Why scale-ups will struggle to keep growing with Product-Led Growth. - Cogent

Why scale-ups will struggle to keep growing with Product-Led Growth.

Matt Shanks

Matt Shanks

Principal Product Designer & Author/Illustrator for children. I'm out to improve the quality of life for everyone who uses the things that I make.

PLG starts off with users, until you forget about them

At Cogent, we’ve been analysing Product-Led Growth (PLG), this new growth model, made clear by the folks at OpenView Partners. Their insights and analyses are great. It makes a lot of sense, and yes, it’s absolutely the new growth model of the future for plenty of reasons that I don’t need to go into here. If you’re measuring user growth and you’re not using the tenants of PLG to ratchet those numbers up, you’re missing out.

But what if you are?

See, PLG is great for growth-stage businesses. It’ll give you traction in the market and it’ll dangle numbers in front of VCs that will make them salivate. But what it won’t do is guarantee your long-term success. No, for that, you need something different

Did Slack get… Slack?

Slack is the one that people talk about when they talk PLG. “Be like Slack” they say. Solve real user pain. If you do that, and spread virally, for free among an organisation, the organisation will approach you to buy your product. You don’t need as many sales people making calls if your product is doing the selling for you.

I remember watching Slack spread virally through the tech community globally. “It’s amazing”, “Get onboard”. Twitter fell in love with it. Developers did too. And so we all did. Business after business signed up to Slack because “all of our employees are just using it and now they want to use extra features so we need an enterprise account.” It was classic PLG. And, for those few moments in mid 2019, things were pretty good.

But then cracks started to appear. The sentiment for Slack changed from “What a great tool” to “I can’t find anything”, “It’s hard to track decisions”, “What’s the difference between Email and Slack.” In short, it started to be a hindrance to productivity.

Slack had options. They could tap into the community and focus hard on solving those problems (or at least providing ways around them), or, they can do what, from the outside, it appears they did – stop focusing on the employee for whom they built it all in the first place.

Now, I don’t work for Slack, so I’m not privy to the decisions that were made internally, but as a user of Slack, what it felt like was that Slack began to focus on buyer pain, not user pain. Visualising ‘stats’ with enterprise dashboards, audit logs, user permissions – all the stuff that a handful of people in an organisation use. They seemed to stop focussing on the masses, and focussed on the few who held the budgets. Great for revenue, probably, but not for long-term success.

Outcomes of a product road mapping workshop

Having a good product is only part of the equation

In its early days, Slack was on fire. Atlassian was too. They were great products. The feature set was tight, and VERY useful. Companies like Notion are now riding that wave. Solving user pain through making great products is great for getting VC attention and making all the graphs do what you need them to do to grow your company. But, weirdly, a great product isn’t what makes a great product company.

A great product company is able to scale their product-led, user-first culture, as well as their product. It’s about having those hard conversations after your PLG approach has sky-rocketed you to early momentum. How do we keep focus on the user? How do we ensure that our Business Strategy isn’t kicked off course when all those enterprises come knocking on our door because our PLG strategy has worked so well? How do we make sure the growth is fast, but also sustainable?

Embedding a product-led mindset and culture leads to good growth

At Cogent, we’ve been talking a lot about what ‘good growth’ looks like. We’re a strongly values-led company so ‘good growth’ has led to some interesting conversations. Fast growth is one version of good, and PLG is an excellent playbook for that. But what’s not in that playbook is what happens when your PLG strategy pays off if you haven’t got a product-led mindset and culture embedded in your unicorn-aspiring company.

Slack now has plenty of competitors who are all looking to see which slice of user pain they can relieve for their customers so they can ratchet their growth quickly and cut Slack’s lunch. The question is, which of them will be the most prepared to keep solving user-pain when all those companies come knocking on the door asking for an enterprise subscription, and, because they’re now paying, are demanding more dashboards of their account manager.

 

Related posts

Growth
Eadaoin Doherty

Leading The Product – my first virtual conference

Last week I attended the Leading the Product (Digital) Conference. It’s the first time they’ve run a virtual event and I must say, I was very impressed!

The day was based around the ‘7 P’s of Product’: Problem, Purpose, Position, Performance, Price, Promotion and Practice. This set a great base for covering a host of topics ranging from strategy to delivery.

Read More

Have your say

The 2020 Australia & NZ Product Teams Survey is now open. We want to hear from founders, developers, designers, product managers and tech leaders across Aus & NZ.​