FREEMIUM Chapter 4 Podcast
Product-Led Growth Is a Long-Term Growth Strategy, Not a Short-Term Sales Tactic
In my consulting work with Winning by Design, and in other wide-ranging conversations with CEOs, the number one topic of discussion is not whether or why we would automate our GTM, it is how do we do it?
Since 99.9% of companies were built not using PLG tactics, by definition almost all companies would need to retrofit large portions of the business to take advantage of the efficiencies and improvements in customer experience afforded by automated GTM. CEOs know instinctively this is not a small undertaking. And of course, they understand that growth expectations from the core business will not let up while they divert talented resources to work on this investment in the future.
Chapter 4 of FREEMIUM takes this challenge head-on, offering an investment and return framework for how to think about making a few key decisions up front, and then measuring and monitoring returns in year 1, in year 2, and in years 3 and beyond.
Find below a podcast-style discussion of the principles in the chapter, generated by Google’s NotebookLM. Enjoy!
XOXO,
Chapter 4 Summary
The #1 consideration when deciding if PLG is for you is “fit”: Can we develop a hypothesis for PLG that pencils out into a viable business case, from # of new customers all the way through monetization, retention, and expansion?
The next consideration is whether we can resource it? Consider this a “breakthrough” project and allocate the appropriate time and talent: typically 1-3 years and 5-7 of your best people (take them off current assignments).
Mindset starts from the top—any PLG effort needs CEO-level sponsorship of a mindset of empathy for the end user, generosity in solution design, and metrics-based experimentation
Building the right cross-functional growth team is essential for rapid iteration
The appropriate metrics of success shift over time: first PMF, then GTMF, then monetization, and finally growth.
Manager Minute
Thinking about your own company, take time to reflect on the following questions:
We have a hypothesis about how and where PLG would work within our company:
Underserved Market: ______________________________
Persona and JTBD: _____________________________
Target # of Free Customers: _____________________________
Target % of Paid Customers: _____________________________
Price for Paid Offering: _____________________________
Total 5-year business case: ______________________________
When considering how much empathy and generosity are embedded in my company, the following are true (check all that apply):
We have developed named personas for our customers
We understand the JTBD for each of our personas
We track our customers’ success with our product
Our leadership makes our customers’ success a primary focus behind closed doors (not just in company-wide meetings)
I know the people I would assign to my growth team:
Growth Product Manager: ______________________________________
Growth Engineers (1-3): ______________________________________
UX Designer: ______________________________________
Growth Marketer: ______________________________________
Data Analyst: ______________________________________
To maintain focus and commitment over a 1-3 year timeline, I will need to consider the following:
____________________________________________________________
____________________________________________________________
____________________________________________________________