Product-Led Growth (PLG) has been “the way” to grow early-stage, venture-backed businesses since 2016. But the time for software-style growth models for consumer businesses is over. (It should never have started). 

As a venture fund and brand agency that has been identifying, backing, and advising consumer businesses like Harry’s, Casper, Peloton, Hu Chocolate, Warby Parker, NomNom, care/of, Sunday Lawn, Bubble Beauty and Bandit Running for more than a decade, we continue to make the case for betting on consumer brands.

Our experience has shown us that force-fitting the linear thinking of PLG onto consumer businesses and focusing on the daily levers of Customer Acquisition Cost (CAC) and Cost of Goods Sold (COGs) is a non-starter. Consumer businesses will go farther, faster if they employ Culture-Led Growth (CLG) principles and embrace the unique challenges and opportunities that come with building a consumer brand.

Product-Led Growth ideals don’t work for consumer businesses 

Here’s a definition of Product-Led Growth (PLG):

PLG is a business strategy that attempts to drive growth through the product itself. It places the User Experience (UX) with the product at the center of everything and encourages rapid, data-driven, feature innovation to deepen engagement, increase frequency and spawn virality in a way that minimizes the need for sales and marketing.

PLG principles don’t work well for consumer companies for the following reasons:

• Product isn’t a puzzle to solve. Consumer goods and services may be leveraging new technologies, science or methods, but they’re not software. Positioning and messaging are the “kernel,” but how the brand arrives in people’s lives is the application.

• Innovation happens along the pre-, during, and post-journey. Consumer goods and services need to innovate to stay relevant, but they aren’t built on new releases. Ideating outside of “the funnel” (a fallacy in the first place) is where brand leaders can invent an attention arbitrage and build their brand.

• True value is the combination of repeat rate, lifetime value, and brand remarkability. Consumer goods and services spend money to acquire new customers, but these people aren’t “users.” Getting existing customers to want to buy again, to want to try a new product, and to want to tell their friends about the brand – that’s the real growth hack.

Culture-Led Growth can help brands scale in the “attention economy”

Here’s our definition of Culture-Led Growth (CLG):

CLG is a business strategy that drives brand growth by continuously harnessing the external/internal culture that influences the brand’s customers. It places the Customer Experience (CX) with the brand at the center of everything and encourages remarkable, insight-driven, product, service, experience, distribution and media innovation to nurture repeat purchases, try new products and inspire advocacy in a way that minimizes the need for sales and marketing.

Here are seven ways to make CLG work for consumer brands: 

1. Create a TO→ for what you DO

PLG encourages companies to have a singular mission, be agile, and explore multiple ways to reach that goal. The issue is that these missions can fall flat pretty fast.

Early-stage consumer businesses should develop a TO→ Statement. Such as, to “put a man on the moon by the end of the decade,” and then make sure everything they do furthers that ‘to.’ It should be short – cultural – and should spur innovation. It isn’t a financial objective or tagline. It’s something people can see and feel, like Burton’s ‘to’ line: “Until every mountain allows snowboarding.” 

2. Hire design and marketing talent

PLG encourages businesses to hire a lot of engineering talent (and some sales talent) to build a product no one else can build and slide it into new organizations.

Early-stage consumer businesses should hire design and marketing talent in-house and seat them at the executive table. Third parties can be helpful, but that isn’t something to outsource as part of your operating model. Brands need to put this kind of talent at the center of their business to continuously tap subculture. One example is Bandit Running, where Ardith Singh is a Designer and Tim West is a Creative; both are at the helm using their talents to build Bandit. 

3. Overcommit to your muse

PLG encourages businesses to be laser-focused on their users and put their experience with the product at the core of everything the company does to improve it. 

Early-stage consumer businesses should center everything they do around a Muse, who serves as both instruction and inspiration. Brands will have many cohorts, but they should have only one Muse for whom they develop everything. Think about the Muse as a persona in culture: for Trader Joe’s, that Muse is a “substitute teacher who drives a late model Volvo,” and they orient everything in their operations around that person.

4. Ideate fast, delight faster

PLG encourages businesses to iterate on the product endlessly, but iterating on only product isn’t what gets consumer brands to greatness.

Early-stage consumer businesses need to do less iterating and more ideating. Brand leaders should be quickly developing ideas beyond the product and service – brand actions – that are worth people talking about. Then they should delight their customers repeatedly across their journey. It’s not easy, but when founders can think about their brand as a service – like how Chewy sends hand-painted pet portraits to its customers – founders make people fall in love with their brand.

5. Data as a signal

PLG encourages businesses to do what the data tells them. But giving data that much agency over a brand can all but completely remove accountability and creativity.

Early-stage consumer businesses need to develop insights about the culture that surrounds their brand and Muse. Brands need data and should use it to guide strategy, but they need to be brave enough to reject it or make a bet without it. Bubble’s conversations with 4,000+ customers on WhatsApp – not rounds of quantitative studies and data analytics – inspired the idea for their breakout lip balm product.

6. Optimize for creativity

PLG encourages companies to optimize for efficiency. That’s important, of course, but consumer founders also need to cultivate a culture of creativity.

Early-stage consumer businesses need to create the time and space for magic to happen: it cannot be forced out through an Excel sheet or email. Creativity is a process that bears the best fruit when the conditions are just right. Consumer founders need to develop actual creative briefs, not just OKRs. Look to BrewDog’s “Arise Prince Willy” limited time offer beer, brewed with Viagra, that celebrated Prince William’s and Kate Middleton's first baby, and how it took over people’s feeds. 

7. Build a customer base that loves you ASAP

PLG encourages businesses to make building faster than anyone else the objective, strategy, and tactic (all rolled into one). The goal is getting there first. 

Early-stage consumer businesses, however, need to be less focused on disruption and more focused on diffusion. Brand leaders need to know who their Pioneers are. They need to make sure this key cultural segment of innovators and early adopters feel seen and heard. They also need to do things for those customers that don’t scale, giving them something worth talking about. Red Bull’s Flugtag is an iconic example, as the company continues to get people all over the world to show their “wings.”

CLG > PLG

Founders building in the early-stage consumer space, especially in goods and services, should start to question the ideals that put PLG on a pedestal, and evaluate whether that’s the right growth path for their business. 

Product-Led Growth worries about the product and not much else. Culture-Led Growth worries about the brand and everything else. CLG looks like it is a much harder thing to achieve (because it is), but it’s a better way to build a brand that people want.

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