Product-led growth (PLG) is defined by VC firm OpenView as “a growth model that drives product usage customer acquisition, retention and expansion.” This is a major shift in growth driven by hands-on sales efforts that has broader implications than it might seem at first.
The main difference is that the most successful product-led companies reach only a small fraction of the users who subscribe to their products — 14%, according to OpenView’s third annual Product Benchmark Report.
For companies hoping to emulate the success of Fisma, Slack, Zoom, and the like, this leaves a difficult question to address: Which of their users should they reach out to and when?
Uncovering sales opportunities is what Swedish startup Ripe is offering its product-driven customers. “It’s about helping users understand which users are both successful and who fit their ideal customer profiles, and what actions to take with them,” Elin Lutz, CEO and founder of the platform, told TechCrunch.
Lutz and her co-founder, Jonathan Dykert, had experience building SaaS products and realized that product-driven companies didn’t need more information: they just needed to be able to connect the dots between production and sales, which was ripe. It does.
The two teams joined forces in 2021 to form their company in Stockholm, which was originally called Chimer. Lutz explained that the new name reflects the company’s role in helping clients “target mature accounts.” [their] its own existing use cases”.
The information Ripe relies on comes from the customers themselves – but from a variety of sources previously cut off and inaccessible to sales teams.
“We’ve seen that there’s something amazing about the data being stuck in the product […] And it’s not served across the organization,” Lutz said. “There was a big difference between how sales work and how the product works.”
In a product leadership company, access to product usage data is critical for customer success teams; Otherwise, they have no way of knowing which users are worth their time. Static profile data doesn’t help much; They need to know who is engaging with the product and how.
Consider signing up for a premium product: How does the company behind it know if you’re a single user who never leaves the free tier, or a single user who represents enterprise-sized leadership? In a sales-oriented process, the sales team already knows. Bottom-up adoption, which is more and more common, requires connecting data to answer this question.
The fact that many B2B companies are adopting a freemium model will undoubtedly create a tailwind for companies like Rip.
“The way enterprise software is purchased has changed, with most of the purchasing power in the hands of the end user. However, there is no infrastructure to connect sellers and buyers in real time,” said VC Paul Clem. “Getting into this relationship at the right time and in the right way represents a huge opportunity.”
Clem is also a partner at European venture fund Earlybird Venture Capital, which led Rippen’s $2 million pre-seed round along with Norway-based Alliance Ventures. Individuals from the European B2B SaaS and tech scene participated in the funding, such as Pleo and Mentometer sales, Soundtrap’s co-founder and Livy’s CEO and CTO, Ripe said.
Similar companies such as Endgame, Correlated and Pocus exist in the US. But as more and more businesses embrace product-driven development, there seem to be more places for service providers to avoid building their own internal dashboards. After SaaS for SaaS, companies that enable product-driven growth are a new trend to watch.
