Product-Led Growth (PLG) Demands Middle-Out
- PLG is redefining products and services
- Combining developer (i.e. code), beyond DevOps, with revenue directly relevant to the business is critical
- Sales, marketing, and operations must now be supportive of PLG allowing it to drive sucess
- 'Middle-out' refers to this shift
- Companies like DevRev , are being created to lead this
Why Should I Care?
I feel this is a critical 'ask' of any article without assuming you, the reader, knows why. Sometimes it's a catchy headline, others, it's a subject near to the reader's core, but ultimately it should be up to the writer to define the 'why' then let you decide.
For me, on this subject, it's because PLG struck a chord in me. The days of long, drawn-out high-end dinners are mostly over to help in capturing a thought leader's buy-in or convince a professional to change. The benefit of time, self-aggrandization, and/or industry analysis are in the past. What's left is the critical need to find solutions that ensure real impact to a business, not just lip service.
Product-Led Growth is one of those characteristics that will define the post-pandemic industry leaders, not just woo it.
The HBO Series Silicon Valley hit home with many of us in the technology sector. The witty, clumsy, and sometimes, downright sad brand of humor took the tropes about building a tech company and put them on display for the world.
One of the most memorable moments in the show was a concept called ‘middle-out’ an awful (by design) named concept from the show’s front runner and engineer turned bad CEO, Richard. Middle-out enabled the show’s technology to leap-frog the current compression tech by removing the ‘fluff’ in between to enable a highly-compressed but high-functioning video codec that could change the world.
So, I am sure you’re thinking: “Thanks for the show overview, moving on…” but, wait!
Think about it:
While middle-out helped a show’s fantasy tech to achieve greatness, the concept is quickly being applied to real-life technology all over the world.
The pandemic has forced an era of digital transformation almost overnight. This means a business must pivot towards technology to stay alive while looking at every aspect of its operations. From supply-chain operations to customer engagement, nothing can be held sacred.
Whatever your 'middle' is must be evaluated and optimized or removed.
You down with PLG?
Enter PLG or product-led growth. A concept where a product or service leads revenue and growth in an organization, not marketing or sales. PLG is becoming the ‘middle-out’ driver of the new world of high-demand development.
But there are major obstacles. Legacy business modes, technical and developmental debt, cultural shock, and even the aspect of utter failure. Any of these can contribute to disaster.
In a typical organization, sales, marketing, and operations are all necessary; even in the middle-out of PLG, these are still critical but play a support role to PLG without dominating it:
The typical outcome of a classic sales model, as shown above, is that customer usually gets outcomes like:
- A product that doesn't meet expectations or is misaligned
- Extra services, though, while required, gouge the customer's bottom line
- Product feature promises that are months or years away, but are required for core customer operations
And, look: Sales, Marketing, and Operations are NOT BAD, but they cannot be the 'tip-of-the-spear' for customer outcomes, either. PLG in this context truly feels like a foreign concept and an impossible goal for product/service models. Furthermore, developers, product leaders, and customer advocates wallow in the reality that every day is a battle between 'the middle' and their roles.
The 'Middle-Out' Solution, Today
In Iron Man 2 (I know, metaphors and Hollywood... :) ) Tony Stark's father sends him a message from the past through a newly found reel of film and, while optimistic, reveals his progress is bound by the time in which he lives:
SPOILER ALERT: Tony goes on to discover a new element through a homemade particle accelerator in his malibu mansion's basement, and the rest is cinematic history.
But what about PLG? Aren't there any solutions to help balance 'the-middle' with customer outcomes? How can development drive revenue without the complex, esoteric, and mostly necessary concept of sales, marketing, and operations?
Yes. The answer: Development + Revenue Operations-as-a-service, DROaaS.
DevRev is the 'Middle-Out' for PLG
A few years ago, I went through a personal experience that forced me to leave a company. Up to this morning, that experience still created career pain for me. But now, I know why:
As a former sales engineer, my job was to ensure the technology of my company could be technically validated before the customer purchased the solution. Typically, when a major purchase was on the table, you bring in executive sponsorship to align to the customer and ensure a partnership is either formed or stregthened.
At this particular customer meeting, I was called out by our company's executive in front of our customer's business sponsors to 'fix' the issues they were relaying. While I completely agreed, that moment destroyed my ability to effectuate change within my role. I left that role because I felt like I had lost any confidence in myself from that customer.
So was this my fault? Absolutely, AND, not at all.
The concept of PLG was not present at this company. Well, to be fair, it was, but the organization that had been set was required to move through the middle (like most!)
And then it donned on me this morning, years later:
There was NO method to create a 'middle-out' without killing the company. As an SE I still went through the tried-and-kinda-true process of filing feature requests as JIRA tickets, beating my head against product management, and relaying customer requirements. But it was too long, too removed, and too cumbersome.
But it was all 3rd-hand. Development was never able to associate my requests to a product/revenue event! It was neither's fault.
The 'technology simply didn't exist' (i.e. limited) at the time.
Born with a focus on creating a platform where developers can directly influence revenue, and customer demand can be met head-on, DevRev takes customer alignment to a whole other level by creating a CRM (customer relationship management) system focused on developers, but without the meddling middle.
DevRev takes customer alignment to a whole other level by creating a CRM (customer relationship management) system focused on developers, but without the meddling middle.
DevRev was has been bootstrapped and backed by Dheeraj Pandy, formerly co-founder of Nuantix and CEO. DevRev seems to be focused on a few core principles around building their platform I've extrapolated from their blogs:
- The 'Why Not' attitude with every role as code-first!
Bucking the status quo to get the best people while ensuring every candidate is code-enabled and literate.
- Codify ALL the things
Optimize with code and automation where people have usually been present.
- Self-Service for ANY platform (especially SaaS) is a requirement, NOT a feature
Ensuring the platforms used to build a platform can be quickly modified, stitched together, and serviced is critical for speed.
- Hybrid Work Forever
While in-person collaboration is critical, the pandemic has fundamentally transformed teams so plan accordingly.
- Survival Creates Bonds
The pandemic will forge bonds within companies, or not, to define destinies. How you and your teams choose to acclimate will define you.
But What IS DevRev?
From their website:
PLG is Digital Tranformation
While highlighting DevRev shows how PLG, middle-out, and the pandemic are reshaping the ideas and go-to-market strategies companies face, PLG is but one facet of this shift.
Whilst typically ambiguous, 'Digital Transformation" as a term is gaining teeth and a transformation of its own. Always on a technology leader's goal list, Digital Transformation had always been met with marginal initiatives or vague visions. Through and post-COVID-19 (and let's face it, COVID-19 will be with us forever), this concept has taken on a life of its own:
- Organizations went full remote-work literally overnight
- Closet, or hobby initiatives around end-users and security were catapulted (can one say 'trebuchet'd'?) out of obscurity and into production settings
- The power-shift of culture and roles within companies have shifted towards those who can enable direct results and measure those via KPIs (key performance indicators)
- No concept or idea surrounding technology is too 'scared' or difficult to be overlooked
PLG, in this context, becomes a natural evolution through the pandemic's chaos. Much like the industrial revolution rewrote the concept of menial jobs with automation, PLG, BPA (business process automation), data insights, and others are all using machine learning and intelligence to accelerate outcomes.
PLG in this context becomes a natural evolution through the pandemic's chaos.
As funny as Silicon Valley's take is on 'middle-out' (and believe me, if you watch it, be advised it's very NSFW), the same reactions and 'wow' moments are to be had for your business when using PLG.