching products that solve their problems; but also includes continued listening. Having the trust and loyalty of your customers continues to benefit an organization as it grows.
In a PLG model, users are close to the products, and that helps dictate company direction. Some people interpret the “p” in PLG to mean that the product organization is in charge. In reality, it means that the customer is in charge.
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