Bundling Strategy by Growth Motion
When to bundle products and when a single-product land wins
- Difficulty
- Moderate
- Time to result
- ~months to results
- Steps
- 4
- Confidence
- 90%
Dietrich separates bundling into two questions: is it a good growth strategy, and how do you compete against a bundling giant. Her key distinction is that bundling slows product-led growth land motions but works well for sales-led motions, and against an all-in-one competitor the only defense is being markedly better. The mechanism is that evaluating multiple products stalls fast self-service purchases.
Origin
Carilu Dietrich's experiments at Atlassian with bundled lands (Jira, Confluence, Hipchat, Bitbucket) and observations of Slack vs Microsoft Teams.
Core principles
- 01Multi-product diversification is needed to expand your total addressable market toward a billion dollars
- 02Bundling is not a great land strategy for product-led growth because it slows the fast single-product motion
- 03In economic squeezes, buyers shift from best-of-breed toward cheaper all-in-one bundles
- 04Against a powerful all-in-one competitor, the only way to win is to be markedly, worth-the-extra-money better
How to run it
- 1
Match bundling to your growth motion
Use bundling for sales-led motions where it's effective, but land with a single high-velocity product in product-led growth.
Pro tip Atlassian went back to single-product land after bundles slowed the PLG motion.
Watch out Requiring buyers to evaluate multiple products (do I need all three? are they each best-of-breed?) stretches the decision from ~7 days to longer and cuts conversions.
- 2
Expand to multi-product deliberately
Move from single-product to multi-product to diversify the financial model, sell into a friendly existing base, and expand your addressable market.
- 3
Defend against an all-in-one by being clearly better
When a giant can bundle your category for free, recognize best-of-breed only wins when customers believe it's markedly better and worth paying extra.
Watch out When CFOs put on the squeeze and the all-in-one is free with other purchases, a marginally-better product loses; you must be so much better it justifies the cost.
- 4
Test everything with data
Run experiments on bundles vs no bundles and different bundle contents rather than trusting intuition or pundits.
Pro tip Data-led insights beat anything a pundit would say; the secret to PLG is whether you can test it.
In the wild
Atlassian experimented with bundled lands like Jira plus Confluence plus Hipchat, but found that forcing buyers to evaluate multiple products slowed the self-service purchase, so they reverted to landing with a single product like Jira that a buyer could try and buy in about seven days.
→ Single-product, high-velocity land preserved conversions while bundling was reserved for later cross-sell and sales-led motions.
Common mistakes
Bundling as a land motion in PLG
Leading with a bundle forces buyers to evaluate multiple products at once, lengthening the decision and reducing conversions, which kills the fast product-led land.
Competing on marginal superiority against an all-in-one
When a competitor bundles your category for free, being only slightly better loses to price; you must be dramatically better to justify the extra spend.
Is it for you?
Best for
A founder or product leader deciding whether to bundle products or facing a bundling incumbent
Not ideal for
Very early single-product companies still finding product-market fit, for whom multi-product bundling is premature
From the transcript
“I believe in bundling as a growth strategy specifically for product-led growth companies bundling is not a great land strategy”
“bundling for a sales lead motion is pretty effective when you're at the right stage of growth”
“the only way to win is to be the best and I have a product that's so much better that it's worth the extra money”
“data-led insights are better than anything any pundit would say on a podcast”
From the episode
How to achieve hypergrowth in your business and career
Carilu Dietrich (Atlassian, Miro, Segment, 1Password)