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How to Move from a Sales-led to Product-led Company with Wes Bush

In 2016, Blake Bartlett at VC firm Openview Venture Partners first termed “Product Led Growth.” It refers to a growth model that relies on the product as the main vehicle to acquire, activate, and retain customers. In recent years, the idea of moving a business to be “product-led” and focusing on using your product to build a growth engine has gained momentum. But should you make this move now?

We met with Product-led growth champion Wes Bush. Wes is the founder of Product Led Institute, and bestselling author of the book Product Led Growth: How to Build a Product That Sells Itself.

In this interview, Wes Bush helps you understand what you need to consider when moving to become product-led and how you can leverage a product-led growth mindset to drive growth in 2021.

What is product-led growth?

Product led is when you’re using your product as that main growth lever to grow your business so that you can cover your acquisition, activation, and retention costs.

It’s when you have that mindset as a team to look at your products as not just something you sell but as how you serve people. It’s been pretty cool over the years to see how companies are doing this.

For marketing teams. Yes, you could write a thousand blog posts on landing pages and all that fun stuff.

Or go a different route.

You could create a free landing page tool to get people in and really learn your product. Maybe the next step is they use another part of your product and go on from there.

It’s fascinating to see just how you can start to think about using the product to build a growth engine for your business.

When to consider moving to product-led growth?

You may wonder if now is the right time to go down this path or not. I’ll touch on one of the biggest red flags.

When you have a new market, you’re creating a new category or a new space. If you’re in that particular environment, what you’re often having to do if you’re selling your product is having to educate people about this new problem you’re solving with your particular software or solution.

So there’s just a lot of education.

In that time, your sales team will be pretty darn valuable because they’re helping people understand the problem; challenge them a bit. At the end of the day, help people discover if this is a great way to solve the problem.

Suppose you find yourself in the blue ocean. In that case, you’re creating net new demands, and it is a bit more of a complicated product.

I would say continue with your sales motion right now. But eventually, once that market starts heating up, it starts getting more competitive. People start understanding that problem faster. You need to move down that product-led path very quickly!

Before the competition catches up and starts creating the most powerful customer acquisition model in your market against you, you want to be one of the first movers whenever it comes to that.

How to determine if you should offer a free trial, freemium, or demo for customer acquisition?

This one’s tricky because the answer is always going to be; it depends. And it truly does.

Free trial, freemium, or demo. Each has different risks, pros, and cons. I would argue there’s a lot more variance of that than most people are aware of.

There are other things called a usage-based free trial. That’s mixing and matching. Like having a free trial then freemium, — or freemium and then a free trial.

Honestly, I’ve seen many different combinations of this, but what it comes down to is, what kind of value is your product providing? If you could focus on one area, your time to value will be a good indicator for which model to choose.

Let me give you three scenarios.

Scenario 1, let’s go back to you having this on-premise solution.

It’s super complicated to use. You might want to consider just staying with or having that demo option. This way, people can go through your product and have a quick conversation with sales versus setting something clunky up that takes forever to set up. A demo can save a lot of time. It would be a quicker time to value.

Scenario 2, if your users can sign up for the product and see the value within less than a week, or maybe even you could do it on that first day.

A free trial in this scenario could be beneficial. Because in that first seven-day period, people can understand the product. They can see the value for it.

Scenario 3, if you have a longer time to value, but it’s still an easy product to get set up at the beginning, sometimes freemium can be the better fit.

I’ll give you an example: there is a company called Tettra. They’re doing awesome things. The founder is amazing if you want to check them out. It’s a wiki tool. If you sign up for the product, it’s like google docs, but it’s a bit more powerful.

In their tool, you can go ahead and create a wiki, but what they realized is initially, they had a free trial model, and people weren’t sticking around.

They understood, “Hey, it’s easy to use, but for some products, the true value builds as you get integrated into it, as you use it more.”

So in their case, when they made the switch to freemium, it was like a night and day difference for their business. Tettra is now offering a ton more value to their audience because, in about two to three months of using the product, people see the compounding effects of having this company wiki tool. Their leads save a lot of time, and it is a no-brainer for them to make that upgrade decision.

If you have a product that is a bit quicker to set up but might take longer to see the full potential value of that product, freemium, in that case, can be a great fit. Because you’re not putting an artificial timeline — you got seven days; you must sign up now, which we know is fake.

Instead, focus on how long it takes for someone to get embedded in this product and start enjoying it. Time to value is so important.

How product-led can be beneficial to your sales team?

Product-led growth is great for sales teams. When your product does most of the selling. When a lead goes into your product, they start experiencing the value; they’re making an educated decision.

Using the product-led approach, you’ve de-risked it for your prospects by showcasing the value of your product. What does that mean for sales?

Suppose the product can do a lot of the selling— if it can do most convincing and trust-building by just showcasing the value. What do sales teams do?

In some product-led businesses, they’ve decided that if it’s a ten-month (temporary) solution, we don’t need sales for this particular product. For instance, Netflix, are they going to call a family account and say, “Hey, you need to start upgrading your sister and your brother?”. No! There are some use cases where it just doesn’t quite make sense.

But if you’re in the B2B world, a lot of the time, what you see nowadays is people starting to use the product for free—using a free trial or freemium model. They’re getting their feet wet. They’re understanding the value of the product, and as they bump up on some of the usage levers, it just becomes a natural upgrade conversation.

For example, take a look at Slack since we’re all familiar with Slack. If you start hitting your message limit pretty quickly, you’re losing access to some of your files or aggressively start adding new users, so why don’t sales teams go through their account; try and find the decision-maker and get them to upgrade.

Whenever you roll out this product-led initiative, sales are more resistant because of the stigma around the idea that the product can sell itself.

In some cases, what this means is the smaller accounts. The ones who often sales teams don’t want to spend too much time on because it might not be worth it from an account value perspective can go entirely self-service.

And then there’s this other bucket, let’s say for the midsize accounts where it could be more low-touch, they reach out whenever they think they can add value to the conversation.

This way, sales reps can focus on the enterprise side of the market.

Can companies with on-premise technology benefit from a product-led growth mindset?

Absolutely! If you look at product-led growth and every piece of what it takes to make a successful product. Let’s take one aspect of it – getting someone to value faster.

Now, if you’re still completely sales-led, you have this customer onboarding sequence; let’s say it’s four calls with every new customer.

Each call walks them through how to use your product and how to get to value. Here’s one area I’d recommend you trying to focus on improving.

What if you took each of those current manual processes and broke it down.

Call one; we’re just showing them the dashboard and all these exciting things that our product can potentially do.

Call two; we focus on this one piece, a specific feature that can be complicated, and go through it. And so on.

As soon as they sign that contract, why not set up an account for them automatically and educate them?

Have something to guide people through just how to use that dashboard, use that part of the product very quickly, and hopefully get them to that value without them having to hop on a call and go through that with you.

There’s nothing wrong with hopping on a call and going through the product. It’s beneficial for the company from a user research perspective too.

But it’s just thinking about how we can reduce and break down the time it takes for someone to experience the value of that product. So that’s just one example of how, if you even like on-premise how you could think about using the philosophy of just delivering value faster in your business.

Like what you read? Get inspired with real-world examples.

Let us show you three customer use cases on how you can field demand and boost product usage by enabling your buyers to try and evaluate your software in a frictionless way by spinning up private sandboxes on demand.

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The Show Notes

Read how Instruqt can help knock down your product barriers.
Product-Led Institute
Product-Led Growth book
Wes on LinkedIn
Connie on LinkedIn

Connie Tai
Chief Marketing Officer. Achieving total customer relevance and sustained growth are the key drivers in her strategy. She brings a wealth of experience in B2B marketing, digital marketing, and eCommerce. Before Instruqt, Connie has worked in the edtech industry at the startup phase as well as the scaling phase.

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