Product-led growth (PLG) has emerged as the buzzword of 2021.
In OpenView’s 2020 SaaS benchmarks, we pointed out that public markets were starting to take notice of product-led companies. The companies on OpenView’s PLG index traded at a 50% revenue multiple premium to their SaaS peers, with the valuation gap widening over the course of the year. Buoyed by the siren call of premium valuations, investors and operators alike started to take PLG seriously.
Tomasz Tunguz predicted that in 2021, "Product-led growth becomes the standard GTM for software and infrastructure companies."
Bessemer called product-led growth one of “three GTM strategies top cloud companies employ in the New Normal” in their State of the Cloud report.
There are now more than 400 job postings looking specifically for PLG expertise, up from 100 at the end of 2020, including roles at large SaaS companies like ServiceNow, Toast, and UserTesting.
But most companies have only dipped their toe into the PLG waters rather than diving head first. They tend to hire a Head of Product Growth, launch a free trial or freemium product, and then wait for the market to take notice. Only 27% of SaaS companies say that product-led growth is fundamental to their business, a number that hasn’t increased year-over-year.
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