I had a hard time writing this because it was difficult to not approach the topic from an academic perspective which doesn't fit into my preferred writing style. I prefer writing in simple and easy to process language so we learn together. How am I doing so far?

Defining product strategy is the first make-or-break moment for any product. Your product strategy helps you figure out how to develop and position your product in a way that delights your customers, generate profit (or other key metrics you’ve identified if non-profit), and get an edge over your competitors.

A good product strategy addresses how to achieve your product vision by defining a clear map of how that vision to translates to the tactical activities you and your team need to execute to achieve your vision.

Key elements that we consider when developing effective product strategies include customers, competitors, distribution, markets, key differentiators and the vehicles that will help us achieve our goals. An effective product strategy considers the many moving parts of these elements, how they are interrelated, what high-level directions will work for our product considering these elements and defines what tactical activities we need to execute to achieve the product vision.

A product-led approach to distribution and growth is one of the methods that may be defined as part of an efficient product-strategy.

Ok! So, what exactly is product-led growth?

Think about what happens when you walk into a car dealership wanting to buy a car.

You see a car you like and ask a lot of questions. The cars typically come with brochures (read product papers/briefs) that give you quite a bit of information about them. You’ll also find salespeople engaging you and giving you more information. In a lot of cases, you are encouraged to “take the car out for a spin”. When you take them up on this offer, you learn more about the car, you learn how it drives, how long it takes to go from 0 to 100, how efficiently the gear system works, if the seats are comfortable, how well the seats adjust to your back, where the cup holders are and a lot of other ‘little things’ that you may not have noticed in the brochure.

Now, the fact that you noticed these things during the test drive does not mean they weren’t included in the brochure, but who has time to read a 10-page document?! And sometimes, even when you take the time to read them, trying it out usually makes a huge difference. Wait, you’ve never had the car dealership experience? Ok fine, I’m sure you’ve walked into a mall to “just pick up a pair of jeans” but ended up with an armful of outfits to try on and ended up shopping more than you planned or getting something totally different from your original intention post your fitting room journey.

Great! You’ve experienced PLG. Well, at least as a consumer. Whoop whoop!

So, let’s bring this back to product management.

What does going product-led mean to you as a product manager?

The goal of any product is to serve as much of its target market as possible. Your purpose as a PM is to position your product in the best way to help your target audience find the product (acquisition), use the product (activation), love the product because it helps them solve one or more problems (referral), advocate on behalf of your product (retention), and most importantly, earn from your product (revenue).

Product growth can be achieved in multiple ways. Traditionally, we approached growth by trying to manipulate demand. (lol, manipulate is not a bad word)

Ok, let’s do some quick high school economics.

There are two (2) forces that drive a market – demand and supply. They are both interdependent and can be manipulated in different ways to affect market equilibrium. Both demand and supply can be manipulated to create different outcomes. I’m sure you’ve seen the movie ‘The Big Short’. Go watch it if you haven’t. Like, now!

Ok, so growing our product is also based on basic laws of economics because, well, we all operate within markets.

So, back to how we traditionally manipulated the forces of demand and supply. Traditionally, companies approached product growth using techniques such as demand generation (read sales) and lead generation (read marketing). These on their own are great ways of growing products and revenue, so why are we now advocating for a different method? Well, the simple answer is – evolution.

The world continues to change, and we are now at a phase where users are becoming more intentional about their purchases. Users want more value for their money, and they want to be sure that the product delivers on its promise before making a commitment. Yes. It is now a buyers’ market and I love it!

What this means is; as product owners, we now have to go beyond the first layer of convincing users our product is for them. We now have to find innovative ways of communicating the value of our products to consumers. This way, when we convert users, we actually retain them not only as paying customers but also as advocates! You’ve probably heard the saying that word of mouth is the biggest form of marketing.

If I were to define product-led growth (PLG), I would say –

PLG is a business development approach that leverages the values of a product by allowing prospective users to explore the product before making a buying decision. In most cases, PLG encourages users to make long-term buying commitments because it highlights the benefits of using the product to solve their specific problems.

Other approaches to business development include sales-led and marketing-led. In both of these, the business leads the process and ‘handholds’ the consumer till they make a purchase. Product-led approach, however, is consumer-led as the users typically ‘find’ the products, explore them and then make buying decisions based on their evaluation and assessment of how well the product solves their problem (value).

Companies implement PLG in different ways –

• Freemium offers where the product is segmented into features and functionalities which are offered based on varying degrees of prioritisation. Users get a version of the product free and then upgrade as their needs increase. Common implementations of freemium approaches include graduated subscription fess based on user counts, and feature-based graduations.
• Free trial versions that allow users use the product in its entirety for a certain period. The most common offers include 2 weeks trials and one-month trials.
• Product demos are also an interesting way of implementing PLG. They are not exactly consumer-led though because most of these offers require the prospective user to book demos through sales or support channels. However, demos allow users to explore the product albeit with a guide and for a short period.

Fine, let’s get into the argument of whether PLG can operate on its own without sales and marketing.

The whole point of PLG is to allow users explore the product without the pressure of making a commitment, but how do they find your product in the first place? You need to make the initial effort of creating enough awareness to help your prospective users find your product.

The question answers itself, right? Ha ha!

I like to look at PLG as a lead generation method. Wait, wait! Before marketing experts crucify me, hear me out. To grow a product, you need to go from awareness to adoption, then conversion, and retention. PLG does a great job from adoption to retention and even helps with advocacy but somebody has to do the first job of getting the product in front of of the customer right?

What does lead generation do? It helps to gather information about the product while giving your prospects a taste of the product, right? The taste can be anything from thought leadership to rewards. PLG helps your prospects ‘taste’ the product andcollects information about these prospects.

Have I won the argument? No? Na wa ooo. Ok, email me, let’s chat over coffee and understand each other better.

I’ll discuss more on how PLG works with sales-led and marketing-led approaches to growth in later articles.

Kai! This discussion is getting long, and I promised not to bore you right? Ok, I’ll just discuss one more thing today and we can continue another time.

Is PLG for you?

As a product leader or founder, you’ve probably considered if you should explore a product-led approach to growth. You’re probably wondering what that means for you, how should go about the implementation. You have? Great. Unfortunately, I can’t answer the question for you (sorry) but I can help you arrive at the right answer.

First, let’s answer a few questions.

1. What is your aim? Why are you considering PLG?
2. What’s your business and distribution model? B2C? B2B? SaaS B2B?
3. Who are your users? Are your users also your buyers? (answering question 2 helps to answer this).
4. What stage of the PLC is your product at? Are you looking to grow your market or introduce a new product?
5. Of all the problems your product solves, what are the top 3?
6. Put your VOC hat on, as a user, does your product clearly communicate its value and benefits?
7. Again, VOC hat please. Who is your target market? How well do you know them? (please note this is different from question 3)
8. Ok. Just keep the VOC hat on, how effective is your user onboarding journey?
9. Again, why do you want to go PLG? Compare with your answer in 1 above. This is a repetition because answering questions 2 through 8 should have given you some more insights about your product and your market.
10. What is wrong with your existing approach? Whether you’re currently sales-led or marketing-led, why are conversions currently low?

In next article on PLG, I’ll discuss these questions, why you should ask these questions and the interpretations of the answers you’re likely to have. We will then discuss different implementations of PLG across African markets and industries and spotlight a few companies who have successfully achieved growth using a product-led approach.

How do you spot a product-led product?

As with a lot of things, there’s no one size fits all to PLG-ing but there are some common characteristics like freemium models, trial versions, self-onboarding, feature-focused marketing and communication, value-based user engagement, direct-to-consumer targeting, leaner sales teams, bigger R&D teams etc. PLG is also more common with SaaS products because their business model is the most adaptable to some of the implementation approaches (we’ll discuss this soon).

A few notable product-led products and companies include Zoom, Zoho, ChatGPT, LinkedIn, Calendly, Slack, Canva etc.

We also have some great examples of PLG implementation in Africa. Companies like Lendsqr, Invoice.ng, Klas, Simpu etc.

Like I said earlier, this is a deep dive and I’ll be touching on a lot of different aspects, but I also want to be sure that I’m not just writing for myself, so let’s take a break here and I’ll hit you up in a few days. Deal?

Before then, please do me this favour –

I’d like you to explore an example of a product-led company (product) so we can all get our PLG juices flowing. It can be any of the ones I listed above or any one you’re familiar with.

Aspects you should focus on in your review should include –

1. the product value (what benefits does it provide to users?)
2. their business model (how do they make money?)
3. their market (what is peculiar to the market they operate in?)
4. their team (what’s unique about their team structure and dynamics?)
5. their competitive edge (what do they have that their competitors don’t?)

I know! I never liked homework in school either but I promise this will be fun. Hit me up @ yewande@produqtedge.com if you’d like get on a 30-minutes call to discuss your findings.

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