The Product-Led-Growth (PLG) Playbook for B2B Startups
My students and I heard from the growth teams at Pinterest, Facebook, LinkedIn, Lyft, Shopify, Tesla, Adidas, the NBA, and Disney+ and held workshops led by growth thought leaders Brian Balfour from Reforge and Sean Ellis, author of Hacking Growth.
we recruited a handful of B2B startups, forming student teams to apply the patterns we observed in the class to their PLG strategy.
Define and Navigate Four Sequential North Star Metrics ATTACH
Two interesting observations surfaced with regards to the metrics focus of the growth team.
- First, high performing growth teams focused on a single metric at a time.
- Second, the North Star Metric evolved as the venture scaled.
The sequence through
四个主要的关注指标，其实这四个指标分别是解决这几个问题：
- 寻找市场，这个时候关注是否有用户来使用；
- PMF
- 规模化，加速获取更多高质量用户
- 盈利，关注商业化
North Star Metric #1: Establish Flow of Free Users for Experimentation (i.e. new users per day)
The focus should not be on optimizing CAC or monetization. We are simply trying to create a reasonable flow of free users to conduct experiments with.
如果产品使用 Freemium 来吸引用户，那么这个阶段关注新增的 Free 用户即可。
North Star Metric #2: Prove Free User Retention (i.e. New User->WAU%) ATTACH
有用户来了之后再考虑如何让用户留下来，其实就是 PMF，询问用户是否对产品感到满意，如果产品消失，用户是否会感到非常失望。如果有 40% 的对此感到非常失望，说明产品已经有了忠实的目标客户。
prove that the product consistently delivers on the value promise.
- first approach, from Brian Balfour, evaluates the usage retention of users, organized by acquisition date cohorts. LinkedIn nicely summarizes in this article how they defined a “Quality Signup” as an immediately measurable metric that correlated nicely with long term usage retention.
[source]
- Following Balfour’s approach, the data is then organized into the model below, where each color represents a set of users acquired in a particular period, such as in the month of May, and the shape illustrates the percentage of those users that remain as free active users over time.
[source]
The second approach, from Sean Ellis, leverages a simple survey to assess the perceived importance of your product by the user. asking users a simple question, “how would you feel if you could no longer use the product”, and provides three response options, Not Disappointed, Somewhat Disappointed, or Very Disappointed. Ellis recommends calling victory on this stage when 40% or more state they would be “Very Disappointed”.
In both cases, user segmentation is critical. This segment is often referred to as Quality Users amongst growth teams and the Ideal Customer Profile (ICP) in B2B software companies. This article by FirstRound Capital about Superhuman is a brilliant description of how they used segmentation with Ellis’ approach to find their Quality User definition and claim victory on Step #2.
North Star Metric #3: Prove Scalable Quality User Acquisition (i.e. Cost per Quality User)
develop at least one scalable user acquisition channel that acquires Quality Users within the tolerable CAC target. Cold calling and paid digital marketing are rarely used.
North Star Metric #4: Prove Monetization (i.e. Quality User->Paid User% AND ACV)
Finally, with a clear definition of the users that retain with the product and a channel to acquire them scalably, focus on converting free users to paid customers.
Establish a Cross-Functional Team Reporting into Product, not Marketing
增长团队更像是一只特种部队，人数不多，但是各种只能的都有，团队内部可以自闭环来快速实验。
These teams consisted of the following capabilities.
- Product Managers: Receive input from the various constituents (team, users, product data, market data, competitive data) and drive prioritization of the experiment funnel.
- Full-Stack Engineers: Split time between executing the aspects of experiments that require back-end coding and develop the tools used by non-technical resources to execute experiments.
- Designers: Own the user interface and user experience of the product. Design ads, landing pages, in app messages, and other UI/UX elements used in experiments.
- Data Analysts: Evaluate the data and influence the product strategy and roadmap with observations.
- Marketers: Run user acquisition experiments, mostly focused on email campaigns, viral programs, and digital ads.
- CSMs: Serve as first line of support for inbound support chats or emails.
Transition growth team from “athletes” to “specialists” as the organization scales ATTACH
specialized engineers as either core product engineers dedicated to the product road map or growth engineers dedicated to the growth funnel.
产品和设计以及开发都要成为某种专家：
- 根据业务线，某个业务线的专家；
- 根据 Funnel，成为获客、或者转化方面的专家；
Specialize Product and Engineering as either Growth or Core Product
Report Growth into Product, not Marketing
Start with CSMs, Not Salespeople
This ruins the “adopt-before-buy” potential of PLG. If human-in-the-loop model is needed before adoption and monetization occurs, use a CSM profile, trained to understand the buyer needs and then show the buyer how to fulfill those needs in the product.
PLG 讲究的是 touchless，如果整个过程中一定需要某种角色介入，这个角色应该是 CSM 而非 Sales.
Compensate Salespeople More for Expansion Revenue than New Revenue
这是大多数 PLG 公司所采用的一种策略：
- PLG 用于获取新客户；
- 通过优秀的用户旅程，让客户对产品感到满意并自助成为付费客户；
- 随着用户的行为，当产品意识到这个用户可能是一个高价值客户，则可以让 Sales 来主动联系客户；
- Sales 的目的是进行 Upsell/Cross-sell；
Enable Rapid, High Quality Experimentation
- Hold the team accountable to properly defining the experiment up front.
- Setup a weekly call to review the outcomes of last week’s experiments, discuss learnings, and discuss ideas for the next set of experiments.
- Maintain an experiment log.
- Balance Quick Wins with Big Bets.
- Invest R&D in making experimentation easy across the organization.
Strategic Considerations of PLG
The Hidden Power of PLG: Sustainable Moat Development
Early Focus on PLG Increases the Likelihood of Product-Market-Fit
PLG is Very Difficult to Implement After Scale
Category Attributes Favorable to PLG
#1: Low time and effort to retainable value #2: A value proposition that has current demand versus one that needs to be evangelized #3: Potential for virality #4: Large, horizontal market
PLG Playbook for B2B Startups - Summarized ATTACH
