Head of Growth at Lovable | Why Growth Playbooks Are Crumbling—and What’s Next

The traditional approach to product distribution, relying on funnels, is becoming obsolete. Instead, companies should focus on "loops," which act as compounding flywheels for growth. These loops, whether driven by product, marketing, or sales, are crucial for building predictable and sustainable businesses. The speaker highlights examples like Dropbox's viral storage-for-storage loop and Lovable's word-of-mouth loop powered by exceptional customer experiences.

The landscape of product-led growth (PLG) has been significantly reshaped by four key market shifts: users becoming buyers in B2B, the declining effectiveness of traditional marketing and sales channels due to short attention spans, the increasing availability of product data enabling better user experiences, and the blurring of roles across product, marketing, and analytics. While PLG was once hyped, its principles are now more relevant than ever, especially with the advent of AI.

The rise of AI, particularly generative AI, has disrupted traditional distribution channels like SEO and social media algorithms. Companies are now facing new challenges, including the commoditization of simple functionalities due to no-code/low-code platforms, increased operational costs from AI, and the need to re-evaluate their distribution strategies. Emerging strategies include leveraging AI-driven velocity, robust data utilization, building a strong brand as a product exercise, expanding through ecosystem integrations, embracing founder/employee social presence, and engaging with the creator economy. Ultimately, distribution remains paramount for building successful companies, and product loops are a key mechanism to achieve this

• Traditional distribution funnels are less effective; focus on growth loops as compounding flywheels.
• PLG emerged due to shifts: users as buyers, channel lifecycle changes, data availability, and role blurring.
• AI has disrupted traditional channels like SEO and social media, reducing acquisition by 80-90% for some.
• Simple, commoditized functionalities are no longer defensible; focus on complex, high-utilization features.
• New distribution strategies include AI velocity, data moats, brand as a product exercise, ecosystem integrations, founder socials, and the creator econom

The Collapse of Traditional Distribution and the Rise of Loops [00:18]

• Product managers often overlook distribution, which is a critical mistake.
• A great product alone is insufficient for success; effective distribution baked into the product is essential.
• Companies can have amazing products that fail due to poor distribution, while some terrible products thrive due to strong distribution, often holding monopolies.
• Distribution is defined by four key questions: How to acquire, activate, monetize, and retain customers.
• The ability to answer these questions in a predictable, sustainable, and defensible way differentiates successful companies.
• Fastest-growing companies do not grow via funnels but via compounding flywheels known as "loops."
• A loop involves an input (e.g., a new user), an action/step, and an output that can be reinvested as another input.
• Loops can exist in marketing, sales, and product, each with different spans and impacts.
• The goal is to build product loops for acquisition and retention, with monetization fueling these loops.

"Not f word funnels but loops. Loops is where it's all at."

Dropbox and Lovable: Examples of Effective Loops [04:15]

• Dropbox initially used a viral loop: "give storage to get storage," which fueled its growth to its first billion dollars with minimal marketing spend.
• Currently, 60% of Dropbox's acquisition is powered by a product loop where users upload and share content, leading recipients to sign up.
• This loop empowers users to act as marketers, originating from product experiences, not marketing or sales teams.
• Lovable, a 10-month-old company, relies heavily on a word-of-mouth loop as a starting point for growth.
• This loop is initiated when the product exceeds user expectations, creating a "magical" first-generation experience that compels users to share.
• The loop is sustained by providing lovable customer experiences, particularly focusing on activation and the first two minutes of user interaction.

"The gift that just keeps on giving. And it's all done just by providing lovable experiences to customers."

The Four Shifts Fueling Product-Led Growth (PLG) [06:27]

• Product-led growth (PLG) became a significant trend due to four fundamental shifts in the market.
• Shift 1: Users in B2B Products Became Buyers: Previously, enterprise buyers dictated B2B product adoption. However, end-users, frustrated with inadequate tools, began seeking and adopting their own "prosumer"-like solutions, leading to the rise of self-serve B2B products.
• Shift 2: Channel Lifecycle: Traditional marketing and sales channels are no longer sufficient. Campaigns become irrelevant within a week due to crowded markets and short consumer attention spans, making constant content creation unsustainable.
• Shift 3: Data Availability: Product managers now have access to data dashboards, allowing them to understand product performance directly, rather than relying solely on sales feedback, and to improve user experiences.
• Shift 4: Roles are Blurring: The lines between product management, marketing, and analytics are increasingly indistinct. Professionals are expected to possess skills across these domains, leading to greater agency and autonomy, but also increased responsibility for monetization and acquisition outcomes.
• Consumer products were already operating with these principles, while B2B traditional enterprises are adapting to this "new" way of operating.

"The better you have alignment internally against it, the more straightforward your growth is going to be."

The AI Disruption and Its Impact on Distribution Channels [10:11]

• The emergence of AI, exemplified by ChatGPT and OpenAI, has created significant disruption.
• Many companies have rushed to incorporate "AI features" into their roadmaps without direct customer requests, sometimes as a superficial rebranding strategy.
• AI is fundamentally altering distribution channels, particularly impacting SEO. Companies heavily reliant on search engine optimization are struggling as consumer habits shift.
• Users are now turning to conversational AI like ChatGPT for answers instead of traditional search engines like Google, drastically reducing organic search traffic.
• G2, a B2B review company, experienced an 80-90% reduction in acquisition after the advent of ChatGPT, as their primary growth driver, SEO, became less effective.
• Social media platforms are also becoming less effective distribution channels. Algorithms change frequently, and platforms are "clamping down" to optimize for user retention, limiting external traffic and impressions.
• This makes search and social media increasingly difficult for companies to drive traffic through.

"Are you still going to Google search to find things? No, you're going to chat GPT or cloud or whatever you are because conversational AI is so much better to answer your questions than doing search and like spending a bunch of time looking at the links."

The Rise of Commoditization and the Need for New Moats [13:15]

• There's a trend of customers building their own tools or "SAS replacements" on platforms like Lovable, particularly for simple functionalities, due to the ease of low-code/no-code development.
• This means companies risk competing against their own customers if their core functionalities are easily replicable.
• Simple, formerly defensible functionalities like signatures, forms, scheduling tools, and internal dashboards are becoming commoditized.
• The "commoditization bar" is rising, meaning companies monetizing on basic features need to pivot.
• A 2x2 matrix analyzing functionality complexity vs. utilization reveals different strategic positions:
  • Complex + High Utilization: Safe zone.
  • Complex + Low Utilization: Needs increased utilization.
  • Simple + High Utilization: Requires a strategic shift.
• Companies like DocuSign have resorted to legal action against users replicating their e-signature functionality, indicating a struggle to defend their market position.

"If it's easy, I'd freak out. If it's hard and you can't enable to do it, you're a little bit more in a safer zone because otherwise if it's easy, you all of a sudden overnight are going to start competing not against other companies but against your own customers that are leaving you and building their own replacements for you."

Building New Distribution Channels in the AI Era [16:03]

• Despite platform shifts towards AI and distribution channel shifts (dying search volume, clamped-down social networks), growth is still possible.
• Relying solely on SEO and SEM is no longer sufficient; product managers must take responsibility for growth.
• Product loops remain critical, and the product itself should be viewed as a marketing channel, enabling users to become marketing agents.
• Freemium models are still relevant for capturing attention and reducing entry friction, but AI makes them more costly, impacting margin profiles.
• Product cost, especially freemium usage, should be viewed as a marketing budget.
• Velocity can become a moat, accelerated by AI. Empowering "AI-native" employees with agency and trust allows for rapid, end-to-end project completion. Lovable ships updates daily, even hourly.
• Data is a sticky moat and distribution channel. User data in memory can be defensible and aid retention, but should not be used to hold customers hostage. Salesforce's decision to cut off Slack data access highlights its strategic value.
• Brand is increasingly a product exercise, not just a marketing function. Lovable's brand is felt through product interactions, where "unlovable" experiences trigger immediate fixes. Human connection drives adoption when software is commoditized.
• Ecosystem integrations and partnerships allow access to existing distribution channels. First-mover advantage is key, as seen with OpenAI's new app store, which may represent a future distribution shift.
• Founder/employee socials humanize the company and build organic reach. CEO social media presence can achieve millions of impressions organically, as demonstrated by Lovable's CEO. Building in public is a powerful growth strategy.
• The creator economy is a viable B2B strategy, leveraging influencers on platforms like YouTube, TikTok, and Instagram to reach potential customers.

"Make sure that you invest into baking distribution and baking those growth product loops into your product experiences."

The Future of Distribution: Product, Brand, and Community [26:04]

• The product itself should be the primary focus of distribution efforts, as it's the most defensible channel.
• Successful companies are built on great product plus distribution.
• The commoditization of software building means companies will increasingly compete on factors beyond mere utility, focusing on emotional connection and brand resonance.
• Distribution is what builds equity and makes a business valuable.

"Remember distribution is everything. That's what builds that successful company. That's what makes that equity that you own in that business worth something. Not just great product. It's not enough. It's great product plus distribution."