Product-led growth is a holistic approach to growth. The current mainstream way of thinking is to look at growth through the AARRR funnel by Dave Mcclure. Marketing is responsible for acquisition, while Product is responsible for activation and retention. This leads to a siloed strategies.
A good growth strategy is built on [[Product-Led Growth]]. A good growth strategy should answer these questions:
How does your product grow?
What are your points of leverage? What are the places we can have the biggest impact on growth?
Where and where does current growth slow or stop? Identify our horizon where growth starts to slow down and stop.
What are the methods to reverse this and improve our growth?
How do I align individuals, teams, and the org around the methods? Guiding principle
What new info do I have that changes our underlying assumptions? New info that causes an evolution in your strategy.
How does a product grow?
- Not just about pricing
- We want to at least have a basic understanding on these:
- What: What features or attributes we charge for, or what user is willing to pay for?
- How: How customers value the scaling of price with usage of their product? Charge by users, or by usage?
- Amount: How much do we charge?
- When: Never (free), or monthly, yearly etc.
- Each element above can increase or decrease the friction for user to pay for the product.
- Helps us fight growth headwinds (competition, increasing CTA) and increase conversion rate
- Types: Direct network effects (NFX), cross side NFX, data NFX, economies of scale, brand