First there was inbound. Then there was conversational marketing. Now there's ... product-led growth.

This newest marketing strategy is catching on at companies like HubSpot, Unbounce, AppCues, and more. In many ways, product-led growth looks like a bottom-up SaaS strategy or a customer-first mindset. Here's the actual definition:

Product-led growth is a go-to-market strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers.

Wes Bush, Product-Led Growth

I first heard about it through the Product-Led Institute and the book Product-Led Growth: How to Build a Product That Sells Itself. Perhaps you've heard of the strategy, too? The book does a great job covering the basics of product-led growth. In particular, one chapter caught my attention: Moats.

Here's a bit more.

The MOAT Framework for Product-Led Growth

The Moat framework helps you identify how you will approach product-led growth at your company. It helps you understand your business better so that you can understand how best to serve your customers. And at the end of the exercise, you have a pretty good idea of what makes your business unique and defensible (hence: a moat). :)

MOAT stands for:

• M — Market Strategy: Is your go-to-market strategy dominant, disruptive, or differentiated?

• O — Ocean conditions: Are you in a red- or blue-ocean business?

• A — Acquisition: Do you have a top-down or bottom-up marketing strategy?

• T — Time-to-value: How fast can you showcase value?

Different answers to the MOAT questions necessitate different strategies.

Perhaps you're already seeing those questions and wondering where your business fits in. I thought it'd be an interesting exercise to answer these questions on behalf of Buffer to see where we stand.

Understand your market strategy: Are you dominant, disruptive, or differentiated?

To understand your market strategy, you must first understand the way in which your product grows and you win customers.

These growth strategies can be visualized in a matrix based on two different variables:

1. Does your product get the job done better or worse than others? You might have a product that solves a problem better than anything else out there, thereby winning an underserved portion of the market. You might have a product that solves just one part of a problem really really well, which would allow you to capture an over-served market.

2. Do you charge more or less than others? Pretty self-explanatory. Price plays a big role in how you grow and win customers. You might cost more and be a premium option, or you might cost less and be a budgetwise choice.

After thinking of your product with these two questions in mind, you then plot your product on the growth strategy matrix into one of four quadrants: dominant, disruptive, differentiated, or out of business.

The growth strategy matrix: Is your strategy differentiated, dominant, or disruptive?

• Dominant strategy — Win all types of customers (gets job done better, charge more)

• Disruptive strategy — Win overserved customers (gets job done worse, charge less)

• Differentiated strategy — Win underserved customers (gets job done better, charge less)

• Out of business — In due time (gets job done worse / charge more)

Another way of assessing where you land on this matrix is by running through a set of questions for each strategy. This can happen either as you're deciding what your growth strategy currently is, or you can look forward and determine what you want your strategy to be.

Here are the list of questions to ask yourself when deciding if each strategy is the best fit for you:

Dominant growth strategy

Gets the job done better / Charges more

• Is your total addressable market big enough to support a freemium model?

• Does your product solve a specific job significantly better and at a lower cost than anyone else in the market?

• Can your user realize significant ongoing value quickly with little-to-no help from company personnel?

• Do you want to be the undisputed market leader in your category?

Disruptive growth strategy

Gets the job done worse / Charges less

• Is your market full of over-served customers?

• Are you competing in a hyper-competitive market?

• Is your market large enough to support a freemium model? (Hint: Look to your competitors to gauge the market size.)

• Do you have the resources to support a freemium model?

• Can your onboarding be completely self-service?

Differentiated growth strategy

Gets the job done better / Charges less

• Is your market comprised of underserved customers?

• What is your TAM?

• Is your Annual Contract Value (ACV) high enough to support a low- or high-touch sales team?

• Could your prospects experience an “Aha!” Moment during a free trial?

What is Buffer?

When deciding your growth strategy, it can be helpful to think of it in terms of these questions:

• Do you want to offer the best solution for the lowest price? (Dominant)

• Do you want to offer the best-customized solution for the highest price to underserved customers? (Differentiated)

• Do you want to offer the simplest product for the lowest price to over-served customers? (Disruptive)

• Or are you planning a hybrid strategy?

I think if you'd ask around at Buffer, you'd find some people on the Dominant side and some people on the Disruptive side. So perhaps we have a hybrid approach. We compete really well on price. We also intentionally do not built out every single social media marketing feature possible. For those reasons, I'd say we're disruptive. But you'd likely find several Buffer teammates who might disagree with me!

Ocean conditions: Are you in a red ocean or a blue ocean?

This concept is quite ubiquitous in business and strategy. It's a framework I first came across in terms of content marketing:

In terms of product-led growth, it's important to know which ocean you're competing in:

• Red-ocean companies try to outperform their rivals to grab a greater share of existing demand.

• Blue-ocean companies access untapped market space and create demand.

There's nothing wrong with either approach (although the blue ocean strategy has always appealed more to me). It's more about knowing where you stand. If you're a red-ocean company, then you'll be more competitor-focused in your positioning, marketing, and customer care. If you're a blue-ocean company, then you can afford to be more market-focused.

Where is Buffer?

Historically, we've been a red-ocean company, competing with many, many other tools in the social media space --- including the big players like Hootsuite and Sprout, the native solutions on Facebook and Twitter, and all the one-off scheduling tools that have proliferated as the tech has become commoditized.

With the shift in focus toward DTC companies, we seem to be swimming toward blue oceans. There's not a lot of social media competition in that space specifically. Sure, some of our competitors serve that niche capably, but no one at our size serves it wholly and intentionally.

Does acquisition happen top-down or bottom-up?

This answer, too, will determine your approach to product-led growth.

Top-down acquisition requires a sales team and lead qualification / scoring. You typically have a very high average revenue per user and a much lower total user count.

By contras, a bottom-up approach allows anyone to try a product all by themselves, with no intervention needed from a person at the company. No sales reps. No qualification. This is typically achieved either through a freemium product that you can use for free for as long as you'd like, or through a free trial that asks for payment to continue using.

Where is Buffer?

We are a bottom-up SaaS product. Anyone can come to our website and sign up to use our product, either for free (forever) or with a free trial.

How fast can you showcase your product's value?

An aha moment (sometimes called the eureka effect or WOW moment) is the moment when new users first realize value in your product. It's related to your product's activation event, but from the user's perspective.

via AppCues

This is the core of the time-to-value question in the MOAT framework. When is your product's aha moment, and how long does it take to get a user there?

Ideally, you'd like the aha moment as soon as possible. The sooner, the better. Typically, once a user experiences an aha moment, they are far more likely to continue using your product.

When is Buffer's aha moment?

We're still in the process of defining activation, but in the past, we've used a few different measures:

• Scheduled a certain number of posts

• Connected a certain number of profiles

I'd argue that an aha moment could also happen when you view analytics for the first time or when you share content with the browser extension. If either of those two were truly the aha moment (it's important to apply a layer of data to possible aha moments so that you can know for sure), then it'd be important to encourage those moments to happen earlier and earlier in the product lifecycle. You may backfill a new user's data so they see analytics as one of their first screens. You may put a browser extension link into a welcome email.

Putting it all together

When you understand your market strategy (dominant, disruptive, or differentiated) ...

When you understand whether you're in a red ocean or a blue ocean ...

When you pick a top-down or bottom-up approach ...

And when you shorten your time-to-value ...

You've created a strong and defensible MOAT around your business, thanks to your product. Knowing these inputs and understanding how they work together can be a key foundation for all that comes next for your product marketing and product-led growth work.