It’s never fun to manage a company through a crisis. Even more so, when the crisis is not something of your fault, and especially if your target market is part of the crisis as well. Sales don’t go as smoothly as they used to, and you can no longer rely on the things that you knew were working. You can cut costs, but only so much: you know your success depends on the team you were able to build, and that’s where most of the cost is. You don’t want to let good people go.

It’s no wonder many CEOs are looking for alternative business plans to avoid a painful reduction in force. As a startup, you are stuck between a rock and a hard place, since on one hand, the markets are slowing – usually both your customer market and your ability to raise new funds. On the other hand, you depend on additional fundraising to survive, and to raise well you need to demonstrate great business results.

How can you cut costs and still grow significantly? Many CEOs tell me that the answer is going into product-led growth. “We will lower the prices and add a self-serve ability” is a sentence I heard multiple times recently. In some cases, it is indeed the right thing to do. But before you go there you need to know what to expect – and then make your decision, because PLG isn’t what it looks like from the outside.

Now, don’t get me wrong. I love PLG. It works very well when done right, as some of my customers can share. But it’s not a magic solution. If you decide to do it, make sure you get there for the right reasons. If you want to learn what it takes to do it well, and how to approach it strategically, our online Unboxing PLG course is for you.

Until then, here are 3 things that people mistakenly think about product-led growth. 

PLG Is Easy

Looking at companies who did very well with PLG – companies like Slack, Monday, Canva, and HubSpot – it seems it can solve all of your problems. Even the PLG book says “how to build a product that sells itself”. Who wouldn’t want that?

The problem is that we see these companies when they are already successful. And when they succeed, they succeed big time. But we don’t see all the mistakes and failures they had along the way, and of course, we don’t see all the other companies who tried and failed. 

One of the most dangerous things to do with PLG is to enter it without knowing why it’s the right solution and for whom exactly you are going to build it. For PLG – and any other product – to succeed, you need to have a product strategy. A good product strategy explains in detail what problem you are solving, for whom exactly, and more importantly – why it’s the right decision. Since PLG is an all-in game (more on that later), approaching it wrong can do more harm than good, and that’s an understatement.

One other thing that makes PLG hard to succeed with, is that it can only work when it’s the right thing for your target customers, and it’s their preference that determines the answer, not yours. You have to constantly research how to approach them and work with them, keeping their perspective in mind, not yours. It’s hard with any product strategy, but with PLG the role of the strategy is even more important. That’s what we talk about in sections 3 and 4 of the Unboxing PLG course.

PLG Is About the Product

As the name suggests, product-led growth is a product thing, isn’t it? Well, not quite. While many of the actions are in the product itself (think self-serve onboarding for example), to succeed with product-led growth you need many more functions. 

You must have marketing on board since you still need leads, and the role of customer success becomes even more critical. In fact, you also need a sales team to do it well – those large deals won’t happen by themselves, and sales is no longer a contradiction to PLG, the contrary. The role of sales changes to consultative selling, but every successful PLG company has them.

I might have convinced you by now that you still need all the teams in the company – great, but that wasn’t the point. If you think that merely changing the product will get you the results you want – think again. To truly succeed with PLG you don’t only need to have all the teams you had before, you need them to work much closer together than they used to.

The reason is that on a classic sales motion, the sales team comes in very early in the process. So if for some reason the marketing message wasn’t exactly relating to the value that the product delivers, a good salesperson can identify that and navigate the discussion to where the product can help. This is just an example of course corrections that people can add to the sales process – a process that is always challenging, and especially in rough times.

So for PLG to succeed, you need all the teams to be fully aligned. A strong product strategy is key for that, but also a strong champion. Getting the entire company to a PLG mindset isn’t going to be easy, and you will run into challenges. If the CEO or GM isn’t committed to such a move, the challenges will cause you to give up before you get to see any results.

PLG is a company-wide move, not just a matter of changing a few screens.

PLG Will Get You Quick Revenue

It looks easy, right? People sign in, try the product for a few days or weeks, and then enter their credit card information. Simple and clean.

But the truth is that getting to revenue with PLG is much harder than with a classic sales model, and even more so when you think about significant revenue. 

The journey to product-market fit isn’t easy and can take time for any product. The reason it’s harder with PLG is that you are trying to succeed without the human in the loop. Getting to product-market fit with a machine that works seamlessly is much harder than getting to product-market fit with process. 

So why is PLG such a big deal? Because when you get there when you were able to create that machine that delivers results at scale – you are on a roll. PLG is not an easy way to get revenue quickly. It is a long-term journey that would pay off as you scale.

Unfortunately, you cannot start PLG only when you reach scale, because in most cases if you were able to succeed well without it, your market doesn’t want PLG – or at least not the segment you were aiming for. For example, if you were selling a cybersecurity product to security officers, who love to be deeply involved and debate the product’s capabilities before writing the big cheques, just deciding to add a self-serve motion won’t help you here. Your entire product-market fit was built in a different direction. If you still feel PLG is the right thing for you, maybe it’s because you are starting to see different people involved in the decision, as the shift-left movement is moving power to developers, for example. And developers hate sales calls, so that’s a match. But then again, you don’t know how to sell to developers, so essentially you would be starting your product-market fit journey from the get go.

Product-led growth is a great thing, but you have to do it right to succeed. As always, we are here to help you.