Product-led typically means "driven by customer needs" but also being able to make the correct trade-offs vis a vis engineering and sales considerations. That is, delivering something that is in line with what you can build and not delivering "value" that the customer is not ready to pay for.
Which can be opposed to "sales driven" where the sales team sold something, engineering has to play catch up, which can lead to technical debt and lack of focus mid-term.
Or engineering led, where the engineering team will decide priorities and might push cool tech demos that will never become successful products. Google being the best example of this type of culture.
Edit: article is terrible. He creates strawmans to sell his wares. As always, beware of consultant blogs.
Product led is about building the best product, with the “best” taking into account customer wants.
But product is just one dimension of customer needs, and customer needs are fulfilled across all other departments either directly or indirectly. A sales-led company can still be driven by customer needs, so the definition is way too broad.
Also the statement that “product led” means “making the correct trade off between sales/engineering” is too broad. You could just as easily say “sales/engineering led” means “having the correct mix of product”.
There's no such thing as "customer-led". That's not a common term, or when it's used it's used so generically as to mean pretty much everything.
"Product led" describes specifically what a "product manager" is hired to do -- make trade-offs primarily between engineering and sales (as well as take into consideration management priorities and general user satisfaction, but user satisfaction is only one priority out of many -- and often not the top one, either).
And if "sales-led" or "engineering-led" resulted in business success then product managers wouldn't exist, because they wouldn't be needed. But sales and engineering often have very conflicting priorities, and would result in drastically different products if left to their own devices.
You don't seem to be understanding what I'm saying at all. Let me try again.
Sales managers specifically focus on sales, they manage internally and have people underneath them. Similarly, engineering managers focus on engineering, manage internally and have people underneath them.
Product managers don't have people underneath them, they don't have reports (except for other product managers). It's a fundamentally different position that is explicitly cross-departmental.
And the idea of product managers existing without sales/engineering managers is nonsensical. Who would they talk to in those departments then?
Of course everybody tries to add value. But the point here is that product management is the only position that is explicitly cross-departmental, precisely to prevent departments from making decisions that seem to make sense internally but don't for the company as a whole.
Because experience shows that, without product managers, departments often do make decisions that make sense for the department but don't for the business as a whole.
At very small companies, the founder/CEO is often the de-facto product manager, but once you reach a certain scale you need to hire product managers to handle all the lateral communications and decisions, while the CEO focuses on things at the top.
I am understanding, I am disagreeing. I've worked at both "product-oriented" and "non product-oriented" companies, including as a product manager, and what you are saying applies to both.
> But the point here is that product management is the only position that is explicitly cross-departmental, precisely to prevent departments from making decisions that seem to make sense internally but don't for the company as a whole.
At non product-oriented companies, companies still have cross-departmental roles. This is sometimes a singular function (called something like central planning, pmo e.t.c.), but can also sit in cross-functional meetings for heads of departments, or sometimes there are divisional strategy teams which then meet, negotiate and divide back.
> At very small companies, the founder/CEO is often the de-facto product manager, but once you reach a certain scale you need to hire product managers to handle all the lateral communications and decisions, while the CEO focuses on things at the top.
Product Managers at large companies do not facilitate all lateral communications. They facilitate lateral discussions to and from product, for example between "logistics and product", or between "sales and product".
They won't facilitate the discussion between logistics and sales (i.e. "we need a bigger warehouse in 3 years"), or between retail and logistics ("your delivery is late") for instance (which requires other cross-departmental collaboration and planning).
> And the idea of product managers existing without sales/engineering managers is nonsensical. Who would they talk to in those departments then?
Exactly! All I mean is you can't use proof that product managers exist as proof that a company is product-oriented. I've worked in a company that wasn't product oriented that had product managers, and they still added plenty of value :)
My view is that you can have a product-oriented company without having any product managers, because product-orientation isn't to do with any of this stuff. It's to do with the company setting its primary goal to make the best product (i.e. making better things than competitors). It's the focus on building products that's the different thing, not the focus on customer or reducing silos.
As an example, an outsourcing cleaning contract company will not be product oriented, but will be customer oriented and will have an organisational structure that allows cross-departmental communication. They could also still have product owners and a 'product-led' IT division for instance.
I'm in agreement with pretty much everything @crazygringo has said.
I don't know if this will help, but if I can offer a clarification on why I think product-led id not synonymous to "customer-led" or "market led" is that it's not simply finding and responding to market demands.
You have different types of product managers (f. ex. I am kind of excluding "technical product managers" from this characterization), but typically, product needs to own and understand what customers want BUT be able to understand the tradeoffs, factor in what delivering that value actually entails* AND assess the opportunity cost of pursuing these features vs 1 000 000 possible ideas.
This is typically not the job of sales managers, engineering managers or marketing managers, etc. So product is the function that uses market demands + input from all these other managers, gets buy-in and then helps things go smoothly.
* Building a feature is only part of the cost of a feature. It has to be marketed, it has to be maintained, it has to be improved, etc.
Product-led is where users drive the full funnel of marketing, sales, and hopefully, product + engineering. Consider GitHub:
Marketing: You get invited to collab on a github repo and make an account. People share links to OSS repos you depend on. You see a Add CI/CD/Actions button on the PR review page and eventually click it.
Sales: You need to make a private repo, and convert from freemium. Your company grows, and so does your seat count. You hire a CISO, and they demand upgrading for SSO. You get a phone call that you added SSO but not scans. You get an email that they ran a scan, and here are the first 3 Caves on one of the 3 languages you use, and would you like a consultation on that + price optimization?
Product: Your actions are recorded by analytics for everything, your google searches mined, and basically you live under a digital microscope for where dropoffs and slow growth are around inbound, usage, conversion, internal growth, and churn. Pricing scales with value/use.
Engineering: Feature requests are tied to teams analyzing the above, both internal and external. Things like observability and fast deploys matter more as teams are explicitly interested in experimenting with users.
Product-led doesn't mandate other orgs go away nor freemium, but does emphasize flywheels around self-serve and usage patterns / funnels, which rethinks a lot. It requires heavy product market fit (and helps get there). For something like big b2b, that is super hard, but if you hit it, sales flips from slow, expensive, and oppositional top-down to more of a lead-rich, warm, and even automatic flow, which is amazing.
The original article showed a misleading view of product-led by doing a bad strawman, or maybe from pre-use/fit that's not tied to customers ("if you build it, they will come" is not product led). Product-led is generally slow (ex: SaaS) and hard to get fit, which is a tough spot and IMO why VC funding needs to be of a limited and patient sort for early stage. ("You're spending too much and need to do layoffs to get time to get to better fit" said no VC ever.) The article _does_ make a good point that value-driven leaps are tough, and doing 0-1 stuff requires different work than 1-n, and especially when product-driven.
- Product led growth makes it easier to launch a start-up. Global market, nice product features, some word-of-mouth publicity. That’s all it takes to launch a product led SaaS business.
- Product led growth is not just a go to market strategy, it's a complete business growth strategy. Product led everything, from product management and design to marketing and sales.
- The products must be built for the end users... Even if you are targeting a business, you need to remember that it is an individual who is going to use that product. And it is for these actual users for whom the product must be designed.
- When it comes to corporate buy vs team buy, team buy is much quicker and frictionless. Having a product that can be purchased by a team on their own is the best for product led growth. The scaling can come later when you have multiple teams within the same organization using your product.
- Each sale is a small ticket sale but this also enables people managing just a small or large team to decide whether they want to buy your product. As this decision is based on experienced value and not some perceived value promised by a sales guy, the success probability is really high.
- There are two things that product design teams need to ask themselves. One, can the user start with the product without any training or help video? If the answer to this one is yes, you are in a good place... Two, do I need to send the user outside the product for any information? If the answer to this one is yes, you are in trouble.
- The product led marketing has to happen inside the product, once the customer has signed up. Each and every aspect of the business must be thought out according to the user journey.
Disadvantages:
- On the face of it, product led growth sounds so doable that most startups begin with a very grand vision of what they wish to achieve. Whereas in reality, they need to start small and gradually step up to reach their grand vision.
- Churn is the biggest problem in product led growth. Churn rate is a good metric to judge how good your product execution is.
- Another disadvantage of product led growth strategy is that product execution must be stellar. If product experience is not great, users will move elsewhere.
Pivoting to Sales-led:
- Product led growth is capital efficient. It is very easy to go from 0 to 100 million in ARR. But beyond that sales led growth is more effective because the brand is set and it is easier to move to enterprise level.
- Once you have used the product led growth to find that wedge into the enterprises, you can consider sales led growth. The point to remember here is that demands on the product team increases dramatically once you pivot to sales led growth. You are no linger thinking of single workflows or single teams. Your focus must shift enterprise wide and there can be no compromise on API coverage, customization or integration.
