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Product-led growth companies, those who educate and convert buyers with product rather than sales and marketing, operate at about 5% to 10% less profitability than sales-led motions.
First, because public tech companies are less profitable than they were a year ago. The sales-led companies had higher net income margin than thePLG companies. This reversal isn't worth looking into just because it may be temporary.
“The PLG playbook is still being written — and what’s happening today will be an important chapter in that playbook.” OpenView Partners' Kyle Poyar
The model of product-led growth has been adopted by many private companies. If a company is less profitable, it will be important for the company to have a path to profitability.
Things aren't clear-cut. There are some reasons why PLG companies are less profitable now than they would have been in the past. Kyle Poyar is a partner at Open View Partners.
A Boston-based VC firm known for advocating for product led growth has several horses in the race. It is invested in making sure that PLG is a recipe for success and is interested in looking into what can make it happen. This is what Poyar had to say.
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