4 ms·

The coming PLG to SLG apocalypse

15 points by iajiboye 6mo ago

iajiboye 6mo ago
Nowadays, it seems every new startup has a trust center and is SOC 2 compliant from day one (wink, wink Delve). What's truly happening is that AI unit economics are forcing companies to move upmarket much earlier than previous cloud and SaaS eras. An enterprise customer will simply offer better margins compared to a self-serve one. So companies are recognizing PLG motion isn't a persistent revenue generating motion. Instead it exists more so as a product discovery and experimentation capacity with the aim to ramp you quickly towards enterprise negotiated deals. The difficulty with this is simply unified revenue operations across blended PLG/SLG motions is complex to achieve if you did not build the commercial foundations early. The culprit varies: 1. Massive dearth of elite, world-class monetization engineers who remain in billing for the entirety of their careers; few engs stay in the billing space by choice 2. Starting with Stripe Billing (plans and subscriptions do not scale): in billing, exceptions are the rule not the exception 3. Commercial governance, command and control tooling for the fragmented revenue stack is nonexistent (it is not-uncommon to be using 8-9 platforms for your end-to-end catalog/pricing to contracting to metering to invoicing to collection to revenue recognition lifecycle) Agents won't serve the Frankenstein mess. It is much better to have a single source of truth (i.e system of record) of commercial terms, guardrails, policies, workflows for agents to operate upon than trying to use agents as a drop in for the manual glue work monetization, billing and ops teams currently do. I've seen this in my career at companies like Segment, Twilio, and Orb. Happy to chat more and learn about how your companies are dealing with supporting both self-serve and enterprise customers simultaneously. I don't believe any one does this superbly well!
deleted 6mo ago
[deleted]
pstoll 6mo ago
PLG. Any article I have to search for an acronym and don’t find it - nope.
stavros 6mo ago
I didn't realize how much I appreciated writing having a distinct voice until LLMs made everyone sound the same. This strikes me as extremely LLMy: > SaaS era: ~decade to go upmarket. Cloud era: ~5 years. AI era: <2 years. The gap between 'developers love this' and 'enterprises are asking for SOC 2' has never been shorter. No judgement if you want to write your articles with LLMs or whatnot, you do you, I've just discovered that their default style grates a bit. It's like when Bootstrap came out, initially it looked amazing but very quickly it became the "default site" look.
Thev00d00 6mo ago
Hard to tell if this is so hard to read because it is LLM generated, or because its is hollow "thought leadership" with no insight. Unsure if there is no astroturfing rule for HN, but this is pretty blatant.
bigbossman 6mo ago
I agree with the headline, but find it ironic that there's no self-serve option
- iajiboye 6mo ago
  There's no irony there. The friction is actually quite intentional. Enabling the capacity of unified selling motions early on in a company's lifecycle is not something that one can just sample or "try". It's a commitment that executive leaders and champions have to take seriously. Folks might see the pain point but only understand the tip of the iceberg but having a conversation and paid pilot surfaces key structural issues. This leads to stronger outcomes rather than trusting that companies know exactly what to do and can self-serve those transformations themselves. So you can say in our scenario, the headline is in fact too true and the timeline collapsed to nonexistent for us, haha.
homarp 6mo ago
Since I looked it up: Product-Led Growth (PLG) Sales-Led Growth (SLG)
latenode 6mo ago
PLG only worked when the product could sell itself to a team without procurement getting involved. That window is closing fast and everyone pretending otherwise is about to have a bad year.
- apsurd 6mo ago
  Why is the window closing though? Because the prices went up? Or companies have to demonstrate belt-tightening? Or the AI mandate has teams building their own saas?
  - iajiboye 6mo ago
    There's several aspects. For one, I don't see teams building their own SaaS even with AI. Companies buy rather than build to avoid significant operational and maintenance burdens as well as transfer risk and liability to a third party. AI does not change that calculus. What AI instead is enabling a shift from Software as a Service to Service as a Software. In other words: SaaS is dead, long live SaaS. Most vendors in SaaS started because software is high margin and has limited scaling costs. But as they mature, they find clients also want guidance, professional services, and clear outcomes. This is part of the rise of the Forward Deployed Engineer (FDE) as a formal role. So it's not enough to sell the software, you also now to have sell how to use the software and what transformations are possible using the software. Essentially you can sell software to an individual but you sell transformations ("value alignment") to teams, divisions, orgs. Another is that inference will become more expensive rather than cheaper over time. The capex spend on data centers has to be paid back by someone. This is the standard Silicon Valley playbook. Start cheap, gain marketshare, operate as a cartel, and then massively hike prices (i.e Uber, Airbnb...). So vendors (even if they operate with value-based pricing) still have to protect their inference costs will see more value from going upmarket early with larger contract deal sizes TL;DR Companies will still buy SaaS but a new variant -> services and outcomes rather than purely software. This coupled with increasing inference costs means value alignment will more likely require a negotiated conversation than a 1-click purchase
    - apsurd 6mo ago

15 points by iajiboye 6mo ago

Nowadays, it seems every new startup has a trust center and is SOC 2 compliant from day one (wink, wink Delve). What's truly happening is that AI unit economics are forcing companies to move upmarket much earlier than previous cloud and SaaS eras. An enterprise customer will simply offer better margins compared to a self-serve one. So companies are recognizing PLG motion isn't a persistent revenue generating motion. Instead it exists more so as a product discovery and experimentation capacity with the aim to ramp you quickly towards enterprise negotiated deals. The difficulty with this is simply unified revenue operations across blended PLG/SLG motions is complex to achieve if you did not build the commercial foundations early. The culprit varies: 1. Massive dearth of elite, world-class monetization engineers who remain in billing for the entirety of their careers; few engs stay in the billing space by choice 2. Starting with Stripe Billing (plans and subscriptions do not scale): in billing, exceptions are the rule not the exception 3. Commercial governance, command and control tooling for the fragmented revenue stack is nonexistent (it is not-uncommon to be using 8-9 platforms for your end-to-end catalog/pricing to contracting to metering to invoicing to collection to revenue recognition lifecycle) Agents won't serve the Frankenstein mess. It is much better to have a single source of truth (i.e system of record) of commercial terms, guardrails, policies, workflows for agents to operate upon than trying to use agents as a drop in for the manual glue work monetization, billing and ops teams currently do. I've seen this in my career at companies like Segment, Twilio, and Orb. Happy to chat more and learn about how your companies are dealing with supporting both self-serve and enterprise customers simultaneously. I don't believe any one does this superbly well!

deleted 6mo ago

[deleted]

pstoll 6mo ago

PLG. Any article I have to search for an acronym and don’t find it - nope.

stavros 6mo ago

I didn't realize how much I appreciated writing having a distinct voice until LLMs made everyone sound the same. This strikes me as extremely LLMy: > SaaS era: ~decade to go upmarket. Cloud era: ~5 years. AI era: <2 years. The gap between 'developers love this' and 'enterprises are asking for SOC 2' has never been shorter. No judgement if you want to write your articles with LLMs or whatnot, you do you, I've just discovered that their default style grates a bit. It's like when Bootstrap came out, initially it looked amazing but very quickly it became the "default site" look.

Thev00d00 6mo ago

Hard to tell if this is so hard to read because it is LLM generated, or because its is hollow "thought leadership" with no insight. Unsure if there is no astroturfing rule for HN, but this is pretty blatant.

bigbossman 6mo ago

I agree with the headline, but find it ironic that there's no self-serve option

iajiboye 6mo ago
There's no irony there. The friction is actually quite intentional. Enabling the capacity of unified selling motions early on in a company's lifecycle is not something that one can just sample or "try". It's a commitment that executive leaders and champions have to take seriously. Folks might see the pain point but only understand the tip of the iceberg but having a conversation and paid pilot surfaces key structural issues. This leads to stronger outcomes rather than trusting that companies know exactly what to do and can self-serve those transformations themselves. So you can say in our scenario, the headline is in fact too true and the timeline collapsed to nonexistent for us, haha.

homarp 6mo ago

Since I looked it up: Product-Led Growth (PLG) Sales-Led Growth (SLG)

latenode 6mo ago

PLG only worked when the product could sell itself to a team without procurement getting involved. That window is closing fast and everyone pretending otherwise is about to have a bad year.

apsurd 6mo ago
Why is the window closing though? Because the prices went up? Or companies have to demonstrate belt-tightening? Or the AI mandate has teams building their own saas?
- iajiboye 6mo ago
  There's several aspects. For one, I don't see teams building their own SaaS even with AI. Companies buy rather than build to avoid significant operational and maintenance burdens as well as transfer risk and liability to a third party. AI does not change that calculus. What AI instead is enabling a shift from Software as a Service to Service as a Software. In other words: SaaS is dead, long live SaaS. Most vendors in SaaS started because software is high margin and has limited scaling costs. But as they mature, they find clients also want guidance, professional services, and clear outcomes. This is part of the rise of the Forward Deployed Engineer (FDE) as a formal role. So it's not enough to sell the software, you also now to have sell how to use the software and what transformations are possible using the software. Essentially you can sell software to an individual but you sell transformations ("value alignment") to teams, divisions, orgs. Another is that inference will become more expensive rather than cheaper over time. The capex spend on data centers has to be paid back by someone. This is the standard Silicon Valley playbook. Start cheap, gain marketshare, operate as a cartel, and then massively hike prices (i.e Uber, Airbnb...). So vendors (even if they operate with value-based pricing) still have to protect their inference costs will see more value from going upmarket early with larger contract deal sizes TL;DR Companies will still buy SaaS but a new variant -> services and outcomes rather than purely software. This coupled with increasing inference costs means value alignment will more likely require a negotiated conversation than a 1-click purchase
  - apsurd 6mo ago