Hard things about product-led vs sales-led companies

Product-led growth vs Sales-led growth

You probably all heard of product-led growth and sales-led growth.

Oh, wait? You DID NOT.

Well for those of you who did not, there are tons of books, which cover the topic starting from “Product-Led Growth: How to Build a Product That Sells Itself” by Wes Bush, “The Lean Startup” by Eric Ries, “Swipe to Unlock” by the product guys from Facebook and Google. Please go and read those right now. Stop reading this article!!!

I am serious stop reading the article right now. Instead, read the books, which are going to be more useful at this stage.

Now that we are together with all of you who are familiar with the topic let’s quickly go through what it means to have product-led companies and sales-led companies. It is worth mentioning that the term is more used for B2B companies and not that much for B2Cs, but it is also acceptable for B2Cs.

Product-led companies

Basically, product-led companies are the ones, where a whole company is concentrated on making THE BEST PRODUCT. I mean really everyone, including sales team, product, engineering, marketing, customer success, support, and even the ugly and bold Joe, who does nothing except drinking coffee and playing chess all day long with someone from Zimbabwe.

So, Why is that? Why the company would like to have product-led growth?

Well… Among 1294 reasons, one that stands out is that everyone will make everyone’s life way easier. Meaning sales will have shorter sales cycles to acquire new customers, because… The product is great. Customer support will have fewer calls because… Guess what? The product is great. In addition to all this, the product and engineering teams will be able to deliver more items of the product roadmap to make the product greater than it already is. Seems like everyone is happy and the company is successful. Everyone should get a beer and enjoy their lunch. So maybe you are asking now:

“Are there companies that work based on the approach described above?” Some product-led companies I know are Slack, Netflix, all products of Atlassian, and many more.

But wait, seems like “ a fairy tale”, is it even possible? Well….Let’s not judge too fast. Instead, let’s see what a sales-led company is.

Sales-led companies

As you can guess from the term sales-led company, those are the ones, where sales burn their butt off to sell the product and generate revenue, so that they can sustain this harsh, difficult and miserable life of a corporate world. This means that whatever product and engineering teams build, the sales team will try to sell. It usually starts with cold calls and ends up with signing a deal after 3 to 6 months of heavy discussions, paperwork, and sometimes even the company policy changes (Trust me I have seen that). Don’t get me wrong, this does not mean that the approach is wrong, there are some companies who won’t be able to survive without being sales-led. For instance, SAP, ServiceNow, IBM, and so on.

Ok, so you probably say…

Hard things of product-led companies

The point is, it is HARD. The hardest thing to get to “the fairy tale” of being a product-led company is that everyone needs to work 27 hours per day to get to the top of the mountain and still may not get there. There are lots of books and articles on how to work smarter and not harder, which is another great component, but… You will still need a small portion of luck.

The point is that lots of pieces of the puzzle need to come together to reach the level God of a product-led company. I will just highlight some of the most crucial ones, which are: Product Vision, Product Strategy, Product Roadmap, Objectives all of which must be correspondingly aligned with Corporate Strategy, OKRs, Company’s Mission and Vision, Sales, and Marketing strategy. So as said above: “everyone should work on making the great product”. Otherwise, this thing won’t work and that’s why this is one of the hardest things ever on the planet earth. Of course, that cannot pass jumping over oneself and then doing a backflip at the same time. Have you seen those guys? I cannot imagine how they do that!

But let’s get back to the product-led companies, so… I was saying, oh yeah…As you can see everyone on top should be aligned between each other, meaning CEO, CTO, CMO, CPO, COO, CFO, and all the rest, who has the C letter in front of their title. So, based on these different Cs and their personalities. Is it possible for everyone to agree on one major goal?

I guess it is if there are Slacks, Netflixes, Googles, Apples, and many mores. Of course, apart from all of the things mentioned, there are lots of other factors like the industry you are in, is the market ready for the product you are building. You might be building a motorcycle for outer space and no one will try to buy it without a proper sales speech or a demo. And that’s exactly why some need a sales-led process and never can become a product-led company. It is easier for sales reps to tear their butt off than the whole company because the outcome will be more or less the same.

So maybe now you will say: “Ok Stef, have you ever worked in a product-led or sales-led company ?”

My experience

Yes, of course, I worked in product-led, sales-led and even some mixes of sales-led with a note of product and my current company is probably “product-led through sales”. The main point, what I outlined for myself based on my experience is, that some of them would never become and didn’t need to become product-led. You need to go through 20 tons of shit, blood, and sweat to be at least a little bit close to “the fairy tale” and become “a magical creature”. What do we do in the current company? We experiment and a lot, we try to do both bottom-up and top-down approaches, which are basically the synonyms for product-led and sales-led, sometimes some approaches work and sometimes not. We try to discover our market and finally get to the product-market fit.

Head of Product @ SuperAnnotate | Love product management, my wife, and talking about stupid and crazy shit.

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