Why Product Led Growth Is Having It’s Moment Now
Everyone is talking about Product Led Growth nowadays and most of those folks subscribe to the school of thought that it is one irreversible shift which is here to stay. But interesting question to ask as part of this discourse would be why PLG is happening now vs 10 years earlier or 5 years later.
Emergence of Product led Growth is first-order consequence of unique set of goldilocks conditions in the market dynamics and technology structure which has expedited this trend, which had been brewing for a very long time . These are some of the key drivers which have catalysed PLG, especially in context of SaaS businesses.
- Maturation of SaaS model For Distribution
SaaS as a model of delivering software has matured. From the early days of CRUD applications pioneered by Salesforce to complex ML notebooks with linux kernels or design heavy visual tools like Figma or Miro — Saas has come a long way.
World of software distribution has never been flatter. When the world becomes flat or distribution gets solved for certain industries — it creates a Cambrian explosion of supply ( eg apps and android / iOS appstores ). This also ensures that the best products who deliver best value at most optimum price point — start emerging and winning in their respective niches.
For example, Workday is bleeding market share to it’s nimbler product led startups because there is no gatekeeping process stoping enterprise buyers to try different products. There is no RFP process which is needed for software to be purchased and enterprise software buyers are much more informed about the alternatives. They try and buy. Product experience is the moment of truth across the spectrum of software buyers — whether a small restaurant or mom and pop store in hinterland of US or largest of Fortune 500 customers across the globe.
Bad products and good products — channels for both are same — internet — and when distribution is not a moat anymore, the locus of value shifts towards better products which keep end customer experience (. vs those of gatekeepers ) at the centre.
2. Lowering Cost of Software Development
Software development costs have gone down drastically in last decade or so. Cloud providers like AWS, Google Cloud allow two developers in the proverbial garage ( our own houses in context of remote work ) to build highly scalable multi-tenant distributed systems without thinking about cost of ownership of servers or underlying infrastructure. You have access to same compute and infra tech which is available to top consumer tech companies like Netflix or Dropbox.
Another major improvement which was not evenly distributed earlier is ability to collect payments via global scale payment infra provided by likes of Stripe etc. Also entrepreneurs from countries like India or Africa where the recurring payment infra has been conventionally cumbersome to setup, can quickly setup their remote US domiciled company using a service like Atlas for just $500 USD.
Another major improvement has been rise of developer friendly frameworks ( Django/ Rails/Node vs old school Java frameworks) and open source communities and knowledge sharing platforms ( github/stackoverflow ) , it is 10x easier and cheaper to build robust software systems now. We all know what happens when cost of underlying blocks goes down — we move up the Maslow’s hierarchy of software development — which is nothing but starting to focus on end customer experience and UX. It’s not only about software’s capability anymore, it’s also about accessibility, ease of use etc.
3. Democratization of Information or Reviews
We have access to Capterras and G2s of the world which are aggregating information and reviews about B2B software products. What Yelp or Google Reviews did to local businesses ( enabled discovery and peer reviews ), these software comparison platforms are doing to B2B software.
Software buyers now look at the reviews of the products and go with one which serves their needs and they can quickly try and buy the product. This was not the case 5–7 years back.
4. Rise and rise of Product Function
Another mega trend which has been brewing up for sometime and which has grown exponentially in the last few years- is the shift in the intra-org power dynamics which are gravitating towards the product managers.
Ben Horowitz in his famous phrase said that a product manager is like a mini-CEO of the product — but now it seems product manager is like the mini-CEO of the organisation itself. Their surface area of responsibilities have grown larger, engulfing some of the critical org functions as well. 10 yrs back, product manager used to act more like program managers — making trains run on time, orchestrating across functions and writing PRDs( glorified tickets ) that noone used to read. Now that’s not the case.
Their role has undergone a dramatic metamorphosis. The intra org dynamics which were the biggest bugs of product management function — delegating via influence / no-one reporting to them and broad yet not hands on knowledge about every auxiliary function — have become their biggest features. Product manager’s OKRs increasingly have the KPIs of sales, marketing, customer success and support as well.
So Product Led Growth is something which is here to stay and is only gonna stronger as these drivers or undercurrents become stronger. For PLG timing is now and it is having it’s moment in spotlight.
