PLG Function Breakdown
The product-led function takes various shapes and forms across companies and is still relatively new to organizations. So, an obvious question becomes, how should a PLG function be structured in a company?
The question has many parts to it:
- Where should the PLG function report?
- What are the characteristics of a PLG team?
- How do you structure the PLG function?
The goal of a PLG function is to help drive outsized growth in acquisition, activation, retention, and monetization, as well as build a path to enterprise sales. Priorities of a specific company vary depending on its company stage.
A PLG function touches many different aspects of a business. At the fundamental level, it tries to connect business metrics to product execution. Since a PLG function has all the above elements, it’s tough to define where it should live in an organization.
I have spent 3+ years leading a PLG function at Sentry and talked to 20+ leaders from the top PLG companies in the space to understand the PLG function breakdown. Here’s the summary:
Where should the PLG function report?
Most companies have the growth function as either an independent function or part of the product org. In my, and many other popular PLG companies’ opinion, that’s the right way to approach a PLG function. The approach allows for taking a longer-term vision and incorporating three core elements:
- Build a long-term growth platform to enable repeatable, sustainable growth
- Run occasional growth hacks/experimentation to optimize conversions and adoption
- Be part of the product innovation
I prefer growth functions to be independent of the product function for small to mid-stage companies because that allows for a higher velocity of execution, a data-first approach, and the ability to pivot quickly.
There are some places where the growth function reports to marketing. You absolutely want to avoid this. The PLG function should build longer-term value and experiences in the product that help drive sustainable growth. Making the function a part of the marketing org results in short-term goals and wins. If a PLG leader reports to your marketing head, the conversation will go something like this:
Growth leader: We need to build a long-term sustainable growth platform for the organization with elements of occasional growth hacks.
Marketing leader: Yes, but we need to show a significant impact on business metrics every quarter, and those business metrics should be relevant to the marketing motion. Can you focus on things that show impact now versus in the future?
Now, that’s a recipe for killing the growth motion before it starts because the growth team will soon run out of low-hanging fruits to show impact, and then you are just waiting for someone to say, “is the growth team driving any impact for the company?”
What are some core characteristics of a PLG function?
I have always believed in defining an identity for my teams. Having an identity helps hire for the team and brings a sense of a mission. In my opinion, growth teams
- Prioritize outcomes versus output: Measure everything and focus on things that drive real impact on business metrics.
- Are high velocity: They execute fast, run experiments and build upon initial outcomes
- Pivot quickly: If something drives impact, double down; otherwise, pivot and work on something that drives higher impact.
How do you structure a PLG function?
The size of a PLG function in a company varies significantly depending on the stage of the company. Typically, PLG-leading companies have the following elements in their function:
- Acquisition: Focuses on .com/.io to drive efficiencies in converting users to Sign-up. Many companies have a growth team on their website platform and experimentation.
- Activation: Gets users to their Aha moment. Growth teams typically own sign-up onboarding.
- Retention: Cares about engagement in the app and the feature adoption. More details on adoption pieces are here.
- Monetization: Growth teams own Free Trials, Upgrade/downgrade experiences, as well as parts of building funnel to the enterprise sales
- Growth platform: This is the essential element since the platform aspects powers all of the above and lays down a path to sustainable growth for the rest of the product org.
I have seen the following compositions within a growth function
- Growth Leader - Often titled as Head/VP/Chief
- Software Engineer — The number varies depending on the stage and nature of the company
- Product Designer - To help sort through user experience
- Data Scientist - Growth is often a numbers game. That’s where you find your opportunities.
- Product Marketing - The projects are continually optimizing messaging in the app
- Email Marketing - The team constantly uses a multi-channel approach
- Product Manager - When the team size grows to be more than a couple of engineers on the team
While this is a composition, the growth function takes various forms across companies.