Designing for Buying: How to Break Through the Ceiling in Product-Led Growth

Glasp

Hatched by Glasp

Jul 19, 2023

3 min read

0

Designing for Buying: How to Break Through the Ceiling in Product-Led Growth

In today's world, the power of end-users and their ability to influence communities has been on the rise. This trend, known as product-led growth (PLG), has become a key focus for many companies. However, there are three limits that companies must overcome in order to truly succeed in this space.

The first limit is failing to serve other masters. While PLG companies initially focus on serving individuals, they must also consider the needs of collaborators, teams, leaders, and companies as a whole. By expanding their scope, these companies can tap into new markets and extend their reach.

The second limit is the failure to segment customers. PLG companies need to understand that different customers have different needs and buying processes. By adapting their product to these differing needs, they can successfully enter upmarket and cater to a wider range of customers.

However, it's important to note that once a PLG company goes enterprise, it's unlikely that they will go back. The enterprise market brings with it new challenges and complexities that must be addressed in order to thrive.

The third limit is the law of large revenue numbers. PLG companies need to invest in top-of-funnel strategies to complement organic viral adoption. This means developing a portfolio of strategies to attract new customers and generate revenue.

To overcome these limits, it's important to start by doing thorough recon. Understand the problem you're solving and how it varies across individuals, teams, leaders, and other use cases/departments. This will allow you to tailor your product to meet the specific needs of each segment.

Additionally, treating land and expand like a user journey can help guide your growth strategy. By understanding how customers progress through different stages, you can optimize your approach and increase customer retention.

However, implementing whole-company systems can be challenging. It requires breaking down traditional silos, building trust across functions, and incentivizing and measuring teams differently. Companies like Figma, Notion, and Datadog are leading the way in this regard, demonstrating the benefits of a system-wide design approach.

When it comes to pricing, PLG companies often face conflicts. Prosumer vs. business pricing, SMB vs. enterprise pricing, and pricing for usage expansion vs. revenue capture are just a few examples. Balancing these tradeoffs requires careful consideration and a deep understanding of your target customers.

It's important to remember that product-led growth is only the beginning. Many founders believe that once they have a great product, they can hire sales and marketing people to take it to the next level. However, PLG requires a system-wide design approach, rather than a sequential handoff.

In the realm of learning, the debate between intensive and slow learning projects has been ongoing. Research suggests that concentrated periods of learning, rather than spreading it out over months, are more beneficial. This is known as the spacing effect, where massed presentations initially have an advantage but fade over time.

However, intensive projects should be followed by more leisurely maintenance. Continuing to practice at a more relaxed pace after an intensive burst helps maintain proficiency and prevents a sharp decline in skills.

Contextual interference and retrieval practice are two additional factors to consider when designing a learning project. While contextual interference can be helpful, it may backfire for complex skills or poorer students. Similarly, retrieval practice is generally beneficial, but it may not work if the person is unable to retrieve the information they are trying to remember.

In conclusion, designing for buying in a product-led growth environment requires overcoming three key limits: failing to serve other masters, failure to segment customers, and the law of large revenue numbers. By understanding these limits and implementing actionable strategies, companies can break through the ceiling and achieve exponential growth. Three actionable pieces of advice are: prioritize customer feedback, carefully consider pricing tradeoffs, and take a system-wide approach to design. With these strategies in place, companies can thrive in the product-led growth era and continue to innovate and grow.

Hatch New Ideas with Glasp AI 🐣

Glasp AI allows you to hatch new ideas based on your curated content. Let's curate and create with Glasp AI :)