Kyle Poyar Contributor Share on Twitter Kyle Poyar is a partner at OpenView. More posts by this contributor
- Usage-based pricing is a company-wide effort
- Inside the rapid rise of usage-based pricing
It’s no secret that 2022 has been a brutal year for software companies. Valuations have been slashed, inflation keeps climbing and layoff announcements abound. The whispers of a potential recession have morphed into full-throated shouts. Once high-flying companies now struggle to attract new capital to sustain their growth, causing SaaS executives to pivot hard toward profitability.
The silver lining on this dark cloud: Downturns coincide with a rush of startup activity. Folks who’ve been laid off or have woken up to realize their stock options are suddenly worthless will opt to bet on themselves. They’ll finally take a chance turning that nagging idea into an actual product. And they’ll build a company with the discipline that comes with a macro environment that prizes capital efficiency rather than growth at any cost.
In short, the best software companies of the 2020s will be built over the next 12 months. But the way to build and scale a standout company in the 2020s doesn’t look like it did in the past.
Let’s unpack what’s changed and principles for how to build, distribute and monetize products in this new era, the Age of Connected Work. I’ll focus on six of the most fundamental principles that apply to nearly every PLG product.
Image Credits: OpenView
Build for the user
The classic B2B playbook focused almost exclusively on executive buyers. The actual end users of a product were an afterthought.
Now, the B2B buyer journey starts with the end user. They discover software products, share them with colleagues and tell their boss what to buy. Product engagement sets the tone and then buyers follow users. You should think deeply about the needs and experiences of the folks who will actually use your products, not just those who will sign the PO.
Build to be discovered
Software companies used to throw money and bodies at getting noticed by big company executives. Expensive customer acquisition costs weren’t an issue as long as you could maintain healthy top-line growth. Now, prospective buyers feel bombarded by the constant barrage and want to opt out (more and more are even using tools like Gated to mute the unwanted emails).