The key to product-led growth - Mind the Product

Episode transcript

Randy Silver: 0:00

Lily, I’ve been hearing so much about product lead growth lately and I have some ideas on how we can improve the podcast. Okay, Randy,

Lily Smith: 0:08

hit me.

Randy Silver: 0:09

Well, first off, it’s an easy one. Let’s go with a classic. And I think we should offer a free trial. Ah,

Lily Smith: 0:16

you do know how podcasts work, right?

Randy Silver: 0:19

Oh, yeah, right. Okay, here’s another one. How about referrals? Let’s get everyone who listens to tell a friend about the show.

Lily Smith: 0:30

Okay, I do like that one. So, oh, boy. Are you listening to us right now? Before we get into today’s chat, go and tell a friend about the product experience podcast. Okay, I’ve done it. Got any more ideas?

Randy Silver: 0:45

No, actually, but I do know who to ask. Today’s guest is no again not. She’s a strategic product consultant and the founder of infinity phi, Israel’s first product leadership academy. And Noah is working on a course in strategic product led growth. That’s due to launch early next year. And she’s got a lot of great advice in this area.

Lily Smith: 1:07

And we have a link to sign up to her newsletter in the show notes. But no more chitchat? Let’s get to it. The product experience is brought to you by mind the product.

Randy Silver: 1:22

Every week, we talk to the best product people from around the globe about how we can improve our practice and build products that people love.

Lily Smith: 1:29

Is it mind the product.com to catch up on past episodes, and to discover an extensive library of great content and videos,

Randy Silver: 1:38

browse for free, or become a minor product member to unlock premium articles, unseen videos, AMA’s roundtables, discount store conferences around the world training opportunities.

Lily Smith: 1:50

mining product also offers free product tank meetups in more than 200 cities. And there’s probably one day you

Randy Silver: 2:00

know, thank you so much for joining us this week on the podcast. It’s great to see

Noa Ganot: 2:05

Thank you. That’s great to be here. Thanks for inviting me.

Randy Silver: 2:07

So we got a chance to meet each other a few months back when Marty Kagan and the Silicon Valley product group came to London and did something for a bunch of European coaches. But not everyone’s met you already so can you tell us a little bit about yourself? How did you first get into product? And what are you up to these days?

Noa Ganot: 2:24

Cool. So maybe I’ll start with a letter. I’m a strategic consultant and an executive coach for for product leaders. I’ve been doing that for about five years. And prior to that I’ve had over 20 years of experience and development. I’m originally a developer, and I’m known as a system engineer and a development manager. And then I moved into into product, you know, the regions of my product career, I think started as a kid, I remember my mother discussing with me why certain things work the way they are, for example, wine and ATM, do they ask you to take your card out before they give you the cash, and sort of all of those sorts of discussions of things should operate in a way that makes sense. So I think that’s where sort of the route started. As a product leader, I’ve been doing a variety of roles. I lead one of the two products that a cybersecurity company called Imperva had, since we were about 100 people for three years up to an IPO of almost half a billion dollars back in 2011. And then I moved to eBay, where I built to manage the product management practice and the product management team and the r&d centre that they had in Israel, that it was a VP product of a startup. And having seen all of that made me realise that product leaders specifically and Senior Product Managers have such a gap that is so hard to fill with with regular books and content that I decided to focus on that as my consulting and coaching business.

Randy Silver: 4:06

And one of the things you’re working on a lot right now and the thing that we want to talk to you about especially this week, is product lead growth, a bit of a hot topic these days. So before we get into your take on it, can you just give some background what does it actually mean to be a product lead company?

Noa Ganot: 4:27

Great. So actually, I think the question sort of calls for clarifying because product lead growth is such a hot buzzword these days in the in the courses that I teach on product lead growth actually show that the search trends on product lead growth in recent years. They’re growing like crazy. Everybody wants to do product lead growth and another thing that that is really hot, especially in our circles is everybody wants to be a product lead company with a how empowered product teams and all of that. So I think these are terms that are sometimes mixed. But they mean very, very different things. So product led company is a company that grows through its product that sells product as opposed to services or projects, and puts the product at the core and focus of its entire business strategy. And it means also how certain things are done behind the scenes and processes and really empowered product teams and the fact that product teams, including all old people on the team are actually the ones that are driving the company forward. And but product lead growth, for product lead growth, you need to be on a product lead company, it’s very, it’s almost impossible to do it otherwise. But it is something quite different. Which means that the product itself is actually the selling tool of itself. And it also means a bunch of other things that are worth noting, because they are much more significant than whether or not you allow a freemium or a free trial of your product. So for example, one of these things means that you are selling bottom up, so you are selling through your end users, and they would be the champions that would go and ask for a budget and actually make the sell or make or make the sale happen within their companies. And that’s a very, very different ballgame than just letting them try it out.

Lily Smith: 6:39

And what are some of your favourite examples of really successful product led growth companies or strategies even,

Noa Ganot: 6:48

you know, so So frankly, companies, I think slack is probably the most famous successful company running product lead growth, but there are so many I can talk about the tools that I use use myself, so you know, there’s HubSpot, and MailChimp and Monday and a bunch of others, you know, I have Monday being an Israeli company, I have a special warm place in my heart for and they are also they were really product lead growth purists at least at least at the beginning, they really they didn’t want any sales teams. And that’s why they decided to go with product lead growth. So they were really into it from from day one. It’s an interesting example.

Randy Silver: 7:38

Is that is that a feature of a profitable company not having a sales team? Is that? Or can you do it both ways.

Noa Ganot: 7:46

So think, maybe it used to be nowadays, it’s it’s actually the other way around. It’s already well established that at some point, you do need salespeople, even if you do product lead growth, even if you put your product up there, as the front layer for for your sales. Because usually, that’s when when you want to actually go to the to the larger deals, it means also going with companies that expect to talk to someone and also it doesn’t make sense to just enter your credit card for I don’t know 100k deal. It doesn’t happen this way. So it is a known fact by now that even if you are on product lead growth, and it works for you the really, really large deals you would need a salesperson for and also your the customers that would be signing on those large deals want the salesperson but but it’s usually a different type of selling, it’s it’s more of consultative selling, it still often relies on a bottom up approach. So for example, a company would start using the product. You know, for slack, for example, one of the things that got them really successful is when they realised that their target shouldn’t be companies, but rather teams. Because to convince the whole company to use my product is really, really difficult. But the team that I work with on a daily basis is something that could quite easily be convinced. And when they realised and you can see their lingo up until today everything is about your team and your team members and and your team members. And when they realise that they actually saw really a spike in the usage and adoption of the product. So now if we go into into thinking about sales, at some point, maybe a team would pay for itself, or certain teams would do that. And then at this point a salesperson can come in and say hey, you know you already have several teams using it and they’re happy, we know that they’re happy because we see their adoption, we see their usage, they’re using it on a daily basis. So why don’t we talk about having an enterprise account, or it could be the other way around, it could be that several teams are using it. And then at some point, somebody sees that we’re paying to Slack separately in quite a few departments and teams, and then someone in the company would say, hey, Slack, let’s talk an enterprise agreement. And that’s how it works. But it’s very different. Because the product is already in use in the company. It’s not like, hello, let me tell you about Slack. Maybe you should try it out.

Lily Smith: 10:40

And that’s a kind of classic example, I guess, with Slack. Does that tactic work for most companies in terms of like, target the team, you know, get in the kind of at the ground, as it were? Make it like an easy signup process? And then sort of target that organisation later? Or is there more to it than that? I’m guessing there’s a lot more. But

Noa Ganot: 11:08

yeah, there’s probably so so first of all, you know, when you’re asking that, is that working for most companies? First of all, not I don’t think that most companies have adopted plg, at least yet. And for some industries, it makes more sense. And for some, I guess, maybe at some point, but maybe it’s not quite there yet. I think the one thing to remember, if you’re considering if plg is for you or not, is that it’s not so much up to you, it really depends on your customers and how they expect to buy software. So in some in some markets, for example, if you’re creating tools for developers, there is almost no other way. Developers are like, allergic to talking to sales. And they’re technical enough, obviously, to try things by themselves, and they wouldn’t have it any other way. So if you’re selling to developers, it’s almost given these days that you just have to go plg. But in other areas, for example, if you’re selling to, I don’t know, the largest enterprises out there, or if you’re selling to more classic enterprises, maybe government or defence. So over there, maybe product led growth is not the right thing for you. If you’re selling hardware, if your product involves hardware, that’s not as easy to try it out before before you buy. So it’s not always the right solution. And some people go into plg, for the wrong reasons. They do it because everybody does that, because it’s a hot buzzword. I’ve heard people telling me that, you know, my product was failing. So I thought maybe product led growth could save it. It might. But it would be the answer only if the problem was that people wanted to try it before they bought it. And that would actually create a better solution. So before you decide to go into product lead growth, you need to consider why why you’re doing that. And now that back to your original question, really about maybe the tactics and how to do that. So, you know, it’s always easy to see what successful companies are doing, and sort of tried to mimic that. But that’s like, just the tip of the iceberg that you can see above water. And if you just mimic these actions, without the strategy, that is the iceberg itself that you usually cannot see from the outside, you’re most likely to not land on the results that you actually want to because and specifically with with product lead growth, it really is critical that the strategy is clear and everyone is aligned. The The reason is that if you have classic salespeople, so if you think about the journey, people are involved all along the way. So there is, you know, the customer had seen some marketing material, and then maybe they get on a call just to book a demo. And then there is a salesperson that actually shows them the demo, understands what they need, they can talk it through. And while while alignment is also important there, it’s important that the marketing talks about the value that the product can actually deliver and that the salespeople understand the value and make sure that the customer qualifies for that value that the product can actually deliver later because we’re into having happy customers and not just customers who are willing to pay no matter what. And so alignment is important there as well. But if you take the people out of the equation, which is what often happens with product lead growth, then there is no one to mitigate any gaps. So if the the alignment is not 100%, tight, things would not convert, if the marketing materials are talking about a value that is slightly off from what the product can actually deliver. People want continue the journey. And that’s where strategy really, really is crucial. Think about it, you know, I’m sure you all had this experience before, right? Having seen some ad thinking, wow, this is so cool I can, I can definitely use it, I think this is solving a big pain that I currently have. And then you log into the product, and you realise that it’s very different from what you thought it’s not really doing what the ad said that it would be doing, and you don’t understand it, you’ll immediately abandon it. So yay, we had to lead you know that the mark the ad converted, but it’s there’s no customer at the end. So what did we do here other than spend money?

Lily Smith: 16:04

And no, so there’s a, that I, from my understanding, there’s a virality sort of social aspect to product lead to growth strategies as well, where you have to bring in some kind of incentive or or something that makes people want to share or it’s part of the functionality that it you’re sharing the product outside of your core business or or network so that it has that that kind of viral effect. When when you’re using the product? Is that something that you can uncover? You know, you mentioned earlier about you, it has to be driven by customer need. So presumably there’s some businesses can do this and some businesses can’t and and if you’re interested in this kind of strategy, like how do you how do you uncover that potential in your business? Right.

Noa Ganot: 17:04

So I think one of the things to remember is that with with product lead growth, you know, there’s so much advice out there on what you should be doing. And you can find, you know, quizzes that you’ll you’ll fill them, and they’ll tell you, if you need to do Freemium or free trial, and boom, you’ve got the answer. But I’m not a big fan of this type of training and advice, I would say, because I think these things are complex. And you really need to think it through on a case by case basis. Now, there are some guidelines. So for example, the reason that I was talking about free trial and freemium is that the virality aspect, some of it is built in with the nature of your product. So with Slack, obviously, if I use it alone, I didn’t get any value. So so the need to share it with my team members comes with the essence of the product. In other cases, the company that is delivering the product would need to work maybe harder to get people to actually share and invite others. And this is one of the considerations on whether you should go Freemium or free trial. So generally speaking, freemium is working well, when you have this virality of like work outside of your team outside of your company, for example, Calendly is a good example. So we use for example, we might be using Calendly for free, but as we invite others, and they use the product as well, we they are like scheduling appointments with us, they might see this and there is an inherent virality here that is happening. And the tool is actually advertising itself to other people. So this is a plus one for freemium saying that more the fact that more people would be using the my product would actually help bring more users from other companies or other organisations. In other types of tools. This requires a little bit more, more effort. And then maybe freemium is not the most productive way in these cases, because then you’ll end up having tonnes of users who are actually using the product for free. And only a bunch of them would actually be converting and the fact that they’re using the product for free doesn’t necessarily give you anything in other cases, by the way, reality is just one point. In other cases, it could be for example, data. If your product improves as more people use it, then definitely you want to get more people to use it and maybe freemium would give you a boost there, or it could be content. If your product is working on user generated content, then if they do it on a free version, then then you’ll have more more content. So virality, again, some of it is inherent. And some of it you need to think about, but it’s one consideration on these areas of how you how you actually craft your product lead growth strategy.

Randy Silver: 20:32

So let’s talk about some of the mistakes people made as they put this strategy in place, because I’m guessing it’s not an OKR. next quarter was become product lead, let’s just put something in place. And and see resulted, I’m guessing this, the effects of this type of these types of initiatives generally take time, don’t they?

Noa Ganot: 20:53

Yes, absolutely. In fact, getting to success with product lead growth takes usually longer than if you decide to go on a classic sales, lead enterprise sales, for example, for all of the reasons that we that we said so far. So the fact that people are actually involved in the process means that you will be able to convert on an on a on an immature product, for example, because you set expectations and they’re fine. And you will probably be able to convert larger deals this way. But also, because, you know, one of the mistakes that I often see companies do, and this is unrelated to product lead growth. But with product growth, it’s definitely an important one to to note is that people even if your customer journey is perfect, you have polished it and optimised it and it is the best journey that it can be. Some things just take time. So if you need to try the product, use it for two months to understand if you actually want to start paying for it, and then start inviting others to make a decision as a team, not as a sole user, and then go and secure the budget. And then or even maybe before that, to actually get the value out of the product, you need to work with it for a while you need to maybe integrate it to your other systems and all of that these things take time. So some so you need to understand even in your optimised customer journey, how long it would really take. And usually with product lead growth when you begin it’s far from being optimised. And unlike with a sales lead approach, it’s very difficult to overcome those gaps. So the journey needs to be nearly optimised in order to start yielding results. And that’s why results business results with product lead growth take longer than than if you go without it. So how

Randy Silver: 22:54

do I know that I’m on the right trail? How do I know that I’m starting to go into the right place specific it’s not going to pay off for three months, six months a year, and I’m doing all this work? I’ve got hypotheses that doing this is going to lead to more sales, it’s going to lead to more growth, it’s going to lead to a more efficient conversion metric for me, but I’m not seeing that for quite a while how do I know I’m on the right path.

Noa Ganot: 23:20

Right. So first of all, you need to understand why you’re doing it to begin with. Because if you’re just doing it because it’s a hype, then that’s probably a bad idea. If you’re doing it because you understand that your customers would only by it this way or usually by the way it would be we have worked with a certain segment. And now we are we want to expand our product to another segment. But in that other segment Now it makes sense to go with product lead growth, unlike in my original segment. So if you know why you are doing it, usually you do it because you won’t be able to do it any other way. And if you do that, that’s much more encouraging to really go all in which is one one of the mistakes that I see is that people are like really hesitant about it so they change a little bit of the product, they expect quick results and then it doesn’t work and they go back so if you do that, you’re probably better just not wasting that amount of resources on changing the product if you think you can go without product lead growth, and you’re not willing to do what it takes to succeed then maybe you’re better off just not starting altogether. But your questions about how do I know if I’m if I’m at least on track, then generally speaking product lead growth or any product market fit journey, by the way, goes really hand in hand with cracking the customer journey step by step. So a general customer journey would be acquisition activation, retention, revenue and referral with product lead growth. Since we’re talking about getting value before money, that means that we really want to make sure that we nail down retention before we start talking about revenue. And that there is a very, there is there is a typical way to go about this. So you would go and you will find where is your journey end to end journey currently stuck? Where is your current bottleneck? One way to that I really like to use to identify that bottleneck is to just give yourself rate yourself as in red, yellow, green for each of these phases. It’s a very simple exercise that you can do in minutes, you can do it like the entire company management can do it together, it helps also with alignment. And then you realise where you should be focusing your efforts. Because if something is red, then your entire pipeline is blocked that and that’s where you need to be. So your progress would be solving one bottleneck after the other. And also, looking at the customer journey end to end, you will see that you are now your bottlenecks are in more advanced places, although sometimes you would need to go to go back, for example, you usually start with acquisition because you need to have users to be able to work with so you start with acquisition, but you only work in initially, until it’s no longer a bottleneck until you have enough to work on activation. And then you work with the users that you have an activation, maybe you were able to convert some of them and also start working on retention retention is really hard. So it can take longer to actually optimise retention or even be able to succeed with retention whatsoever. And so at some point there, you might be stuck, you might no longer have users to work with and convert because your funnel has, has emptied, because you haven’t perfected acquisition yet. So at this point, maybe you want to go back to acquisition and create a more robust and a more sustainable way to actually get users and an ongoing manner. So that you will always have users in your funnel to actually work with while you’re still optimising the journey later on. So you need to look at your journey end to end, understand where you’re currently stuck focus there, and you will see the progress because the problems that you would be solving would be more advanced and more towards actually converting people to customers as you go. So that’s sort of the feeling of progress that you would have.

Randy Silver: 27:31

No, this has been fantastic. But we’re running out of time. We think we’ve got time for two more questions. Before we finish off on on the last one, what’s the biggest mistake you see people making again and again as they start their journey towards product being product LED.

Noa Ganot: 27:47

So other than not getting to it from the right reasons. I think one of the things that product lead growth is really calling to and one of the pitfalls is giving too much for free. And since we’re so focused on giving value and making sure that they get value before before money, and we want to get one to get really happy users. I see companies sometimes actually struggling to start charging for all of this great stuff and sort of changed their mindset into actually making money out of it or selling because we have positioned ourselves up until now as the best partners of our potential customers. Would it work like am I even allowed morally to start talking to them about Okay, now, now you need to pay. So some of it is psychological. And some of it is just because you you got used to working differently. And that’s even I would say a chasm that that companies really need to cross because if you give too much for free, honestly, there is no reason for them to pay. And we’re not doing this for charity. So you need to be very mindful of we’re doing this for the success of the business in everything that you do.

Lily Smith: 29:09

And now it sounds like when we talk about designing the that sort of perfect customer journey for acquisition, activation all the way through. That sounds very much like a design and product team play. But who should be involved in this because it’s a very strategic move for a business, isn’t it?

Noa Ganot: 29:31

Yeah, that’s that’s actually a great point. And a great question. And you know, one of the reasons that you will see a lot of advice there and like how to do the perfect onboarding, that’s, that’s great, but that’s really just part of the mix. So you should have an on top of product engineering design, you should have a marketing person and a customer success person because success success has a very significant role in action. really making this a success, as the name suggests. And I would say that if you’re on a smaller team, for example, if you’re a startup, maybe you don’t even yet have a customer success function. But make sure that whoever is working on your product lead growth, strategy and implementation, that someone owns the customer success hat that someone owns the marketing hat or the design hat. It could be the same person, like the product person could take a lot of this load. In fact, in many startups, I see nowadays that customer success actually reports to product it’s great for for the beginning, to actually learn about how customers perceive the product and where they’re struggling. So whether it’s a dedicated person or not make sure that this point of view is well represented. So that really all the points could be connected. Because otherwise, as we said, a number of times, it would be very difficult to get to any results. And we’re not doing this just for fun. We’re here for results.

Lily Smith: 31:08

No, it’s been so great talking to you. As Randy said, we are running out of time, I know that you’re working on some content for people to learn more about product lead growth. Do you want to talk about that really quickly before we wrap up

Noa Ganot: 31:20

here? Sure. So I’m working on having a offering a digital course called strategic plg strategic product lead growth that is coming exactly to filling this gap of we’re doing everything that we’re told to do, but still no results or we don’t know where to begin or we started and now we’re stuck and cover all of this strategic approach the things that you need to know all of this iceberg that is underneath sea level that you really need to to have in place so that the actions that you do eventually all convert into the results that you’re that you’re expecting it’s going to be a digital course that self paced and probably available around January 2023.

Lily Smith: 32:07

Lovely and we will put a link in the show notes to know as blog so you can sign up there for her blog to hear all the latest. But thank you so much for joining us and talking to us about product Nyquist

Noa Ganot: 32:21

Thank you Lillian Randy. It’s been a pleasure.

Lily Smith: 32:33

The product experience is the first and the best podcast from mine the product. Our hosts are me, Lily Smith,

Randy Silver: 32:42

and me Randy silver.

Lily Smith: 32:44

Louron Pratt is our producer and Luke Smith is our editor.

Randy Silver: 32:48

Our theme music is from humbard baseband pow that’s P AU. Thanks to RNA killer who curates both product tank and MTP engage in Hamburg and who also plays bass in the band for letting us use their music. You can connect with your local product community via product tank, regular free meetups and over 200 cities worldwide.

Lily Smith: 33:09

If there’s not one near you, maybe you should think about starting one. To find out more go to mind the product.com forward slash product tank near you.