276 How to build a SaaS product that sells itself | Podcast with Wes Bush - ProductLed

Hello everyone, my name is Christian. Welcome back to Tech Pond. Today I'm super excited because we invited Wes Bush, the founder and CEO at ProductLed and the recent book author of ProductLed Playbook, on our podcast. Wes, it's a pleasure to have you.

Yes, thanks so much for having me. I'm excited.

At first, for anybody that doesn't know you in SaaS, probably you are one of the most prominent figures in, in the industry. Please tell us what you do and yeah.

Yes, so I'm known as the product-led growth guy because like a long time ago I wrote the bestselling book on product-led growth, and then, uh, we founded the company productled.com to kind of help more companies build and scale their PLG motions. And since then we've launched two other books, one on product-led onboarding to help people with their onboarding approach. Then the new one that just came out yesterday is the Product Playbook that just kind of breaks down the step-by-step playbook you need to do to build and scale a product-led business. So I would just say I'm a little obsessed with product-led growth and I absolutely love it when it comes to helping companies with this. So yeah, that's my short introduction.

That's amazing. That's amazing. First of all, let's, let's talk about the books. So you have 3 books, right? And the latest one is an actual playbook on how companies can build their, their motion, right?

Yes, for sure. It's like very tactical, strategic as far as how you actually do it.

So first of all, who is it for? Who can do product-led? What is product-led actually?

Yeah, so product-led growth, if you're not sure what it is, many people would define it as it's where you use your product to acquire, engage, monetize users. So a lot of times that looks like it's like a free trial, it's a freemium model or something like that. Essentially what it does is it allows you to try before you buy. Now for the second part of that question, like who is it for? Is it for everyone? Right now, like the product-led growth movement is like really happening in like the software as a service space. And so like that's pretty common where you see it, but where I've actually seen it work really well is so many other industries that you don't even think about product-led growth. Like if you, since I travel a lot, like I go to the airport, you see like the duty-free section with like the cologne, perfume, like, okay, I'll smell some of these. And it's like, what is that? It's literally a product that grows. Yes, it's, it's a form of it. And so we've been exposed to this all the time. And so I just think it's becoming a lot more accessible to companies. And when it comes to like the should you do it or not, we recently ran this survey and we found that Actually, 97% of B2B buyers would prefer to like try before you buy versus talk to someone in sales. And so that's where the market's heading. And should you consider it? Should you do it? Uh, most times the answer is yes. There is like obviously some things where it's like it's not broad stroke, everybody should do it, but, uh, most times that does make sense for your business to consider it at least.

Amazing. So 93% of buyers or '97.

Yes.

'97. Wow. And B2B, we're talking about B2B, not consumers, right?

Yeah. And in the prosumer space, when it comes to like apps and everything else like that, product growth was like alive and well, thriving well before B2B. It's just kind of come to the B2B software as a service space because it's become a bit easier to do. But yeah, people, that was the only way some of those how businesses could function.

And when do you think this switch happened from B2C to B2B or what caused it?

Yeah, I think it just comes down to buyer preferences and also competition at the end of the day. So when you look at software as a service, like way back, like let's go 20 years back, there was actually not a lot of vendors. It was very expensive to create the software. And so there was just not as many options for everything. And so as a result, it was a lot more expensive to buy. Buy these solutions. Whereas nowadays, the tables have completely changed. And so now they're for every single software category, you would know this at TechCon, there's hundreds of options. And so now it's actually deciding like, which one is the best one. And in that environment, it's like it's gone from a seller market to a buyer's market. And it's like whatever the buyers want, the buyer preferences of how they want to buy, that becomes a lot more important in this kind of market. And so you either have to adapt or you try just doing your own kind of sales, like go-to-market motion, which people don't want. And then that is a hard way to grow your business.

Absolutely. And great answer. Thank you. Thank you for sharing this. And I'm curious about your services that you provide. Is it only for B2B SaaS companies?

Right now, yes. We focus specifically on B2B SaaS companies. As I say that, I'm like, Is it only like in the future ever going to be that? No, it's just where we decided to focus right now.

And I saw a statistic or something that you helped companies generate over $1 billion in PLG revenue, right? Something like that.

Yeah, absolutely. Completely self-serve revenue.

That's amazing. That's amazing. And how can companies start to implement this? Let's take an example. It can be any B2B SaaS tool. So far they had the book, book a demo or book a call button and now they're trying to switch to PLG.

Yeah, absolutely. So there's 9 things we've identified that are really critical to building and scaling a product-led business. And I can go through all of them pretty quickly and just give you like a high-level overview of how to think about how to do this. So whether you are thinking about scaling PLG in your business or you already have a motion, you're like, how do we scale this up? It actually follows the same order and the order here matters. So the very first thing you gotta do is just your strategy. What is your company level strategy? How does it connect to how you're gonna win? Do you have a very specific way of like how you're going to win, dominate your specific market? Do you know what that market is, who it's serving for? And so you gotta get really, really clear on your strategy. Now once you're clear on that, the second kind of big step is Understand who your ideal user is, not your buyer, but the user, the person who's actually gonna get the most value out of it. You gotta know them really, really well and understand what their endgame is, what success looks like for them. Once you know that, then you can move on to the third step, which is like going through your model. Like what would that user need in order to feel like if they signed up for your free version, they would walk away feeling transformed, at least a little bit where they're like, oh, I can now do these things that I couldn't do before. And the best product-led businesses out there, they, when you sign up for them, it's like night and day difference between like, you don't think about like ChatGPT, like in that sense, it's like a perfect example. It's like there is pre-life before ChatGPT and then there's like addiction. Like I'm using this all the time and you can't imagine life without it. So the best models work like that. Those are the first 3 things. Now, once you lock that down, the next thing is you gotta go through your offer. So is it irresistible? Is it something that ideal user really, really wants? The problem is most companies, they decide not to be very specific in who they're targeting, so their offer is kind of vanilla anyway. So once you get really specific on who that offer is for and tie it with a great model, it becomes irresistible. And then once you get that, you have happy people who are motivated signing up, Then we gotta talk about your onboarding. How do you get people to value in that free product? And so that's really important because as we know, if you sign up for free products, you don't get the value. It's just, you just don't go back to that product. And so that's the next step. And then you go through pricing is the sixth piece. And pricing is like, okay, once you get them value, how do we make it self-serve? How do we make it really easy for them to kind of pull out the credit card on their own and swipe it and have full confidence that like, yes, this is exactly what I need. And I know exactly what I'm getting charged and it's fair. And so that's kind of the first 6 ones where most people get stuck. The last 3 are just about how do we scale this up? And so once you have that, you can move into the data side. And that's the 7th component where it's like, what's your biggest bottleneck in your go-to-market motion? Where are people dropping off? Once you know that, then the 8th one is all about your growth process. So now that we always know the biggest bottleneck, How can we accelerate experimentation inside the company to attack that bottleneck at all times? And the cool thing about this is that those first kind of 8 pieces that we work through, you're actually gonna be solving most of your problems with the product. And so the last one, the 9th component is all about the team. And so it's last for a reason because you can create the most leverage without adding additional headcount in a product-led motion. but of course once you find like a channel or something like that, you're like, man, like these ads on Facebook or Meta, like they're crushing it. Maybe we hire a specialist or somebody to just take that to the next level. And so you can add in team members at the last part of this. And overall, like those are those 9 things we work on with teams to just go through and help them implement them much faster.

That's amazing. And you can find all of this into the book, I can imagine, right?

That is the book. And that's actually us trying to eat our own dog food with our PLG motion because This book, it's like the whole goal is like we're trying to make it so that we can afford to give this away for free to anybody who's like a B2B SaaS founder. And you can DIY it yourself if you want, or if you want to work with us to implement it, that's also just what we do as well.

That's amazing. And I think it's the best mindset is the same that we did with, with the book. We said, okay, it's better to offer it for free you build a new relationship, people can test it out, can see it, and they appreciate when they receive something. So I think this is, this is the model. And the stats also say this, if 97% of buyers want to, want to try before. Now the debate is freemium versus free trial. When does it work? Who is it? Who is a better fit for, for what? And yeah, anything that you can share?

Yes. So I know this is like a really popular question because we have this article on our website, Free Trial vs. Freemium, and it's one of our most popular ones. I know, I know some of the listeners are searching for this. And here's something a little controversial when it comes to this decision: the model does not matter. And so a lot of people obsess about the model, but I, I focus on everything that goes on behind the scenes. So as an example, when I think about how to decide what do you give away for free, I always start with like, who's the ideal user and what is that big outcome they're trying to get to? And then I break it down, try and gamify this, make it fun where it's like, hey, there's 3 levels to this game. Level 1, let's say we use Canva as an example. Like the big endgame is to design anything you want at any given time easily.

Right.

Level 1 might just be design a simple graphic and let's say it's a poster or something like that. So we have that as level 1. Now, solution-wise, what, or I mean like challenge-wise, what are the challenges people would run into in order to create that poster? So there's like writer's block, there's, you know, not being a good designer, and there's a lot of those challenges. And so the next thing we gotta do is like just kind of go through each of those challenges line by line and say, okay, now what are the ideal solutions we could arm them with to overcome all of those challenges so that when they start this level 1 with us and they start creating a poster, it feels effortless. It's a lot easier than they're used to. And so when we work backwards from that point, it then becomes— well, the model becomes whatever those solutions are, whether it's a certain amount of those, uh, like features or widgets, uh, or it's specific to what solutions you gave for free or whatnot, that just becomes the easy part where we're like, oh, that ends up being a usage-based free trial, or it's a premium model, or it's a free trial. They just need 14 days for this or something like that. And so working backwards into the model will just make it so much easier for companies to kind of decide what the heck do you give away for free?

Makes total sense. And I think your speech at SaaStock is about this, right?

Yes, I get super nerdy about it because I don't know if you have the same thing, but I'm like, I can't do the same presentation twice. I'm like, I'm always tweaking. And so yeah, it's going to be fun.

Yes, absolutely. Now I'm really curious on when should companies come to you as a company to come for your services, or should they do it themselves? So what's the difference? Because you offer a lot of value for free. Sometimes they can do it themselves, but sometimes they need your help. So what, what do you say is the difference?

Yeah, so I'll tell you my ideal scenario and then I'll tell you what actually happens.

Okay.

The ideal scenario is, let's say you're thinking about like scaling your PLG motion. You already have it and you're looking to scale, like fantastic fit. Like, well, we'd love to help you kind of take it to the next level. But we also get a ton of people that are like, you know what, this is, we want to consider PLG and we want to go through this. And so a lot of times we have those people come in, they'll like talk to us, be like, yeah, we're like excited. And then they're like, okay, we just want to like try this out first and see how this works. And then, and then about 6 months later or 8 months later, they come back and they're like, oh my God, this PLG thing didn't work. And I was like, I wish I could have like worked with you then because we could have avoided a lot of this stuff. But, uh, here we are. You're now motivated. You now know the value of working together. And so yeah, it's a little more of some of those people where it's like, okay, we tried this, it didn't quite work, we hit a plateau. And so I, that's why like on our implementation page, I'm like, break through your growth plateau with Product-Led Growth, because it's like, it often is people bumping up against that plateau and they're like, I don't know how to break through this. And it's usually because out of those 9 components we talked about, usually they're only focusing on like maybe 3 or 4 of them. And so they're just missing out on so many of the other pieces that are important to the winning PLG recipe, if you will.

Right, right, right. Yeah, this is the reality, right? And people need to, need to figure it out. But for yourself, who would you say is the decision maker on when to implement the PLG? Is it the CEO, CMO, founder? How does it work?

Yes. So I, I've analyzed all our customers, which ones are most successful and everything else like that. And back, like I reversed, like 2 years ago, it was actually 80% was like senior product executives were like signing up, going through our programs and everything else like that. But when we looked at which ones were most successful, it was interesting. Like there was 80% product execs, 20% were like SaaS founders. And the SaaS founders surprisingly were generating 80% of the results. And so we looked at the results from like their self-serve revenue they generated at Did they see success rolling out the PLG motion and whatnot? And so that kind of shocked me initially, but then what we learned is like, it has to be the founder and CEO of the business because this is something that it's not just a product initiative. It's not just a marketing initiative. It's not just a new call to action. It's actually like the DNA of your company. And so it's really important that you get the SaaS founder. They have to get it for it to work at the end of the day.

Makes total sense. Um, and how does it work? How do you help them actually? Is it more like a consulting agency, do it for you? Uh, yeah, super curious on how it works. Is there also a platform in there?

Yeah, so one day there'll be a platform, don't worry, working on the SaaS part. But for right now, yeah, yeah, what it looks like is we have a product-led implementer that will work with your company. And so it looks like a weekly cadence where every single week that we're working together on implementing one of those components that has the highest leverage in your business. So if it were just beginning, it might be your strategy. If we're working together for a little bit, it might be like your onboarding, if your free-to-pay conversion rate's really low, but we always help you identify like what is that highest leverage opportunity. And so we have like the leadership meetings once a week with your team, and then the implementer will also be able to do other projects throughout their time working with you. So for instance, if there's a gap on like understanding your ideal user, they can also do some of those interviews, understand like, hey, like, I know you're telling me this, but the users are saying this. And so they can get really embedded inside your company to provide that unbiased feedback to help you build your PLG motion. And so, yeah, it's one hand like strategic on those workshops and then other hand tactical to actually roll up their sleeves and be accountable to growing the business.

But people need to understand it's not just, yeah, as you said, just a new feature or a new tweak of a product. It's actually you have to do a lot of sacrifices to to actually implement it, a lot of work, right? And to actually get it and, yeah, work fantastically. Because if you get it right, possibly it's the best channel for getting new customers, right?

Totally, yeah. And I think one of the other things too that we try and get the teams to learn through just osmosis by being with the product that is Blender is that it's trying to build a capability. Like, each of those 9 components is a capability on its own. So like, how do you do really good strategy? How do you like really understand your user? It's also capability. How do you decide what is the right model? They're not one and done things. They're things you're always going to be doing as your business evolves and grows. And so we try and make sure that you're able to understand that and you have people on the team that are trained up in that too.

Yes, absolutely. Now I'd love to hear your story. So basically how you started your career and reaching up to this point.

Yeah, for sure. So my career started B2B SaaS, venture-backed companies doing demand generation and digital marketing. Okay. And so it was always like sales at companies for the first two startups I was working at. And so I was in charge of getting basically leads for their sales team. And so I'd get leads for the sales team. I'd always ask them like, hey, like how are those leads and how is the follow-up and everything else like that? And a lot of times they'd be like, Yeah, those people really didn't want to talk to us and everything. I was like, huh, you know, I just spent like $100 grand on that, uh, guy. Like, that just feels like awful, like, at the end of the day. And it's like, is this really how people buy software? And yet I was kind of looking at all the tools we were using, even at those startups, like the Slacks, uh, the Zooms, and all that stuff. I was like, we've never done that sales process for, for those pieces of like tools. So why are we doing it this way? And a lot of times for some of those venture-backed companies, the reason why they were raising the capital was because there was like, hey, we want to grow, this is the way we want to grow, the VC kind of gets behind it. They're like, okay, you want to grow your sales team, you need the funding for that. So when you get that capital, a lot of times it comes with some of those strings attached, or at least like conditions of like, I think you're going to use it for this. And so we were just in that sales ed mentality and then we decided, let's launch a free trial at a company called Vidyard. That actually didn't work for a lot of the reasons we talked about. We were not going through those 9 components, just 2 or 3 of them. And then we launched this freemium model and that actually took off. And so that was called Udit at that time. Now it's just Vidyard Free. And it's like a simple Chrome extension. You could record a video, send it to anybody, see like, oh yeah, did you watch like 50% of my video or the full thing?

Yes.

And So that completely took off. And since that moment, I was always kind of hooked with like, okay, like this is the way to grow software businesses. It's way easier. Like if I was to acquire those like hundreds of thousands of users, the traditional means, the sales playbook, it would have cost us a huge fortune to get that. Yet people were just wanting to share this with other people because like, I got this cool tool, you should check it out too. I was like, that's unheard of. So yes, I've been hooked since.

That's amazing. And after that, you started the product-led, right?

Yep.

Yeah, this is too good to not do, and a lot of companies need this, so I need to, I need to start this, right?

Totally. Yep.

And can product-led and sales-led work together?

Uh, yes. And the thinking behind that though is I get a lot of flack, I would say, for my thoughts on like, keep them separate. Like think about sales-led businesses differently than product-led companies. And the reason why is because I believe you should, like the DNA of the company is really important. Like how do you solve problems in a product-led business is much different than how you would solve problems at a sales-led company. I'll give you an example. So let's say we have like a problem with growth and getting people to see the value of our product. In a sales company, a lot of times it's going to be like, okay, let's hire somebody for that. And let's hire another customer success manager. Fantastic. Problem solved. It's like a who thing, not so much a how thing. Whereas like a product company, a lot of times it's like, oh wow, we have a lot of free users reaching out to us wanting help. Self-serve knowledge base. Let's empower them. And so it's much, much different how you solve some of those problems. Now, can you do them together? Yes, at a later stage, but like to get one of these go-to-market motions right from like $1 to $10 mil, that's usually where I would say focus on just one of these. And then, you know, once you get around that $10 mil mark or beyond, then you can start playing around and like, okay, if you're a product-led company adding on a sales-led motion, or if you're a sales-led company, maybe try the product-led motion as well and blend it. Because I think to get to the $100 mil mark, yes, most of the companies that you look at, even the Slacks of the world, they do both at the end of the day.

Absolutely, absolutely. Great advice. Thank you so much. Now I'm curious to know something that SaaS founders don't know about the B2B buying journey from your research. Uh, I think you have some great insights on how people actually buy software, how businesses actually buy software, not what we imagine. I guess there are some differences, right?

Yeah, I mean, I think the biggest one we, we kind of touched on, which was just that most people don't really know, like, okay, 97% of users, like, they want to try before they buy. But the other thing too, that when we analyze like 568 B2B SaaS websites, is we found that actually only 50%, uh, like 50% of all SaaS is still sales-led. So there's like a huge kind of potential there. Look at like 97% want this, 50% are just doing not that, uh, and then 22% are kind of hybrid options, and then 23% are like actually product-led in that regard. And so I think there's a massive delta between just what people want, what we're offering currently. And then we also did another study which found that, okay, out of, you know, all the current product-led experiences, like out of those 23% of folks, only 5% of people say it's a great experience. So there's still like, once again, another opportunity where it's like, if you are doing product-led, there's still a lot of people signing up for that and they're like, I'm not getting the value, I'm not seeing it, I'm not getting the right free stuff to kind of make your product shine in that free experience. And so I still say we're at the first inning of PLG because there's just so much opportunity for us to do this much better. It's just got to get a lot easier for us to do it.

I totally agree. When did you start the company exactly?

That was like May 2017.

Oh wow, so it's been 7 years?

Yes.

Oh, amazing. And what would be your best piece of advice? I have to, to request your best piece of advice for a SaaS company looking to start PLG, and on the other side, your best piece of advice for a SaaS founder, first-time SaaS founder looking to build its own SaaS.

Okay, so first advice for if you're thinking about doing PLG and whatnot I would get really clear on your conviction behind this. So there's like the first book I wrote on product-led growth was more or less about, hey, is this right for you? This is a new way of doing business. Is this the right approach for you? And where I see a lot of founders get in a rut is that they just kind of half go into something. They think, oh yeah, like this is, Sounds great. Everybody else is doing it. Maybe I get a higher valuation if I have this. Wrong reasons to do it, but really have conviction to see it through and give it the commitment. Because what often happens is that first version will not work that well. And so then it's like, oh, do you just scrap it and start off with another go-to-market motion, go back to kind of what you're doing before? And so you do need a lot of conviction to say, hey, you know what, our market, this is the reason why we want to make it work. When I interview other founders that have seen really good success with PLG, like for instance, when I interviewed the founder of Hotjar, great guy. His whole thing was like, you know what, I was working at these enterprise companies and we had these screen recording tools and all that stuff. I was like, this is amazing. But there was nothing for the small and medium-sized businesses. They just wanted to make it accessible. And they were just kind of fixated on like $29 per month plan. And they're like, we gotta like bring this to the masses. And how were they gonna do that? It had to be a product at Notion. When you think about Melanie, like the CEO of Canva, it's like her vision was literally just like, we want people to design anything and make it easy. And how are you gonna do that for make like anybody design anything? Okay, big total addressable market. How do we make that and how do we serve that? It has to be a product at Notion. Get clear in your vision, have a conviction for what is that ideal go-to-market motion for you, and kind of work backwards.

Amazing, amazing. And how about someone starting their first SaaS company? Yes, this is funny because it's not the product-led stuff, but I would say, um, you work with a lot of founders, so I think you see some things that work, some things that don't work. So I'm curious about your, your insights.

Yeah, like, I'm a huge fan of Do founder-led sales for at least like the first 10, 20, 30 companies. Like, don't worry about your go-to-market motion. Like, sales-led and product-led stuff, all we're talking about here today is your go-to-market motion. And all I want you to care about for the first, like, getting off the ground is really get clear on the problem you're solving, who really gives a hoot about that and who's willing to pay for it, and really prove out that MVP as early as possible. And that'll save you so much time. I've seen too many people get like obsessed with PLG and then they're they jump the gun and they're like, oh yeah, let's make this SaaS right away. And I'm like, you don't know who your ideal user is. You don't know how that works. And so save yourself some pain. Just do that founder-led sales for a little longer.

Totally agree. Thank you so much for sharing this. I have one last thing for you, Wes. Sure. I'm really curious about your top 3 favorite SaaS tools that you use, your most favorite ones and why.

All right. I always go back to like, which ones do I use every single day? I mean, Canva is just great because it's so easy to just design anything and I just send my rough, rough stuff to our graphic designer, but it's like it communicates the idea. So I'm like, good enough. We're on the same page now. Another one, I mean, I already mentioned it, but like ChatGPT, I think is a fantastic one to just brainstorm ideas. I've never used it so much for the book stuff, But it's helpful on that end. The third one, oh, this one's tricky because there's so many out there. Hmm. I would probably say just top of mind, like FigJam, I think is pretty good. Or like whether it's Miro, I kind of just gravitated to one or the other. I've just kind of brainstorm ideas, draw things out, and really collaborate with other people because I'm more of a visual thinker. So I think having that is helpful.

That's amazing. Where can people find the book, find you? Probably at the SaaS events. And yeah, anything else that you want to share today on the podcast before we close it off?

Yeah, I think overall, if you take one thing away from PLG in general, it's this. It's that your user success will eventually become your success. So if you're really, really good at making your user successful, They will find a way to pay you. They'll make that business model work for you. And I would just focus on that because that's kind of your overall north star for the business.

Yeah. Dan, thank you so much. Thank you for joining us. You can find the book in the description, right? On Amazon?

Yes. Yeah, it's on Amazon. Just search for the Product-Led Playbook or go to productled.com. And yeah, if you want more PLG advice, just find me on LinkedIn. You can search my name, Wes Bush.

You can see a lot of value there also on the website, LinkedIn, and yeah. On, on the SaaS events. Thank you so much, Wes. Thank you for joining us. I will also grab a copy of the book. I think it's really interesting and it's the new model, and I totally support you in doing this and helping as many founders as, as you can.

Awesome. Well, thank you so much.