This article was taken from a presentation by Kyle Poyar at the Product-Led Festival, held by our sister community Product Led Alliance in June 2020. Catch up on all presentations with the OnDemand feature. Since the presentation, Kyle has since changed roles and is now Operating Partner at OpenView.
I'm Kyle Poyar, VP of Growth at OpenView, a venture capital firm based in Boston. I work hand in hand with our portfolio companies to drive the best practices for product-led growth.
In this article, I'll be focusing on:
- Where product-led growth came from,
- Why the freemium model is growing,
- Why adaption is critical to product-led growth, and
- How to harness the power of product-led growth.
I'm excited to walk you through the changes in the market that have driven product-led growth by empowering end-users. I’m also going to explain how you can harness the power of product-led growth to expand your business even faster and more efficiently.
Where did product-led growth come from?
At OpenView, we coined the term product-led growth based on what we were seeing in our portfolio companies.
Organizations like Datadog, Expensify, and Calendly were taking an innovative approach to building products and growing the business, and we realized that this was going to be key to the future of software. Based on these trends, we’ve built a community around product-led growth.
Thinking back only five or 10 years, adopting new software was a long and painful process. The journey from sales through to implementation and user certification could take months or even years. Literally, years before anyone got any value at all out of the product! These days, we just don't have the patience for that.
The era of the end-user
Today, if you think about how your organization adopts software, it just kind of shows up unannounced.
End-users are finding products like Dropbox, Calendly, and Expensify, and they're telling their boss what software to buy instead of the other way around. The end-user era is here, and it's here to stay.
The SaaS companies on everyone's minds recognize the magnitude of this shift. So when you look at the S-1s of companies like Atlassian, Dropbox, and Zoom – the documents that they file when they go public – they're highlighting the dawn of the end-user era and how it’s transforming the way they build software.
Atlassian is saying, “We recognize that users drive the adoption and proliferation of our products.”
Dropbox says, “Bottom-up adoption within organizations has been critical to our success, as users increasingly choose around tools at work.”
Zoom, which everyone's using right now, says, “We grow through viral demand driven by individual users.”
And this isn't limited to just a few companies. HubSpot’s CEO and co-founder Brian Halligan has talked about how they've completely pivoted their business model to reflect the end-user era.
His aha moment came when he was looking at how his own organization was buying software. He said,
“Software buying has been turned on its head, and you need to market and sell to humans and enable those humans to put it to work for you.”
And so HubSpot started opening up freemium offerings of all of their products. Every product they have is available to try out before you need to talk to anyone. It's a huge shift in the organization, and it's setting them up for strong future growth.