Product-led growth

Luca Mastella is the founder of Learnn, the leading Italian online education platform. It's like Masterclass, but for business topics such as growth, marketing, search engine optimization, design, and data analytics.

I don't think there is a platform in the English market that matches the quality and depth of Learnn's content. And that's why they have grown to over 130,000 active subscriptions after just three years since launching. What's even more impressive is that the platform has been consistently growing since day one, without any need for external funding.

This success is not a coincidence—Luca understands growth like very few people. In this episode, we dive into product-led growth with practical examples of how it is implemented at Learnn.

What is product-led growth?

A few days ago, I came across a post criticizing product-led growth. "This whole PLG story is bullshit," it said. "The idea that your product can sell itself and that it's so good that people will organically find and buy it is so stupid." With this in mind, I wanted to start this interview with some definitions.

First of all, the idea that the "product can sell itself" doesn't mean that it's so good that people will organically find and buy it. As Luca explains, "Product-led growth doesn't negate the need for marketing and sales." A product selling itself means that someone can stumble upon our landing page, sign up, use, and buy our product without any sales assistance. You are still doing marketing and sales, but you are also building marketing inside the product itself.

Second, a key idea in product-led growth is that "The product should not only satisfy users' needs after purchase but also provide value before it," notes Luca. This can be done via a freemium plan or a free trial, through which we can acquire users who wouldn't convert otherwise. Before introducing a freemium plan, Learnn's paid ads converted 2% of visitors while the remaining 98% were lost forever. With a freemium plan, their paid ads convert to a sign-up 50% of the time. Users will then have time to convert after experiencing the value of the product.

"Third," explains Luca, "product-led growth is about using data to understand all aspects of our product and our users' behavior." For example, the screenshot below shows that Learnn's users who watch at least 10 lessons within four days of signing up are 14 times more likely to convert to a paid plan. By knowing this, Luca and his team can optimize their onboarding, marketing funnels, and automations to activate new users.

Freemium plan or free trial?

As mentioned earlier, one of the key concepts of product-led growth is allowing users to experience the value of a product before making a purchase. This can be achieved through a free trial or a freemium (free forever) plan. With a free trial, users can access the full product by providing their credit card information. Instead, a freemium plan gives users limited access to the product for free. Choosing the right model heavily depends on the peculiarities of your product.

One of the most important considerations is how users can experience its value while still being motivated to eventually become paying customers. Let's take Learnn as an example. "If we were to offer a free trial," explains Luca, "users could simply sign up, watch the entire course they are interested in, and then leave. And if they don't finish it, they can just create another card and another account."

Instead, with a freemium model, users have free access to 40% of each course. This allows them to experience the quality of the product, but they still need to upgrade to a premium plan to watch the full course. Data analysis can also help make a more informed decision.

Luca points out, "When we tested a free trial, we discovered that the cost of acquiring a premium user after the trial was very similar to the cost of acquiring them directly." This led them to realize that the main barrier for users was using their credit card, regardless of the associated cost. By introducing a freemium version, they have significantly lowered the barrier to entry.

Scalability issues

Although Learnn has eventually adopted a freemium model, Luca notes that it's important to transition to this point gradually. A potential problem is scalability. "One of the reasons behind Myspace's fall from grace," he says, "is that the performance degraded as the user base grew." It's crucial to understand if your infrastructure is scalable enough to offer a freemium plan. If not, a free trial can help safeguard it from an overwhelming influx of users.

The second problem might be the quality of your product. Luca observes, “The goal is to implement a product-led strategy when the product has achieved a level of data, security, technology, and user satisfaction that enables it to accelerate the conversion to premium plans. If the product hasn't reached that level yet, it will have the opposite effect.”

That's why Learnn launched their MVP as a closed beta (with 4,500 paying users). They have then spent six months improving the product based on users' feedback. Afterward, they introduced a 7-day free trial and eventually launched a free plan after optimizing their infrastructure.

Onboarding

We saw that users who watch at least 10 lessons within four days of signing up are 14 times more likely to convert to a paid plan. If you are not paying attention to your data and user behavior, you are just hoping that users will get there on their own. Instead, one of the most important aspects of product-led growth is having an effective onboarding that increases the likelihood of that happening.

With over 100 courses on the platform, Learnn has optimized its onboarding process to help new users find the right course. They utilize onboarding surveys to gather important information, such as users' roles in a company, objectives, and interests, in order to optimize the user experience (UX) and activate new users. The product team then consistently monitors drop-off points and makes necessary adjustments. You can also use tools like Page Flows to gain insights from other startups' onboarding processes.

Land and expand, on autopilot

When thinking about an education product for enterprise customers, one might take for granted that a sales team is reaching out to potential customers, handling sales calls, doing demos, onboarding each customer, and so on. However, Learnn launched their B2B offer just 9 months ago and, without a single salesperson, managed to acquire 500 enterprise clients.

How did they achieve this? The product-led way, of course.

By using data gathered from onboarding surveys, Learnn segments users based on company size, roles, and email domains. With these insights, they set up email funnels and automations to educate users about their B2B plan and encourage them to consider a team plan.

Below is a screenshot showing how Learnn organically expanded within a company. The first two users were acquired through Facebook and Instagram, and they invited their colleagues within the company. All eight of these users were on a free plan until the company's CEO purchased a yearly premium plan with 45 seats (worth €5400/year).

Product-led SEO

When people think about search engine optimization (SEO), they usually think about writing articles and making them rank on search engines. As depicted below, Learnn is ranking for thousands of keywords on Google. The best part? These are not blog articles.

Each lesson of Learnn’s courses might answer a specific question. For example, a lesson in their Facebook Ads course is titled "How to analyze Facebook Ads data." Hundreds of people search for this keyword on Google every month. However, the problem is that lessons are only visible to logged-in users. In other words, search engines do not have access to Learnn's internal content.

But the Learnn team changed that.

They created a dynamic HTML page template to populate content for thousands of keywords. So, if someone searches for "How to analyze Facebook Ads data," they will land on this page:

And they have a similar page for thousands of other keywords. And each of these pages was created automatically. The key concept is to make visible to search engines what is already part of the product, typically hidden behind logins or other barriers.

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To conclude, Luca leaves us with one last piece of advice. “I’m a former basketball player, and I have always made the mistake of loving to play. But I learned that you can’t be a coach and a player at the same time. You are either a coach or a player. I love being a player, and I still make the mistake of wanting to do everything myself. But at the same time, I know that if I’m not the coach, I have to find another coach. When you want to be involved in every process, you reach a point where you are the bottleneck. That’s when you realize that your company needs to evolve into something different. That’s when you need to learn to delegate and trust your team.”