How to Use PLG to Stop Diluting Your Product Vision
Imagine you had an awesome idea for a business. You decide to pursue it. You work your fingers to the bone to build your product from scratch and find a product-market fit. Your amazing product gets some funding and you decide to scale. You hired a team of developers, product managers, and even a sales team to really ramp up your growth. Your remarkable team solves problems, ramps up revenue, and gets some traction. Now, some big logos are at your door ready to pay big bucks for your incredible product as soon as you tweak it a bit, customize a feature or two, optimize it a little, you get the drift. What would you do now? Stick with your original vision or close the deal?
First of all, congratulations on your (imaginary) success! This scenario is all too familiar for many founders and product managers in tech. The decision you take at this juncture decides the future of the product!
It’s your first big customer. Your big testimonial to build credibility! Of course, most of us are going to try and close that deal. But, if you do make that decision, what do you sacrifice?
With this imaginary scenario, Partho Ghosh, Sr. Director of Product Growth at Hootsuite explains ‘How to Use PLG to Stop Diluting Your Product Vision’ from a product manager’s perspective. Partho has extensive experience leading product transformations and growth consultation across start-ups, SMBs, and large organizations. He helped three companies go through acquisitions in the past decade. Partho shared his experiences of working in multiple PLG tech organizations to help win back your product vision with PLG.
So, what do you sacrifice? In most cases, the product vision gets sliced a little and consequently the roadmap, the product backlog and the execution or delivery. But, that doesn’t mean it’s a bad or the wrong decision. Before you read any further, a disclaimer: Partho is not saying you shouldn’t listen to your customers, and he is not condoning enterprise sales.
Partho insists that customers are the product’s lifeline. He says, “As product managers, it’s our job to figure out the problem, solve the pain point, help the customer grow, and make the solution work for our business too. But, be wary of building whatever it takes to ramp up revenue and creating a feature factory that no one wants!”
Partho believes that these five ways will help win back that product vision with product-led strategy.
1. Understand your product vision
Sounds pretty easy, right? As you gain market-fit, customers start depicting your vision, because they want you to focus on them and their problem. As a product manager, you might realize that there’s a (big) gap between your customer’s perception of your vision and your founder’s vision and goals. Here’s what you can do
- If you don’t have a product vision, create one with your founding group, now! A vision will help you align and create a decision-making framework and empower your teams.
- Consolidate the gap - Talk to stakeholders and the founding group to align your customer’s needs and the founder’s wants.
One vision - As you scale, it’s important to bring focus to your vision as you try to own or create a category and ensure the product team is working towards one vision.
2. Focus on building a product that truly sells (& expands itself)
In product-led, we often talk about building a product that sells itself but rarely talk about the expansion. Look at your LTV (LifeTime Value) to CAC (Customer Acquisition Cost) ratio. If you can pull off a 3:1 ratio, you have a healthy business, anything better than 4:1 leaves money on the table. 1:1 ratio means you are losing money the more you sell!
Product managers can use this metric segmented by markets, industry, personas to find data to determine where to invest or divest. Use it to build alignment on segments or products that require PLG help and ensure customers can self-serve and onboard themselves.
a. Focus on your product vision, not deals
Once you’ve figured your LTV/CAC out, it’s time to bring the focus back to the product vision and not deals
- Segment your roadmap thereafter to work on features towards your vision, create that balance between your customer requests, your innovative visionary features, and maintenance.
- Focus on the greater sum of your customers and not single customer requests.
b. Ensure your value metric makes sense
- The best PLG products have a value metric that is simple and grows as your customers succeed with the product, leading to easy in-app expansion conversations. The value metric can be around
- Sophistication or maturity (I.e., value)
- More users or teams or population expansion
- A mixture of value metrics can result in big things
# of users + moving your customers along a maturity scale because of your product =$$$
c. Create a monetization team, fast
As soon as you find the right value metric, dive in and build a monetization team around it as quickly as you can.
- Make sure the team is focused on driving expansion and is not bogged down in billing system issues. Separate those teams if needed.
- Create OKRs around expansion for this team so they can work across the organization to build change.
3. Get serious with Data.
We know this already and we ARE data-driven. But, how many product teams have embedded a
- Data analyst
- Product data analyst
- Data scientist
- Growth analyst
- Product marketing manager for market insights
How many of the product teams talk to FP&A (Financial Planning & Analysis) to understand that side of the business? It’s time for us to rethink how our team structures are made to include data to solve complex problems. It’s also time for us product managers to self-serve much of the data with analytic platforms like Pendo or Mixpanel.
4. Over-invest in our product’s hook!
Nir Eyal’s Hook model or Reforge’s framework or whatever model you use, over-invest in your product’s hook, heavily!
Get obsessed with your product’s Time-To-Value and that “Light Bulb” moment.
At HootSuite, Partho works with dedicated teams for the Setup, AHA, and Habit moments (Reforge framework); and they focus on knowing the exact product drivers are associated with every moment and what kind of revenue impact each moment improvement can bring.
5. Truly become product-led (not product-management-led)
Product managers play an awesome role of being the glue between everything (and every team) associated with the product - marketing, design, development, customer support and putting out the best product and user experience out there for your customers. The way PMs go about this role might use some change.
Product-Led Growth takes a village, and the product is not owned by a department but rather by the whole company.
In product-led companies, a product manager has to bring all the voices - your customers, sales, support, design, development, and so on to the product. They have to collaborate with customer leaders and customer experience teams to make sure they derive the problem and not try to give the solution that your customer asks for, bring the problem back to the table, and solve it in ways it works for our business.
Customers love talking about the solution. “As product managers, it’s our job to figure out the problem, bring in the perspective of all the product stakeholders, and find a solution that also works for our business”, says Partho. In summary, your product vision need not suffer because of choosing enterprise sales. Be strategic about enterprise sales readiness and at the same time be wary of building an undesirable feature factory.
Listen to Partho Ghosh’s complete session and ask questions, visit ProductLed.Marketing community. Check out other informative sessions on everything product-led at Blastoff! 2021.