Think about your company for a moment. Is your product roadmap constantly disrupted by sales requests? Do you constantly prioritise customer requests for features? Do you measure success by the number of features you build, not the outcomes they deliver? Or does the product take shape entirely based on the vision of the founder?
If any of these sound familiar, you fall in the same box as lots of companies – your company is sales, tech or visionary led.
So what’s the problem?
Your approach has brought you this far, and it will keep things moving… for a while. But it’s not sustainable and will soon become a roadblock which will slow your growth.
When the time comes to scale and grow (and chances are you’re reading this because that’s where you are at now), being sales, tech or visionary led just won’t cut it - your functional teams will start to focus their precious energy on the wrong things. Features will be delivered, but they won’t hit the mark. Productivity will drop. Delivery teams will miss the market opportunities and, critically, business value will not be realised.
And all this because you’re not led by the one thing that really matters – Product!
What does it mean to be product-led?
Being product-led means your company uses the product to provide real value to the customer through constant customer- and technology-led innovation.
It means being guided by the potential of products and product teams. You create a vision that provides a common goal – a North Star for your product teams that delivers on the business goal. The product strategy then provides the plan to get there. It guides the tough choices and tradeoffs for what you will focus on to develop products or features that sustainably drive growth.
“The key to product is what you don't do…so that you can focus in and really do a good job on what you need to do.” Marty Cagan (source)
Becoming product-led has become an aspiration of many tech companies today. And if it isn’t your aspiration, it should be. The reason is simple:
Being product-led is the path to success.
You only need to look to many multi-billion dollar public and private enterprises that have been built on the foundations of a product-led approach, such as Shopify and Canva.
In fact, the cumulative market capitalisation of product-led-growth companies has increased more than 100 times over the past seven years.
How exactly does being product-led drive success?
Customer-centred: You have truly customer-centric thinking – the product roadmap and innovation process is driven by solving problems for the customer, not features and roadmaps defined by sales teams to get the next sale, or the business leaders’ preferences.
Focused: Decisions and trade offs are aligned to the vision and business strategy so you build the right thing and don’t waste time and resources.
Outcome-driven: The focus on outcomes, rather than features and outputs, drives sustainable growth.
Market value: You scale for a target market, with a focus on delivering long term value, rather than building for specific customer requests for short term results.
All of this works together to drive the all-important product-market fit – when you’ve made a product people want, and that drives a profit for the business. In other words, it delivers customer value and business value. Only when you have reached product-market fit can you truly think about growth and scaling your organisation.
Where are you now?
Most companies that are not product-led fall into three groups: sales led, tech led or visionary led. Which one are you?
See if any of these sound familiar:
Sales led: You prioritise customer requests without aligning to the overall strategy. Many companies start off this way and focus on a single customer. But as the customer base grows, it becomes increasingly difficult to build bespoke solutions for each customer and for your product teams to explore new ways to achieve product success.
Visionary led: You rely on a single ‘visionary’ to do all of the work of developing a powerful product strategy. Operating in this way is not sustainable. Equipping entire teams and organisations to solve problems together is much more powerful and sustainable for long-term product success.
Tech led: You are driven by the latest and most up-to-date technology to drive the product strategy. This is a risky approach, as you wind up developing products that have no clear value proposition, resulting in no customers.
What it looks like to be product-led
You have a clear vision that describes the future, focuses on the customer and provides a North Star for the organisation.
Your product strategy describes the path to achieving that vision, is insight-driven and focused with a clear action plan.
The teams are organised with clearly articulated customer-centric value streams.
The product roadmap supports the vision and strategic intent with a focus on delivering value. Initiatives talk to the outcomes which are goal and benefit oriented.
Cross functional teams are given problems to solve and held accountable for outcomes, rather than being given features to build and being measured on output. In other words, you fund teams, not projects.
Example: How we helped iSelect move from Sales-led to Product-led
When we met iSelect, they were sales-led. Teams focused on short-term feature delivery rather than long-term customer value. Internal departments had differing stances on areas of accountability, ownership and decision rights, and there was no aspirational vision to support a move towards a digital and customer centric future.
At the heart of their transition was the product vision. Propel delivered a transformative and meaningful product vision along with supporting principles, refreshed team topology, product roles and responsibilities, and measurable success metrics that have paved a clear way forward for iSelect to achieve uplift in product success.
We’ll delve deeper into this process in the next article, so you can understand what it takes to become product-led and see how Propel can help accelerate your journey.