Today, the best performing companies seem to be winning with a go-to-market strategy centered around product-led growth. It looks like this: We have a minimum viable product, so now it’s time to give it away for free. Remove all friction to onboard users. Identify common use cases, find early adopters, and make it easy for them to provide feedback, incorporate and make the product stronger. Keep investing in product and engineering talent. Release, release, release. Reward those early adopters with access to beta features. They pay it forward by telling their friends to sign up. Virality and a virtuous cycle are born.
The product is first in this model, and here’s why it works. Product-market fit is no longer found at the customer executive and functional leader level but with end-users. You could view it as the democratization of software (and other products) where the actual users, not the CEO or CFO, dictate which tools are ideal for getting work done. By the time large swaths of employees are using Slack instead of Skype, or Zoom instead of GoToMeeting, it’s too late for the C-level exec to tell the masses, “but we've been using the other tool.” More than ever, business buyers are shopping, trying, and purchasing things in a corporate setting just like they do as a consumer at home. If your company can build a killer product, then product-led growth is the fastest way to market.
Building a predictable and repeatable sales motion is the last but most crucial piece of your go-to-market strategy. Top of the funnel lead flow should be consistent with the product-market fit established. Here is where sales can shine. Armed with a slew of use cases, rave reviews, and usage stats, the account executive or customer success manager can sell, cross-sell, upsell, and renew with ease. Product-led growth is also the less risky proposition to take as a sales leader.
Twilio is perhaps the PLG darling of them all. With a compound annual growth rate of 60% over the last three years, it’s hard to deny the sales-last model hasn’t worked out beautifully for Jeff Lawson and the company. His quarterly overview from their last earnings call succinctly summarizes why the future is looking big and bright for sales inside product-led growth companies:
"We now have over 220,000 companies; look, the vast majority of those, we were brought in by a developer. That's how the relationship started. And so they bring us in. They build out a prototype. They see that early success. And then, we follow in with our sales team, and we expand the relationship over time to make them successful in the first use case, in the second and the third. And that's the power of the platform business model. It combines a very efficient go-to-market engine. We spend less on sales and marketing than a lot of other companies, especially when growing at our rate and scale. But then that allows us to not only get in the door but also expand our presence in that account because we've got those technical champions."