Why have product-led companies become so popular in the past number of years?
We talk to Blake Bartlett, Partner at OpenView, on why product-led growth has become such a popular way for software businesses to grow.
On this episode you'll learn:
- What are the three era's of software, and how they've changed how businesses go-to-market?
- Why product-led companies have many advantages of traditional software companies, what they are, and how they've changed the way companies invest.
- The importance of A/B testing your pricing and packaging as a product-led company.
Time Stamped Notes
[3:20] - Blake describes that a product-led company is and how they tend to begin with a self-serve journey, and then grow and expand from there.
[4:40] - Product-led companies have become more popular because the way businesses purchase software has changed. Blake describes this as the three era's of software and gives us details of each one. An end-user can today start using enterprise software at their company without needing the support of their manager or IT department.
[7:30] - Companies who are building software for the end-user should develop the product with those users in mind because they're a fundamental part of the buying process. You need a distribution plan to get your software into end-users hands.
[9:30] - Most companies can add a product-led motion to their go-to-market. To do this, companies need to develop software that solves their end-user's most significant pain points. Blake talks about Calendly and how there an excellent example of a company that developed for its end-users. They developed their product to help sales reps be more effective. Once they have a lot of sales reps in a company using their product, they can reach out to the head of sales and discuss why it would make sense for them to upgrade.
[14:40] - A critical part of being successful with a product-led model is getting your pricing and packaging right, and understanding where to add the paywall, so you don't give the core value of your product aware for free.
[15:30 - Having a lot of free users using your product is a great way to upsell your product to the CIO and execs at companies.
[18:40] - Blake discusses the importance of A/B testing pricing and packaging. He gives an example of how TypeForm leveraged free features to grow free user adoption and how they monetized those free users into paying customers.
[20:35] - Blake talks about how product-led vs. non-product-led companies invest differently. In traditional companies, they need to invest heavily in sales to carry quotas, and marketing to help sales hit that quota. In product-led companies, how you invest and the timeline of investment looks different.
[22:55] - We talk about how product-led companies can potentially expand internationally a lot quicker than traditional software businesses.
[23:55] - We talk about how product-led companies can use their user's data to help plan out their product roadmap.
[28:10] - For companies who already have a sales-led model, and want to start investing in product-led growth, they need to create a plan on how to create a more humanless experience and then persevere with that plan.
[32:15] - We talk about team structures for product-led companies and who would own the revenue number.