Transcript
Kyle Poyar:
My name is Kyle Poyar. I’m an operating partner and I help our portfolio companies accelerate their revenue growth.
Kyle Poyar:
OpenView is a venture capital firm investing in expansion stage software businesses. We’ve invested in awesome companies like Datadog, Expensify, UserTesting, and Workfront. We have a major focus in investing in product-led businesses and we believe that’s the future of how companies are going to build software products.
Kyle Poyar:
At OpenView, we were looking at the patterns of our most successful portfolio companies and they were growing a completely different way than the traditional SaaS playbook. So back in 2016, we really studied these companies, how they succeeded, what were the most common stumbling blocks, and we called it product-led growth and started creating a community around it. Product-led businesses have been outperforming their peers, both in the public markets and their private markets, and more than half of recent IPOs are now product-led businesses.
Kyle Poyar:
Product-led growth is all about focusing on the end user, delivering value really quickly to that end user, and then scaling from user to team to organization wide. That’s the real opposite of traditional software patterns where folks built expensive products that were hard to use. It focused really exclusively on the executive buyer, at the expense of everyone else that was actually using the products.
Kyle Poyar:
Product-led growth isn’t just a pricing strategy, it’s not about freemium, it’s not about free trials. It’s about an end user focused growth model where the product is front and center and how you acquire, attract, activate, convert and expand your customers. And absolutely, free products are a major part of that so that folks can try before they buy and you’re leading with the product experience.
Kyle Poyar:
People often think of product-led growth as anti-sales. I mean, if you can buy via self service without a sales rep, what is the role of sales? I’d argue that sales is really important, but it acts differently in a product-led business compared to a traditional software company. And so in product-led growth, sales is actually taking that customer that started their journey via self service and helping guide them to a shared promise land that is recognizing what is possible with the software, why they might want to adopt it with more people, and helping them unlock barriers or friction points that get in the way of rolling it out more widely.
Kyle Poyar:
You need to design pricing and packages that allow folks to see real value before the pay wall and that allows you to scale as folks adopt the product from an individual user to a team to company wide.