Episode 122: Mastering the Art of Product-Led Growth: Effective Strategies for a Self-Selling Product

In this episode of Product Thinking, Melissa Perri talks with Wes Bush, CEO of ProductLed. They explore the art of product-led growth and share effective strategies for building a product that sells itself.

Wes Bush is the renowned author of "Product-Led Growth: How To Build a Product That Sells Itself." He asserts that, over the past several years, the way we buy software has undergone a transformative shift. Businesses must lead with their product and allow potential customers to experience its value firsthand.

Product-Led Growth provides the framework for businesses to adapt to this new era of customer-driven decision-making. It's not just a trend or buzzword but an actionable business strategy that enables companies to succeed in this new business landscape. With Wes Bush's guidance and expertise, businesses can learn to build products that sell themselves and position themselves for long-term success.

You’ll hear Melissa and Wes talk about:

Product-led growth as a strategy where the product serves as the primary means of acquiring, engaging, retaining, and monetizing users. In this approach, every part of the business leverages the product to achieve its objectives.

When it comes to monetization, the key precursor is building a product that can sell itself. This can be achieved by providing users with a super valuable experience that enables them to derive value on their own. In many cases, this leads to users wanting more of the product and being willing to upgrade.

In fact, in self-serve apps, this product-led monetization is quite common. To facilitate this process, it's important to minimize any friction in the user's experience, ensuring a smooth and seamless transition toward the monetization stage.

There is a common misconception that a product-led approach requires a fully self-serve experience from the very beginning. However, this belief is not entirely accurate. The key idea behind a product-led strategy is to make it easy for potential customers to recognize the value of your product with minimal hurdles.

There is a common misunderstanding about the complexity involved in product-led growth. Some people assume that it's simply a matter of offering free trials and giving newcomers access to everything on your platform. However, this oversimplification overlooks the nuances of the approach.

Rather than focusing solely on these tactics, the key is to emphasize the rapid demonstration of your product's value to users. By encouraging users to engage with your product as quickly and effectively as possible, you can facilitate its adoption and promote sustainable growth.

If you enjoyed this episode, make sure to subscribe, rate and review us on Apple Podcasts, Spotify, and Google Podcasts. Instructions on how to do this are here.

Resources:

Wes Bush on LinkedIn | Twitter

ProductLed | Product-Led Growth Book

Transcript:

Wes Bush - 00:00:00:

I think the more you create, like, a culture around, how do we understand our users? How do we build that empathy? That's kind of like, one of the things you can't just hack. It's got to be a part of, like, no, we care. And that comes through a lot more in a product-led company.

Host - 00:00:15:

Creating great products isn't just about product managers and their day-to-day interactions with developers. It's about how an organization supports products as the whole. The systems, the processes and cultures in place that help companies deliver value to their customers. With the help of some boundary pushing guests and inspiration from your most pressing product questions, we'll dive into this system from every angle and help you think like a great product leader. This is The Product Thinking Podcast. Here's your host, Melissa Perri.

Melissa Perri - 00:00:50:

Hello and welcome to another episode of The Product Thinking Podcast. Today we're talking all about Product-Led Growth and what you can do to implement that as a company. I'm joined by Wes Bush, who is the CEO of productled.com. Welcome, Wes.

Wes Bush - 00:01:05:

Awesome. Thanks so much for having me, Melissa.

Mellisa Perri- 00:01:07:

So I've been following you. We were just talking about this before we jumped on, but I've been following you for a very long time. You wrote the book on Product-Led Growth. It's been really awesome resource for a lot of companies out there. What made you start to get into Product-Led growth and kind of find yourself on this path?

Wes Bush - 00:01:22:

Yeah, so it's been a long journey, but it really started. I was working at these B2B software companies, and I was doing digital marketing for what was then defined as, like, you would call it, more of a sales-Led company. And so I was in charge of getting leads, and my whole thing was like, okay, I'll get leads for the sales team so they can then qualify them, reach out to some of them if they're a good fit. And so I was spending, like, hundreds of thousands of dollars running, like, white papers guides. I was that guy behind the guide that you downloaded. And so I would always have the conversations with sales teams and everything. Like, how are those leads? Were they good? And a lot of times, they're like, they didn't know who we were, or they're like, yeah, they were kind of, like, resistant to talking to us. I'm like, okay, yeah, no surprise there. But when we launched a free trial at this one company called Videoard, first time it was like, oh, okay, this feels more in line with how people want to purchase, but it completely bombed the first time. It's like, people were going in and they couldn't figure out how to use the product. We didn't really put resources behind it. And so I was like, okay, first ProductLed attempts kind of fail flop. And then the second time we launched this free product, it just clicked it was a simple Chrome extension. People could record a video in less than a minute, and it went from like zero to 100,000 users in less than a year. And at that point, I was like, that was the kind of epiphany for me. I was like, wow, I get it. There's this hard way of growing a business where it feels like you're pushing a rock up a hill.

That, to me, felt like that more sales ed model where I was like, okay, I'm just acquiring leads. I'm sending them to the sales team, and they're going to follow up with them, and people don't really want to talk to them for the first touch point for many of them, not everybody. Some people loved it. But then there was this other Product-Led Motion, which was like, how the heck could you go that fast without that motion? And then I started consulting, and that kind of like, led into it. And then when the term Product-Led growth was kind of coined by OpenView, I was like, oh, that's what I've been doing. And I was like, finally, let's kind of break this down and share the methodology of how companies can do that. So, yeah, that's how I kind of fell into PLG.

Melissa Perri- 00:03:43:

Awesome. That's a really fun story, and I love how it just reflects to making the product better for the customer is really what fueled it. It sounds like everybody getting in there and being able to try it. I know. I'm also extremely frustrated when I can't just try things out. I'm like, I don't want to talk to a human. I just want to try it, see if it works.

Wes Bush - 00:04:00:

And I think it comes down to, do you want to feel empowered to do something? And it's like, okay, yeah, I could type into Google or ChatGPT, okay, what's my latest problem? And get some help on it. Or it's like that I could go through, fill out a form and then talk to someone to fill out, like, okay, what is this problem? It's just like, one is like, here's the dials of controls. You can figure it out on your own, and the other one's like, well, let us help you, and there is time and place for that. But I think generally speaking, more and more, it's like, no, just give me the right tools and I'll figure it out.

Melissa Perri - 00:04:34:

Yeah, I love that concept of Product-Led Growth really empowers your user. So for the people who don't really know what this term is or what Product-Led Growth means, or they think it means something else, can you define it for us? What is Product-Led Growth?

Wes Bush- 00:04:50:

Totally. So I define Product-Led Growth as, like, whenever you're using your product as the main vehicle to acquire, engage, retain, and also monetize your users. So, like, every part of the business is using the product in a way to hit their goals. So like, from a marketing perspective, it's like, well, actually, what's our main call to action? It's like the free product most often. And then when it comes to onboarding customer success and everything is like, well, you know what, we could in theory manually onboard everybody or we could give them the self-serve knowledge base. We could make it really easy for people to get the value. And so every team is just kind of utilizing the product to hit their goals.

Melissa Perri- 00:05:34:

Great. So when you say utilizing the product, can you give us example of when the product would lead monetization? What does that look like? Instead of sales being like, hey, go buy this, and talking to a person on the phone, what types of techniques do people put into place to do Product-Led Growth?

Wes Bush - 00:05:51:

Yeah. So when it comes to monetization, there's a precursor to this one. And I was so kind of afraid I'll say it. Whenever I was deciding the subtitle for the book on Product-Led Growth, because I knew it was going to be called Product-Led Growth. But the subtitle was like, oh man, I spent like embarrassing amount of time on that. But it was called how to build a product that sells itself. And I was like the monetization part of it. It's like, is that possible? And so the way I kind of construed it was like, well, if you actually give people a super valuable experience, if they're able to get the value on their own, the next step that often happens in a lot of these self-serve apps is I love it, I want more of it, then I'm going to upgrade. And so that part of the product actually leading demonetization is actually very real and it happens a lot. And it's like, well, when it comes to that empowerment, again, it's like they made it effortless for me to upgrade. I could choose the plan that was best for me. I could easily identify which plan was right for me. I could pay with my credit card on my own and there was as little to no friction as possible in that whole experience. So yeah, that's kind of the product leading that part of the monetization, if that explains it.

Melissa Perri - 00:07:07:

Yeah. So I could see this playing out a lot too with your upsells and your cross-sells inside your product, getting more revenue per user with that. In the companies I've seen who've done this successfully too, it looks like we have to segment different types of features and keep those features behind a paywall in order to do that. And where I see some people actually struggle with it is figuring out what features are going to be the most valuable that we can get more money per user for. Do you have some kind of framework to think through? Where should we start? How do we grow revenue? How should we be thinking about unlocking more revenue? As people use these products.

Wes Bush - 00:07:46:

Yeah. And I think part of this too, one of the most common questions I hear a lot with companies that are kind of new to building a product, that business is also the beginning part of that is like, what to give away for free, what to gate, and then what should we upsell? And all those things. The easiest way, I found, to kind of decide for each of those buckets, like, where do we put them as far as these features, or also just like, if it's something like an email marketing tool, like, okay, how many contacts do we give away for free if it just scales up infinitely? So in that case, I always bring it back to like, okay, who's your user? What is end user success look like for them? So what is that desired outcome that they're hoping or that job to be done? I know there's lots of different ways describing it in product. It's fun, but that main thing, that main nut they're trying to crack, what is that? And then I break it down into three buckets. So there's like, beginner problems. Those are some of the initial things. Like, if you're trying to host a podcast or something like that, it's like, I maybe am trying to find my first guest. I'm trying to understand what tools to use to record it, how to do all these things.

You're going to be searching all those beginner problems and the goal there. And this kind of will tie back to that video example too, and why the first time didn't work. Second time did was because we, for the first time didn't solve any beginner problems. We're just like, hey, here is a free trial of our intermediate solution. You got to integrate it with your marketing automation platform, all these other complicated things, and you have 14 days. Good luck. Just like, why didn't it work? Oh, yeah, people didn't have videos. They didn't know how to create the videos. And I was like, no, duh. Most people don't have that. And so when we solve that beginner problem and gave that away for free, things grew exponentially. So that's the first part. If you're tackling, like, what to give away for free, solve those beginner problems and then those intermediate problems, they're more advanced, they're more intricate. That's really where back to your initial question of, like, where to gate, that's where the majority of the value is. Because when you try and monetize beginner problems, it's not as valuable. Let's just face it. It's like, okay, yeah, how to make a video great. Thank you. Intermediate problem, it's like, who watched that video? Did Melissa watch 98% of my video? Like the sales demo or something? That's hugely valuable and that's worth monetizing. And you can get a lot more for that at that point. And they're using you already. So that's really kind of the buckets there's. Beginner, intermediate, and then the advanced ones. More like the upsells on that end of like this is once you've mastered the core of our product, you can move on to this level.

Melissa Perri - 00:10:32:

So it sounds like from what you're describing too, there may be some types of companies that can actually pick up product-Led growth and run with it pretty well, but there's probably some companies that can't or the strategy just doesn't quite work for them. I'm thinking of even super complex healthcare tools or something where you would need to learn it very drastically before you get in there. Although I think a lot of this could be solved by good UX and could use a product-Led lens on it. What have you found works well? What types of companies have you found where Product-Led Growth works well and these strategies work well?

Wes Bush - 00:11:11:

Yeah, definitely. So there is always going to be like some of those areas where it's like, you know, what this healthcare technology that connects everybody's? Like, I don't know, IVs and all these other things. It's like you want a free trial? No. Do I want a free pilot of seeing what this looks like? Or maybe it's even a paid pilot too, to kind of see how it would work, how it could save the money, all those things. Yes, that still applies. People still want to do it. Even when I talk to big public companies where they have like, they kind of define their product as like, this is like the heart transplant thing. Like, you do not mess with this or else it just shuts down the whole organization. They can still do this in small areas of the company and kind of roll it out, test it, see what it looks like. So there always is a way. It's just how does it kind of get implemented? That is, I think, the open for discussion. I think a lot of times we hear like, oh, product Led means it has to be like 100% self serve from day one, or some things like that. And that's not necessarily true. It's really just about how can you allow someone to really see the value of your product with as little friction as possible? And so that's one of the ways I try and think about it. If you're deciding, like, is this right for us or not? When it comes to the complexity component.

Melissa Perri - 00:12:33:

That’s a really good misconception, I think, that you just hit on because I do think people think Product-Led Growth is only free trials and opening up everything in your platform to somebody new. And I have heard people say, like, it just won't work here if we try these, but to me, it's sounding like the approach is not necessarily from that standpoint. It's more about how do you get people using your product so they can see the value of it as fast as possible.

Wes Bush - 00:12:59:

Totally. When I writing this next book, on how to build, like, a product organization. But as part of that, the one big shift that I found really prevents companies from kind of adopting this mindset is if we kind of take a step back and we look at what are the fundamentals of business, we're to kind of categorize into three big buckets. It's like companies need to acquire people, get them to the website, attract them, all that stuff. It's like, that hasn't changed. People need to monetize. Okay, second big bucket, it's like, they got to make money. All that stuff is like, okay, that's common sense. Stay in business, at least. Third is like, you got to engage people. You got to give value, ideally quickly. And so in a typical more sales led oriented company, it's usually like, you acquire, then you monetize people, and then it's all about engagement, and you kind of grow that engagement, give them more customer value over time. And so the one big shift is like, it's just going from acquisition to engagement, and then it's about monetization. And so it really seems like just one small thing. But as far as how you do business, it changes a lot, especially for the user as far as how they can interact with you. And so I think that's why there is a lot of that. Like, ideally, yes, you have that free motion. You do have a way that people can engage with you as frictionless as possible. Now, with some products, like we talked about, it's not always possible, but how could you engage people in a way where they get it, they understand it, you derisk it for them and really help them make that educated decision with as much transparency as possible?

Melissa Perri- 00:14:40:

You know what? While you were talking about this, something just went off in my head because I have been using Dave McClure's AARRR method for the longest time, Pirate Metrics

Wes Bush - 00:14:48:

That's a long one.

Melissa Perri - 00:14:50:

Yeah. So just for the people who don't know what AARRR is, A stands for acquisition. The second A is activation, and then it gets into revenue and then retention and then referral at the end of it. And when I first started teaching this, a lot of B2B companies were like, that's not true for us. Revenue is the first thing we do, or we have people pay and then they get acquired. And to me, now that you're saying this, I'm like, oh, that's a great framework for thinking of a funnel for product led growth. And it is B2B companies. It sounds like it's not just B2C. So that just blew my mind as I was talking to you, like, hey, everybody kept telling me this wouldn't work. It sounds like it's getting pretty close to that.

Wes Bush - 00:15:32:

Totally.

Melissa Perri - 00:15:33:

So for companies that you have seen in B2B, for those out there who might be skeptics about this, what types of B2B companies have you seen do product-led growth, well. What do you look at and say those are good examples of them doing this?

Wes Bush - 00:15:47:

Yeah, I mean, there's so many of the classic examples. We hear about the Slacks, the Mirrors, like the Airtables and all that stuff, where it's like, oh, yeah, they really get it. I love some of the smaller ones, though, where it's like, you know what? They just implemented. They got people the value really quickly. There are some examples, too, I've just learned about recently, like exceldraw.com, where it's like, it's rethinking even what I talked about, like acquire, engage, and then monetize they're putting engage. Like, you don't even have to sign up. Just start using it. If you want to save anything, then you can give us your email. So I see a lot more companies even pushing the limits on how quickly could we get you to engage. So you just get it, because any barrier we put in your way before you start seeing that value, is potentially going to take away from that experience for you. So those are some of the examples that first come to mind where I'm like, yeah, I love seeing companies push the limits on that engagement and putting it as soon as humanly possible, just like, do you understand what this is? Okay, good. Start using it.

Melissa Perri- 00:16:51:

I think so many companies, too, would just cry or be like, no, if they heard that you were opening up the product without even a login page because people get scared that their competitors are going to come in and copy everything. I'm sure you've gotten that pushback from people before. What do you say to companies who are like, no, we can't possibly just give this away for free or open this up without an account thing. People just get it and copy it.

Wes Bush - 00:17:17:

Yeah. So whenever I hear that, I get kind of worried. One of the things I'm working on is like, what are the core values of a product-led business that need to exist in order for you to really make do with this strategy and make it really work? And one of them is transparency, and it's so important, and obviously there is some tech where it's like, oh, yeah, we got to keep this under lock for maybe hopefully good reasons. But a lot of times it's just like, you're wasting a lot of time, and you could be learning twice as fast if you made this more transparent. And you could be winning based on getting more users adopting it versus just kind of worrying about who is going to be potentially copying this. So, yeah, I would really kind of push back on that and be like, you know what? This is going to be a thing. Like, you got to make your product transparent. You got to make your pricing transparent if you want to actually have people purchase it without having to kind of talk to anybody. So there's transparency. It has to be there, is a really important thing.

Melissa Perri - 00:18:17:

I honestly think it's a competitive advantage too, doing that model. Like just being able to say, here's our product, we know it's valuable, go use it. Even I work for so many companies that do competitive analysis and they're signing up for your product anyway. They know what's behind it. So I do like that way of thinking. And I feel like if you just come forward with your great UX, your great product, your great value, it doesn't really matter. Somebody's going to learn about it anyway. You just got to be better at really understanding what the value is and pushing your features out more.

Wes Bush - 00:18:54:

On this fun tangent, I would apply the same thing to benchmarks.

Melissa Perri - 00:18:58:

Yeah.

Wes Bush - 00:18:58:

Every time I hear people like, so what's the best benchmark for this free trial conversion rate? Or something? Like, I don't trust any of those reports. And here's why. It's about creating your own benchmarks and optimizing those. It's like, sure, somebody else could have that, but back to what we talked about. What are they giving away for free? What are they gating and all that stuff. There's so many factors that kind of matter in this big decision. So really just focus on yourself and that optimization loop which ties back to that transparency and opening it up, it's like, that's how you win. How fast can you optimize? How fast can you innovate? That's the best way.

Melissa Perri - 00:19:32:

So speaking of benchmarks and metrics, are there a certain set of metrics that you would look at to say, hey, yeah, we're doing Product-Led Growth or we're getting better at doing Product-Led Growth or we're not there at all. What should people be measuring for success there?

Wes Bush - 00:19:48

Yeah, so back to that, like acquire engage monetize part where I find most companies are really good at is the acquisition part already. It's like, okay, good, we have this free model, we're tracking sign ups. Yay, it's like, that's fine, but where a lot of companies need to develop a new muscle around this is just how do we track engagement? Because we've been tracking really well, like acquisition, monetization, but that's like the missing piece. And if you don't track that, it means it's not getting that much focus. So it's really important. And what I always like to walk companies through is like, okay, so however you want to define it, is it your AHA moment? Is it like first value? What is that good leading indicator of like, somebody's actually getting value from this product? And so just understanding what does that look like for your product? And if it's your first time and you're listening to this, you're like, I don't have that. Don't obsess over this. I have seen teams spend months and months and months trying to define, what is this perfect metric? Just start somewhere, start tracking it and seeing, does this actually have an impact. And what you should find is if you track this metric of like, okay, 25% or 30% of people got this one action in the product, what you should be able to tell pretty quickly is like, well, actually 80% of those people that actually get to that action, they have a much higher chance of actually upgrading. And if you see that connection between like, okay, they got to this value moment and the upgrade increased, that means you have a pretty solid metric in place where you should track that engagement.

Melissa Perri - 00:21:25:

Okay, so we're looking at those engagements. Do you look at anything too? I know some companies do a combination of product-led growth, right, and then they go into enterprise sales. So those strategies are usually they're starting off with like the small or the mid market, and then they say, we want to move up market, go to enterprise. And then they start to hire some salespeople to do the more complicated stuff. Do you ever look at ratios of dollars to sales team or how big your sales team is when you're looking at any of this? Or does that not really matter?

Wes Bush - 00:21:54:

So I don't really focus too much on the ratios. But the big problem with product-led companies when you do layer on sales is really trying to understand when is the best time for sales to interact with those users. Because a lot of users are kind of like resistant to like, oh yeah, I don't necessarily want to talk to the sales right now. I just want to kind of figure it out on my own. So that timing piece is really important. The question I always like asking companies if they're contemplating, like, should we add sales to this whole mix is like, is that salesperson going to be adding value or friction? Not value in the sense of the business value, but value in the sense of the user's value. So are they going to add value or friction? And so some of the best ways I've seen product like companies add kind of technical sales consultants to the mix is like, I was using this product, I'll give a nice shout outs to databox.com and I was setting up an automated scoreboard for our business and I got stuck. I was like, oh, wouldn't it be cool if I could create this custom metric getting fancy here and track it for the business? I was like, yeah, that would be cool, but I don't know how. And so there was this nice little pop up where I was like, do you want to book a time with technical sales consultants that kind of go through and build this out? I was like, hell yeah, count me in. This would be great. And so it was an immediate way out of value and then that just made it more likely to upgrade to the pro kind of account because I was like, okay, now I get it. This is one of those more intermediate problems. Back to that part too, where I was like, yeah, it makes a ton of sense for this to be gated as well as I get why I need help here too sometimes.

Melissa Perri - 00:23:32:

That's fascinating. So they had a role that was not just pure, like, sales contract-focused. It was more like technical support or like a higher level. I guess account managers kind of do that in some places, right? But they could actually help you with best practices, set things up, solve the problem you were looking for. So they had a really deep knowledge of how to use the product to the best of your abilities.

Wes Bush - 00:23:54:

Absolutely. And like, for products that have a lot of depth, it's an amazing way to serve your users because a lot of times it's like they just don't know what's capable within your product. They're like, oh yeah, I see on the surface level, like, nice templates or something. They're like, oh, you can do that for us and customize it. Wow, okay. Yeah. The value dollar amount of what that's worth to them is just like at 10x, just because now they know how they can actually use it.

Melissa Perri- 00:24:23:

That's fascinating. So do you feel like maybe with Product-Led Growth becoming more of a prominent thing, the sales role is going to change at all? Have you seen that anywhere?

Wes Bush - 00:24:34:

Oh, totally. I think it already has. I mean, like, when sales-Led, marketing-Led kind of companies came on the scene, it was like there was this new role called the senior, or no, not the senior, but the sales development rep. And so that was like, booming. It was like, everybody get SDRs, you must have SDRs, you're going to make this model work. And now for a lot of product-led companies that might have that kind of product experience, where it's like, okay, yeah, you do need a little bit of potentially ability or some help along the way to get set up to reach the full potential in the product. Whether you call them like, onboarding coaches, customer advocates, the whole goal of these folks is really just they're looking at where you are in the journey and they're trying to predict and help you get to those value moments faster. And their whole metric is like, okay, how many of these users have actually got to value? And they're actually focusing in on that because they know it's like when you get into this product, you see the value, your odds of actually upgrading skyrocket.

Melissa Perri - 00:25:35:

That's fascinating. Have you seen too? I guess my question is, where do these people live? Are they under a Chief Sales Officer? Does that change who the Chief Sales Officer is or who the CRO is, or do they live under product? What kind of structure usually exists around these people and how do they work with the product team?

Wes Bush - 00:25:54:

Yeah, so this is the part where I'm going to say it's all over the place right now. And I've seen it live under product. I've seen it live under sales. I've seen it live under your CRO. I've seen it live under even marketing too, if marketing has a quality metric that's tied to getting people to value, which is kind of important as far as looking at marketing campaigns of what is a good campaign or not, not just basing it on sign ups. So, yeah, no, good answer there. But I think that will change. As we were talking about this before, it's like who typically leads the product-led initiative? And we've seen it can be like your Product Manager. It can be the CPO that leads it as well. It can be the Founder if it's a smaller company. So there isn't really like, it has to be this person yet. It has to be this department and this is who owns it. But I think we're starting to see there is a pretty good division between maybe there is that VP who manages the go to market motion. It would make most sense for it to be under them. And then there's kind of like your VP of product where they kind of manage the rest of how do we automate the rest of the business around the product?

Melissa Perri- 00:27:06:

Fascinating. That's really cool. Way to think about it. So we're looking at it falling under the go-to-market area. Who's the person who typically works on the product-Led strategies or implements it? Is it like a Product Manager? This term Growth Product Manager became a really big thing, right? And I think a lot of people are like, what is that? How is a growth product manager different? But I know a lot of companies want to hire them. Who runs this? What's the profile that you look for? And what is a Growth Product Manager?

Wes Bush - 00:27:36:

Yes. So it totally depends on the size of the business, too. So for, let's say, like a mid stage company, what I've seen work really successfully is like, you'll have that CPO who's kind of like leading this initiative, and then they will have somebody who might be that Growth Product Manager, just a Product Manager doing the growth product management thing. And they're the ones who are actually executing on this and making sure that this is what's being built out in the product. And then as it kind of expands, you will have kind of like a growth PM working on the acquisition side of things, the engagement side of things, monetization for each of those parts of the funnel.

Melissa Perri - 00:28:13:

How is a growth product manager different than another product manager? What makes them special? What kind of expertise do they need?

Wes Bush - 00:28:20:

I was going to ask you that. I think there's a lot of nuance to it. It's like, yeah, it sounds good, right? Product manager. It's like, okay, I focus on growing stuff. I think a good product manager. They're focused on the right things that should move the lever on growth. So, I mean, I'm kind of like, that's my take, but what's yours?

Melissa Perri - 00:28:43:

It's funny because I worked for a company once that tried to hire me on full time as the VP of Product for Growth, and there was already a VP of Product, and I was like, how is this different than just, like, VP of Product? It was just me optimizing the funnels to get people into the product, but I didn't see the way that I did the work any different. I guess if I was going to hire a growth PM or I guess I have hired some growth PMS, I kind of look for people who know a lot about onboarding, right? Like how to get people in there, how to demonstrate value quickly, how to make and like, UX. I think UX matters so much in those PMs. Like, there's some really good back end PMs, there's good AI focused PMs or tech PMs, but I feel like a good growth PM just has to know how to do frictionless UX, right? And why that's important, and how to hit them over the head with the smallest not smallest, but the things that they want to do quickly so that it then engages them to get further into the product and keep moving it. But I do think it's hard delineating that sometimes in companies, right? Like, are you a growth PM? And does that mean that you only work on the free trial stuff? And what if the free trial stuff is also part of a bigger product that you unlock as you get deeper into it? Is somebody overseeing that? How does it go all together? I think it gets a little confusing there. So I've always kind of seen growth PMs. I'm looking for that UX bit, just really understanding the customer, but I don't see it wildly different than a regular PM. But I'd love to know your opinion on that too.

Wes Bush - 00:30:21:

Yeah, no, I definitely agree with you on that part, where it's like it's probably a bit more like user front end kind of focus about that user journey. Where are people getting stuck from the very beginning all the way through the product experience? And I think with the importance of where the product or where people are starting to interact with the product is becoming way earlier in the funnel, it used to be like, okay, after you sign the contract here, boom, here's the product, you're like, what? That's the product experience and everything else like, that is a lot less important. Whereas now it's like, whoa, I didn't have to fill out a form or anything, and I'm already in your product. This is nuts. So I think it's just really looking fast forward around that next step of that journey and how to optimize it.

Melissa Perri- 00:31:08:

Yeah, I think that's a really good way to think of it too. So sounds like we're aligned on it's. Not a special magical unicorn. Who does this? Just a really good product manager. So my next question is kind of about we were talking about this a little bit with what types of companies can do product-led growth. And you said pretty much all of them. In your book, you talk a little bit about how Product-Led Growth might differ from red ocean strategies and blue ocean strategies, too. Can you tell us a little bit about what that means and what kind of advice you have for companies that are doing one of those?

Wes Bush - 00:31:41:

Totally. Yeah. So in a Blue Ocean, there's a lot of education that you have to do as far as, like, hey, here's this new approach. The main kind of reason why is people are just not sure where they don't know necessarily what is the new problem to be solved? Or they're like, oh, I haven't really thought about that. So they're not problem aware. They got to understand a lot about the space to understand, like oh, yeah, here is why this is a super big issue. Unless you're already in that kind of space, you don't really necessarily know about it. It's kind of like Product-Led Growth. Maybe like, three or four years ago. It was like, what is this thing? And then now we start seeing there's all these tools for how to qualify your product users and all this stuff. It's like okay. Yeah, they were, like, three years early. Now people are starting to get it, and it's different. And so if you're super early in that kind of market, what's really important is you focus on educating people. And a salesperson can do in a fantastic job of that. They're providing? Back to that question. Are they providing value or friction? In a Blue Ocean, a salesperson is more like Consultative Sales. They're providing a ton of value helping you understand what are the problems? How what you're doing might not be the best approach and get you on the same page. And so in a Blue Ocean it's awesome to really help them, educate them. And now in a Red Ocean, the biggest difference is like it's usually becoming a commodity very quickly. And in the software space, it's like everything can be developed very cheaply, very quickly, all over the world. And so it's like, as soon as you have a good market or something, you expect there to be, like, hundreds of monkeys kind of, like, competing for that same space. And so if you're in a Red Ocean and you don't have a product and model, it's kind of silly because you want to have the most efficient go-to-market motion possible, because you're going to be competing for the lowest cost acquisition costs. You're going to be competing for how to run more efficiently as a business. And if you're not kind of monitoring that, it's going to be very hard to grow a sustainable business. So that's kind of like the warning if you're in a Blue Ocean. But the thing there is it's not so much like should you be product-led, it’s when?

Melissa Perri- 00:33:51:

That's a really nice insight right there. So for these companies too, they say, hey, this is going to work for me. I've got this type of strategy, I want to do it. And they start to implement product-led growth. Where are some of the number one things you see that they get wrong when trying to put this into practice?

Wes Bush - 00:34:09:

Yes, and back to that very first example I kind of shared with like, we just slapped on a free trial to our existing product. I've seen that way too many times where they just think it's a free trial and it's like, oh yeah, product, that's all it is. Let's just give people a free trial. And then they also don't take into consideration that big shift. It's not just you acquire people, throw them into the free trial and monetize them. It's not that you skip the step. It's like, okay, you acquire them, maybe you have a free trial. But then it's all about actually creating an engaging experience where people get to value. And I tell you, this is the biggest thing and the hardest problem in building a product-led business. Because we have all signed up for different apps on our phone or wherever, web apps, and the experience was hard. We couldn't get to value. What do we typically do? It's like we just don't go back. We delete it, we can it. Exactly. And so that's the ultimate kind of like the challenge is like usually you lose 40% to 60% of people in that first experience. And that's why for product like companies, that first five to seven minutes of that product experience is a make or break experience. And so that's really dialing that in, getting people to value quickly. That's the toughest part of it all. And most important challenge to tackle.

Melissa Perri - 00:35:36:

One thing that I see that I really hate that people do too. They put those UX tool tips on everything to explain how to use your product. I'm like, if your design is not good enough to just use it, you should need to go back and fix that. One of my biggest pet peeves when people do.

Wes Bush - 00:35:56:

Kind of like duct tape for software products, isn't it?

Melissa Perri- 00:35:59:

Yeah, it is duct tape. That's a great analogy. Actually, I'm going to use that like duct tape for software products completely. I hate those stupid little tool tips. I've seen people try to bandage that up, be like, oh yeah, we're doing this great onboarding experience and it's awful. So when you're thinking about doing the free trial, we talked about solve the beginner problems, then unlock the intermediate problems. So those sound like good tips for how to slice up the products. What else besides doing that getting the free trials wrong. Have you seen people make mistakes with.

Wes Bush - 00:36:33:

Yeah, I think before you even start doing that, one of the kind of, like, pre-requisites is you got to have really good data and tooling to just kind of understand what is going on. Are you really going to be able to track your users with some tools that you have or I've seen companies where they're doing this, and it's like you just have Google Analytics, really, and it's better than nothing. I was expecting a bit more, and that's fine. It's like, we all start somewhere, but it's like having that understanding of the user. And really, this is the other piece of another core value. Like, there was transparency we talked about. The other one is like, empathy. How do you understand your users? How do you make that really work inside your organization? And so I've seen so many great product companies tackle this in different ways, even from how they hire, even to how they onboard people. I've seen companies where it's like, what do you do for the first two to four weeks of the onboarding? It's like, regardless of the role, you're doing support. I was like, what? Why? And it's like, that's funny, but it's building empathy with the user. It's like, you understand the problems of the user. Exactly. And there's other ways. I know Andrew Kaplan used to work at Wistia, and he would just have, like, full story Fridays, like, every Friday, their growth team would just go through and understand what are the users getting stuck on as far as experience? And I think the more you create a culture around, how do we understand our users, how do we build that empathy? That's kind of like one of the things you can't just hack. It's got to be a part of, like, no, we care. And that comes through a lot more in a product-led company.

Melissa Perri- 00:38:13:

So when I tell people that they should be product-Led, they always think the rest of the company freaks out because they go, oh, it's product management-Led, not product led. And I'm sure you get that too. But there does have to be, like, a cultural shift. And I think also at the executive team level, right, for a company level and also at the executive team level, to become more product-led in the way that they work, what are the types of things that you see that need to change from going from sales-driven type selling into product-driven type selling?

Wes Bush - 00:38:49:

Yeah. So the way I kind of look at it is more of, like, changing your company level strategy versus just looking at this in just the product side of things. So from the company level, I always start from the very, very top. So for your vision, what does that look like for your business? What does your mission look like? When I studied, like, 100 plus product-led companies that have done really, really well. I went to our about page. I started to find trends where it's like a lot of these product led companies, their missions sound very similar. It's like, we make communication frictionless, we make X accessible, we make this simple. It's like, what is it doing? It's all about that empowerment. Once again, it's like, okay, we're empowering people to do something. We're making it. Usually they're using a dominant play for their business, where it's like, we have the best product for the best price, and that comes across in accessibility and they're making it easy for you to use. And so it's like, that was actually their playbook for their mission. They are basically just designing their product to make that happen. And then as part of their strategy, it's like, that was their strategy. How do they win? How do they empower their users? It's like, well, they make it effortless to get started, they make it effortless to get the value, they make it effortless to upgrade all these things. And so how it comes across is like, it has to be a part of your company level strategy, how you will win. And I think a lot of times that gets missed in just the, oh yeah, we need to be product-led because it's going to help us raise more money. I've seen that too, but it's not really what's going to drive the results you want.

Melissa Perri- 00:40:24:

It's funny how those things pop up in a vision. We need to do this so that we can get money.

Wes Bush - 00:40:30:

Totally.

Melissa Perri- 00:40:32:

So when you're implementing more of a product-led culture or trying to do that in a company, I can see product management being total supporters. Do you get any detractors that people need to be watching out for? What types of I guess departments are usually like, no, I don't want to do that.

Wes Bush - 00:40:49:

Yeah, the biggest one is always Sales, where they think like, oh, this thing is going to take my job. Kind of like we think right now with AI. And it's like, it's going to take everybody's job. And I think a lot of times it's like, at the onset, everything new, everything with some level of change can be perceived as a bit scary because why? There's a bit of unknown. And once the known is known, then it becomes a lot less scary. We start realizing, actually, no, we could empower our employees with AI and they're actually capable of doing twice the amount of work and they're not burnt out. It's like, that's awesome. And same thing with Sales. It's like, okay, so right now you're dealing with a lot of smaller accounts. That takes up probably, maybe, let's say 40% to 60% of your time, these small accounts, and you get paid, let's say on commission. Wouldn't you rather work on bigger accounts and just let the product sell the rest of those smaller accounts? And once they start seeing it. Sales is actually one of the biggest advocates of it, and that's whenever I've seen companies successfully kind of transition from sales-Led to product-Led, where most of those product initiatives start off is actually, how do we help Sales? How do we help them sell more? Maybe it starts off with being like, okay, so we launched a new product. We need to upsell some customers. Let's do that through the product. Who are the best people we should reach out to? Okay, great. Let's start there. Sure. You can do your manual outreach boss and run this in parallel, see which one works, see how we could help you hit your goals. And so when you kind of focus being product-Led on, like, it's actually being about product-Led, not about, like, product is leading the growth. And, like, this is the product team's kind of initiative here. It's about how can we serve all teams and empower them? I think that's really where it gets sticky. You start getting wins, and people are like, oh, yeah. We could also apply that in marketing. We could give away a new free tool, and that could be super helpful. One of my favorite examples of product-Led kind of marketing is ConvertKit. So it's a great email marketing tool, easy to use. And they started realizing it's like, so our whole business is kind of dependent on people getting more subscribers. How could we make that easier? We could write 1000 blog posts on landing pages and all that fun stuff, or we could just give a free tool or create a free tool on a landing page tool and give that away for free. And we have zero intention of monetizing it. So it's like there's really cool ways when you start thinking across the entire organization and all departments, like, what's your biggest challenge? Okay, cool. How could we solve that with the product?

Melissa Perri- 00:43:31:

I love how this crosses everything. And it's not just a product management thing. It's not just like, hey, we got to teach the teams how to build a prototype. At that level, it really sounds like it cuts across the whole company, and it changes the orientation of the company to work that way. And I think that's what being truly product-Led means. So thank you so much, Wes, for joining us today. This has been great. I think you gave a great playbook for a lot of people to get started. If they want to go learn more or figure out how to work with you to get started with Product-Led Growth, where can they find you?

Wes Bush - 00:44:03:

Yeah, so if you want, like, a free copy of our book as well, just head on over to productled.com, and you'll find a ton of free stuff on PLG there.

Melissa Perri- 00:44:12:

You're walking the walk here. Given the good free stuff away. I love it.

Wes Bush - 00:44:19:

Once you get those intermediate problems, then we can talk.

Melissa Perri- 00:44:23:

Yeah. So come to west for the intermediate, but check out all of your beginner problems on this website and the website is really good. The books all on the website. It's a fantastic place to get started. So thank you so much for creating all that content for us so that we can dive in and get started on our product led journey.

Wes Bush - 00:44:38:

No worries. Thanks so much for having me. Melissa.

Melissa Perri - 00:44:40:

So thank you so much for listening to the Product Thinking podcast. We'll be back next Wednesday with another Dear Melissa, where I'm answering all of your questions and if you have any questions for me, please go to dearmelissa.com and drop me a voicemail and let me know what's on your mind. We'll see you next week.

Stephanie RogersJune 7, 2023