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April 12, 2019

Entering the Product-led Era: Why the Product is your Startup’s Go-to-Market

By Aggelos Mouzakitis

It is without a doubt that we are entering the product-led era.

The era in which the quality of your new product will be the #1 lever of growth for your business.

Simply put, bringing a new product to the market won’t be enough anymore.

The days of the marketing era or the sales era have long passed.

Building a high-quality product that offers a great customer experience is the most important aspect of growing business nowadays and having a go-to-market strategy (GTM strategy) that will succeed.

Also, the way to build long-term relationships with your clients has changed too.

If you want to learn more about the product-led era, keep reading.


Chapter 1: How Marketing Looked Like for Different Generations

Chapter 2: Entering the Product-First Era

Chapter 3: How to Build a Product-Driven Organization

Chapter 4: Final Thoughts

Chapter 1: How Marketing Looked Like for Different Generations

The first marketing efforts started the time of the industrial revolution.

Mass production raised the need for mass advertising.

This was the production era, where bringing a good product to the market was enough.

Everything had production orientation and everyone was focused on reducing the production costs and building products that satisfy target customers’ pain points to improve customer loyalty.

With mass production came mass advertising.

Simply put: someone had to buy all these products.

The ads, across the existing marketing channels, back at that time were based on two things:

  • Smart taglines,
  • Great copy.

These two things were enough to sell since target markets were not as educated they are today. 

Here are some ads from the 1920s and 1930s:

These first marketing and advertising efforts were very successful for one more reason: people were not exposed to the same number of ads and value propositions as they do today.

This means that they were more “open” to advertising messages, and more willing to listen to what companies have to say.

Back then, everything started with customer needs and ended up in creating smart ads that would get people to take action. Having a large advertising budget and a good agency was enough to give a competitive advantage. These days’ business plan was simple: Run some research, build it, sell it to the target audience.

Fast forward a couple of decades, companies were still using advertising as a way to reach consumers, and sell to them.

Here are some ads from the 1960s and 1970s:

Have no doubt about it: the ads of that time were truly ingenious. 

And, the fact that they were successful—in terms of revenue generation—makes them even more appealing.

Baby boomers were the generation mainly exposed in the ad messages of that time.

What is really interesting, is the fact that most baby boomers—people who were born between 1946 and 1964—feel nostalgic about the ads of that time.

Also, there seems to be an emotional attachment between them, and the products of that time.

For example, many people of that age still believe that their “Luckys” won’t harm them, since “the doctor says it’s ok.”

Image Source: eBay

Thus, ads at that time heavily influenced the way people:

  • Think about products,
  • Feel about products.

A few years later—in the early 90s—the internet came along and changed everything.

A simple tagline was not enough to sell anymore; and, people started searching for products and experiences online.

Some of the biggest players in eCommerce were born at that time:

Image Source:

The generation mainly exposed to the advertising and marketing messages of that era was Generation X. (People who were born between the early-to-mid 1960s to the 1980s.)

Right around that time, the first customer acquisition actions started from internet companies.

Here is the first banner ad ever created by the Hotwire—a digital offset of the infamous Wired magazine—on October 27, 1994:

The generation mainly exposed to the advertising and marketing messages of that era was Generation X. (People who were born between the early-to-mid 1960s to the 1980s.)

Right around that time, the first customer acquisition actions started from internet companies.

Here is the first banner ad ever created by the Hotwire—a digital offset of the infamous Wired magazine—on October 27, 1994:

It is without a doubt that the internet revolutionized the way new products were introduced to the new markets. 

However, the best product wasn’t always the most successful one.

Simply put, marketing and advertising were still influencing consumers’ perception of quality.

But, along with the internet came one more thing: over-commercialization.

People were—and still are—bombarded by the hundreds advertising and marketing messages they are exposed to daily.

Customer acquisition has become more expensive, and marketing and sales teams have become more aggressive in their effort to attract new customers and find more use cases across buyer personas.

  • Social media
  • Online ads
  • Content creation
  • Referrals
  • Affiliates

Companies are using all these tools and channels to get traction and turn a small percentage of that traction into paying customers. That’s their go-to-market plan.

The advertising and marketing landscape has started to change, and marketers have realized one simple thing: a product-led value proposition, not the best marketing action plan, is the secret ingredient to long-term success

Of course, this means that having a better product is essential, but it’s not a business model by itself.

What are the characteristics of the “product-led era” and why it’s important for businesses to increase their lifecycle?

Find out in the next chapter.

Chapter 2: Entering the Product-led Era

According to ProfitWell:

“Overall CAC is up nearly 50% over the past five years.”

Image Source: ProfitWell

This means that marketing teams are struggling to find ways to acquire new customers, keeping the balance between the Customer Acquisition Cost (CAC), and the Lifetime Value of the Customer (LTV).

Also, something significant is that Ad Blocking penetration increased year-after-year.

In the USA alone, Ad Blocking penetration rate has increased by more than 10% between 2014 and 2019:

Image Source: Statista

So, two things are clear by now:

  1. That is more difficult (and more expensive) to acquire a new customer,
  2. That consumers—potential customers—are less willing to hear what we have to say.

All these indicate the need for moving towards a more “product-led Go-to-Market mentality.”

The product and NOT marketing should be our primary concern.

Product-led companies are the ones that will survive and move forward.

The reason is simple: people are tired of smart taglines and nice ads; they want more substance.

For example, SEO software Ahrefs manage to grow their ARR by +65% year-over-year:

  • Without VC funding,
  • With a team of 30,
  • Without any salespeople.
Image Source: Medium

How did they manage to do it?

By focusing on the product, and the value it adds to their users.  

However, most companies find it difficult to market their new products or to increase their current customer base because their marketing efforts are not effective.

If only that was true.

As Slack’s CEO Stewart Butterfield, put it a while back:

“… even the best slogans, ads, landing pages, PR campaigns, etc., will fall down if they are not supported by the experience people have when they hit our site, when they sign up for an account, when they first begin using the product and when they start using it day in, day out.”

There is no doubt that we are heading to a product/service-first era.

Be careful though: the best product is not the one that always wins.

Having said that, if you have a better product than your competitors, and wait for new customers to come in without any effort whatsoever, then you are in the wrong direction.

Marketing will always be necessary, but in the context of a stellar product, and an excellent experience for the users.

In that product-led Go-to-Market era:

  • Product—and not marketing—is the No.1 lever of growth,
  • Users expect great experiences, both online and offline,
  • Having a great product is NOT enough.

You may be wondering:

“Ok, but, how can I build and run a product-led company?”

In the next chapter, I will give you some guidelines on how you can achieve exactly that.

Chapter 3: How to Build a Product-Driven Organization

Building a product-led company is not easy.

When I say “product-led,” I don’t mean that you have to add one feature after another.

After all, the fact that a product has many features is not an indicator of a great product.

Adopt a product-led Go-to-market mindset

It’s easy to say, but extremely difficult to implement.

Adopting a product-led Go-to-Market mindset is the first thing you should do.

Here are some ways to achieve that:

  1. Empower communication between different teams within your organization (i.e., your marketing team and your product team)
  2. Have your sales team work in customer support, so that they are aware of the friction points that current users have to deal with
  3. Do NOT prioritize product development tasks that require much time to implement
  4. Find ways to gather as much customer feedback as possible, before launching new products or adding features to your product
  5. Allow everyone in the team to contribute with ideas that could potentially improve your product
  6. Hold bi-weekly or monthly product reviews, where you will evaluate your product’s current status, and measure the value that your customers get
  7. Run user experience tests before every big launch or marketing campaign, to make sure you know the friction points of your UX

As you can imagine, adopting a product-led Go-to-Market mindset is more than just holding a product review meeting every other week or every month.

Above all, you should get everyone aligned with your product vision.

You should always stress the importance of building something that will actually deliver the value it promises to your customers.

This is the only way of building a product-led organization.

Start with the product; everything else will follow.

Chapter 4: Final Thoughts

There you have it.

Now, you know how we’ve transitioned from traditional marketing strategies to marketing that is focused on the product.

You also have a handful of tips when it comes to building a product-led organization.

Forgive me for repeating myself, but if your company is not moving forward, you don’t have a problem with your marketing.

As Tim Soulo, the CMO and product advisor at Ahrefs puts it:

“Most stagnant companies don’t have a marketing problemthey have a product problem.”

Focus on the product and the value it adds to your customers.

But, be aware that you also have to communicate that value to:

  • The right people,
  • At the right time,
  • Without being intrusive.

What are your thoughts on the product-led era? Are you paying enough attention to your product, and how do you communicate that value to your customers and prospects?

Let me know by leaving a comment below!

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Aggelos Mouzakitis

Aggelos is the founder and Growth Product Manager of Growth Sandwich. He is among the first Customer-led experts in the world, leveraging advanced, Jobs-to-be-done customer research to orchestrate and guide Growth for B2B SaaS companies. A- and B- series SaaS are hiring him to organise, design and execute programs that infuse the whole company with qualitative data, empathy and the necessary knowledge to address any growth dilemma. In the last 4 years, he has worked with more than 100 SaaS companies and trained literally, thousands through my physical and online courses.