like a harder one As the financing climate is starting to bite, it’s time to ditch the “growth at any cost” mantra of the past decade. Telling investors about your viral user growth is no longer enough — they want to know how it translates into revenue, resiliency, and runway.
The lingering market uncertainty is a particularly loud wake-up call for founders pursuing product-driven growth. The go-to-market movement pioneered by the likes of Slack and Dropbox has revolutionized the way teams adopt and buy software. But even the best PLG products don’t drive their own viral popularity forever, and all companies ultimately face a similar challenge: to keep growing, you need to hire sales teams and build a pipeline.
As VC funding dries up, a particularly dangerous path lies ahead for PLG startups. Those on the path to revenue growth have no margin for error, and founders face a series of tough questions: which teams to deploy, when to do them, and how to set them up for success. These decisions will determine whether a PLG-driven startup will sink or swim.
I’ve spent more than two decades building, scaling, and consulting teams tasked with bringing software products to market. While it’s true that every business is different, there are a few similarities in every go-to-market journey I’ve been a part of.
Don’t be afraid of the demand plateau – plan it.
Here’s a roadmap founders can use to build on their PLG strategy and chart a path from product-driven popularity to sustainable profitability.
Increase the piece of the pie you can win now
The serviceable addressable market (SAM) is where the go-to-market journey really begins. The little brother of the total addressable market (TAM), a figure often thrown around during fundraising, the SAM is the piece of that pie you can win right now. It is vital to understand which market segments your product can appeal to and your go-to-market team can address.
To get that insight, here are a few questions you should ask:
- What qualities do our existing customers share?
- What problems are they currently facing?
- How do they go about adopting and buying software?
Invest the time to establish the criteria that define your ideal customer profile. Finding your SAM is an ongoing process, especially as your team and product capabilities expand, but gaining a clear understanding of your original SAM is milestone No. 1 in your go-to-market journey.
Qualify your best leads
Your search for the SAM should have given you an idea of the logins you’re trying to make, and with a bit of luck, you’ve won some active users. Now that your acquisition channels are up and running, the next milestone in your go-to-market journey is to define a product-qualified lead (PQL).