KR8: ?? PRODUCT-LED GROWTH ?? Daniel Johnson about feedback, PLG pros, cons, and controversies!

Welcome to the next KR8 newsletter!

In this issue, we will talk more about Product-led Growth. You will learn what you can benefit from this strategy, why not everyone should use it, and what the future of PLG is. Also waiting for you is an interview with Daniel Johnson - We Scale Startups founding partner who will talk about why feedback is so important for business growth.

If you haven't read the previous issue, be sure to check it out, as you will find the most important definitions, case studies and learn how and when to use PLG. You can find the previous edition here.

Our brilliant conclusions are available only in the extended version of our newsletter here!

Stay tuned and enjoy your reading! ??

Why is Product-led Growth profitable?

Startups are cheaper to build but more expensive to grow – here’s why - SaaS is a very popular business model. There are only more and more of them appearing on the market nowadays. The cost of building new digital platforms is decreasing, but they are becoming more difficult to promote due to high competition.

Why the Sales-Led Go-to-Market Strategy is at risk - A PLG strategy lowers its cost of sales. This translates into shorter sales cycles, lower Customer Acquisition Costs (CAC), and higher Revenue Per Employee (RPE).

Self-serve first: the overlooked but essential paradigm underlying great software companies - Companies that use self-service during sales are growing faster.

When you shouldn't use PLG

• When your product is very complex, onboarding the user yourself is impossible, and implementing the product in the customer's company requires a lot of effort and solid support on your part.
• When your product is very niche and has a small Total Addressable Market (TAM), relationships matter a lot in sales.
• When your product opens up a new category in the market, attracting users requires a lot of education and changing the habits of users who have been previously solving their problems in a completely different way. PLG will be a good option once the market has settled on your solution.

Kreatik talks – Daniel Johnson explains why feedback is crucial to business growth - we talk to Daniel Johnson We Scale Startups founding partner, business mentor, and professional speaker about the influence of culture and emotions on business, why customer feedback is key to success, and why users always demand more.

PLG controversies

In a Product-Led Growth strategy, a key factor is user satisfaction. If the platform they are testing meets their expectations and solves some important issues, they are willing to invest in a paid version. Some companies confuse this satisfaction or even intentionally replace it with addiction. Such accusations are especially directed at social media creators. Notifications, infinity scroll, collecting likes and hearts, competing for followers, non-chronological presentation of content (based on an algorithm), and many other mechanisms make users almost unable to tear themselves away from the digital product.

But the problem is not just present in SM; many digital products hide this addiction under the guise of habit formation, a mechanism described by Nir Eyal in his book Hooked – How to Create Habit-Forming Products.

How Nir Eyal’s habit books are dangerous - It's long been said in the industry media that intentionally making users dependent on a platform or app is uncool or downright immoral, and I agree. Per Axbom is even more adamant and says it is straight-up dangerous.

Netflix strategy analysis - based on?Product-led Growth - The Product-led Growth strategy can be so effective that it's risky. Netflix found this out when, and at one point in its development, it had to stop offering a free trial period. Maciej Marczak wrote about applying a PLG strategy from the perspective of a streaming service on our blog.

What is next?

A large, global customer base is the dream of any company following a product-led growth strategy. A large customer base brings big profits but also big challenges. Although users in the product onboard themselves, they cannot be left completely unattended.

Community-Led Growth: The Product-Led Growth Expansion Pack - The product-led growth strategy assumes that no one else is involved in the interaction between the product and the user. In practice, it often looks quite different. Communities form around digital products with lots of users, and they are worth nurturing. A well-cared-for community can drive sales. Corinne Marie Riley wrote about Community-Led Growth.

UX helps cross-culture business – how big companies design for a global audience - When designing for a global community, you need to consider cultural differences that can affect user satisfaction with the product and the trust they have in the company. You'll read how companies like Amazon, Uber, and Airbnb have tackled this challenge on our blog.

Do you want to know more about digital, strategy, e-commerce, or UX? Check out our newsletter! You can read it?here. Be sure to?subscribe?to avoid missing an issue!

Do you have any experience with the Product-led Growth strategy? Maybe you already have some success stories with this strategy?

We look forward to your feedback and see you in a week! ??

Kreatik Team