Product-Led Growth: How to Build a Product That Sells Itself (ProductLed Library Book 1)

by Wes Bush

Trying a product is and always will be an essential part of the buying process. When it comes to software, consumers demand the same experience.

Product-Led Growth means that every team in your business influences the product. Your marketing team will ask, how can our product generate a demand flywheel. Your sales team will ask, how can we use the product to qualify our prospects for us? Your customer success team asks, how can we create a product that helps customers become successful beyond our dreams? By having every team focused on the product, you create a culture that is built around enduring customer value.

cheaper.According to ProfitWell,6 CACs have increased by over 55% in the last five years. During that same period, customer willingness to pay for features has dropped by 30%.

Tidal Wave 2: Buyers now prefer to self-educate. This isn’t limited to the Business to Consumer (B2C) space. Three out of every four Business to Business (B2B) buyers would rather self-educate than learn about a product from a sales representative,

Proves?

Tidal Wave 3: Product experiences have become an essential part of the buying process.

Proves?

the product-led model is built for a large TAM where you can scale rapidly.

Perfect for new categories. When you’re launching a new category, you have to change the way people approach problems. This not only takes time but requires you to educate people on how to do things differently. As a result, it often makes sense to start with a sales-led approach to better understand the customer’s pain points, objections, and core problems implementing your solution. If you jump too quickly to a product-led model with a new category, you risk a high churn rate because you simply don’t understand what it takes for customers to succeed.

Good one

model has a big leak. According to SiriusDecisions, 98% of marketing-qualified leads (MQLs) never result in closed business. One reason this conversion rate is famously awful is that the MQL model has a few hidden flaws: It encourages marketers to gate content to hit their MQL goals. It focuses on content consumption as a leading indicator of intent.

My biggest regret is that our first customer was $1M ACV. Ever since that first customer, our product, go-to-market, our support model have all been pulled in one direction — high-end enterprise. Our first $1M ACV customer forced us to get on the elephant hunting treadmill, and we’ve never been able to get off it.

Blue Ocean If you’re in a blue ocean and creating demand, your product may have a steep learning curve. Before you can make the sale, you need to educate your market on why your new way of doing something is better.

Had Salesforce started with a no-touch, product-led model, it would have been hard, if not impossible, to combat those objections. As a result, most people wouldn’t buy the product. You don’t become a market behemoth by selling products nobody can understand. For this reason, most companies leverage a sales or marketing-driven go-to-market strategy in a blue ocean.

create a successful product-led business, you need a quick time-to-value. New users need to be able to experience a key outcome in your product quickly and without any assistance.

This isn’t just my opinion. Intercom claims that 40–60% of new users never come back after signing up.

HubSpot has been doing this successfully for a while now. When you sign up for the free marketing and sales tools, you get immediate value from the product. But, as you get more value from the free product, they tempt you with free-trial landing pages for blocked features. This allows the user to experience the new feature for a limited amount of time before upgrading. For HubSpot’s sales team, it’s also convenient: It acts as a “hand raiser” to cue them to reach out and ensure the user succeeds with the new feature.

per user pricing kills your growth and sets you up for long term failure is because it’s rarely where the value is ascribed to your product.” If you get charged by the user, are you going to share that product throughout your entire team? Or are you going to limit the usage to a select few?

Ability debt is the price you pay every time your user fails to accomplish a key outcome in your product.

Christopher Gimmer, the CEO of Snappa, initially required every new signup to activate their email address before logging into the product. Requiring users to activate their email address is standard practice. However, what Gimmer didn’t realize was that 27% of signups never activated their email. Users never saw the product. In less than a week, Christopher’s team removed the email activation step. If Snappa’s current free-to-paid conversion rate held up, this one change would net a six-figure ARR outcome. When the results came in, they showed a 20% boost in MRR.

but many businesses don’t know the main outcome that people want to achieve in their product. As a result, they unknowingly force unnecessary steps onto users during onboarding. It’s easy to do. If you don’t understand your product’s value, what’s stopping you from showing unnecessary features that might be helpful?

The Bowling Alley Framework is a powerful onboarding strategy. I’ve used it to help brands make millions—without spending a dime more on marketing.

Typical sales guy...

In my experience, well over 30% of required user onboarding steps are rubbish. (Yes, yours, too.)

Fuck you