Again, this is one of those posts, where I have to start with a disclaimer. The post is a little snarky. And, yes, it’s intentional, but hopefully to make a point and to help us open our eyes to explore worlds outside of where we normally exist, in this case SaaS. I’ll use the SaaS world as the victim example of my observations, but each of us suffers from tunnel vision in how we look at innovation, go to customer, and discovery in our own sectors.
We could, actually, move so much faster and produce far better results if we pay more attention to what has happened in the past (ie History) or what is happening in other sectors. Rather than reinventing things or repeating the same mistakes, we can learn from broader look at and different experiences.
PLG, Product Led Growth, is one of those areas. It seems, the SaaS industry, has discovered an phenomenal “new” way to bring products to market. The concept is, “What if we made a product that sold itself?” Ideas are, making a product so easy to acquire and use, that customers would buy it without engaging a sales person. Or a product that is so low risk, that even if we made a mistake, the impact is negligible.
And this scales, creating a snowball effect, growing sales by word of mouth. Perhaps, it’s seeing what a colleague is doing, thinking it’s cool, and adopting the same product ourselves. And it may spread. So we make the same sale to a new person. 10 sales result in 10 new users, then 50, then 100. And we can grow with very little sales effort/expense (but not without any).
At some point, as we start seeing product adaptation within a company, we or the customer says, “We need to adopt this at a grander scale. We need to get the entire enterprise standardizing around this product.” As sellers, we do this because it probably drives our growth rate much faster, a one time sale of 1000 seats, usually can be done much more quickly, cheaply, and easily than 1000 sales of a single seat into an enterprise.
But when we start looking at this approach, the whole buying/selling process changes. It is no longer an individual decision. It’s an enterprise decision in which many people have to be involved and come to agreement. And the risk is much higher, there are greater change management implications, there are adoption implications, financial and other implications.
But in B2B PLG models, that’s the process. We get the snowball going with individual adoption, but at some point to move faster, we convert to an enterprise sale.
So this is all pretty basic, yet there is post after post, huge amounts of digital hand wringing or provocation about all of these concepts. And there is the feeling underlying all these discussions that this is new and different, and it is only SaaS companies and PLG companies have discovered this revolutionary new growth strategy.
At this point in the discussions, I tend to stifle a yawn, often reflecting on one of my favorite movies, “Ground Hog Day.”
One of the problems with being “older,” is I’ve been through so many incarnations of this before. Yet, too often, we think it’s new and novel, something that has never been done before.
We’ve seen dozens of iterations of “PLG” in the past. Some successful, some failed. We see dozens of iterations of PLG in different industries now. In both these cases, they aren’t called PLG, in many, it’s just the way business gets done, and we don’t have to provide the “cool kids” label to this.
Let me look at just a few examples:
- Probably the great grandparent of all early stage PLG thinking, and probably the current source of the greatest innovation in PLG type approaches is the consumer products industry. While my wardrobe doesn’t reflect this, the fashion industry is one of the most innovative in creating the snowball effect in product adoption and growth by individuals. I spend a lot of time looking at the fashion industry and working with people in it. “PLG methods in fashions goes back decades or longer. Their approaches continue to evolve and be the most innovative in the market with thinking around creating fads, leveraging INFLUENCERS to leveraging influencers, to how/where to acquire, to building a complete product experience and community. We can learn a huge amount from from these segments–but somehow too few do.
- In technology, PLG goes back decades. Much of our success in technology has less to do with how well we sell, but just that we’ve had a hot product. But let’s just look at one area, the introduction of the PC/MAC/Osborne/Altair’s/TRS 80 and others. When originally introduced, they were usually focused on individuals–hobbyists, artists, and so forth. We learned about them through magazines, bought them at Radio Shack and the predecessors of the computer/office superstores, or through catalogs. As we experimented with them, even in corporations, there would be a few early adopters, then others would follow along. In the division I ran, at the time, 10 people on my team were experimenting with PCs (and there were different models even though we (IBM) sold the PC. As popularity increased and the business applications increased, they moved from individual sales to “enterprise sales.” The sales cycles became longer, more complex the average deal value went from $1000s to millions. Everything we see in today’s PLG world, we have seen in the evolution of the PC (It’s interesting to see how it’s going from an enterprise purchase back to an individual purchase).
- Likewise with PC software. In the early days, I was a fan of Visicalc and Wordstar (I am really dating myself). They were cheap, I liked using them. But then as I started sharing documents and spreadsheets with colleagues, they were using different programs and we struggled to share them. We evolved, for many reasons, from SoaF (Software On A Floppy) to looking at enterprise purchasing. And the way those software developers marketed and sold their products changed, as well. They still had individual license sales, but most shifted into an enterprise focus. It’s easier to sell a 1000 licenses of Word than it is to sell a Word license a 1000 times.
- Outside of technology, we see all sorts of variations of PLG–they just aren’t called PLG, it’s the way the way many industries have engaged their customers. In electronic components and basic materials, they are called “samples.” They may be free or very cheap (Hmmm, sounds like PLG). They were offered to scientists, researchers, engineers, designers and developers to experiment with, to learn and adopt. As individuals learned, they scaled, making prototypes. Then as they looked to expanding the use, embedding these products in to millions of products, the buying/selling process changed to an enterprise focus. And the issues, grew beyond just cool products to looking at supply chain, life cycle, warranty, and other larger issues.
I’ll stop here, there are dozens more examples of “product led” to “enterprise led” strategies for growing in the market. We see how these models have evolved over time, we see how these models “co-exist” as fundamental go to customer strategies in so many industries. And we see, in certain circumstances, that only one model might be possible with certain types of products. For example, it is unlikely that fashion will ever be anything other than PLG (except slotting space on retail shelves). Certain SaaS software categories can only be implemented as enterprise sales (Like ERP). Certain capital equipment, professional services, and so forth are enterprise sales and are unlikely to follow a PLG model.
And I sit, amused, at how many in the SaaS world are wringing their hands about innovating this “new” approach to the market, PLG. We’ve been here before, we’ve done it before! Why don’t we learn from the successes and failures others have seen in other markets, products, and industries, adapting them to our markets/products.
We become prisoners of our own experiences. Too often, through naivete, arrogance, or sheer ignorance, we don’t look outside our worlds to learn what others might have done. Some of these innovations from different spaces can’t be copied directly, but we can adapt and tweak them to fit our markets and products. We can reduce the risk, we can accelerate time to results/profitability, and success not by blindly reinventing what has been invented somewhere else, but by exposing ourselves to diverse experiences and artfully plagiarizing from them.
I’m tough on SaaS/PLG! Partly, because they make themselves such easy targets, partly because of the fondness I have for technology, particularly software products. But I see others, in different markets/industries making the same mistakes, limiting what they do an reinventing wheels that have already been invented. In fact, this morning I had a conversation with some electronic components executives about how they might adapt SaaS PLG approaches to their markets and go to customer strategies.
We make go to market innovation far more difficult than need be. We just have to open our eyes and look in different places.
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