Keen on product-led growth in SaaS? Look towards gaming

Published in

Northzone

5 min readJun 30, 2020

Product-led growth has become a popular buzzword in the SaaS space, fuelled by growth stories like Slack, Dropbox and Hubspot. It typically refers to software companies that distribute their products through other means than traditional enterprise sales models.

This wave of SaaS businesses is supported by a few tailwinds among B2B SaaS buyers. In the extension, it’s about the blurring lines between enterprise and consumer tech worlds, summarized beautifully by @nbt here. There is lots of great content on these topics, so I won’t go deep, but trends like ‘consumerisation of the enterprise’ and ‘millennial buyers wanting to self-educate’ has fueled SaaS companies leveraging freemium business models. This has led to some of the fastest growth trajectories among B2B software companies ever recently. Hence, we’ve created a new buzzword to attach to this phenomenon: product-led growth.

Obviously, claiming the name of a new theme in business is cool, but these companies typically employ established thinking that has been used by product-led technology companies for decades. In particular, companies in the gaming sector have historically been thought leaders in terms of product development methodology and product-led growth. More generally, gaming companies are often seen as a glimpse into the future of technology, business models and product development methodologies. Since my time at King, it’s become clear to me that there were several principles that we and our peers used, that companies across industries would benefit from applying when thinking about product-led growth.

This post is an attempt to synthesize those principles and attach relevant content related to each of them. What are some of the key principles to guide your strategy, processes and organization when it comes to driving product-led growth? What strategies did some of the world’s leading gaming companies use, and what can be learned from them in the SaaS world?

Principles of product-led growth in gaming

To me, there are seven key principles that embody product-led growth among leading gaming companies. Some are high-level and general, some more specifically related to the gaming industry, but they are all applicable to product-led companies across industries. Those are:

A deeply engrained focus on product engagement and user love
Product engagement and user love is the core driver of long-term success. Focus on deeply understanding and maximizing them at every point of the customer life cycle. For gaming it’s easy; optimize for fun. For SaaS, you might express targets & metrics differently, but the overarching goal should be the same. People should love interacting with your product at all times.
Product design satisfying intrinsic motivation & fuelling virtuous loops
You want people to actually want to use your product, even if they did not have to, and you should design every facet of your product to make that happen. Gaming companies are constantly scared of losing ‘funness’ — you should be too. Once users are engaged, use that and create virtuous loops of more engagement and/or more user growth.
Data driven decision making, where possible
Decisions should to largest extent possible be based on data. Sounds obvious to many, but the crux is about deeply engraining it into the culture, and practically setting yourself up to quickly asking the right questions, looking at the right data and drawing conclusions.
Iterative testing enabled by tech, process & culture
Data-driven decision making is enabled partly through iterative testing, in particular with regards to product development, distribution and sales. This has been popularized by ‘The Lean Startup’ and others, and many understand this on a conceptual level, but few realize just how quickly and extensively leading gaming companies iterate.
Flat organizations and distributed decision making
To allow for fast, iterative testing and data driven decision making, the company is steered on vision and high-level targets, with each part of the organization being empowered to independently set direction and make decisions (within boundaries). The hard part is continuing to do this at scale with maintained alignment.
Sales = try-before-you-buy + organic distribution
Most people don’t want to be sold to, they want to experience product value first hand. Help them. In gaming, the free-to-play business model and ‘viral distribution’ (i.e. spamming people on Facebook) were huge drivers of expanding the mobile gaming market for companies like Supercell, King and Rovio. There’s a lot for SaaS founders to learn from here.
Business model & pricing aligned with usage and engagement
Aligning the perceived value (cost) of a product with the experienced value allows for lower perceived friction for the user, and greater long-term user love. Test extensively to find the right model and price levels.

Curated content related to each principle below

Some non-gaming content is included, but all are favourites of mine.

1. A deeply engrained focus on product engagement and user love

2. Product design satisfying intrinsic motivation & fuelling virtuous loops

3. Data driven decision making, where possible

4. Iterative testing methodologies enabled by tech & organization

5. Flat organizations and distributed decision making

6. Product-led sales = try-before-you-buy + organic distribution

7. Business model & pricing aligned with usage and engagement

If you have great content to share along these topics, or if you’re building a product-led SaaS or consumer company, I’d love to connect. I’m on henrik@northzone.com or @henrik_grim.

Keen on product-led growth in SaaS? Look towards gaming

Principles of product-led growth in gaming

Curated content related to each principle below

Written by Henrik Grim