Head of Growth at Lovable | The Collapse of Pre-Ai Distribution Moats, and How to Build New Ones

Hi everyone, my name is Elena Berna and

today I'm here in front of you talking

about the collapse of preAI distribution

modes and how to build new ones. Let me

do a quick introduction on myself. As I

said, my name is Elena Vera. Welcome

everybody to Product Con. I'm very

excited to be here. I currently lead

growth at Lovable. Uh you may have heard

this of this company. uh we help

customers uh build their apps, B2B apps,

P2C apps, e-commerce apps, uh websites

all by chatting with AI. I've also uh

previously worked for companies like

Survey Monkey, Miro, Dropbox, um

Amplitude and I've advised many many

other businesses by superpowers really

to identify patterns and frameworks in

the market and uh help all of you

understand uh some of the macro elements

that are happening uh in our industry.

so we can all make a lot less mistakes

and grow our companies a lot faster. So

today, as I said, I'm going to be

talking about the changes that AI has

brought to growth and what every single

one of you should be doing about it with

your products. But first of all, growth.

What is it? There's so many things that

are flying around it. Is it a growth

mindset? Is a growth model? Is it uh

just everybody's supposed to be

responsible for growth. So let me break

it down of the evolution of what growth

has been and where are we today and what

growth really means for every single

team out there. So what does it mean?

Well, first of all, I'd like to break it

down into two elements. There is product

and then there's distribution.

Having a great product is not enough.

You can build a most incredible product

out there, but there's many incredible

products out there that have never seen

a light of day and have never been able

to gain a really good traction in

customers, which means that having a

great product does not equal a great

company. So, we're going to go back to

this. The product plus distribution is

what actually creates a great company.

And distribution is where growth is all

about. So, how is it that we acquire

customers? How is it that we activate

them? How do we monetize them? And how

do we retain them? Those four questions

are crucial in our ability to understand

how is it that we're going to take that

product not only to market but grow it

to be a successful scaling business. And

fastest growing companies have all have

one thing in common and that is they

grow via growth loops. a closed

ecosystem that continues to compound

itself like a flywheel meaning you have

an input through interaction and

generation uh in the product you produce

an output that then contributes to a new

input. So instead of having dreaded

funnel, I call them f-words that we

should not be using that have a really

big top of the funnel mouth and then

there's something like a revenue comes

out at the very bottom and it's

constantly linear uh leaky buckets that

is going on in your growth ecosystem.

Loops help you continuously generate

output out of the input that is uh

rooted into the system. So input action

step output generates another input. Let

me put it in practice for you. I've

worked at Dropbox. Uh Dropbox, I'm sure

all of you are familiar about. It's a

cloud storage platform and they have the

most incredible loop that has powered

their growth for a very long time, which

is they have a new user coming in. They

share well, they upload content into

Dropbox. They share that content with

some of the recipients uh who they need

to um distribute this content to. Some

of those reshar sharing recipients, they

receive it via link, they receive it via

email. Those are just the channels of

distribution. and then they click

through it and a lot of them become new

users for Dropbox. So this means that

every single new user that will sign up

for Dropbox will bring additional new

users through activation and engagement

you part of the product journey. The

same thing can be applied to lovable

where I'm uh hiding ahead of growth

right now which is we have a word of

mouth loop that is very strong where we

have a user coming in and they do

something in the product they build an

app uh or they materialize the idea into

something actionable and they so

delighted by it their expectations are

so blown away that they go and they

share it with their network whether that

happens in from private groups across

Slack channels whether it happens face

to face or whether it happens on social

media then that drives additional input

into top of the funnel for us. The main

thing here is that the sustainable

system that continues growing over and

over again. These growth loops is what

really started driving a lot more

awareness around productled growth

because then instead of just relying on

marketing or your sales team to drive

your top of the funnel and to be

responsible for the revenue a lot more

pressure has started being put on the

product itself and B2B teams were like

why what is happening B2B teams or

products that are built for businesses

to be consumed by other businesses have

never really operated that way. They've

always operated via sales and marketing

holding majority of the revenue goals.

But what started happening is that

there's multiple changes that started

happening in the category that drove a

lot of these B2B businesses to rethink

about how is it that they actually going

to be growing. More changes specifically

that happened in the market is number

one a user in B2B products became a

buyer. Now we always had IT, CISO,

security, CMOs, chief level people

making decisions on what products the

company is going to use. However, a lot

of those products did not fulfill

expectations that employees actually

needed to perform jobs to be done within

them, which caused those employees to go

and start finding other products. Not

only finding them, but also buying them.

And once you started buying them, user

and buyer persona started to actually

blur. And that was the first time this

has started to happen in B2B about 10

years maybe even 15 years ago which

really started driving a wave of self-s

served B2B products and really

consumerization of the B2B software.

Second of all is channel of life cycle

channel life cycle. Now marketing teams

notoriously always drove top of the

funnel. Who's responsible for

acquisition? It's marketing team.

However, it is tough to be in marketing

out there right now. The channel life

cycle of what I'm referring to is

shortening. Meaning if you put in a

campaign out there 20 years ago, that

campaign could have lived months, maybe

even years continuously producing for

your company. However, nowadays campaign

is lucky if it survives a day, two days,

three days. If you have it live for a

week and it's still functioning, good

for you. Now that puts enormous pressure

on marketing teams that is just not able

to put out so many campaigns in order to

drive top of the funnel. The pressure of

acquisition and engagement needs to

start be diversified across other teams

and marketing cannot bear the entire

weight of the pressure of it. The third

change that started happening is data

availability. So every single action

that we have happening in the product is

readily available for us to look at to

analyze and to make decisions upon. This

is something new. we didn't have

analytical capabilities that we did um

right now compared to 15 20 years ago

and that really provides us to look at

the product as almost a marketing

surface that we can optimize that we can

utilize in our growth model which is

before it was more of a black box and

sales and marketing would tell us the

data of what market wants but now

product tells us so much more data than

anything else and any other department

that can contribute into painting the

picture for us and then the last one

probably one of the most important ones

too is our roles are blurry. We're no

longer marketers are just doing

marketing things. Product managers are

doing product manager things and

engineers are just coding. All of our

roles are evolving and product managers

need to be responsible for marketing

too. Marketers are doing their own

engineering tasks with no code tools or

vibe coding tools. And engineers are

starting to become more of a product

managers and being responsible for

end-to-end delivery. That really allows

the pressure of growth model not to just

sit on sales and marketing but really

sit within product as well because

product can now take responsibility and

accountability over how company is going

to acquire activate retain and monetize

their customers. But that was all fine

and dandy and in fact this was really

big for about 5 years and PLG productled

growth as something has been really big

even though that made a lot of B2B

product teams very nervous because this

is not how B2B actually used to be

built. But then at the same time our

counterparts in the consumer space were

like what's going on? We've been doing

this for years. This is nothing new.

We've never had sales and marketing be

this responsible for growth. We always

had to have product be the star of our

experience and really shine to our

customer because there's no this layer

of spelling that happens in the middle.

So consumer teams were looking at us and

the B2B folks going eh what is they're

not inventing anything new versus for

B2B it was a really big deal of going

into productled roles and putting that

accountability on to product is what I

call consumerization of B2B uh that has

really occurred over the last five

years. But then something started

changing. Now before this, before I

really go into it, product growth really

became a differentiation for a lot of

the products. So products like Mero,

Block, Figma, all of them started rising

to the top because they provided such

incredible enduser experience that even

all the way enterprise buyers started

purchasing it and PLG was a way to enter

the market and really to own the market

and it was a way to dominate the market

in many ways. But then something else

started happening and it's something big

and I'm sure that you can guess. Can

anybody guess what happened in the last

two years that started disrupting our

entire growth model ecosystem?

That's right. It was AI. KPT entered the

stage and it started really changing the

way that we both build our software but

also how we're starting to distribute

and grow our products as well. So first

of all, there's a lot of AI wars that

are going on. There's cloud versus JGPT.

All of us are on the background going

what is happening what who is winning

what is being developed there's a lot of

movements in the place at the same time

all of the companies were like hey we

need AI features otherwise we're going

to be falling behind so every single

company started to sideways look at AI

starting creating functionality that is

AI feature or AI native whatever you

want to call it AI agent uh put in AI

something in there and now started

calling themselves AI companies where

the customers really wanted it or not

because let's face it uh road maps are

not really built by what customers want

uh or innovation that we want to have.

Road maps are built sometimes by sales

requests, but most of the time by way

CEO wants to take us. Anyway, this just

a really fun meme that I created um on

how road maps are really fantastically

materialize into reality. And this is

has really caused a lot of changes in

what we offer to our customer and

technological shift that is starting to

happen at every single company because I

don't even know a single company that is

not building AI functionality nowadays.

Now, I don't know if any company can

afford not to build AI functionality

nowadays because they'll probably be

disrupted by AI native company that

does. However, there's also starting to

happen a really big distribution shift

and more specifically AI is now killing

a lot of distribution channels. Let me

give you an example. The marketing and

just growth playbook 101 has always been

you start a company, you start with SEO.

Google has always been the biggest

distributor for most of the product

because that's where people go to search

for a solution to the problem. However,

Google has been really losing a lot of

uh traffic volume due to chat GPT and

other AI uh chatting solutions. What

happens is that instead of going and

searching a bunch of the links being um

being seen a lot of paid marketing

advertisements on Google, people go to

chat GPT to answer their questions and

as such the search traffic has really

been falling. Now, companies that have

been dependent on that search traffic

really heavily have really been

suffering quite a bit. This is an

example of G2. I'm sorry G2 for picking

on you if you're in the audience. Again,

I'm really really sorry. I hope that you

recover from this, but G2 has really

benefited from search volume in the

past. And you can see right when Chad

GPT started launching here, this there

started to be a drop. Now, this is data

only through February this year. it has

gotten even worse where they've lost 80

to 90% of their traffic at least looking

at um tools such as SCM Rush and Similar

Web. I obviously don't know any inside

information out of it, but this is a

consistent story of the companies that

are purely relied on SEO or organic

search as the main driver of growth. So

now when you're starting a company or

you're planning to grow it via SEO, it's

not really such a good idea. I'm not

saying not to do SEO, by the way.

absolutely should, but can they be your

star growth channel? I'm not so sure

because the traffic is declining pretty

rapidly. And social networks are not

helping either. They're all closing down

their ecosystems. If you try to include

a link in your post on LinkedIn or X or

really anywhere else, you're getting

penalized for distribution. And now

social network is not uh giving your

post as many eyeballs as it would if you

didn't have a link. So now you have the

search Google which is used to be a huge

attribution channel that is not

contributing as well. You have social

networks that are clamping down because

they're trying to keep eyeballs on their

platform because that's how they

monetize um of how many impressions and

how much time you spent um on their on

their platform are not really good

channels for growth. So how is it that

you're going to grow? And unfortunately

Chat GPT Open AI or really any other

provider they're not right now

distribution channels. They're taking

away all of those eyeballs, but they're

not providing us an ability to use those

eyeballs to drive distribution to our

products. So, they're a destination, not

a traffic control the way that social

and and search used to be. So, we have

this really weird situation happening

right now in the market where yeah, we

have a huge technological shift

happening and then we have a

distribution collapse that is going on.

And how is it that we're going to

continuously grow our products in order

to build successful businesses? And

wait, there is more. Now, there's also

companies like Lovable in the space

where a customer of your product can go

and build functionality potentially that

exists in your product for 25 bucks a

month. So instead of paying thousands of

dollars for a solution or a platform or

something they're not utilizing, they

can go and they can create it on their

own. Now overnight seemingly companies

started to compete with their own

customers. So not only you have this

technological wave that you have to

catch distribution collapse that is

happening but you have a new competitor

not only other companies in the category

that you're competing but your own

customers that now breaking apart your

platform that you've built so hard over

the last couple of years if not decades

and starting to create that

functionality on their own. In fact

simple but formally defensible

functionality is no more. So if you're

monetizing or where your most product

market fit is visible is in signatures,

forms, landing pages, scheduling tool,

loco tools, dashboards or internal

tools. Watch out, the cost of software

development is dropping with AI. And now

everybody can create a software app. And

if there's no complexity in it or

there's no reason to use it outside of

what the functionality is now customer

can go and develop exactly what they

want on their own without having to

purchase a solution. This is the next

wave of PLG. This is not productled

growth. This is something of I my

customer build my own thing whatever I

want. I don't even need to find a great

self-s serve solution. I just build it

myself. And that before was never

possible because only one to three% of

our te of our population is technical

enough to do it before. So there was

huge gates on creating software before

and those gates are being broken down

very quickly. So all of a sudden

everybody with non-technical skills is

able to go and as long as they have a

good idea and understanding of the

problem they can go and build it

themselves. So who is at risk the most?

Well, if you think about it of a 2x two

in the product usage, there's a simple

functionality and then there's complex

functionality that you have as well as

there's low utilization and high

utilization of features that are

available in your platform. And if

you're in a simple functionality column,

whether you have a low utilization, then

I'm sorry, that's just like it's

terrible because you're not even

nobody's using it. But even if you have

high utilization of a simple

functionality, beware. You are subject

to be disrupted by your own customers.

If you have complex functionality and

low utilization, that's not good. Make

sure to drive that up. Establish the

targets and go after them. And the only

companies that are truly safe from

competing with their own customers are

complex functionality with high

utilization in that upper left quadrant.

But not a lot of us have it there

because we've all built platforms that

majority of them are being utilized by

very specific functionalities or few

features and we have big groups of

people that are using very simple things

and not the entire platform. So it feels

to them that they're paying for bloat.

Be careful with that platform narrative

nowadays because if you're overselling

customers and a lot of functionality

that you've built through blood, sweat,

and tears, I know it was hard. I know it

was a lot of work. But if the customers

are not using it, you are at risk of

being disrupted by your own customer

base because they can take that simple

functionality that they're using which

you probably was your initial product

market fit on and then they can go in

and build it themselves. In fact, it's

already starting to happen. I'm going to

call out Docuign here just because this

is a very interesting twist and

something that I think is going to

happen more and more often where a

customer builds a docuign copycat in

under two days. unlovable where docuign

started threatening illegal action

against the own customer saying that

they copy copycat app um and they

threaten uh to sue them because they

don't like uh what is actually happening

because they're being disrupted from

below. So be careful on this. Look at

your feature usage. Look at the

complexity of those features being uh

developed on companies like lovable. I

would actually urge you each one of you

to go to Lovable and see if you can

replicate your own product in Lovable

and how easy it is. And if it's easy, I

think that you need to have a hard look

at your strategy and hard look at your

utilization numbers and that your

overall product portfolio and how is it

that you're going to be monetizing and

driving usage off of that. So, what is

it that where is it that I'm going? PLG

has been great. CLG has been a really

big wave that's sweeped over us. AI is

coming in. It's changing our

technological underlining of every

single product and we're all busy

incorporating AI into uh how our

products function. Our distribution

channels are collapsing around us and

our customers are becoming our own

competitors which puts a lot more

pressure in the already existing

pressure cooker of how is it that you

succeed as a company which is what my

next couple of minutes what I want to

spend time on. Platform shift is

everywhere. platform shift is going to

continue happening uh over the next

couple of years. Every single company

probably is going to materialize into AI

native company. It's just going to be at

different velocities in different

categories. Distribution shift is

coming. We right now don't have an

option of what is that next wave of

distribution. Maybe open AI is going to

go into it. Right now they're not. Right

now they're still building the moat and

right now they're still sucking all of

us in. they're not providing an outlet

for distribution. Maybe they will, maybe

they won't. If they will, be on the

lookout because you're going to need to

be there. There's going to be a first

mover advantage into it and you're going

to need to move fast. So, we're right

now in the holding pattern of

distribution shift to see what else is

going to happen. But that holding

pattern does not mean in action. In

fact, here's the couple of things that I

really urge you to think about it at

your company, in your next leadership

meeting, in your next team meeting in

order to really solidify your growth

framework and understand how is it that

you're going to survive through this

technological and distribution shift um

in the market. Right now, it's all about

finding a moat. What do I mean by moat?

mode is something that is competitively

defensible, that is very hard to

replicate, and that is something that

differentiates you from just being a

tool. A tool that is very easy to

replicate, a tool that is very easy to

build, and something that gives you an

advantage that's usually maybe is a

product. It often has actually nothing

to do with product, but something that

product integrates or or interacts with.

So, let's talk about some of those

modes. Option number one for a moat is

velocity of development. This is

absolutely a new mode that can be

unlocked with what I call AI native

employees. I firsthand seeing AI native

employees at lovable. And that's

something that I've never experienced

before. It's some people that are not

just looking and seeing, oh, these AI

tools can augment me and help me. They

default to AI tools as the way of doing

work. from engineering writing most of

their code in AI to all of the product

specs that are created to start with

with AI to designs to project plans to

anything and everything. Everybody in

lovable can finish the project from

start to end uh without having any cross

functional dependencies because of how

AI tooling is being utilized. That

creates incredible velocity where we

able to ship huge things every single

week if not every single couple of days.

And something that I really urge you to

look into is whether you can accelerate

your shipping velocity by creating more

AI nativeness in your organization to

create increase of productivity. The

second option is your brand. I'm the PLG

growth person. Um, and all of a sudden

I'm talking about brand. Let me tell you

this. Five years ago, if you told me

that I say that brand is your moat, I

would have laughed at you. However, I'm

seeing this firsthand also at lovable of

how much brand can actually be your moat

right now in the sea of competitiveness

pressure. So, your brand is not just

your voice or your tone or your colors

or your name. Your brand is really every

single piece of interaction that happens

in your products that delights that

creates a love mark on the customer that

creates an experience that they want to

talk about that creates that word of

mouth loop. So tools and our products

can no longer be utilitarian. They have

to invoke an emotion in customer. That

means that you have to look through

every single experience and say is it

delightful? Is it interesting? Does it

exceed expectations? And you cannot ship

if it's not because this can be your

differentiator across just something

that is cold that is just functional

versus something that creates a

relationship almost with me or I feel

drawn to or I feel that it's an easier

and more delightful way of doing things.

That can be your differentiation and

that can be a difference between you're

making it or not making it across the

same exact tool or same exact product

that does exactly the same thing. So

invest into your brand but not just

marketing. This is not a marketing

exercise. This is very much a product

and marketing exercise that should be

driven. In fact, I actually think brand

is becoming more of a product exercise

than marketing overall. The next one is

data. data has always been a big mo user

data and memory is sticking. So can you

leverage it to not only build a better

product because you have an advantage of

access to that data but also can you

keep it as an ecosystem play. Now

there's uh various ways of how you can

leverage this as a melt. Um some

companies go all the way and close data

ecosystem to give them an advantage.

example of this uh Salesforce who

acquired Slack um couple of years ago

has now locked down Slack data for

access to companies like Glean that are

trying to do internal enterprise search.

So they're basically saying, "Hey, we

have all of the data of all of the

conversations that our people are having

on Slack." And instead of giving it via

APIs for other companies to build other

products on, they're keeping it close to

their heart and they're saying, "No,

you're not going to get that data. That

is our competitive advantage and you'll

get no access to it." Now, this is an

extreme of closing down your moat for

anybody else to access, but this is a

lever that you can pull in order to

create differentiation for yourself and

create competitive advantage to

yourself. I can say I recommend going

all the way nuclear this way. Uh, but it

is on the range of options that is

available to you. So take a hard look at

your data because that might be a reason

that you might win in this uh space

right now but you need to make sure that

you're leveraging it accurately and you

looking at it from a very strategic

perspective. And then the option that I

want to talk about which is an ecosystem

play. Ecosystem play is uh something

that is fairly uh popularized over the

last couple of years too. This is why we

all build platforms right? um every

single product went from a tool to a

platform over the last five years

because we wanted to build ecosystems,

we wanted to build marketplaces, we

wanted to build integrations, continue

investing into it. It's really hard to

replicate those functionalities and ease

of integration uh with tools say that

are built on lovable. Now they will get

there but there is a first mover

advantage here and I highly recommend

you to really harden your advantage and

harden your mode by investing into

integration strategy because if you are

just a completely standalone product

with no data hook with no brand with no

velocity and shipping it's really hard

for a user to leave to somewhere else.

However, if you have all of these

additional hooks into the market around

you, then product yes product you the

functionality of the product is still

important obviously but there is more

reasons to stay which is to my whole

point is that you need to give user more

reasons to stay than just product where

PLG era was all about just how amazing a

functionality that the product can

deliver. Now the era is you need to give

more because now the functionality can

be very easily built by any of your

customers and second of all everybody

can get into that functionality and

compete it with you. So you need to

think about that mode something around

the product where product hooks into it

to provide a competitive advantage to

you and to your company but product is

not the only reason as to why you

succeed. And last piece is remember the

first mover's advantage is real. You

cannot spend a bunch of time in the room

discussing it and prioritizing it for Q4

or next year. This is the type of the

situation that I think that as our Q3 is

knocking on our doors, we should be

prioritizing it now. We should be moving

into it now. We should be re-evaluating

every single engagement and uh and

really the roadmap item that we have

currently and seeing whether that it's

important for us to build a moat because

if you don't have a line item in your

strategy to build a moat against

existing distribution collapse and

technological platform shift that is

happening in the space I would be very

worried for your future in six months

and 12 months because our space is

changing so rapidly and you need to be

on top of it. Distribution is

everything. If you can just take the one

thing away from here, tooling and

software development is becoming

democratized. So you need to build a

growth model that is defensible, that is

sustainable, and that is predictable.

And one way to go into it is to build a

mo around your product. Thank you very

much for your time. Hopefully this was

interesting to some of you. And please

hit me up for any questions on LinkedIn.