When should you forgo developer-led PLG to win big?

In the first year building Constructor, I determined that the most popular go-to-market strategy at the time, known as product-led growth (PLG) would not work for us. It was a painful realization for a product head!

Algolia was a well-funded Y Combinator startup that built an early lead with a bottom-up, product-led growth motion. Users could sign up and go without talking to anyone. Algolia sold on speed, simplicity and cost. At the time, developers liked the product!

We decided to zig where they zagged.

Our goal was clear: Build a billion dollar business to solve search for the world's largest eCommerce companies. To do that we needed to sell our value to VP and C-level executives on the differentiators they cared about: Conversion, revenue lift and ROI.

That meant we had to master enterprise sales very early. It was an unpopular choice that cost us interest from investors who were wedded to the conventional wisdom of the time: Growth at any cost, margins be damned.

The pivot to enterprise enabled us to outpace Algolia in the most valuable segment of the market. It also led to another pivot...

Early on, our CEO Eli surmised that our ideal customer persona (ICP) was not other engineers like him: “I’m cheap as hell; I’m the last person I’d want to sell to!” He was remarkably self-aware in this :)

More than being a tough sale, developers weren't the right audience. Yes, they built search, but they didn't own business outcomes.

Instead we focused on the people who cared most about search outcomes: Product, marketing and above all, owners of P&L.

Engineering-led go-to-market motions can be powerful: An engineer uses a credit card to prototype, the tool becomes entrenched, usage grows and spending balloons. But it can also be a trap if your ICP doesn’t own outcomes for your product. Eventually you'll get displaced by someone who speaks the business's language.

By focusing on personas who owned search outcomes, we could tailor our product and go-to-market to the people making decisions.

Algolia advertised price, simplicity and speed: Milliseconds matter. Not only did this miss the ICPs’ language, it hamstrung crucial pivots.

When Constructor shifted the conversation to AI and conversion outcomes, Algolia struggled to provide optimized results fast enough. They had to renege on their product and marketing investments in speed to develop and pitch an AI solution.

Frustrated customers defected. We had delivered higher-quality results but now we also did so faster than Algolia.

A few questions to ask

What is the ultimate prize you're after? If your terminal market is enterprise, it might make sense to target it first.

Are a segment of potential customers happy with an incumbent? Don't build a product for them!

Who holds the business results your product optimizes? Design the business around those people.