Using product-led growth principles to lead a company
Product-led growth isn't just a go-to-market strategy. Founders and CEOs, here's how to apply PLG to your leadership approach.
Interested in learning more about all things product-led growth? Subscribe to our PLG newsletter, The Notorious PLG.
Leading an organization and its many moving parts is a beast of a job. Leading an early stage startup, where the many moving parts may not yet be established, is even harder.
Product-led companies, with an intense focus on creating better products that put customers at the center of acquisition and retention, thrive with a culture where every team is all-in and in constant alignment. Operating in silos, with distinct goals that clash with other teams, is difficult in any company, but can be a death knell for a product-led one.
Product-led companies are born one of two ways: either they’re founded on these principles (like Dropbox, Slack, and Calendly) or they’ve transitioned over from the more traditional sales-led growth model (like Vendasta, Guru, and Hubspot). In both cases, all-in alignment is critical to achieve the frictionless flywheel effect common to product-led growth.
Oji Udezue, former VP of product at Calendly and now product lead at Twitter, describes a weekly process at Calendly, wherein every piece of customer feedback is collected and triaged, with anything actionable dealt with immediately.
By staying on top of customer pain points like this, companies can integrate processes much more efficiently–processes that, in a sales-led company, are separated by function, with high friction and long lag time.
Product-Led Growth means that every team in your business influences the product. Your marketing team will ask, ‘how can our product generate a demand flywheel?’ Your sales team will ask, ‘how can we use the product to qualify our prospects for us?’ Your customer success team asks, ‘how can we create a product that helps customers become successful beyond our dreams?’ By having every team focused on the product, you create a culture that is built around enduring customer value. By having every team focused on the product, you create a culture that is built around enduring customer value. —Allan Wille, CEO of Klipfolio
Product-led leadership starts with all-in alignment
The whole basis of product-led growth focuses on the user and their needs at every stage, even before they become a customer, so that they become the flywheel for acquisition and retention.
Knowledge base software company Guru started out as a high-touch, sales-led company focused on custom demos for each prospective customer as their primary user acquisition strategy. As the company grew, they realized they’d need to shift to a product-led company to scale further.
They did so by implementing tiny details all the way down to changing the website’s call to action copy (from “Get a demo” to “Try the product”), to creating a new role focused on product support with team members intentionally hired in from support, account and sales teams for a diverse and holistic cross-section of expertise. Today, Guru has that flywheel well in place: from the network effect it has because of the integrations it has with other apps people use for work, creating built-in stickiness and inevitable scale.
And in order to get there, an entire shift in culture had to happen.
Unlike a sales-led company, where sales teams and processes are the primary driver of growth, at a product-led company, every team and every department is involved in the making of a great product. From the obvious product teams to marketing all the way to customer support, this intensely cross-functional approach is critical.
Growth isn’t just the one team’s responsibility. It’s led by a great product, and a great product is the byproduct of many teams working together to support the same goal.
Applying product-led thinking to leadership
The benefits of product-led growth seem obvious: more efficiency, happier people, increased retention, and lower acquisition costs. All these things? They’re not just about your customers and product. The exact same principles and mindsets driving product-led growth also drive effective leadership, which means you don’t have to learn it all from scratch; you just have to transfer your skills.
When leaders focus intensely on the wants and needs of your users (in this case, their teams), people become a flywheel in a very similar way to customers in a product-led company.
They have a better experience, they become advocates, and they bring other great people in. They may become leaders themselves too (and in early stage companies, they will become your leaders, whether or not they have the title or experience)—and the flywheel starts to scale...or fail.
So, great leadership is important. But how do you do it well?
Dispelling a myth: leadership is not the same as management.
In most organizations, both are important. We’ve seen managers nestled in the middle of company hierarchies, delivering defined outcomes to upper management, who then report to “leadership.” As we move further away from the input to output model of industrialization and into roles and inputs that focus on a non-linear kind of growth, many companies are shifting away from pure management to a balance between the two. In early stage startups, where there are no hierarchies, these lines are even blurrier.
Management and leadership share this in common: they’re both focused on activating resources to achieve outcomes. But where management focuses on performance and managing work, leadership focuses on impact and leading people.
When the team is still small enough, you as the CEO need to play both parts: the hands-on work of the manager and the low-touch work of the leader. (Ironically, it often seems founders-turned-CEOs try to avoid playing either of these roles for as long as they can hoping that the merits of their great idea will speak for itself.)
Leadership is hard to do, difficult to learn, but when you get it, you reduce the effort it takes to manage, allowing you to mobilize resources, both people and budgets, more effectively. Poor leadership of course does the opposite, leading to high attrition, wasted resources and what feels like an unstoppable flywheel of bad decisions across the company.
Don’t avoid establishing goals, outcomes, and KPIs, but expect that at some point, things are going to change. Your role will be less about the metrics and more about people, through which the metrics become the byproduct and the signal of whether you’re headed in the right direction.
As a leader, you’re no longer the sole point of contact for ensuring the success of your team. You’re aiming to build an environment, culture, and company where your team’s success is baked in. It’s not easy, especially when you have a mountain of more urgent things to attend to and easier paths to get the immediate outcomes you want. But this is the long-term play that will pay off. Starting to sound familiar?
Okay, so what actually makes a “good” leader? An exercise in empathy
Our biases tell us that leaders are charismatic, influential, great speakers, perhaps even a certain age, color or gender, whether we’re conscious of it or not. But what seems to really matter when it comes to effective leadership is the vague and hard to measure suite of “soft” skills.
These are skills like initiative, self-development, relationship-building, and collaboration, which also happen to be among 16 traits and behaviors noted in effective leaders in a study published by the Harvard Business Review, based on more than 30 years of research. The surprising insight? Women in leadership positions were found to be more successful than men in all but one of those 16 traits, even though men dominate leadership roles. (This isn’t a missive about gender, just a reminder to go beyond your biases.)
A good place to start is leaders and managers who have helped you grow and excel. Explore and reflect on what you liked or didn’t like about past managers and leaders in a way that’s connected to real-life practice—then apply it.
Think outside the box, at where you felt most successful, the environment of that success and who was responsible for that environment. (Thinking this way is helpful because leaders often do their work invisibly.) From there, you can work backwards.
This isn’t a test with right or wrong answers. It’s an exercise in empathy and design, using the same values of successful product-led companies to create better experiences by asking you to reflect on the data you have: your own. Once you have a list, use it like you would data. What worked and why?
If you don’t already have these skills, you can and should start to cultivate them.
Applying a growth mindset to leadership
Product-led growth is all about building systems that automate and scale processes exponentially. Leadership is similar. Where management tends to focus on incremental growth, successful leadership turns that on its head and focuses on growth that continues completely hands-off.
But how exactly do you get to that kind of growth when it comes to people? It goes back to alignment, but this time, it’s an internal sort, the kind where you as the leader get on board with a way of thinking that enables and activates the kind of growth you want. Enter the growth mindset, a belief that traits, talents and skills can be developed and that there is room to grow.
You have to believe that about yourself as a leader (yes, you can learn and grow to be a better one) and you also have to believe that about the people you lead (yes, they can learn and grow too).
Organizations spend about $356 billion annually on employee training and development (2015) and Gallup studies show that 70 percent of employees are disengaged at work. It feels like an uphill battle to climb. On top of that, you may be thrust into the role of CEO without any sort of leadership experience at all. (Don’t feel too bad: a study by CareerBuilder.com found that 58 percent of managers don’t receive any management training.) You had an idea, built something, and made it happen. You may have no idea what you’re doing at all. This is probably the case for most founders.
Here are some challenges you may encounter during your tenure as CEO:
- You spend months hiring for a role, only to have your superstar candidate quit months into the job.
- Your team can’t seem to prioritize what to build first and no one can agree.
- You feel less like a leader and more like an intermediary between investors and employees.
- You start to burn out because you’re putting out fires all day long, with an ever-expanding list of to-dos.
- While you’re trying to keep a positive environment, your best employees quit, leaving even more work on the table.
You may have already experienced some or all of these, even over and over again as is common in the life cycle of early stage startups that get stuck in the cycle of constant catch-up.
You’re never going to “get ahead” of it all. But your agility and resilience as a founder, and the mindset that the world isn’t fixed but rather in flux and in a constant state of growth, are things you can play off of to become a better leader and more effective CEO.
You already have the makings of a growth mindset—after all, you’re building something new in a competitive industry, trying to capture a market that has existing players, products and playbooks. How did you ever think you were going to make a dent? And yet you believed that you could, just like the many others who went out and did it too.
So take the principles key to product-led growth—of alignment, empathy and scale—and build that into how you lead. Then watch that flywheel go.
Interested in learning more about all things product-led growth? Subscribe to our PLG newsletter, The Notorious PLG.