In recent years, the terms "product-led" and "product-led growth" (PLG) have become buzzwords in the tech industry. Unfortunately, these terms are often conflated, leading to confusion and misapplication of strategies. Today, we're going to set the record straight: product-led is fundamentally about being customer-led, and it's distinct from PLG. Let's dive in.

The Misunderstanding

There's a growing trend of companies claiming to be "PLG" when they're not. This stems from a misunderstanding of what it means to be product-led versus employing a product-led growth strategy. As one founder recently (and incorrectly) stated, "PLG is the same as being Product-Led: We can ignore the word 'Growth' because Startup = Growth."

This isn't just semantics – it's a fundamental misunderstanding that can lead companies astray in their strategic decisions.

Product-Led

Being product-led is about how a company makes decisions. In a product-led organization, the product team drives decisions based on customer needs and research. It's an internal-facing approach that shapes the company's culture and priorities.

Product-Led Growth (PLG)

PLG, on the other hand, is about how customers can procure and adopt a product. It's characterized by a low-friction, self-serve model with quick value realization. PLG is an external-facing go-to-market strategy.

Why Product-Led is Really Customer-Led

At its core, being product-led means being customer-led. Here's why:

1. Customer-Centric Decision Making: In a product-led organization, decisions are based on customer research and feedback. The focus is on solving real customer problems, not just building features for the sake of it.

2. Continuous Customer Discovery: Product-led companies emphasize ongoing customer interviews and data analysis. They take an iterative approach to product development based on customer insights.

3. Prioritizing Customer Experience: User-friendly design, intuitive interfaces, and streamlined onboarding are hallmarks of product-led companies. The goal is to make the product as valuable and easy to use as possible for the customer.

4. Measuring Customer Success: Product-led organizations focus on metrics that reflect customer value and satisfaction. They align product development with customer outcomes, not just internal goals.

   
   

The Distinction from Product-Led Growth

While product-led and PLG may sound similar, they're fundamentally different:

1. Decision-Making vs. Go-to-Market Strategy: Being product-led is about internal decision-making processes. PLG is an external strategy for customer acquisition and expansion.

2. Company Culture vs. Business Model: Product-led shapes overall company culture and priorities. PLG defines how the product is sold and distributed.

3. Applicability Across Industries: Any company can be product-led. PLG, however, is more suited to certain software and SaaS products.

4. Human Touch: Product-led companies can (and often do) incorporate high-touch customer interactions. PLG typically minimizes human intervention in the sales process.

   
   

Common Misconceptions

Let's clear up some common misconceptions:

• Being product-led doesn't mean you can't have a sales team. Many product-led companies have robust sales organizations.

• Product-led companies can still have strong engineering or marketing functions. Being product-led doesn't diminish these areas; it just means product decisions aren't dictated by them.

  
  

Examples

Consider Apple. They're famously product-led, with a strong focus on user experience and solving customer problems.

However, they're not a PLG company – you can't simply sign up online and start using most Apple products for free.

Conversely, many PLG companies aren't truly product-led. They may offer a self-serve model, but their internal decision-making might still be driven by sales or engineering priorities rather than customer needs.

Conclusion

Being product-led means being customer-led. It's about putting the customer at the center of your decision-making process, not just your acquisition strategy. While PLG can be an effective go-to-market approach for some companies, it's not synonymous with being product-led.

As you consider your company's approach, focus on truly understanding and solving customer problems rather than adhering to buzzwords. Remember, both product-led and PLG approaches have their place, but understanding the distinction is crucial for strategic clarity.

In the end, the most successful companies are those that truly understand and serve their customers, regardless of the label they use to describe their approach.

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