Wes Bush, Ryan Kim (Spotify)
How to design a product that acquires and retains users, at scale
[00:00:00] Aadil Razvi: All right, welcome. We have the founder and CEO of Product-led bestselling author of Product-Led Growth: How to Build a Product That Sells Itself and has trained teams all around the world how to turn their product into a powerful growth engine. Please drop some energy in the chat for Wes Bush.
[00:00:21] Wes Bush: I'm just happy to be here, .
[00:00:24] Aadil Razvi: Thank you very much for joining us and we have a senior product manager at Spotify. He's currently working on a machine learning powered growth platform for marketing automation products to automatically traffic and optimize Spotify's ads across marketing channels to acquire the next hundreds of millions of users.
He was also an angel investor in pre-seed and seed stage companies and was previously working on growth at Lyft. Give a warm welcome to our friend Ryan Kim.
[00:00:55] Ryan Kim: Hello everyone. Nice to meet you.
[00:00:56] Aadil Razvi: Energy in the chat. I just wanna see people like bang their head on their keyboards and just throw something in there.
There we go. That's what I like to see. Yeah, exactly. We can't start a session on product-led growth without going through the question, what is product-led growth? Most definitions are incredibly vague. Full of meaningless jargon. I'm gonna start with you Wes, tell me what is this product-led growth thing that we're hearing so much about?
[00:01:34] Wes Bush: So I remember there was like, I don't know, early December last year, there was this tweet though and like viral regarding product-led growth. And it's like product led-growth is just an epic for trial and that's all it was. And it took off. And I think you know what, initially when I got into product-led growth and I was like oh yeah, it's like this free thing and that's all there is to it. It's like you have this amazing free model and people just give you their money. But what I've have since learned is product-Ied growth, this is a lot more than that, is really when you're utilizing your product is a way to acquire people.
It's a way to activate them, help them get value from your product. It's a way to retain them. It's also how you can expand your business and your product can enable you to do all of that. That's really what I see product-led growth as. But here's to hear your thoughts on it, Ryan.
[00:02:28] Ryan Kim: Yeah. So I think like there are many ways to grow the company.
For example, like you can be focusing on the sales, you can be focused on marketing. There are many ways to grow your business. But essentially product-led growth, like in my opinion, is building a self started product that will eventually do all the cycles of like company growth, like including acquisition, engagement and also the revenue generation.
So basically building the product, the excellent product to lead the growth of the company. That's how I'm viewing the PLG right now.
[00:03:02] Aadil Razvi: Really an excellent product that as a byproduct of the product being excellent leads to growth. Is that how you think about it?
Yeah. Yeah. Yeah.
Okay. Interesting. And I like Wes, how you touched on, Okay, most people just categorize product-led growth as free trial. The answer to product-led growth equals free trial. But really it's a lever to activate people, retain, expand. Let's dive into that. Tell me about what are some types of businesses that you've seen that are best suited for product-led growth, and maybe some specific examples.
We'll start with you, Wes.
[00:03:43] Wes Bush: Totally. There's tons of examples. Everyone's gonna abuse these ones, which is have you heard of Slack? Oh my goodness. . . You've heard of Slack? Of course. Yeah. There's definitely examples like that, whether it's like Slack, Asana or like different ones, which are Ryan, what first comes to mind for you? For like product-led companies
[00:04:08] Ryan Kim: Definitely a lot of SaaS companies that you just said, like including like Slack, Dropbox, Calendly, like all those great companies. But there are also like other, like unique companies like for doing product-led growth. Like one example I found recently was like Taco Bell.
I don't know if you guys all know about it, but Taco Bell has a subscription model called like Taco Lovers Pass or something like that. Basically you pay like $10 and then you get one taco per day. But the beauty of this product is that like when people go to Taco Bell and get one taco, you're obviously not getting just one taco.
You're obviously gonna get two, three taco or a drink or like a milkshake or whatever it is. And that's how they've been like doubling their revenue and growing their business. So I feel like there are many companies who are like being good examples of product-led growth right now. Not just limited to SaaS.
[00:05:05] Aadil Razvi: All right. Don't say in the audience. I don't want to hear that we don't give examples that are outside of the box because Ryan Kim just drop the Taco Lovers pass at Taco Bell as an example of product-led growth. I love that. Yeah. Do you have any insight around that campaign specifically?
[00:05:25] Ryan Kim: No. I just found out about it and basically they are using that subscription to make the customers to come to Taco Bell stores and then the next is that obviously people are gonna spend way more than like just one taco. So that's how they've been like utilizing their subscription model to bring more users to the stores bring more generation of the revenue and all this stuff.
So when I first read about it, I was like, What the heck is that? Like I love it actually. I've never thought about it, but I really love it.
[00:05:58] Wes Bush: I think that's I'll tack onto that as well. I think there's a lot of examples of like product-led nest, product led companies that like we have been product-led from so long ago.
Like I always refer back to Cologne or perfume. It's oh, like what do you typically do you like try it and see if you like it. And if you do then you can make a educated purchasing decision on it for buying cars. It's expensive. You want to test drive that thing before you actually make that decision.
So there's a lot of different ways, even shoes, t-shirts, like trying on clothes before you actually purchase it. There's so many different cool ways here that this has just been a way of like how we've wanted to purchase. But now I think what the really is alluding to this is this is just what consumers want and this is how we wanna buy.
And product-led growth is just like the wording around this consumer behavior change.
[00:06:51] Aadil Razvi: Wes you've written the book on this. Talk us through the framework or how do you actually think about like how should a startup think about product-led growth if they haven't.. If this is the first time they're actually looking at their startup through that lens.
[00:07:07] Wes Bush: Okay, so I'm gonna like this has.. It's so simple, this one insight I'm gonna give, but it's hilarious because it's taken me like six years to think about it. So the fundamentals of business have not changed one bit. You still need to acquire customers, right? Yes. Still need to monetize them. Of course, if you're a business, you got to make money.
So you also have to engage them and figure out a way to activate, retain them. And then the last piece is you've really gotta expand and figure out how to grow that customer value. So like those four pillars: acquisition, monetization, engagement, expansion. They're the same today. Like product-led is not changing anything around that.
But what is changing is the order. And that's the big shift that we're all trying to figure out here with product-led growth. What is this massive big change? And it's just one thing and it's like what we're really prioritizing now is it's now acquisition. Then it's engagement, and then it's monetization, and then it's expansion.
So we just have moved engagement up and said, actually the modern buying experience, we require people to actually get value, and that's actually gonna help us monetize them later on. That's our hidden secret of all this stuff. That's really like a very high level of product-led growth. What are some of the big like tectonic shifts, if you will around what are some of those big differences?
[00:08:43] Aadil Razvi: Ryan would love to hear, how do you think about the product-led growth framework and specifically in the context of what you've done either at Spotify or with Lyft.
[00:08:55] Ryan Kim: Yeah. So I think like the most foundational thing for product-led growth is that you got to build excellent product that actually solves real problems.
Because unless your product is actually solving some problems like users will not need it. So whether that's like viral product, what it is, people will not use it unless it actually uses by the users. So I think that's the first thing. And then the second thing is like I think what's really important is shortening the time to value.
So for example, when users start using Spotify, the first thing they see is the taste onboarding. So basically you're being asked to select like a few artists that you like, and based on that, Spotify tries to learn what's your music taste? Based on that, they automatically generated playlists and then recommend songs to you.
And that in that way they will be able to know like the values of Spotify so quickly and start learning like how to use the product. So I would say those are the like two things that you should consider, like a lot when you're first building the product as a startup
[00:10:05] Aadil Razvi: So A+ product, top priority and then shorten the time to value which aligns quite closely to what we just heard about in our session with West Kao and Shane Parrish. Yeah, they very similarly figured out ways to give that people that taste, that activation before moving forward. We have a question from the audience I think is appropriate to ask now.
Do you all have any strong B2B examples that you would draw from? I know we touched on things like Slack and Calendly but yeah, either those examples or others that you could go deeper on. Ryan, what do think?
[00:10:51] Ryan Kim: One good example that I'm thinking of is actually one of the products that I'm building in Spotify right now.
So I'm working on a product called Spotify for work. So we are actually providing enterprise services of Spotify to the companies right now. And it's a lot about like understanding like what users are looking for and then essentially using our product to reach out to new companies and then enable them on our services.
We've been like following the mantra of the product-led growth, like within this new vertical of product that I'm building. And it has been like a fascinating journey so far. So a lot of the foundational knowledge of product-led growth is baked in even like as Spotify, I would say.
[00:11:40] Aadil Razvi: So what is that approach look like for that product? Share as much or as little as you can, but yeah, just around that kind of approach. Cause when we think about Spotify, we think of a consumer product. I'm a Spotify premium member. I stream my own stuff.
Okay. Maybe if you're on a family plan, you share it with your family, but how do you make that jump and how do you think about it in that B2B context?
[00:12:05] Ryan Kim: Yeah, so I think like the biggest thing is that the big difference between B2B and B2C is that essentially our customers are becoming the the companies that we work with.
So we need to understand like what they're looking for and how our service can be actually useful for the employees. So for example like we want to tell the employers know that like how their employees are using Spotify, how that's actually impacting their lives, like in a positive manner. What content are they like more interested?
And like later on, like we also wanna share like more enterprise focus features which I cannot tell yet. But then we are like heavily gearing towards the taste of the enterprises and serving the needs of them. So it is quite different than what we are already serving in terms of B2C set.
Yeah, so that's how we are approaching the B2B product right now in my team.
[00:13:00] Aadil Razvi: Got that. What about you Wes how do you think about B2B?
[00:13:05] Wes Bush: We pretty much only work with B2B SaaS companies to like them product-led growth. So I got so many examples, probably the more well-known ones, like there's the.. My favorite ones are honestly like the ones where it's you've never heard of this company, but they have these incredible results.
One of them if many people haven't heard of it, it's called Vendasta so they were initially like sales-led and the only way you could like actually use this software as like you talk to the sales team. But then like they started integrating product-led growth into their business, and then they found long and behold, like their customer acquisition cost,
it actually went from about $13,000 to like $7,000. So it was like a massive difference for this business is like, what would you do if like you could slash that customer acquisition cost in a half, you can invest more in R&D, you can invest more in obviously like better user experience and stuff like that.
So I love some of those like unsung heroes. But the ones like your group will probably be more familiar with is like the HubSpots of the world. Even when I was working at Vidyard, like we, our first free trial was like completely bomb . And then we launched this premium model and it was like, it went to, hundreds of thousands of users very quickly and it was like, okay, what went right in this scenario?
And it's basically like what Ryan mentioned, It's the new version had a very quick time to value, was very easy to get and understands what the value of the product was and experience it in the product. Those things are just the absolute pillars of it. And then there's like your notions mirror.
And even Canva of the world, where it's like they have a very powerful like B2C play, but then they're also like starting to upgrade people on the work side. It's Oh, you want templates, you wanna have your company branding. It's great, we have that option, but that's an advanced feature. You got to have a different price point for that.
Those are probably real quick, some of my favorite example.
[00:15:01] Aadil Razvi: I love that. You both mentioned time to value being kind of one of the key metrics that you look at whenever you're thinking through product-led growth. What are the metrics, what that matter most whenever you're looking at your startup through the lens of product-led growth?
Other than time to value or even with time of value, but in relation to other metrics weighted in importance, Wes.
[00:15:33] Wes Bush: Totally. Yeah. So there's this new kind of metric going around, which is like product qualified leads and it's really just enablement of..
[00:15:41] Aadil Razvi: Sorry, what was that?
[00:15:42] Wes Bush: Product qualified leads
[00:15:44] Aadil Razvi: Product qualified leads, Okay.
Yeah, if you're targeting B2B companies, maybe they call it like product qualified accounts and just basically like how is that account using our specific product. But what all of these like new terms like back when it was like marking qualified leads and stuff like that.
That was the main thing. And then now it's like product qualifi leads. The big difference here is like, how do you operationalize and get people to focus around like this user success? How do you really align incentives and get the company really as well as everyone who's working for those specific areas focused on what is actually gonna drive that value for the user.
Because if you don't actually have this one piece, I know it seems like we're like hitting it over the head, like it's time to value, it's user success, it's all these things. But take it from the whole organization's perspective, like your marketing team is now yeah, they might be in charge of like sign ups for the free experience, but now they're actually gonna be also quality tied to
how many of those setups turned into protocol provide leads? Okay. If it's super low. stop doing those party events. I know you wanna spend money there, but does not generate results. And then for the other side, for your sales team, they can start looking at, okay, how many of those protocol leads actually become customers?
And you can start to optimize and have everyone internally aligns around, like, how do you actually get more people successful within this product? Because, Like that tectonic shift I was mentioning. It's like if you really do prioritize engagement first, you have to have the metrics that back it up and then you gotta get everyone else's efforts aligned with how do we get more people successful?
Because if they are not successful, this whole model work won't work. And the one liner I always use for how could you like summarize the secret of this whole product-led growth thing? It's like your user success will eventually become your success. So like the more successful you make your users, the more successful ultimately you will become as a business too.
Mentioned operationalizing around user success. What does that really look like?
[00:17:48] Wes Bush: Is that for Ryan or for me?
[00:17:51] Aadil Razvi: Oh, no. Doubling down with you Wes. I'm curious what you mean and then I definitely want to hear from Ryan how he thinks about metrics.
[00:17:58] Wes Bush: Totally. Yeah. So for every company, like the opera sensationalizing of it it really does start with getting on the same page with all teams around what is that success look like?
And then it's what we do and even our program too, is we map out, okay, how do we actually get someone to that specific point of success? And then it's about, okay, how do we...really, which team is gonna take the lead on actually maybe it's about simplifying the time to value for this part.
Maybe you're looking at okay, our expansion right now is really weak. Like, how could we do this from the product side of things? How could we make it easy for people who are, our highest users of this product and seeing a ton of value, how can we like automatically reach out to them within the product?
And it's just a matter of looking at okay, where is the highest leverage point and where can we have the biggest impact early on if you're new to rolling out product-led growth in your company.
[00:18:57] Aadil Razvi: Super helpful. Ryan, talk to us about metrics.
[00:19:01] Ryan Kim: Yeah. I think like the most important thing is the engagement behind the product-led growth.
So without users like being sticky to the product, like they're not going to share the product to the other users. And that they're not gonna be using like a premium services or anything like that. So first, like users need to really love the product. So we will be looking at metrics like DAU, MAU or WU, which is like daily active user.
We collective user and we wanna see like, how often do users come. When they come back, how long do they use it? So for example on Spotify what is the number of like minutes spent by each user when they come into the app? Like how long do they listen to the music when they come in?
Is it 30 minutes, is 60 minutes or is it a minute? So we wanna understand the stickiness of the product, first of all. And then later on, like we also wanna look into the virality. For example, like when you're listening to music on Spotify you can share what you're listening to or you can share the lyrics of the song via Instagram or other social media.
And by doing so other people who are not Spotify users yet, they'll be able to learn, Oh, like there are features like this on Spotify. This looks cool. Let me try it. So we wanna know like how often users share those kind of information outside and then how effective they are. I would say like those two metrics are like fairly important in terms of building the successful product-led growth.
[00:20:33] Aadil Razvi: Got that. Yeah. Daily active ,monthly active , weekly actives. How often do users come back, and then how long do they use the product after they come back? I'm getting the feeling, Ryan, that the P and PLG means that you need to have a good product.
[00:20:50] Ryan Kim: Yeah, definitely. Like I can never stop stressing that having a good, excellent product is the foundation work.
[00:20:59] Aadil Razvi: I love it. Tell us, give us a maybe some example, you've given some awesome examples so far Ryan. Would love to hear, are there some specific product features that you've seen that have made a massive difference in unlocked user growth for a particular company?
Are there some features that stand out to you.
[00:21:20] Ryan Kim: Yeah. One thing I really like about is Slack actually. So I know this is like little bit boring example to everyone, but recently they launched a feature called Slack Connect. So what enables is basically you get to chat with outsiders within the select channel that you own.
And this has been a massive growth for Slack in my opinion because let's say I'm working with a vendor and the vendor doesn't have Slack yet for some reason, and like we as a Spotify like prefer Slack as a like main communication tool, then we would obviously ask vendors like, Hey can we use Slack over email or Slack over something else?
And a vendor would give a shot because that's what the the company wants to use. And then like they would naturally start learning like what this product Slack is about. So it is forcing someone to start using the product, but by forcing them to use it, they start loving the product and then fall in love with the product and they start using it like for long term.
And I feel like that feature has been like really game changing feature out there. And I absolutely loved it. And when I first learned about it, I was like, this is brilliant. They're really nailing it.
[00:22:38] Aadil Razvi: Very interesting. Yeah, it's Slack Connect. I haven't actually used it myself.
Oh. No, actually we do, we got the demand curve Slack and the Bell Curve Slack. I think that we connect those with Slack Connect. So yeah. That's super interesting. What about you Wes?
[00:22:57] Wes Bush: So for the question is, are there specific features that have made like a massive difference for PLG?
[00:23:02] Aadil Razvi: Yeah. Do you have any examples of just like yeah, okay. We.. Like this feature unlocked user growth in a very meaningful way for a company that wasn't seeing it before.
[00:23:15] Wes Bush: Totally. I can give like everyone a framework to think about like even for your own something like what are..How do you decide, like for instance, like what should you give away for free versus what should you potentially just have behind the paywall?
I'll use an example like Canva, something like that's pretty simple to pick up. So when you're thinking about this and what should I give away for free? I always start with the end goal. Like what is that look like for your specific user, pick one kind of user. What's that end goal for Canva, let's say it's okay, I wanna have like very easy graphics and be able to complete them for my team very easily.
And that they don't need training to actually like, figure this stuff out. It's easy for them to create beautiful graphics. Okay, great. So that's our promise. Now there's three problem sets here. It's there's beginner problems, which is like, how do I actually like edit and like you know make my first design.
Okay, great. Intermediate problems here is like something like I wanna have my like company branding here, that would be useful. And then there's like advanced problem set, which is I wanna manage all the different employees I have under this installation of Canva and I wanna give permissions to some people for some secret stuff or whatever.
So like you have these different problem sets and when you think about what do I give away for free? I always just bring it back to like what's the beginning problems and sometimes for companies where they get stuck in like just slapping on a free trial. And we made the same mistake at video too, where like our first free trial bombed and it was like actually we were solving these very intermediate problems and we just slap on a free trial and it was like, ah, people had a very hard time like getting to value there.
Whereas when you look at the beginner problems, they're actually easier to solve. And so when you're thinking about what future should I give away for free? Just bring it back to that first principle of what are some of those beginner problems that I could give away for free? And another example is like convertkit.com.
They are email marketing platform. They make money when you send emails to more subscribers, they figured out, okay, a lot of their ideal customers when they're early on in the days, they don't have enough subscribers and ConvertKit by factor of that doesn't get to monetize these people as much as they could if they had 10,000 or 20,000 subscribers.
So they said, what could we do that would help them get more subscribers? And they just gave away a free landing page tool. They created it and they just said, it's free. Here you go. And it's a killer feature that, yeah, it makes a difference, but you would just miss that if you didn't look back at the picture.
Okay, what is that beginner problem? When you're creating a list, what is someone gonna run into first? Give that away for free. And if you realize this is too big of a problem, people are struggling with it before, how could you just maybe create something new to solve that problem first?
[00:26:10] Aadil Razvi: Very helpful. And it sounds like a lot of the stuff that you all have been going through or yeah, B2B examples we've certainly touched on B2C as well. Is there a world where this applies for services, like service based businesses, like agencies? Do you see that? Yeah. Let's just, we'll start with agencies.
Do you feel like there's a world where agencies can apply product-led growth Wes?
[00:26:37] Wes Bush: Totally. I'm a firm believer like any business can apply PLG. It's absolutely possible. It's just how do you do it? That is the trickier part. For an agency, I've seen tons of great agencies give away free audits, free strategy sessions that are actually strategy sessions, not just sales calls.
these super helpful. In that part ends, what this really comes down to is like, how can I engage someone build trust with them around, okay, here's our process, here's how we're gonna help you through this. And that's really where I see the best agencies winning nowadays. It's okay, I'm, yes, one, trying to understand your problem, but two, I'm trying to give you a lot of values up front so you can understand that we're actually here to serve you.
And this is just this is a smidgen of what you're gonna get when you're fully on as a client with us. Absolutely. I think those are two like quick examples I've seen deployed really successfully. But curious to hear, what else do you think, Ryan?
[00:27:40] Ryan Kim: I also think that definitely PLG can be used in the agency. I think one big important thing that we should really think about is that, often time when people imagine product, like we think about the SaaS. I think it's because the PLG strategy was like primarily used in the SaaS tools, like in the past, but now, like it's been applied to every single verticals and sectors right now.
I think like product really can be anything. It can be software, it can be like hardware, it can be like the team, it can be like agency for example. I think the core thing, the core strategy that we should be following is that what is the value that the customers are getting out from the product?
So as Wes just pointed out the consulting agencies can give out like free consultation and give a lot of resources to the companies. That's helpful. That's a great way to show the values to the customers. And when they like it, they'll sign the deal with the agency and they start working with them and that's how like they start generating revenue.
So yeah. I really think that PLG can be really applied to any verticals, any sectors. If that's like well thought out.
[00:28:50] Wes Bush: Yeah, I have a funny example. He's a controversial figure here, but this is absolutely, he's applying PLG to his agency. So if anyone has heard of Neil Patel, he has like NP Digital and it's a hundred million dollar like agency, but they have Uber Suggest, which is a free tool for a lot of people.
It's a SEO tool, and it's helped them get 3 million plus views on their blog every single month. So it's one of the biggest drivers of that too. So there is different ways where if you are like, let's say an SEO agency where you say, You know what, like if you're really gonna try and play big here, what are some of those like things that people would be searching for before they get to you?
They might be trying to do this keyword research thing on their own or something like that. And you could definitely help them with a tool that's absolutely free that you don't monetize. Or maybe if it's successful, like Uber suggest. You decide maybe later on we'll monetize that.
[00:29:48] Aadil Razvi: Yeah, it's a great example. And I like the way that you think about it, where you zoom out and think about what is the value needed before engaging the service. Maybe what's the value after with the landing page, how can you think outside of just the service that you provide or just the product that you provide.
And tack that on as another way of decreasing the time to tack the value. And just because you both brought it up if if you're interested in a free strategy session with Bell Curve, you can apply at the virtual booth . If you've got seven figures plus in the revenue or have raised over seven figures, we're giving up free strategy sessions at Demand Curve, sister agency of Bell Curve.
So be sure to take advantage of that. Should founders and product people think about product-led acquisition retention from day one. Is this something that you feel like PLG should be baked into the product DNA before anything's even been built? Or like what's like the order of operations there, Ryan?
[00:30:56] Ryan Kim: Yeah. So I think like it goes back to what I originally said at the beginning of the session. The most important thing is building the product that actually solves the problem. That is the number one thing in my opinion. Like without the product actually solving the problem, users may give a shot, but they will leave instantly because they don't see the value of it.
So that's the number one. And once they really nail down the product value props and then the engagement side, I think then you can start thinking about the acquisition strategies and then revenue generation strategies. But the most important thing is like solving the problem. Another thing is actually making the onboarding process better.
There were times that people were thinking that like giving more friction in the onboarding experience, will actually make users like stickier to the product. I think like it's true, but it can be also wrong. Each product has like different pathways to go about and I think each product has like different characteristics.
So I cannot say it's like true for all product. What I really resonate is that users should be very satisfied with the onboarding experience and then we should be able to understand what this product is giving by going through the onboarding experience. So I would say those are the like two top things that all startups and products should be thinking about.
[00:32:21] Aadil Razvi: Do you have any examples, Ryan, or does anything come to mind around exceptions to the rule or you're talking about people used to think friction in the onboarding makes the product stickier, but you're saying that's not always the case.
[00:32:38] Ryan Kim: I think maybe I can use the examples of the startup that I used to run in the past. So I ran a startup which was basically turbotax for US visas. So it was like a SaaS tool to help people to fill out their applications so that like they can apply for the US visas right away. So in the onboarding experience, I actually asked them to start filling in their information so that one day we're done with the onboarding experience, they already filled out pretty good chunk of the application, so they're like more inclined to sign up and actually started paying for the service and using it.
So that was the friction that I was giving to the users originally, but after running a while, I figured out that it wasn't actually a good use. Because a lot of people were like thinking that, Oh, like there are too many things to fill out. So I'm just gonna bounce.
So I found out that a lot of people bounce in the middle of the onboarding experience and I tweaked that feature and shortened the onboarding experience. And later I saw that a lot more people are actually signing up and using the service. So I think that's a good example that I learned from my own experience in the past.
[00:33:55] Aadil Razvi: That's a great point. And it goes back to the point you're both making around time to value being able to expedite that process. Wes, anything to add to that?
[00:34:08] Wes Bush: I would almost add like a reframe to this question. Should founders think about PLG from day one?
Yes. Should founders be product-led growth from day one? Maybe and I would change that because I've seen like I've interviewed hundreds of founders on the product-led podcast and one I go through and be like, Okay, like how do you get to your first 10,000 users? How do you get to like your first like mill in like revenue?
What did that like process entail. And for a lot of them it's okay, we had this beta and we were testing that crap out of it. We had hundreds and hundreds of people using our product and once we started to find Oh, we actually have something sticky, okay, then we thought about Okay, let's start automating this.
Let's get more people in here exploring what our product's all about. So they solved actually for retention first, and then they were like, Okay, then we're ready to worry about like monetization, figuring out pricing and onboarding and like, how do I actually get to the rest of the whole kind of piece of the product-led funnel.
That's just the other kind of side of it that I would add is think about retention first and really do a ton of testing. Make sure like you mentioned Ryan, like you understand like what is the problem you're really trying to solve for, and then get people there as fast as possible.
Anything to add to that? Ryan? It seemed like you had a little stuff in
[00:35:33] Ryan Kim: No. I think Wes really nailed it, so completely agree with him on that point.
[00:35:40] Aadil Razvi: Got it. Wes, what do most teams get wrong about product led-growth? There's like a way in which people think about this, and this is why we need to demystify it every time we have a chat about product-led growth.
What's like the default that has people get product-led growth wrong?
[00:36:00] Wes Bush: This is like my passion for this past week , or the last week we're rewriting like our program like overview page. I was like, man, like what do people like typically get wrong most about it? We call it like the PLG iceberg, where it's like you see at the top.
It's this little like free trial, free model that's like. Bam they run face into oh, we got to update our pricing. We gotta showcase our pricing. We gotta align our pricing with the value of the people. We gotta figure out like the onboarding, Oh God, this thing is tough. We gotta get like metrics figure out okay, how do we track user success and all that stuff.
How do we align people around that? So It's a time and time again. I always find it's like it's one of the easiest, most underestimated things out there. It is in your entire go to market strategy. It's not just a new offer or conversion tool on some of those things. So I think that's the biggest thing.
The other piece that's really important is you need to tackle this as a team. I've seen a lot of people fail in this regard where it's you know what? This is like someone's brilliant idea. Maybe this is CEO, maybe it's founder, doesn't matter, but it's like it's living in one person's head.
They don't get the rest of the team bought into it. But PLG is cross collaborative. You need marketings by it. You need sales by it. You need customer success support and all these other teams like aligned with, okay, this is the direction, this is why we're doing it.And also user success, everyone should know that and track it and have metrics around it.
Those are like the first two that pop up. I'm clearly excited about those. But..
[00:37:33] Aadil Razvi: I really hear that it's a culture. It's not a one off thing, it's not an activity, It's not a like checklist that you do once, This is a culture, a way of thinking, a way of organizing as an organization.
Ryan, Yeah, I would love to hear your thoughts.
[00:37:51] Ryan Kim: Yeah. I think the biggest pitfall with PLG is that oftentimes teams think that, Oh, like we are just gonna do PLG over sales-led growth or like marketing-led growth. Which is completely wrong, in my opinion. I think like we should be definitely like building the company in the mindset of PLG, but then sales and marketing are much needed.
So for example, like marketing is not just about acquiring new users and then converting those users to our service. But rather it can be a lot about building your brand awareness. When you're first starting out, like people don't know about your brand, people don't know about your product, like how are you even gonna make the users to even try out your product?
Like in that sense, like marketing plays a big role. Like it spreads the word about your product and how to use it, so it's very important. Same thing goes with the sales like when you are like building the B2B enterprise product and then you're trying to onboard, like big enterprises and then go through the procurement processes.
And then also landline down the customized pricing for particular clients. You need the sales team to actually understand the product and then the clients and then offer like very, the sweet spot of the deals essentially. I think that like in order to grow the company, you need everything sales, marketing, and then product.
But having the PLG as the center of the mentoring the company is very important in my opinion.
[00:39:20] Aadil Razvi: Very helpful. Yeah. I like that. I think that's probably the default like people try to stack PLG on top of their sort of existing ways of thinking and end up you know tripping over each other rather than it being like a cohesive strategy.
For the remainder of our time here next nine minutes or so, let's rapid fire through some Q&A that the audience has asked. And Ryan, why don't we start with you, man? How do you work with go to market teams to decide which features to ship for the customer? So how do you work with go to market teams to decide which features to ship?
[00:40:03] Ryan Kim: Yeah. I think in terms of the PLG, what would be really important is how is it positively impacting the engagement? So ultimately, like we want users to love the product, continues to use the product and then upsell the product from the free tier to premium tier. And the basis like behind those is like building the strong engagement between customers and then product.
So I do think that like whenever we build new features, we need to run AB testing to see like how does it impact the engagement metrics that we care about? Does it impact in a positive fashion, negative fashion? We need to clearly understand like the the end results of it. And then decide based on the data.
[00:40:49] Aadil Razvi: I got that. Wes?
[00:40:51] Wes Bush: Yeah. I touched on this as far as deciding what to give away for free. And also what this should we actually put behind the paywall? So I would just align it all back to that same customer journey. Okay, so this is the goal. This is what we want someone to basically accomplish or we're promising to them.
So when we look at that whole kind of spectrum of different problems. What are the problems that keep popping up again and again? And I always hear this on the podcast, I remember the CEO or former CEO of Hotjar, amazing guy. He's like Zendesk that export. That's my Bible. . . Just going through I was like, Oh, you cracked me up.
This is hilarious. And it was so right, because like when you think about it, I was like, man, like what are all the problems people are saying here? I can't figure this out. Okay. It's not a feature. It's like easier. Okay. And then for the other thing is I would love to do this, but I can't quite figure it out.
Oh God, we actually do that, but clearly we're not onboarding you, okay, when someone gets that page, let's kick off another onboarding sequence for them to do that easy. So there's a lot of things where it's I think it's easy to look at, like here's an nail, like bam. Okay, we're shipping new pages, ship.
But it's let's bring it all back to like, where are people struggling and maybe what are some of those unaddressed needs? That are consistently popping up, that are actually holding people back from experience that promise. I'd always just bring it back to the first principal there.
[00:42:30] Aadil Razvi: Got that very clear.
Yeah, rapid firing away. I'll give you a couple of different examples of different types of businesses that maybe are outside of the SaaS realm, and we'd love to hear how y'all would think about PLG in that context. So lots of PLG companies they've got browser based SaaS products or SaaS products for team collab use cases.
What does PLG look like for, let's say, software companies that offer desktop applications? Wes?
[00:43:00] Wes Bush: Yeah, so I've worked with companies that have done this, and it's not ideal , but you can do it. And there's tons of example, I'm thinking like, I'm just even looking at like my browser here. There's like OBS, there's Camtasia, a lot of different ones that are all desktop based that are, that's actually where they start.
So there is, it's like you. Basically, yes. You just have another step in that process where it's okay, instead of me accessing this value on the browser, I now have to actually go download this. And there's a few other steps that unfortunately they might be a bit harder for you to track on that end, that is one of the big limitations there.
It's not oh, I can just set up a screen recording tool and watch you. How creepy. But that's what a lot of SaaS companies do at early stages, like the V1 product analytics stack is just that. But for desktop applications, that becomes harder. But yeah, it would be just, you can limit certain areas of the product on that end.
And then the upgrade experience, usually that's handled either like within that desktop app or you just send them to the actual website itself. The nuts and bolts of it honestly are not that different like the fundamentals remain the same. Just how you execute on is a little bit.
[00:44:19] Aadil Razvi: Yeah. You mentioned Camtasia, OBS, these are all A+ products in their category.
To Ryan's point, So I'll ask you, Ryan how would you think about it in the context of desktop applications?
[00:44:32] Ryan Kim: Yeah. So generally I think like the biggest problem with the desktop apps as as Wes mentioned is that you need to download it and downloading it. Even though it takes five seconds, like it causes a lot of friction to the users.
A lot of time personally, let's say I'm trying to download the app on the iOS store, for example, like I know it's not the desktop cloud example, but it takes a while and I give up. So I think like it's really important for like if your company is thinking about PLG, you need to have like ubiquitous service that's available on web, desktop and many other platforms.
And, but I do see that there could be some pros of building the desktop apps because for example, like Notion I'm a like a heavy user of Notion and I use Notion on web and also on with the desktop, and on my laptop, I actually prefer desktop app because it actually is less buggy and feels like it's more native.
But when I'm like using it on website, like there's some like lagging latency that I'm seeing on the product and sometimes like I'm not feeling it's like natural. So in that fashion I do recommend like desktop apps, but I don't think that there's any fundamental differences in terms of the PLG strategies that you should be exploring between like desktop and the web based.
They both have like similar strategies and the core foundation. But just like different, like ways of interacting with the products. I would say.
[00:46:00] Wes Bush: I think Ryan and I can just agree it's got a longer time to value. There we go buzzword.
[00:46:06] Aadil Razvi: A+ product, short time to value. Those are the two key takeaways from today.
[00:46:13] Ryan Kim: Exactly. Exactly.
[00:46:15] Aadil Razvi: No, honestly it's helpful to have a simplistic heuristic like that to just say is your product A+? Is the time to value short like it's simplifies the equation quite a bit and demystifies the whole PLG thing for sure. Ryan, what about what we're talking non-software product?
You gave an awesome example that we talk about.What about something like, I don't know, furniture or like physical electronics something like that. How do you think about PLG in that context?
I think like the good examples are like maybe Stitch Fix and Casper I believe. Like Stitch Fix gives you like personalized clothing for your styles and that they deliver the clothing for you, like to your doorstep and like you tried it out and that if you don't like it then you return it.
And like that gives a lot of flexibility to the users that like, they're not bounded by any hidden fees that when they're trying to return it or get refunded, like it's all like crystal clear so users like see the values of using the service and then reliably continue to use it for long term.
Same goes for like Casper, like I believe like they let you try the mattress for like x days for free and then you can return it within that time period. So basically those like two products, like the physical goods, they're actually following the mantra of the PLG.. Letting the users to see the value of this product as soon as possible.
And then if you don't like it, you're more than welcome to refund it. And that gives more confidence to the users to continue to use this product because customers will be thinking like, oh, like they're so confident about their products. That's why they're so confident to say that, Hey, like there's no hidden fee around like refund or anything like that.
So that's how I would view with the furniture or like any physical goods companies.
Got that. Wes, we'll finish off with you, sir.
I just like recap exactly what like Ryan would say, but I would point out the three pieces that Ryan mentioned that I think are like important. If you are in one of these situations where it's okay, it's not software, it's like maybe it's very like people have to actually purchase it or something like that.
There's three big things that pop out that Ryan mentioned. It's like one, like how can you reduce risk for this person? Like maybe that's the guarantee. Maybe that's like a crazy like return policy where you actually lose money as a business potentially if people like enact that. Because you just wanna make it like, this is absolutely like your zero risk here, just like a trial kind of thing.
We're going out on a limb for you because you're taking a chance on us and we wanna really blow you away with this. Two, how can you make it a way where you like actually show the value, the whole difference between like sales-led, product-led, I know I just do that to compare a contrast, but it's like one is about telling you about the value, The other one's about showing.
So the closer you can get to that the better. Even with electronics, we look at go to the Apple store. It's I can see it. Cool. I can play around with that. Cool. I can see everything about it. But I can't walk out the store without purchasing .That's illegal.
You can .
[00:49:33] Wes Bush: You could, but they might have yeah, whatever.
There's precaution. You just say, Look,
[00:49:37] Aadil Razvi: the. .
[00:49:39] Wes Bush: Yeah. Yeah. . This was a free trial. I heard it on Demand Curve.
[00:49:45] Aadil Razvi: Exactly. Thank you both so much for your time. This is an action packed session. Definitely I think you both have good resources to refer folks to. Yeah, Why don't you share some resources where people can learn more about this stuff and then let the people know what you've got going on in your life and how they can reach you.
Let's start with you, Wes
[00:50:08] Wes Bush: Cool. So like our whole goal at product-led is to help you build a successful product-led business, and we wanna eat our own dog foods. So I put in the chat free link to the book on Product-Led Growth. Absolutely a hundred percent free and is not even gated. So yes, I know for marketers, that's crazy.
But honestly, go for it. Read the book. That's honestly if you wanna get your team involved and around product-led growth. One of the best resources to get them. Like thinking about how do you build a product, that business, and then if your team is actually serious about going down this path, one of the biggest things you need to do as a team is build a product that strategy together.
And that is why actually we have a team cohort-based program where you will actually go through this whole process with us, and at the end of it you'll actually be super clear on what are you giving away for free? How do you onboard people very quickly, and how do you actually monetize them without actually talking to them?
So we'll go through that whole thing in our program, but start with the book .
[00:51:09] Aadil Razvi: That's awesome. Yeah, people are asking for the link in the chat, if you don't mind posting that again Wes. Thank you very much. That's very generous of you. Go check out that book. Super helpful. Ryan, take us away.
[00:51:22] Ryan Kim: Unlike Wes, I actually don't have any like book written by myself yet. But I would highly recommend Wes' book. I actually read your book Wes. I didn't tell yet, but I did read it and then I found it like fascinating. So I would like definitely plus one on reading Wes's book about PLG.
And then if you have any questions about me or anything related to PLG, please reach out to me on LinkedIn. I'm very active over there. So yeah.
[00:51:48] Aadil Razvi: You both have been amazing. This was an action packed session. I think we're all signing up for the Taco Lovers pass after this. So yeah.
[00:51:59] Wes Bush: Forget the book guys.
[00:52:01] Aadil Razvi: Let's show some love in the chat for for Wes and Ryan. Thank you very much, both of you. You can go ahead and leave the stage. I'll catch you backstage in just a minute. We will be kicking off the DTC growth session with Nik Sharma and Justin Mares in about six minutes.
Catch all them.