👋 Hi, I’m Kyle from OpenView and welcome to my newsletter, Growth Unhinged. Every other week I take a closer look at what drives a SaaS company’s growth.

Earlier this year Pendo acquired Mind the Product, the world’s largest destination and community for product folks. 

Odd, right? What does a SaaS unicorn want to do with a 20-person media and community site? 

At first glance, this type of bet seems like a distraction and a sign that too much money has poured into the startup ecosystem in recent years. 🤑🔥

But Pendo isn’t an outlier. Lately we’ve seen loads of software companies—and PLG companies in particular—either buy or build their own media and community properties:

HubSpot Co-Founder and CTO Dharmesh Shah summed up the sentiment well. “Next-gen software companies will have a media company embedded inside,” he tweeted in October 2020. 

Along with my colleague Sanjiv Kalevar, partner at OpenView, I investigated why SaaS companies are racing to acquire media assets and how to make these acquisitions successful. Let’s dive in.

👉 Third-party media companies have cracked the code on attracting a large and highly engaged audience for very little cost.

Mind the Product reaches 300,000 product managers, designers, and developers. They manage conferences, content, newsletters, Slack groups, meetups, workshops, and more. Oh, and all of that is done with a staff of just 20. That's hard for any SaaS company to match in-house. 

Meanwhile, unlike SaaS companies, media companies often struggle to monetize their audience on their own. This makes them less expensive (low cost to buy) despite being strategically valuable. The result is a win-win.

👉 Media and community can be an incredible multiplier on a PLG strategy.

In PLG businesses, you're trying to add value for the end user and not just the executive buyer. It can be hard to reach end users with traditional growth tactics like outbound calling, paid ads, etc. That’s especially true as audiences change their content consumption behavior and competitors latch on to the same tried-and-true marketing practices. Why not get your brand in front of users where they already hang out?

👉 Vibrant user communities help just about every function of a SaaS company.

There’s been tremendous buzz about community-led growth as an accelerator to a PLG strategy. The best companies have a vibrant community around their products (see Figma, Notion, Airtable, Webflow, etc.). 

Peer communities are particularly important if you’re reaching a targeted audience (for example, a specific industry vertical or new user persona). You can play the role of educating and connecting these folks, which in turn helps nearly every function of your business. 

These types of communities reach new audiences who are highly qualified because they've interacted with current users. They create stickiness by increasing the switching costs associated with changing vendors. And they make users more successful with adopting your product for more and more use cases.