Peter Peter - Founder, UserActive

The Product-Led Growth Method with Wes Bush

Product-Led Growth Method with Wes Bush

Wes Bush is the bestselling author of Product-Led Growth: How To Build a Product That Sells Itself and is the leading expert on Product-Led Growth. In this interview, Wes talks us through the method he uses as he trains SaaS teams around the globe how to turn their product into a powerful growth engine.

[00:00:00.000] – Peter

Hello, everyone. I’m here today live with Wes Bush from productled.com. Thanks for joining us, Wes. Would you like to take a minute to introduce yourself and tell us a bit about what you do?

[00:00:09.600] – Wes

Yeah, absolutely. So I guess I am the obsessed person with all things product-led growth. I wrote the book on Product-Led Growth. We have a Product-Led Summit, which you’ve been an awesome speaker at, going through all your amazing experience around the product and growth space and how you design it and really give people the value. So, yeah, I’m obsessed about this stuff. I love it. And what we really focus on at productled.com is helping founders get to their first seven figures in self-serve revenue.

[00:00:38.430] – Peter

Fantastic.

[00:00:39.290] – Peter

First seven figures, okay. Is this bootstrapped or funded or is it a whole range?

[00:00:46.090] – Wes

Whatever.

[00:00:46.860] – Peter

However the SaaS companies are funded.

[00:00:49.860] – Wes

Yeah. It’s all over the spectrum. So you’ve had, like, companies with a boatload of funding and also just bootstrap founders, too, where they’re realising it’s like, you know, what the current way of scaling our business with the sales-led approach is very manual. We have to do everything. We got to hire. These expensive salespeople are like, I can only afford the product-led way. It’s both ends of the spectrum. People are like, this is the best way for me right now. And then also on the other end of, like, this is how we’re going to scale the best.

[00:01:16.470] – Peter

Yeah, great. It seems like in the last five years, the product-led kind of movement in SaaS has been huge. It’s been, like, the hot topic. I know you’ve been at the forefront of that, so you’ve shared a lot of your kind of thinking and ideas and innovative concepts around product-led growth. So I read your book, which I thought was fantastic, your original product-led growth book. And now I’m aware you’ve been developing some new concepts. I’d love to talk through those because I think they’ll be really helpful for SaaS founders in this space who want to create a more product-led SaaS business. So can you tell us a bit about the product-led method?

[00:01:56.050] – Wes

Yeah, absolutely.

[00:01:57.110] – Wes

So the first book I wrote on product-led growth is really just like, how to build a product that sells itself. And then over the years, it’s been four years since that time, we’ve helped hundreds of companies just try and implement this. And what we started to realise is, like, why are some companies really successful and other companies not? No matter how good we make onboarding or something like that, nothing sticks, or it just doesn’t work for them. And so we started looking at the companies we helped that didn’t work, and then the ones that really, really saw amazing value, and we started to say, what are the patterns?

And what we identified is there’s actually, like, nine main patterns and there’s actually a logical order to like, if you follow them, you can actually build a product-led business faster, scale your self-serve revenue faster. And so that’s what I’ve been developing, which is called the product-led method. And so it’s really three phases to it. There’s like phase one, which is like, okay, if you want to build this, you really have to build a growth blueprint, which really comes down to these three components, which is like, you need to get crystal clear on what is the vision of your company?

[00:03:01.870] – Wes

Is it like, for instance, a lot of product companies, it’s like, we want to make X accessible to everybody. It’s actually a part of your product strategy too, in a lot of ways that’s like connected to your vision and then your strategy get crystal clear on who is that customer and also that user that you’re actually helping.

And a lot of companies we’re helping are like, they didn’t have that vision component really well dialled in. And then the second kind of component there is the user component of just understanding, okay, who is that ideal user, what is user success look like for them? What’s their job to be done? Obviously it’s very important, but where do they get stuck? What are some of those big challenges? And then once you get that user component, what’s really, really helpful is understanding what is that model that would actually help that user basically become like supercharged in value.

So we look at video games like Mario, it’s like Mario picks up a flower and now he can spew fire, he can beat any bad guy. And it’s like, okay, that’s so awesome, but what could that look like in your product of like, what are you giving away for free?

[00:04:13.110] – Wes

What do you gate? And so those first three components kind of encompass your growth blueprint. And getting crystal clear on them actually puts you in a really great position to build that product that sells itself. And when you don’t do that, that’s where you get in hot water. Like, we’re giving away a lot of free stuff, but it’s not the right stuff or it doesn’t work and actually lead to that user value and user actually converting at one point.

[00:04:39.530] – Peter

Oh, great.

[00:04:40.320] – Peter

Okay, so you’ve got these three areas of vision, user and model. So you get crystal clear on the vision. You really understand the user. And then it’s all about defining what’s the right model for your SaaS is. That about the kind of acquisition revenue type model, how usage is based in the product and how it’s monetised.

[00:05:04.690] – Wes

So when developing your model, what we always start with is back to the user component. What is that user success look like? So you get like crystal clear on that as your entire team. And then what I like doing for the model part is break it down into three groups. It’s like, okay, so what are the beginner problems these people are going to encounter in order to get to that point, what are the intermediate problems they’re going to encounter to get to that user success? Advanced problems.

And so the goal is when you have that you actually have designed your product-led model, which is like everything that was under that beginner problem bucket to get them to that first level that’s free. And that’s the really roundabout way of understanding. What do we put in our free model? Is it a free trial? A free model? It’s like I don’t focus much on the label. It’s like, what’s the outcome for this user? Focus there and it will tell you the right model instead of obsessing about like, should it be freemium? Should it be a free trial? Although that’s a very popular blog post on my site and I know people think like that…

[00:06:06.050] – Wes

Take a step back and look at it from the other view.

[00:06:08.500] – Peter

Yeah, I know when people are getting into SaaS, there’s so much to learn. They start to learn about the models, the pricing methods and then you can tend to approach it from the wrong way, right? You learn the theory and then you’re thinking, which is the best one to use? But like you said, starting with the user understanding them and then creating something that fits to their use case and what they need to succeed really sounds like the right way to go around doing it. So you’ve got these three key areas and then did you say there are nine points within the product-led method in order to be successful? And is that three points in each of these key areas?

[00:06:48.840] – Wes

You got it.

[00:06:49.560] – Wes

So once you are clear on your growth blueprint just like a house, it’s like, okay, we’ve got our foundation, we’re ready to build now. And then the second part is like, okay, let’s build that growth engine and product that can sell itself. And so that also has three components and they’re very logical order, hopefully.

But the first one always starts with getting crystal clear on your offer. So a lot of times we have helped companies where it’s like, okay, let’s improve your onboarding and get people the value. But then they have this awful, very confusing, conflicting offer of like, what’s the values? Like transformation. X-Y-Z. Who is this for? What the heck is going to happen when I sign up? And no amount of good onboarding can help you if you have a bad offer. So start there, get crystal clear. And that all kind of comes back to ties back to the user component. If you’re really clear on that, you’ve done your research, that should actually be pretty easy to do. Obviously you’ve got to make sure it’s compelling and everything, but get clear on that for the offer, make it easy to sign up.

[00:07:53.420] – Wes

And that’s really the end outcome of the offer component is make it effortless to sign up for that ideal user and then the experience component is really where it gets fun. This is your wheelhouse, Peter.

[00:08:04.830] – Peter

Oh, that’s it.

[00:08:06.650] – Wes

Which is all about how do you actually get people to value and create that effortless path to value. And so that’s the fun part, where when it comes to product-led companies, that’s where the rubber meets the road. It’s like if you can’t figure out that experience component, game over. People won’t come back to your app ever again. And I think the stats, like 40-60% of people just don’t come back a second time. So that experience component, that’s really all about that onboarding, getting people to value and coming back the second time again and again. And then the third part is like, okay, good, you’ve got people in the door, you made it effortless to sign up, you made it effortless to onboard people, get them to value.

Now it’s all about how do we make it effortless to actually upgrade. And so having a public pricing page is like a starter, but actually tying the value of your product to what the user experiences is that next level and understanding, okay, as the user gets more value, we should be able to charge more. And what are the metrics we charge based on? What do we do to make that easy so that maybe somebody could start off with a very affordable plan and then as they grow, we could actually have a very lucrative customer here as we kind of expand the value that they receive.

[00:09:23.340] – Wes

So it’s all about growing customer value and aligning those incentives. And so those three components, your offer, experience and pricing component, really form the foundation of building that growth engine.

[00:09:36.230] – Peter

That’s great.

[00:09:36.950] – Peter

I love that. Okay, so you figure out your blueprint first, vision, you get clear on the user, then you kind of start to develop a model that fits to that user. And then the growth engine is really about almost like the product adoption, isn’t it? It’s like that user comes in, the offer is compelling, they see value, they sign up, they start to realise that the product is good and they can understand how it works and they can realise that it has an engaging product experience. And I love this part when you’re talking about the upgrade, because like you mentioned, we do the product experience area and we’re always designing upgrade flows to help.

Sometimes companies come to us and saying and they’ll say, hey, we get users in, but they don’t stick around. And we really find that often they don’t upgrade. And this is such a key area, understanding what parts of your product are most valuable to them, and then designing a flow that makes it really easy to go through that upgrade, identify the things that they need to select, and then go through the payment. This area is the part that I love the most.

[00:10:46.190] – Peter

And because I’m really familiar with it, I’m really curious about what your next phase is, because I wonder if this is going to be something around retention or reducing churn or kind of lifetime value. So let’s see what comes after growth engine.

[00:11:01.490] – Wes

Totally.

[00:11:02.120] – Wes

So once you build your growth engine, phase two, you move on to phase three, which is like all about exponential growth. And how do you actually scale this? Because a lot of folks and I made this mistake too, in my own business where I was like, okay, we have great sales and everything like that and then let’s scale this up. Let’s build a team. Let’s do all this stuff. And it was like crash and burn. It was too early. We hadn’t built that growth engine. And it wasn’t repeating its cycle. It was more of like these one-off, kind of like cohorts and stuff. And so that was something where it’s like, oh, okay, learn that one through experience.

But basically there’s three things here. The first one is you got to get really good data of what is going on in that growth engine. Where are people dropping off? Where are people struggling? Where can you basically add the most leverage? Everything starts with having the right data and a lot of early stage startups. It’s like if you’re just setting up your growth engine, you don’t need to worry about that just yet.

[00:12:02.630] – Wes

Obviously have the basics, kind of like analytics, but then get really hone in the dashboards, the scoreboards set up, accountability for everybody on your team of like, who owns what metric is part of this customer lifecycle funnel. And then once you have the data, it’s about setting up your growth process. So what are some of those experiments that you’d be running? How do you prioritise which ones you focus in on? How do you say, we’re going to invest a month of time doing this one? It’s high impact, but maybe also it’s super high leverage. You could add amazing parts or new revenue line to your business.

So how do you prioritise those experiments and do that consistently so that you’re consistently adding more and more rate experiments and seeing what works, what doesn’t. And then the last one is really team and you can’t build any incredible business without an incredible team as well. And so as you’re going through identifying the highest leverage opportunities and you have the experiments going back and forth, eventually you’re going to get to a point where you say, oh my goodness, we have so many potentially high impact experiments we could be launching.

[00:13:07.600] – Wes

And maybe if somebody owned this part of the growth engine, we could really grow faster. We could compound our growth faster. Now let’s find the onboarding specialist. Now let’s find the data engineer because we need better data to find better opportunities. Now let’s find the person who can get more sign ups for us, who’s really good at the copywriting side of things. And that’s when you can plug in people to the equation. And you have built this scalable monster that prints money, and it grows way faster. So the order here is like, it’s so important. And I wish I had this product-led method, like, way back, like, five years ago would have been useful, but yeah, I hope it was a good overview.

[00:13:50.590] – Peter

Hey, that’s fantastic. I really love it. So you start off with a good growth kind of blueprint, get clear on your vision. Then the growth engine, a lot of that’s focused around the product, making it really deliver value. And then you’ve got the exponential growth area where you’re looking at data. You’re finding out what are the levers that you can work on that are going to really provide consistent growth. And then you put the people in place to effectively execute on that and make sure that you achieve that growth. Hey, I love it.

So this is going to be in your next book, I believe. Can’t wait for that to come out. Are you planning to release a book this year?

[00:14:28.230] – Wes

Yes, it should be end of this year as you’re talking about morning routines. I’m working on it every morning now. Fantastic.

[00:14:35.150] – Peter

Okay, well, I look forward to that at the end of this year. And how can people connect with you and follow you or get in touch with learning about product-led growth or use your services to help them implement product-led growth in their SaaS?

[00:14:48.160] – Wes

Yeah, definitely.

[00:14:48.800] – Wes

If you’re looking to learn more about product-led growth, just check out productled.com. We have a tonne of free resources. All our books are free as well, so go hog wild on those. And then if you just want to follow along my journey as well, I post daily on LinkedIn as far as how we’re building productled.com and everything else.

[00:15:06.740] – Peter

Awesome. Okay, thanks so much. Yeah, go check out productled.com. Thanks, Wes for joining us. It was great to chat with you today.

Grab a free copy of the book: Product-Led Growth: How To Build a Product That Sells Itself

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