Panel Discussion: Product Led Growth @CPO Conference Berlin 2023

Great hello everybody, it's a pleasure to be here. So we would like to give a quick intro on what you can expect from this panel. So first of all a quick introduction of the Product Bakery Podcast and our lovely guest today and then we will just jump right into the topics and questions that we have prepared about product growth. So my name is Christian, I'm a product strategy coach and psychotherapist and hosting since 2020 the Product Bakery Podcast together with Alex Lapund who is a VP user experience and brand at the company called Moonfair. Yeah and to give you some background in 2020 Alex and I came together after we worked for two years together at SumUp as product manager and design lead. We were facing a lot of challenges back then when we worked together and in order to stay on top of things we visited a lot of conferences and tried to get new inputs, new experiences and also exchange knowledge and problems with colleagues. And what we realized back then was that every time I was at a product conference we were also talking about design. Every time we were at design conferences people talked about products and also marketing and we always came back and realized it would have been so great to have you had with the conference but it wasn't the case so the logical next step for us was to start our own conference which we haven't done by the way. But the minimum viable product we came up with was to start with an interface which is our podcast these days to bring people from different backgrounds together from different departments and also from different roles to look at the whole product development process as holistically as possible. And if you think that makes sense you would love to invite you to scan this QR code and follow us and we are also always looking for great speakers to share as much product knowledge as possible with the whole world. So yeah, Alex that was the introduction and self-promotion is there anything I missed? No I mean I think I feel honored that I can be here between all these product people with my design background and yeah it's actually also nice I mean usually we do a lot of like interviews with people on zoom calls so it's cool to have a proper panel and have you guys sitting here and well it's also my pleasure to quickly introduce you I mean I had to take down some notes on what you did and what your careers are like because I think across all of you there's probably no industry that you haven't worked in so yeah I mean starting with Belen you work like with companies like Bubble and SoundCloud you're now the VP product of MicroWars which is online school for remote devs from what I understood you only pay when you actually get the job at the end which is a pretty interesting model compared to a lot of bootcamps and stuff that we see out there for devs. Ryan on I think over three years as CPO for Wend which is a cloud-based point of sale solution now CPO at Clue menstrual health app if I understood this correctly and Mirella who works who founded actually product people and I mean you took a lot of like interim positions at companies like here Zalando and so on so I think we have a really good experience sitting here with us as we already started talking about product let's growth I think I would start with the question of what the key characteristics are for product-led growth strategy and I mean as you already have the microphone maybe you can start. Key characteristics, this is on, well it's lighted but otherwise I'll speak louder. I could I could just close my eyes and think about what were you sharing Adam and I think one part that for me at least resonate with applying this in a product in in real life which is a bit different from reading slides from a reforge course it needs to be compounding the big difference between like what marketing has been doing over over the last decades and product-led growth is that it needs to have a compounding effect it cannot be a linear mechanic where you get an incremental growth for every one marketing dollar or or one step that your user takes so it's normally about designing this this ways in which the the output of your of your loop or of your cycle has to be greater than than the input that you're putting otherwise you just have linear growth that's marketing we know how it works the bigger part for me when when understanding how to apply this to companies was that unlike older marketing strategies it's not this one-size-fit-all where you know we discover a new channel and every company rushes to apply it I remember working with Prasad at Babbel and 2015-2017 everyone was crazy about content marketing so everyone was doing content marketing there's this one ad with my little photo that still like chases me down the internet yeah and then like diminishing returns right because everyone's doing content marketing and everyone's everyone's trying that and the cost cost per click go up and there's nothing to do there product-led growth needs to understand what are your company strengths what are your share capabilities are you a content creation company like Spotify then can you use that to generate those loops are you are you a company where does your company add value and how are you using that by to bring people organically and the most beautiful part that will make marketing die as that I was saying I think is the fact that is is independent from from those economic dynamics if you were close to marketing teams when during the pandemic you saw that a lot of marketing companies were were losing their budgets and all of a sudden doing marketing became a lot cheaper and there are moments where you have your strategy perfectly set up and all of a sudden within a month we will have dates their algorithm and and yours your budget just goes to the drain because yeah the market is just that you're dependent on what the market is going to put as a price where product-led grow allows you to grow dependent on user behavior that's the part that might might change what's happening with you but since humans are a lot more predictable than economic markets then yeah you're a bit safer there beautiful I mean wondering also Mirella considering that you're working across a lot of different companies like do you see also differences there or how do you approach making sure to find exactly what is right for for the businesses sure maybe first starting with the why why is it important all of a sudden first because this is switched from growth at all costs to please be profitable or we shut you down or we bring someone else in as CPO or CEO and we've seen this across lots of the clients that we work with or companies are being sold acquired by various private equity players or there are lots of merger acquisitions happening and all of a sudden everything becomes like this can of beans to see how much margin you can make on it if you are making margin and else how how can you start having it profitable so I think one of the parts that we try to teach our product people to our employees is that we need to be pragmatic so it's it's not just a fad and going back we don't have a superb live stream that you can find on YouTube she says fall in love with your PNL and I think that's the more pragmatic part right how do you make money what are the core things and you said something very valuable that the business model you have hardens everything you can do with your product so if if you rely on certain things to happen for you to make money then you can't like do other things you you need to activate that and you see what product let growth tactics you can activate that work with your business model and some may not work because otherwise I love the example of slack right where it's all this bottom up but sometimes it's not right so so they're like a lot of tactics a lot of things that we see at clients everyone wants to do referrals but in which case the referrals work right you can also just lose a lot of money on referrals and get customers that are not your ideal customer profiles or we churn after the first order where they put in the coupon and you lost money on that order that that would be more of the background that we see of course in b2b this has become more common also because there was this migration of the user becoming sometimes the buyer or becoming the influencer if you think of a SAS tooling like Miro or the slack example that was given earlier so that's indeed a trend and there's a bit more pressure on this SAS tools to to become easier to acquire and buy online or at least to freemium to trial or one of those but most importantly we should be aware of the current economic situation that's pushing this pressure on not necessarily only marketing so I think marketing has still a place maybe in this PLG model it went from being on the top of the funnel into marketing messaging needing to be consistent across the activation renewal retention loop right so on the R so that would be more of you can't have just like a landing page with some messaging and then it puts them on a user onboarding funnel that says something completely different and doesn't deliver on the promises of course yeah that's that's maybe obvious even if it's not obvious on how some people do it I hope that helps over to you Yeah, I was just wondering, Brandon, you have 8 million active users and I was just wondering, are there a lot of aha moments that your customers have or are you still focusing on pushing via marketing channels? Hello, hi everyone, thank you so much for having us here if you have any problems with my accent it's because I'm from New Zealand and if I go too quickly when I arrived last year in Germany this whole thing about Germans being very direct it's not true everybody sat in the meetings and smiled and nodded smiled and nodded light feedback but maybe it's not so easy so please please tell me and actually the thing the point you were making about the power of PLG being that you are marketing disintermediates you right like there's the whole point it's why it's called media you are mediated in terms of your attempt to communicate with someone who you're trying to offer a product or service to and I have a brilliant example of where this happened to us last year so clue is a period tracking app, we have 10.5 11 million monthly active users across the world and we help people manage something that's pretty important for literally half the world's population in fact 51% of the world will have periods at some point in their lives and we last year we were doing brilliantly in terms of our optimizing our Google campaigns we were getting close to that mythical positive unit economics I had this beautiful slide at the board meeting in the summer and I was like yeah we're nearly there we're gonna push it we're gonna pull the money in the board was excited I was excited Google flagged one of our campaigns for inappropriate content this happens to us all the time I I don't I don't think it's inappropriate to talk about a biological reality that happens to people but this happens to us regularly when that happens they stop all the campaigns we have to go through it happens with Facebook it happens with Google it happens with Apple we then have to go through a whole process and of course all of that time and energy and effort that you put into building up that campaign and that optimizing just gets blown out the water right and you end up going backwards in terms of unit economics but when people come into our product we don't have to deal with somebody else's judgment about whether or not it's appropriate to talk about periods like we can talk about it with the user there and then and so we don't have to constantly be kind of at someone else's mercy I mean this is such when you raise that point I was like yes because we've suffered from that in our business very much so for us in terms of the aha moments I mean tracking is our superpower and people come in what's super interesting about clue is that people come in obviously with a very clear purpose in mind and very interestingly we see that people who download the app when they have their period are more sticky than people who download it when they don't which is a fascinating behavioral thing because we suspect it's because you get instant input right like you put in your your data and you instantly see it adapting to you but there are kind of two there are two types of users in terms of their aha moment there are some folks who see it and they can put some data in and they're like tracking is the aha moment the primary aha moment but there is a secondary aha moment which is around accuracy and predictions and that is that takes a while right like the algorithm itself adapts pretty quickly but it does take probably three months before you get really good really good predictions and really good data and women and people with cycles are not stupid like they know that right they know that they're not going to get an accurate prediction the first well they can actually get a very accurate prediction but they know it'll get better and so they will often say I downloaded it I had a look and I give it a couple of months they will usually run more than one app at the same time to judge accuracy between the apps and then decide which one works best for them so there are these kind of two stages of aha moments the tracking and entering some data and seeing the app change and then giving it a bit more time and seeing does it deliver on the promise and we see that in the payment behavior as well right so there are people who will come and they'll subscribe straight away because I think I want the premium version I want all of the things behind the paywall and then there are others who say I'm gonna wait and see are you accurate enough two to four months then we see another judgment moment in terms of the PLG funnel if you like it's super interesting also from from your experience you you're working for many companies and I believe you have also a lot of insights and I was just wondering from your perspective what do product leads need to do to establish to become more product-led within companies I'm gonna give you this microphone because it's louder yes it's louder Wow all right so we're going to pass this on I would say start with a product that has already market fit right because maybe people haven't done this before but it doesn't make sense to optimize or start driving people into something that where you haven't discovered product market fit pretty generic question so I'm going to give a bit of the consultant answer which it depends right I don't know if companies like want to dive directly into this or want to trial it out for example I've noticed the larger companies trial things out with a few teams if that works out and they consider expanding it later so that could be something done with a product line other things that have been successful if I'm thinking in the b2b model where you'd have a sales team at some contract value onwards maybe worth adjusting also the incentives of this sales team that they still get their bonuses or their provision even if they don't sell that much because at some point if you have this transition successful then it's possible that for low value accounts the funnel and the product take over the selling and upselling which would then free up sales capacity for focusing on enterprise if that is the point for b2c it I would say depends looking we kept discussing the aha moment but also which parts of the onboarding funnel or activation as well then retention renewal referral can you double down on so that you don't need to pay for ads all the time for example at Zalando I did a maternity cover where the business unit I was in focused on user engagement and retaining them not not selling so we didn't have conversion to buying something our North Star metric was the number of people with two plus interaction within seven days so they came within our premises which was a mix of Instagram and Pinterest with also some outfits generated algorithmically so we looked at how many of these images that people consume within seven days and the two plus was the metric that the whole business unit went to so we tried maximizing that right getting more of our people to come back more of them to click and with that saving the money you would pay on Instagram and interest to Instagram and Pinterest to acquire these people to come back when they're bored and looking for fashion inspiration so I hope I gave a b2b and b2c example with that how to apply to a company well I was thinking more like what it took us to do it at Babel right now the product I lead has a bit less of those dynamics but I think it took us about I can remember like 2019 and starting to talk about this very actively in things like the company and for me two main things to make it successful were to educate our leadership because the reality of product led is that you are you need to change product dynamics for this to work really well so like you work for Dropbox because a key part of Dropbox activation was that for you for this product to be valuable you needed to invite other people in it so you automatically had this dynamic where I acquire Mirella and Mirella brings me three people and I'm in this virtuous circle of growing it with it with a much higher return than what I've put in but that requires changing the product itself and so it requires aligning with a bunch of different people and unless people are on board with you on the benefits of what you're doing it's going to take a lot of explaining a lot of stakeholder management to actually get people on board on the key changes that you want to do and yeah educating leadership specifically but within the product team is one and then yeah another big learning from from applying specific let's say models from from Reforge was to actually model these things up front there are a lot of these changes that are an investment for the product and normally growth teams come from this marketing mindset of let me do tactics and hack things and and test and trial and convert and put like this price page versus that price page and here the CTA is orange and here the CTA is purple and one color must convert more and this works quickly when you're when you're in a funnel and you can bring a ton of traffic to something but it is really costly to do product development like that so for me the magic tool was to be very judicious about modeling how a how a product loop would work in in theory and really realize and through numbers confirm okay this is the most valuable one from the seven ideas that my team has we're not going to implement the seven we're going to focus on two because these are the ones that actually touch on our product leverages for example the points where we actually get a lot of product traffic this is one feature that gets a lot of people in and so that's the point that I should be maximizing that I can use as a leverage to to grow beautiful and I mean maybe because we've also heard like how important it is to work with the stakeholders and to convince them or to somehow get them I get their buy-in like how would you say that do you approach this when you talk to let it be the CMO or the sales organization like how do you also advocate for this product let's growth well can I just put a little pitch here for Morella's how to manage stakeholders presentation I share it with my team the other day after you said it to me again they were like this is amazing we need to do all of this I mean we are only product lead growth right we're a B2C app which means that the price point is super low so there is no CMO and there is no sales org there's me and the product org it's so this is very makes the convincing easier yeah well yes yes and the the changes that we've had to do so kind of the question around how do we so Clue has been around for quite a while and it's a very strongly mission-led company now I have a very strong belief that you can't fulfill your mission if you can't stand on your own two feet and you know I think the the kind of macroeconomic situation is of the same view at the moment in quite a harsh way for everyone and Clue has been moving towards that understanding for quite some time you know the first few years of Clue was just kind of like grow don't even think about it money will come because we are delivering on this mission for the world which is a really important mission and you know money won't just come unless you're delivering value to people and you can't live that mission unless you're around and sustainable so so for us the the things that we do in terms of making sure that the product leads are able to drive product lead growth obviously metrics metrics and huge amount of data and a lot of data around where everybody is at in the funnel but the changes that we've made have been one explicitly very commercial and one explicitly not like not in the analytics data to the point you were making around if you just change the colors of the buttons it tells you something but it doesn't tell you a deeper question about why so for example the very explicitly commercial thing is that we have started saying we have KPI the the teams on eyeballs on the buy screen right like the more times people see a buy screen the more likely they are to buy Clue had always been very oh we don't want to tell people that we have a paid product that might offend them yeah okay but if we're not there we don't have the data there that's going to feed them even more so maybe we should start looking at how often and when we started measuring that we found to our my horror that 45% of me you hadn't seen a buy screen once in the last year 45% of people using the product hadn't even seen the buy screen once in a year like come on I mean we all use free apps and we're all used to seeing buy screens it's not offensive right so so now we have those kinds of KPIs like is your team is the buy screen are people seeing the buy screen and at the right time and is it working so that's the explicitly commercial but the other side of that is that hordes of data will tell you what people are doing but I won't tell you why and that why is really important like the why are people there with the product what is the job to be done yeah sure there's the like the surface job track my period but but why like what is the benefit that people need out of that what is the emotional job that they need to be done so we spent a huge amount of time and very in-depth one-on-one conversations with users we we all interview users every week it's a it's a core commitment in our team I interview users every week you know everyone it's it's something that we do and we've spent a lot of time exploring what is willingness to pay because willingness to pay kind of can show up in the data but it for a product like ours great we've got millions of people going through things and we can see when they when they subscribe or when they don't subscribe and when they churn but it doesn't doesn't really tell us why it's the willingness to pay mental model that we needed to really get to the bottom of fascinatingly willingness to pay in our space users have a very consistent mental model across cultures across geos across languages it's really amazing you know free is broad and shallow I should be able to do quite a lot of things to quite a kind of shallow depth and I'm willing to pay if I want to go really deep and I want something really personalized once you have that kind of model it's really easy to prioritize and figure out like okay we need to do this stuff to drive you may you and this is where we will get value and this is where we will drive conversion and retention right because they're the same retention and conversion are not always the same in my previous product fixing retention was not necessarily the same about conversion but for clue they are the same decision just two different points in time right so so that's where we where we've gone really deep and how we've enabled the team to be really focused on this product lead growth and moving from a mindset of you know is it to like it's the ultimate product market fit someone's willing to put some of their hard-earned cash towards something that you're providing then I feel proud of it I feel like well I've actually you know we've built something that's valuable so that's been a push beautiful I mean just because we're also talking a bit KPIs here and I mean I think part of this whole conference is also around AI so I'm like wondering is any of you already using AI to collect or analyze the data that you have in your product I have a controversial view so if someone else doesn't we leave controversial I like I mean I think it's the cool new toy and you know I don't I have a real real dislike of anything that in product teams that product managers can use to abstract away the hard grind and work of product management you cannot get anyone else to do the analysis for you you cannot get someone else to do the communication for you there is no tool like there is no cool maybe AI will do it people say anything's like well you know we've got all this insight now we're talking to users all the time we have hundreds of pages of transcript we have all this like maybe we should run a tool over it and get the concise insights I'm like no maybe you should read that transcript and talk to that user and for yourself internalize what is going on with our users because anything it's this point about mediation again right like anything it's abstraction as a layer of abstraction or removal from the user and product managers should be closer and closer and closer not further and further away like do the work this is the work of product is being really close to what is going on what the data is you can't palm that off to someone else or something else like that is the value that product should bring so sure maybe AI I can do it but until my PMS are doing it like really beautifully and are smashing it out of the park and I don't know then there's a reason for them to like no not my team not in the short term so they need to earn to be able to use AI you can play with AI when you've developed a product like growth cycle yeah I have a little bit of your view in fact I was thinking I saw your question because obviously we heard this questions before and we have seen them I was actually honestly comfortable to be between two women and normally you get this like what is like San Francisco tech bro whose ego is very connected to the valuation of their company who must have AI as part of of their slides and it's it's it's an archetype and hopefully it's also in decline like the dinosaurs but but you could you should ask yourself it really adds value right for in at microverse we're a coding Academy for developing markets we are training people in in Latin America and in Africa to become developers because talent is everywhere but opportunities are not and we have no purpose for now to find our data like this but we're finding that we can teach people communication skills and and how to behave in a class a lot better through AI tools poise fathom all of these tools that I don't know if you have used them but otherwise like I absolutely come in because there are really fun products to work with they hear you through a call and they give you feedback at the end of the call and they tell you your tone was too demanding or your energy was actually helpful you use too many filler words or and this is a type of feedback that no matter how much we adapted we cannot provide on a scalable will to an entire cohort of learners at a user base and I think that's where AI machine learning deep learning natural language processing is actually going to bring value rather than shoehorn it and on top of your thing I got made fun of from my employees for doing too many trying to do too many things with judge TP tree when it first got the buzz there are still some things that worked out so since we're b2b we get tons of clients in our funnel that kind of want to do something but they don't know what they want to do and worst fit the client is the more demanding they are with questions and proposals is they want in advance have you had that okay you've been in b2b all right so if if we we don't have a lot of overhead position right so we've been bootstrap from the beginning even if we're at 40 people we have currently no sales people to handle that so if someone doesn't look like they would want to work with us in in a way that we can provide value then I also start giving them less attention so it was like one of these case specifically that kept replying with questions and at some point I told someone hey please send the proposal but use judge ATP and then I saw this email like with a very it was very verbose email of course we corrected a few things from there but that was one case where I would have not answered to that prospect anymore and after two months I think they became like a very low ticket size client so judge ATP helped with that specific thing but they're still not an ideal customer profile so in a way it didn't pan out that everyone in in that funnel spend time on them yet maybe later and aside from that I totally agree with parts that you can automate very small interaction and make it more of an sidekick rather than the main thing and it gives out still a lot of incorrect things or in some cases I just personally don't agree with what it proposes but we did instruct our people to try it out and be familiar with that because they're going to run into it at clients and it's better to already be ahead of the client at least for five minutes over yeah thank you and I'm actually very happy to hear your opinions because there is a lot of hype around AI and it's definitely coming and useful for for many use cases but in product there are still a couple of question marks I would say so to wrap that up we have also had a conversation with with Adam recently to talk about product growth in combination with AI which is our recent podcast episode so free to tune in and thank you very much thanks for having us