08.10.2024 Digital BIAS
This could be the biggest challenge or opportunity for SaaS organisations since the advent of cloud computing. Everyone is trying to establish a product-led approach to customer acquisition, and traditional sales-led platforms are not letting the opportunity slip by either.
As a PLG consultant, I’ve worked with several organisations that have made the switch or have needed help planning it, and some of those companies are well clear of $100M ARR. What that goes to show is that product-led growth is NOT simply as easy as a freemium model, PLG requires wholesale organisational change.
It requires organisational change, operational change and technological change. It’s a beast for sales-led organisations to manifest themselves, and that’s why people like me are engaged to help go through the process.
So how do you pivot from sales-led to product-led in PLG SaaS?
Before you get into what to do with the technology, you have first to understand if your audience is in need of an open-top approach. Just because the industry trend is to go with a freemium model does not mean it's suited or needed in every use case.
The general consensus is that the more complex it is to onboard to your product the less likely you are to be able to open your product up. That doesn't mean that you can’t simplify your onboarding sequence, but the best PLG companies have easy steps that suit self-serve motions. It does not suit technology that requires complex onboarding.
However, maybe there is a challenge to CTOs and product leaders to find out if there is a way to circumvent the long-winded approach and find a way to enable the single user to get a first-hand experience of your product. Now to be clear, I mean finding a way to show the value by going around the complex onboarding if it needs to happen.
So you have two options; you do the research and discover if your audience actually wants the open-top model (don’t just go all in on it because a VC or your board says so) or two completely redesign your whole product and commit to PLG anyway. I’ve dealt with the latter before.
If your audience says no, you are still left with a decision to make. Start by looking at your market share, do you have a big piece of the pie? Are the competition product-led? If so, are product-led companies outperforming your organisation? If you ignore the audience feedback how qualitative and quantitative was the research?
The research from your audience is of course extremely useful. When thinking about your onboarding in your new open-top process, knowing what they currently find most valuable about your product will help shape this new playbook.
If you can ensure you strike the right balance between too much value too soon and enough value to get started but not enough to stay free you have cracked it. But remember this, not every persona you build onboarding for needs or wants a generic onboarding experience.
You have to create unique platform onboarding experiences for each user type. And if you also plan to sell into the enterprise, you may need quick short sharp walkthroughs for people like the CEO, FD or other buying committee members.
Remember for me PLG is about enabling the buying experience, not closing more deals. You keep moving toward a frictionless model by offering highly aligned onboarding for users and decision-makers.
Are we set up to pivot to product-led internally?
Once you cover your bases on your research for the viability of your pivot, you then need to look at resources. These resources are
- Financial
- Technical
- Manpower
- Design
And you can run these in any order.
Can we afford to pivot to a product-led approach?
Much like any other business decision, ensuring that you have the finances in place to pivot to PLG is a must. But the decision is not purely based on build costs. In fact, there are several things financially that you should consider:
- How are we going to fund this?
- From reserves
- From running profits
- From VCs
- Issuing equity
- Issuing debt
- How does our business model change when we have to support X number of ongoing freemium accounts post-pivot?
- Where does this funding come from?
- How can you model this out?
- What pricing strategy do we run with post-pivot?
- Do we have the manpower or do we need to hire more engineers?
- Do we need to outsource the build?
- Do we design the new flow or bring in a specialist agency for that?
There are more than build costs involved when you pivot from a sales-led platform to a product-led one. It’s a whole company pivot, not just a software redesign.
What are the technical considerations in a product-led pivot?
Well the first thing I would ask myself is can we do it and how much of an impact on our current lines of code will this have?
Do we need to rewrite the whole platform? Can we cannibalise the current code and rebuild a new front end?
Who will architect the new system? Who will manage the rebuild? Who will guide us if we haven’t done it before?
Ultimately answering these questions will lead you directly to the next.
Do we have the manpower to make the jump from sales-led to product-led?
Manpower could be the most important part of the equation. The teams I’ve spoken to have often needed augmentation or we’ve been asked to provide our own engineers and take on the project in part or in full.
Many companies have hired a team that enables them to manage their own product and feature releases, they haven’t budgeted at a people level for the kind of work that goes into a PLG pivot. Why would they, they were doing fine selling the product as is.
Engineers aren’t cheap and engineers and design teams that have PLG experience certainly aren’t freely available in the market, which is why we offer the outsourced team around strategy, design and build.
If you’re considering this shift, feel free to reach out and talk to us.
Who will design our new platform?
In truth, this can be handled internally, but if your team have no PLG experience, you should bring in a consultant or agency that has. By utilising those more experienced you can shortcut education time, ramp up strategic delivery and bring your whole team on a journey to a successful outcome.
There are some great options for training out there, Product-Led is doing well for helping teams to run through the core principles and practicals to get you started and our team at Digital BIAS will be launching our own course in 2023 that covers strategy, business considerations and PLG design. A unique offering that will accelerate your ability to pivot your SaaS from a sales-led to a product-led organisation.
For more great insights into the PLG motion, check out our other posts on the subject on our blog. If you're a founder or a C-Suite leader looking to pivot, check out our guide to product-led growth for SaaS leaders.
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