Interview with Kyle Poyar, OpenView Operations Partner
in public tech “Product-led growth (PLG) companies — companies that educate and convert buyers with products rather than sales and marketing (SLG) — operate about 5% to 10% less profitable than sales-led movements. ,” said venture capitalist Tomasz Tunguz. highlighted in his blog post.
This data point could be unique to the moment we’re in. First, public tech companies across the board are less profitable than they were just a year ago. Because not so long ago, PLG companies had higher net profit margins than their sales-driven peers. But just because this reversal may be temporary doesn’t mean it’s not worth investigating.
“The PLG playbook is still in the making, and what is happening today will be an important chapter in that playbook.” OpenView Partner Kyle Poyar
Recent product-driven growth is no longer the exception to the rule. Many private startups have adopted this model, following in the footsteps of Atlassian, Zoom, and Snowflake. If it’s inherently less profitable, founders will want to know. Especially now that investors are once again paying close attention to a company’s path to profitability, unable to reward growth at any cost.
As usual, things are not clear. There are several reasons PLG companies are currently unprofitable, but they may become more profitable in the near future. Contact Kyle Poyar of OpenView Partners for additional perspective on what is happening I took
OpenView is a Boston-based VC firm known for advocating product-led growth, so it definitely has a few horses in the race. But this also means that we are invested in ensuring that PLG is a recipe for success, and we are passionate about what can make it happen. On this topic, Poyar said:
