Many people know what product-led growth is, but understanding what it means to “be product-led" is a bit more complex.
So, let's break it down into simpler terms.
Product-led growth (PLG) is a complete go-to-market motion that uses your product as the main vehicle to acquire, engage, and monetize customers. If you’ve used Slack or Dropbox, you’ve witnessed this first-hand. You didn't request a demo to have a salesperson show you how cloud-based file sharing or instant messaging could revolutionize your work. You just tried the product out for yourself for free. That’s PLG.
Product-led growth is the front end because your users and customers can touch, feel, and experience it.
However, just like building a good website, you need a good backend to power the front-end experience. If not, you’ll have difficulties updating and scaling it up. A pretty-looking static website isn’t that useful.
The same goes for your PLG experience. It needs to be constantly updated to succeed. That’s where building a product-led organization comes in. A product-led organization encompasses everything below the surface that supports PLG.
Product-led organizations (PLO) are organizations that drive growth by placing the product at the center of the customer experience. Every decision and team in such organizations is influenced by how it affects the product and user experience. This is the company-focused backbone that makes PLG all happen. It's about the internal processes, decisions, and strategies that support and drive a product-led approach.
So what does it mean to be “product-led”
Product-led is simply the integration of product-led growth and a product-led organization into one cohesive unit. Having just a front-end (PLG) or a back-end (PLO) is not sufficient.
True product-led synergy is achieved when these two are seamlessly integrated and co-created. They must interweave in a way that enhances and complements the other, forming a cohesive and powerful unit.
Product-led is an approach where the product is central to every aspect of the business and a mindset that permeates the culture and operations of a business.
There are several important distinctions between product-led organizations and product-led growth worth pointing out.
| Product-Led Organization | Product-Led Growth |
| - Internal focused - Business operating model - Team focused - Company strategy - Strategic - Entire Team - Back end | - External focused - Go-to-market motion - User-focused - Product strategy - Tactical - GTM Team - Front end |
Why is this important to know…
Many companies try to deploy PLG without building a product-led organization. They launch a free trial hoping it will transform how they sell, and then they notice it’s not working that well. The reason is that they don’t have a strong product-led organization to back it up.
To embrace PLG, you must transform “how” you sell.
To build a product-led organization, you must transform “how” you run your organization.
A product-led organization is the ying to the product-led growth yang.
One is not better than the other – you simply need both to scale a world-class product-led organization.
That is why I’m writing my next book that tackles how you can become product-led.
The ProductLed System will show you how.
