Your guide to a new PLG era
How to win in the Age of Connected Work
👋 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. Expect deep dive takes on product-led growth, pricing, benchmarks, and much more.
PLG is rapidly becoming mainstream in how folks build generational software companies.
To be clear: we’re very much in the early innings of PLG. Despite the explosion in popularity, still only 30% of the up-and-coming startups we see have a working PLG motion and fewer still truly embrace the principles of PLG at their core.
But today’s generational companies are starting to push PLG even further. They seamlessly blend a product-led growth strategy with connected API-first products, highly composable user experiences, usage-based pricing (UBP), and community-led brands.
In short, they’re redefining what it means to be PLG. And it's way more than just a introducing a free trial.
Individually, each individual shift might not raise an eyebrow. But collectively they constitute a new era for PLG: the Age of Connected Work.
Along with my colleagues at OpenView, I’ve spent the past five months studying what’s next for the PLG movement. I’m beyond excited to share the results of that research and highly encourage you to check out the full report. Let me know what you think by tagging me on LinkedIn or Twitter (@poyark).
Here I’ll share more about what’s happening and why we believe it constitutes a new era for PLG. Next time I’ll unpack the new 11 principles of PLG—aka how to build a generational software company in the Age of Connected Work.
Introducing the Age of Connected Work
In this new era, software has become a fundamental utility powering our working lives—just like water, electricity, the internet, and mobile broadband. We used to “own” and then “rent” software; now we simply use it.
Imagine an everyday occurrence: meeting with a customer. In the past we might’ve emailed back and forth to find a time, traveled to meet in person, and jotted down notes in a journal.
Now that meeting is scheduled via Calendly, automatically logged as a CRM record, takes place via Zoom, gets recorded in Gong, and ends with a follow-up assisted by Grammarly. It’s a fully connected workflow powered by automation that allows us to be more productive, make fewer mistakes, and collect valuable data. If any of our services experiences an outage, we’re left in the dark.
So how did we get here?
Trend 1: Software has become core infrastructure
Digital transformation went from “happening” to “already here”.
Accelerated by the COVID-19 pandemic, every industry had to rethink their digital strategy. This wasn’t about adopting apps like Zoom or Teams to allow employees to work from home; it was about making digital experiences the core way of doing business with customers.
Businesses now depend on software as the connective tissue of their operations. Large companies support an average of 187 apps, up from 129 in 2018, according to Okta’s Businesses @ Work Report. The cloud infrastructure market reached $178 billion in 2021, up by almost $50 billion compared to 2020. This figure is now larger than the amount the US spends each year on water supply and wastewater treatment ($113 billion).
“It is not just that companies are using more software—in a very real sense, they are actually becoming software.” - Confluent S-1
With the core cloud infrastructure and apps in place, businesses want to extend existing investments to deliver even more value rather than buy all-encompassing platforms. It’s no longer about lift-and-shift, it’s about extend-and-automate. Modern software needs to be built to not only be hosted in the cloud, but to take advantage of the unique opportunities afforded by universal cloud adoption: real-time interconnectivity with data flowing freely where it’s needed.
Trend 2: Works happens everywhere
People are working from home, but also in the office, in their car, at a cafe, in a co-working space and even increasingly obscure places like while waiting in a doctor’s office. Simply put, work happens wherever and whenever. Workers have earned this flexibility as their productivity continues to climb, but they owe some of the credit to how technology has evolved to enable this type of work. Hardware has become increasingly powerful and the software running on these devices has made leaps to allow work to happen anywhere with an internet connection.
“Employees are increasingly the primary force for IT modernization at work as they bring the latest technologies from their personal lives to their jobs.” - Zoom S-1
We have high expectations for how seamlessly our software should flow from location to location and device to device. PLG taught us that great software is built for end users. Now that people’s lives are changing, the software that has been built for them needs to keep up.
Businesses that are able to be in the right place at the right time have always won. As place and time have shifted, software that can be discovered - whether you’re trying to launch a survey from your phone or get updates on daily sales from your wrist - will be the new winners. Don’t force people to change their workflow in order to use your product. Instead, meet your users where they work.
Trend 3: Engagement with software sets the tone, buyers follow users
For too long, software development has been restricted to an elite group with access to special training and equipment. Software engineers are finite and companies have been fighting over the same pool of talent.
The Cloud Era, with easy and affordable access to cloud computing, began the process of democratizing software development. You started to see a shift of departments outside of IT building digital solutions to solve workflow problems that were previously sitting in backlogs.
Today the barriers to building software have dropped almost entirely. It’s not just that software moved closer to users, the users moved closer to software with condition-setting interfaces, smart forms, and API-based connections. We are all becoming developers, just different developers than we were used to as no-code/low-code technology becomes the norm. These new developers will create their own personal tech stack and then bring it with them from company to company. They’ll talk up the products that they love, producing a community of evangelists that feel ownership over their software because they had a large part in building it.
“Practitioners, rather than executives, have become the decision makers for adopting modern enterprise products, making it imperative that we focus on these end users.” - HashiCorp S1
What it means for you
To win in the Age of Connected Work, software companies must rethink the principles that underpin how they build, deliver, and charge for their products. They will be product-led in its truest sense; product usage will drive customer acquisition, retention, and expansion.
The ways of applying PLG must adapt to our new context. PLG is no longer just an end-user focused growth model. In fact, the users of a product are increasingly other products rather than people with the rise of automation, AI, and APIs. The next generation of winners will evolve what it means to turn their products into a growth engine, incorporating PLG principles into how they build, deliver and monetize their products.
I highly encourage you to read the full report and share it with your network. If you have feedback, simply hit reply or drop a comment below!