OpenView’s Kyle Poyar explains how to build a best-in-class software company in the 2020s – TechCrunch

It’s not a secret that 2022 has been a brutal year for software companies. Valuations have been slashed, inflation continues to climb and layoff announcements abound. Whispers of a potential recession turned into full-throated screams. Once upon a time, high-flying companies are now struggling to attract new capital to sustain their growth, forcing SaaS executives to look to profitability.

The silver lining on that dark cloud: downturns coincide with a rush of startup activity. People who have been laid off or who have woken up to realize that their stock options are suddenly worthless will choose to bet on themselves. They will finally try to turn this nagging idea into a real product. And they will build a business with the discipline that comes with a macro environment that prioritizes capital efficiency over growth at all costs.

In short, the best software companies of the 2020s will be built over the next 12 months. But the way to build and scale a top-notch business in the 2020s isn’t like it was in the past.

Let’s discover what has changed and the principles of creating, distributing and monetizing products in this new era, the era of connected work. I’m going to focus on six of the most fundamental principles that apply to almost all PLG products.

Picture credits: OpenView

Build for the user

The classic B2B playbook focused almost exclusively on executive buyers. The actual end users of a product were an afterthought.

Now, the B2B buyer’s journey begins with the end user. They discover software products, share them with colleagues and tell their boss what to buy. Product engagement sets the tone, then buyers follow users. You need to think deeply about the needs and experiences of the people who will actually use your products, not just those who will sign the order form.

Build to discover

Software companies used to throw away money and bodies to get noticed by big business executives. High customer acquisition costs weren’t an issue as long as you could maintain healthy revenue growth. Now potential buyers feel bombarded by the constant barrage and want to opt out (more and more are even using tools like Gated to mute unwanted emails).