I Changed My Mind About Product-Led Growth

Whether it was our first call or our hundredth, founders inevitably asked me whether they should market and sell their enterprise software to buyers/executives (top-down) or to users (bottom-up). My view, which only strengthened every time I uttered it, was this:

Marketing and selling to users is just another, roundabout way of getting to the buyer. Compared with the top-down approach — think whitepapers and meetings with the CIO — it takes more effort and time to see a payoff. More effort because users want a smooth self-serve experience, which means more product work. More time because big budget decisions are made at the executive level, which means you are just adding more hoops to hop through before meeting the CIO.

More recently this inevitable question evolved from “top-down or bottom-up?” to “what do you think of product-led growth?”

Product-led growth is the strategy of getting to the users first. It emphasizes letting users see, test, and get value from the product quickly and on their own. Since it’s an evolution of “bottom-up,” my answer was more or less the same.

Sure, there were success stories like Atlassian and GitLab, but those were exceptions to the rule, especially for enterprise software.

I was wrong.

Although the clues had been all around me for months, I paid them no mind until they hit me in the face in quick succession:

• Late in November I had an intro call with yet another founder interested in product-led growth.
• A week later, another founder brought up product-led growth. Not as a question but as a decision they’ve made. (I now work for this company in part because of that decision.)
• The next day, I attended several sessions at FC Build, where CEOs of unicorn and public companies mentioned product-led growth either as a major contributor to their growth or a major area of focus in the future.
• The day after, I spoke on a panel about developer marketing, with other panelists from Twilio, Google Cloud, and Sequoia. In this discussion I heard “developer marketing” used interchangeably with “product-led growth.” (Much of my work involves marketing to developers, yet I never thought of it as product-led growth.) The event organizer holds a panel like this every month, and this one had the most attendants of all.
• A week later, Tomasz Tunguz of Redpoint Ventures made a prediction that “Product-led growth [will become] the standard GTM for software and infrastructure companies” in 2021.

Over a few reflective days in December, other clues from the past year started coming into focus:

• My three biggest opportunities of the year — two unicorns and one Fortune-50 company — revolved around product-led growth. (Having failed to recognize it at the time, I lost those opportunities.)
• Some of the projects I enjoyed most were really about product-led growth: Launching a trial and growing data scientist users for Domino Data Lab, increasing self-serve revenue from developers for Netlify, and commercializing open-source software for Teleport.
• Seemingly every one of my startup clients and every other prospective client had asked me about product-led growth at some point, indicating widespread interest among founders and their investors.
• As I researched enterprise software companies that recently went public for my category creation post, I noticed more than half of them offer free trials.

To ensure I wasn’t just seeing what I wanted to see, I emailed five investors with a question: “How much (or little) demand are you seeing for product-led growth compared to enterprise demand-gen?” Four out of five confirmed seeing strong demand and opportunity for product-led growth among startups; one remained neutral.

The trend was clear: Software purchasing decisions are increasingly starting with the users. “What tools do my engineers need,” “what do they already use,” “can they try this,” “what do they think of this?” Ironically, calling the CIO is now a roundabout way of getting to the users.

I changed my mind about product-led growth. Software companies not already targeting users (over buyers) should consider changing theirs.