Let's talk Product Led...Savings. 💰

Hey folks, 

I know I know you're all busy congratulating Patrick Campbell on selling Profitwell to Paddle for $200 million...but I'm calling from Planet Earth where YC advisors are sending these emails to their portfolio startups: 

We talk “Product-Led Growth” all the time, but considering that startups are laying people off in swarms now, and VCs are warning that capital is drying up, I think it’s time we talked about “Product-Led Savings”. 

As the economy slows down, companies will need to be a lot more prudent in achieving growth. 

And anyway, our last Product Hero did the talking for me on LinkedIn yesterday: 

So here's how you can *save* tons of money in your company *and* achieve more growth with the PLG mindset: 

Watch my video rant 

1. Automate in-app onboarding and support for repeatable processes instead of throwing expensive Customer Success, Support and Engineering resources on it.

I still see so many companies skimping $300 per month on implementing an onboarding tool, but then offering me to jump on 4-6 calls that could have been easily solved with a single tooltip. The unit economics of this don’t add up. I won't be surprised if these companies will be laying people off by the dozen soon. 

What's the alternative? 

I talked about Product-Led Onboarding last week, so this week - I'd like to tell you a bit more about...Happy Paths. 

You can't design great Product-Led onboarding without knowing your users' Happy Paths. 

Simply put - the happy path is the error-free path that users take to achieve the desired result. You can represent it visually by creating Happy Flows. 

Here's a Tinder example of a Golden Path (if you want to know the exact difference between the Happy Path and the Golden Path - you'll find out more about it here)

Conversely - if your user takes a detour, and encounters friction on their path to achieving value from your product - they won't be happy. 

To make sure your users don't wander off the right path, became unhappy and then exit the trail entirely, you should be using Product-Led Onboarding on the key milestones (places where your users can take the wrong turn!). Checklists and interactive walkthroughs will increase the chance of customers sticking to the happy path.

2. Improve retention and push for expansion revenue instead of throwing more marketing $ into a leaky bucket. 

Again - if your users step off the happy path and don't achieve their goals (ideally during the first-run experience - especially if you have a free trial!) - they will likely churn. 

No amount of new signups will fix that (especially if your CAC is high!) 

On the other hand - if you increase your product usage by improving feature adoption with in-app experiences - you can actually drive expansion revenue and improve the LTV:CAC ratio.

Here's more about designing the Happy Path UX. 

3. Replace extremely expensive tools from “big brands” with newer, more cost-effective contenders that don’t lock you into multi-year six-figure contracts.

Hey, that $55,500 annual Pendo contract you have is not a Louis Vuitton bag. It's not a status symbol. I see a lot of companies clinging to the choice they made several years ago, when there weren't any good alternatives. Some of them are barely using the product.

Don't cling onto it like it's a life-raft the switching costs are minimal, compared to the savings. 

If that's the case for you - think about it. You could save $40,000 per year on a Product Growth tool alone (Switch to Userpilot and see! )

You can probably find similar cases across your entire department. And what about your whole company? 

Saving $500,000 on expensive tools means e.g. hiring 5 decent software engineers or great marketers or great sales people... you could spend that money *a lot* better. 

4. Avoid employee bloat and dilution of responsibility.

I recently approached an engineer in a company with a mission-critical bug on their signup page and he simply told me he’s…not responsible for that page. And "doesn’t know who is". 

Hiring more people does not equal more growth by default. It does mean you’ll need to hire more management help though.

Some problems can't be solved in less time by adding more people to work on them. And the more people are in a company - the less personal accountability they feel. 

You can prevent this "employee bloat" by automating certain processes (I've been preaching why you should use tools like Userpilot for your user onboarding rather than building it in-house for years...) 

Conclusion? Savings can lead to growth.

I’m not talking about cutting corners here. 

Even in the enterprise sector - there's this false belief that if you're an enterprise software company and don't have a free trial/freemium model, you can't be Product-Led. Fake news!

Your users (yes, even your enterprise-level, high-ACV, annual contract users!) don’t want to be jumping on 4 onboarding calls, and then even more support calls every time they encounter a UX issue.

They don’t want their work to be blocked because their end-users are in the Phillipines, and your customer support is in Canada.Lack of in-app self-serve support is stopping them for the whole day. 

 So adding self-serve, product-led onboarding and support resources will improve your user satisfaction and *retention* even when you’re sales-led. 

In fact - dramatically reducing your costs of operations (especially customer support and success!) by making your products (including enterprise products!) more product led - *is* a growth play. 

Money, money, money...MoneyFarm! 

Now, I know it's still far off - but since we're talking money: I wanted to introduce our next Product Hero - Ross Godlonton, CPO of MoneyFarm - who will tell us about growing a competitive fintech product in a crowded market. MoneyFarm raised over £44.1 million series B recently - so you can also ask Ross how he's spending the money (wisely) on his product.

See you next week!