Product-led growth One of the most popular topics discussed in the world of startups is that the market value of public companies using growth tactics has skyrocketed in recent years.
It is no different in the field of cybersecurity. why? To find out, I analyzed More than 800 products from more than 600 sellers Use information from open sources, including Google, Gartner, CB Insights, and startup/vendor listings from various sources.
The focus was on security products, not service providers, except for companies that “manufactured” their services, for example, offering them as a product package, at transparent prices per user, with the ability to register online, etc.
Of the 824 products reviewed, 151 can be described as product-led.
The map below summarizes the state of product-led growth in the cybersecurity industry.
The categories are intentionally broad; Below is an explanation of what is included in each category. Some companies have product offerings that fall under multiple categories; I’ve tried to reverse it on the map as well.
The companies presented here are at different levels of PLG maturity: while some have followed a product-led growth strategy from the start, others have pivoted or are still in the process of switching from sales to PLG.
Companies that do not embrace the ideas of openness and transparency will be removed from the market.
Trends That Determine PLG Accreditation
What is driving cybersecurity companies to adopt product-led growth? I have noticed several PLG related trends in the field of cyber security while preparing this market map.
Traditional sales channels are no longer available to startups
CIOs, leadership teams, and mid-level managers have been bombarded with marketing and sales by security vendors. Selling to the highest levels of security leadership requires a large network, introductions, and a large budget for invite-only events, gala dinners, and other entertainment.
Top-down product displays aren’t just expensive – they’re ineffective. Hundreds and thousands of vendors trying to offer security tools and solutions to security leaders can lead to ‘vendor overload’.
Security startups have constrained resources and can’t afford “wine and dine” CISOs, and they don’t have the brand recognition to get around the hype of vendor overload. With that, entrepreneurs are forced to look for new ways of acquiring customers that will allow them to build businesses with reasonable unit economies and the ability to grow. PLG enables companies to lower the cost of customer acquisition, bringing the total cost of revenue as close to zero as possible, enabling the growth of hockey.
Value is a factor that determines whether a particular segment can be driven by the product
Not all product categories in the cybersecurity space have an equal opportunity to benefit from the unit economies and growth potential offered by PLG.
The factors that ultimately determine whether a particular segment can be driven by a product are how realistic the value of the product is and how long it takes the user to fully realize the value that the product in question brings (“time-to-value”).
First, the value of the product must be well-defined and easy to understand. In other words, the person using the product should be able to easily see the difference between ‘before’ and ‘after’.
Developer-focused products and tools for tech security professionals have a distinct advantage here because they solve very specific problems with their users’ experience, unlike segments like Endpoint Discovery and Response (EDR) that sell “security” in a broad sense. Being able to see the value of a product is not enough; Speed is just as important. For example, if it took months to learn that a product blocked ransomware, people are not likely to upgrade to the paid version after 30 days.
One way to communicate the value of a product is to visualize the metrics that best describe it. For example, an antivirus can send a daily notification about the number of viruses removed, while a compliance management tool can present a dashboard with the number of compliance violations detected during the week.