While being product-led can lead to significant benefits and deliver product-led growth it’s not without its challenges.
Here are a few common obstacles that I’ve seen companies face.
Resistance to change with the product-led growth strategy
Adopting a product-led approach requires a shift in mindset and culture. Some team members may be resistant to change or have a hard time adjusting to a new way of working.
Having a strong product vision can help implement a product-led and user-centric mindset. If your teams know what the vision is they can keep focused and motivated.
You will need a mission, vision and strategy and enable your teams to not only see where the journey is going but also know how to actively contribute to getting there. Your strategy needs to be translated into a clear plan of action everyone understands.
Lack of resources
Creating products that truly meet customer needs requires significant investment in research, design, and development.
Companies may need to allocate more resources to product design and development to build better products at scale and for those products to make an impact.
In order to not let that investment explode, however, prioritisation and focus are key. This focus and prioritisation will actually help product development. You avoid just watering everything across all areas.
Moving to this model requires training, learning and coaching teams. Also allowing teams to practice the skills and shift in mindset.
They will need coaching on conducting discovery first and then how to figure out possible solutions. This is a radical change from the norm of going in with a very quickly defined set of features.
Poor cross-collaboration
If you want innovation you need to collaborate, but you can’t just tell teams to work together and expect magic to happen. People are used to working in siloes. They have entrenched thinking. They may have never incorporated customer insights into their thinking before.
As leaders and managers, you will need to provide collaborative tools to facilitate this collaboration. You’ll need to enable everyone to use the same language and the same tools.
And teams need to learn to work together and solve problems across departments. Truly great experiences are only created when teams beyond product willingly contribute and especially help during the requirements-gathering stages.
Product is not an island!
Lack of experience gathering or interpreting user data
You may have masses of customer data, but only a few people who can interpret it, and even fewer who use it.
Spending time understanding your data and packaging it so it can be used by your teams, and across different departments is valuable and again helps align everyone to your strategy.
More often than not, however, companies aren’t actually gathering real insights from their users and are simply making assumptions and operating on old insights. And here the only remedy is getting out there, asking real customers and users about e.g. a concept you’ve sketched out or a prototype your team developed – with the premise to do this kind of work EARLY and OFTEN. (and to again use the insights to share widely and build momentum internally about the magic that real discovery work and user research brings in-house)
Challenging and rejecting requests
There’s a big cultural shift that occurs when moving to a product-led growth strategy. Prioritising the product will mean saying no to those “little requests” from founders and stakeholders.
And beyond the seemingly small and ad-hoc tasks that arise – it generally means needing to establish focus and a product strategy that aligns with your business strategy – assuming that you have one in place.
As Matt LeMay puts it “saying no, without saying no” and establishing a prioritisation framework that tells you which items, services or products are that align with your strategy vs all the other work you can’t do – for the moment or even longer term.
Only once you have clearly identified which areas to work on first, can you then start building out other areas – assuming you’ve done that first part well and know what your core offering is.
No experience in innovating
Do your teams have experience in innovating? They may have been so entrenched in building more and more features, chasing the next shiny thing and troubleshooting issues across your existing services, they’ve never had the time or space to innovate or just to iterate on your existing offering..
You may need to encourage an innovation mindset and offer opportunities like workshops for teams to come together and do discovery work, to better define the problems you’re seeking to solve – before jumping into yet another featuritis project..
Difficulty measuring success
Traditional metrics like revenue and profit may not be the best indicators of success for a product-led company.
Measuring customer satisfaction, retention, and engagement can be more challenging but all of them are essential for understanding whether your product is meeting customer needs. Reorienting the way data is captured or employing new tools to capture the right data can take time and effort, but the results are worth it.
Your teams may need to redefine their key performance indicators (KPIs) with new tracking and reporting, so as to make sense of them from a product & experience perspective. For example, “increasing NPS by x%” is not a useful measure when it comes to measuring product performance.
Moving to a user-centric product model, with the whole organisation on board, may seem like a monumental task, but the benefits will far outweigh the initial teething pains.
It means having your core services and products clearly defined. It also means having a product strategy that aligns with your business strategy, allowing your teams to say “no without saying no”. And this, in turn, means allowing them to focus on outcome over output, moving away from doing lots and lots without direction, to doing more of what matters – and being clearer that it matters, because you will have more clarity about your user needs and how your products and services address those.
Want to know more about the product-led model and product-led growth? Read my article on “The business case for being product-led.”