One of the hottest trends in the startup ecosystem is product-led growth (PLG). The PLG approach to introducing a solution to the market is focused on the end-user.

Initially, many B2B founders viewed PLG as more of a go-to-market motion where providing a freemium offering would enable a company to be product-led.

However, this is not enough. End-users aren’t simply the people who use the product and decide whether to recommend it to the organization. They often hold the position of ‘buyer’ as getting started with the solution can commonly be done on a credit card and then later expensed.

The complexity of the relationship between PLG companies and the end-user/buyer, among other aspects, requires changes in other areas around how you run your operations, marketing, and business goals.

Here’s how you do it.

Building your other processes around PLG

Taking up a PLG strategy involves other processes. For example, the implementation process around PLG is frequently automated and self-serve.

Instead of salespeople as the initial point of contact, customers can talk to technical people whose only role is to support the customer in their trial or use of the product.

If you want to make your product able to sell itself, you will have to invest more in how you design the product journey and think about potential pitfalls. Some of your first hires will therefore be designers that really understand the customer interface and how to make the most impact.

One major area of differentiation between PLG companies and their non-PLG counterparts is the use of data and telemetry. Instead of salespeople manually managing anecdotal data on their prospects, PLG companies gather data and evaluate how end-users leverage their product.

What actions did they take, and what did they not? Is the prospect following the ideal customer journey that leads to a sale?

All of this data is recorded, analyzed, and then fed back to the engineering and growth teams to adjust how the product functions. Let’s look at an example.

Say your product has three functions, one of which is a real differentiator. Looking at your product trials, you can see how quickly your prospects start using that differentiating feature and how much they interact with it.

You can also judge whether you can encourage users to interact with your services in ways that are more likely to convince them to convert into customers.

Another hallmark of PLG companies is clarity in their pricing and packaging. Typically, enterprise sales vendors have forced customers to ask for pricing in order to get a conversation started. The result of all this activity is that end-users automatically look for clarity in pricing, simplicity in packaging, and a growth model they can explain to their leaders.

PLG companies have to respond with self-service sales, expansion, and easy payment methods, enabling a frictionless experience for the customer and efficiency for the PLG organization.

Lastly, the PLG company’s primary goal is product use, not qualifying whether the customer has money to buy their product. While salespeople are a part of the purchase process, their success — and consequently how they are compensated — should be dependent upon getting a foot in the door and making their customers successful with their product.

PLG customers typically grow more after the initial sale takes place, so smart organizations support their customers with whatever resources they need to widen their use of the product over time.

Rather than using incentives based on initial sales volumes, you can base performance goals on successful trials that convert, renew sales and expansions in usage within those customers.

Putting PLG to work in the right ways

Of course, not every company is destined to be a product-led growth organization. For many, it just doesn’t make sense. If you sell physical goods, being product-led can be much harder.

You may be able to use portions of the PLG model such as embedding telemetry if you happen to have a physical hardware technology product, but for non-tech solutions, PLG is probably a non-starter.

Even in the tech world, not every company needs to aspire to be PLG. An organization that sells into the C-suite with a company-wide solution (think ERP, HRIS, and the like) may find that a PLG model doesn’t work for them.

Thinking through the amount of consulting that you might have to take each customer through — and how difficult it would be to automate those steps — can help you see if PLG is right for you.

Alongside this, you also have to think about companies that you work with and how to align your goals with them. If you work with partners — a common model for enterprise B2B companies — then your channel strategy and compensation models will also have to reward the same behaviors that you want to encourage.

If you don’t look at this, then your partners won’t have the same mindset that you do.

For B2B and B2C-focused software and SaaS startups, there may not be a better time to be a PLG company. The shift to consumer buying for technology solutions — whether for their business or personal use — ensures that startups can embed a deep product-led focus to help their end-users succeed. And, with today’s discerning buyers, products must be near perfect to succeed.

PLG companies can rapidly innovate with their products to better match their customers’ needs and therefore win in the market.

Notebooks are leather-bound graveyards for your ideas

There’s so much talk about where ideas come from — what inspires them and how to keep them flowing. Call me uninspired, but I think that’s the wrong question. Instead of where they’re coming from, I’m more interested in where those ideas are going.

Once you have a killer idea, what’s next? That’s the curious question mark for me.

Throughout time, we’ve invented so many ways to describe inspiration. We’ve personified it with the Greek Muses or the Norse Kvasir. We credit divine inspiration or a whisper in a dream.

Sometimes we say that an idea is inspired by the natural world as George de Mestral did. He said the idea for Velcro sprung into his mind seeing how the tiny hooks of cockle-burs clung to his dog’s fur as they hiked the Swiss Alps. Eureka! Idea acquired! That’s enough right?

Getting it out of your head

Well, my Jordans don’t have Velcro straps because de Mestral had the idea for Velcro. It’s because he did something with that idea. He first got it out of his head. Probably told his wife. He probably took some notes and drew some sketches. He probably also made a few prototypes.

Basically, having an idea is one thing, but holding that idea in your hand, that’s something really special.

Now, you may be about ready to promote me from 1st Lieutenant Plain as Day to Captain Obvious, but please hold your horses. I know it sounds simple; get ideas out of your head. But there’s some nuance to unpack here, and I want to draw your attention to a few traps you might fall into. Traps I’ve climbed out of a few hundred times.

Tell me. What do you do when you’re excited about an idea? I bet you tell your colleague or a friend or your husband. And how does that feel? Good? Dopamine rush when you see their expression change listening to you? Adrenaline pumping when you feel their excitement? All those neurological rewards wash over you like you’ve just made something great.

But check yourself. You haven’t made anything yet.

Impressing people with your ideas feels great, but it can be dangerous. Because telling people can actually be so satisfying that you lose interest in actually making the idea. I bet that’s pretty familiar, right? So if you have a great idea, tell people. But don’t stop there.

Enter the pitfall: Notebooks

Ok, so then you grab your notebook — you know, the one with page after page of good ideas you’ve had. You know the one. It’s just like those others on your bookshelf also filled with pages and pages of good ideas you earmarked to get back to someday…

See what I’m saying? I think you’re picking up what I’m laying down. I’m totally guilty of this too.

Back at Google, I was obsessed with documenting my ideas. I filed them away in neatly labeled categories, waiting for the moment when I would get back to them (I was so sure I would get back to them).

The problem is that it’s so easy to lie to yourself. The sad truth is that I may as well have just neatly labeled different trashcans in my office. Because I went back through those notebooks almost as much as I rummage through the garbage (I’ve never been known to do this).

It felt good to write down the ideas in my notebook. I took pride in those notebooks. Those leather-bound idea graveyards. Those dot-grid idea purgatories. But, if I’m honest, I was just lying to myself.

I thought that writing down my ideas was one step closer to making them. In reality, it was one giant leap toward forgetting them. What did I do as soon as I had written it down? I turned the page. (Take that literally or metaphorically. Both apply here.)

So if you have a great idea, write it down or sketch it. Definitely. But don’t let that beginning be the end.

Prototype!

Gut check moment. Are you guilty of any of this? That’s ok. We all are. The question is: what should we do about it? Clearly, the secret isn’t just getting an idea out of your head; it’s about getting it into a format that gives you the best chance of actually holding that idea in your hand.

Now I may be a little biased — my company is called ProtoPie after all — but I’m telling you that’s a prototype. Wherever and whenever possible, you should be turning your ideas into prototypes.

If you want to make your idea better, make a prototype. It’s a format that encourages critique. A prototype tells everyone you show it to: “I am a work in progress.”

Instead of just enthusiasm or apathy, you’re likely to get opinions — actual usable feedback. That can be daunting, especially if the idea is precious to you, but remember — if you love your idea, you want to create the best possible version of it.

If you want to rally support for your idea, make a prototype. It suggests to colleagues, peers, friends that you are taking this idea seriously. It shows a commitment to realizing your vision, and that excitement is contagious.

If you want to focus on your idea, make a prototype. This isn’t scribbles in the margin, destined to be forgotten. It’s a manifestation. You can see it, interact with it, touch it. It demands attention – yours and others.

If you want to sell your idea, make a prototype. A prototype is something everyone can believe in.

If you want to become haunted by, possessed by, obsessed with, fanatical for, engrossed with, and absorbed by your idea, make a prototype. Ok, to be fair, this one feels a bit extreme. But seriously, it’s hard not to be passionate about a prototype.

Go make it real

Over the past few years, my colleagues and I have been obsessed with an idea of our own: making it as easy as possible to translate a design idea into a highly functional prototype — and we keep having new ideas to improve the design process.

I’d love to tell you what inspires those ideas. Where those ideas come from. However, honestly, I don’t give a damn about that. So instead I’ll end with an idea that’s more of the instructional than the inspirational variety.

If it’s still in your head, it’s just an idea. Now go burn your notebooks.

Did you know we have an online event about product design coming up? Join the Sprint track at TNW2020 to explore the latest trends and emerging best practices in product development.

3 reasons why bootstrapping my business was better than relying on VC

Looking back, it wasn’t until I left Brazil in 2011 and moved to the US that I realized not bootstrapping your startup was even an option. Growing up in a business-focused family, it seemed the only way to start your own company was, in fact, to do it yourself.

Fast-forward to founding my startup in the States and I soon found out that raising money from external investors was actually the norm among my entrepreneur peers. But I stood my ground — I wanted to build my business the way I knew how, without the pressure of venture capitalists (VCs) that I saw others struggling with. If GitHub and Craigslist could make it without investment, why couldn’t we?

In the end, bootstrapping was the best decision I ever made — and lets me sleep a lot better than I would with VCs breathing down my neck. Here’s why.

1. It allows us to grow at our own pace

Many VCs won’t rest unless they see that you’re scaling fast. By not having any VC commitments, we have been able to grow at our own pace. We knew it was important to prioritize cashflow ahead of fast growth, especially as 70% of startups fail because of premature scaling.

This means saying no to clients when we want to and focusing on nailing the quality of our products. After becoming financially sound, we even went eight whole months without accepting a new client, so we could take a step back, pause, and make sure we were delivering the absolute best service we could . Had we been forced to answer to VCs who are only interested in returns, there’s no way they would have sat by and allowed us to reject all new clients for the better part of a year.

Those eight months not only allowed us to focus on the quality of our work, but also on the quality of our lives. I have always prioritized well-being and balance for myself and my teams, without the external pressure to continuously grow. By bootstrapping, we are able to achieve that.

Better yet, while starting out, bootstrapping meant that I was able to get going fast without waiting to raise funds. It’s helped us both speed up and slow down when we needed to — on our own terms.

2. It helps us solve problems with a laser-focus

There’s no denying that having spare cash lying around as a growing startup can be handy. You can hire the top talent, pay for swanky offices, and explore new ideas without worrying about the costs of them failing.

However, having extra investment money can inadvertently be bad for your business in the long run, in a number of ways. Not having a safety net meant that we were forced to solve problems and overcome hurdles efficiently, quickly, and with laser focus.

For example, when starting out, we drastically needed to upgrade our marketing game and generate conversions, and we didn’t have time to waste. That pressure to move quickly and stay adaptable meant we developed a successful marketing strategy that is still in use today. We relentlessly A/B tested our brand messaging, changed our website every 6 months until we found the design that works, and pivoted to leverage YouTube ads after we saw that many of our clients were likely to find us there.

3. We’re able to get the best talent

While it may seem counterintuitive, not having excess time and money to spend on your recruitment strategy could actually be a blessing in disguise when it comes to supercharging your hiring process.

For example, it’s notoriously hard to find quality developers — especially in the numbers that we need them. In fact, 23.8% of tech businesses say that finding quality developer talent is the biggest challenge they face. As a bootstrapped company, we didn’t have the money to endlessly throw at our hiring process, nor did we have the time to waste on finding great candidates.

To solve this, we developed an efficient and streamlined hiring process to help us find the best applicants. We quickly learned from our experiences searching for the kinds of candidates that fit our company. We held weekly team meetings about hiring and implemented personality tests and live coding tests as part of the application.

After the three-week interview process, we gave the candidates real work and real challenges to find out if they were right for the company. This helped us weed out anyone who wasn’t the very best fit.

Now that we’ve refined our hiring process, we have a greater understanding of what makes an excellent candidate for our team. Had we been able to spend the money on taking a while to find the top developers we have, there’s no way we would have created such an efficient hiring funnel.

Bootstrapping my business hasn’t been easy, but it’s been worth it. That’s not to say I’m ruling out investment forever — if the right person comes along in the future, we might consider an offer. But getting to this point without external investment shows that we know what we’re doing, and any potential investors would have to understand that we would continue to do things on our own terms. Until then, we’ll keep doing what we’re doing, and doing it well.