9 Hard Truths about Product-Led Growth You Should Know

Product-led Growth is Everywhere

Product-Led Growth (PLG) is a hot topic–everyone talks about it. As I was scrolling through my LinkedIn and Substack feed recently, I realized just how much of a buzzword it has become. It often sounds like PLG is a silver bullet; people sign up for your product for free, they onboard themselves, they breeze through their "aha!" moments like they were born to do nothing else, and suddenly, you're the next Slack or Notion. But if you've worked at a startup that transitioned to PLG, you'll know there's much more to it than that. There's no magic in PLG – just as little as there's magic in AI – it's hard work and there are tons of misconceptions that we need to clear up.

Below, I'm sharing 9 insights I learned while pivoting from sales-led to PLG, that might surprise you.

1. PLG Doesn't Mean "No Sales"

Let's kick things off with the biggest elephant in the room: PLG = pure self-serve, full stop. Is it though? Companies like Notion, Slack, and HubSpot may start out with a self-serve approach; you sign up, get to initial value, and start using their products on your own. But sooner or later, they will strategically bring their sales team into the conversation to try and team up with you to masterfully craft an enterprise deal. How, you ask? They look for product-qualified leads (PQLs). PQLs are users who have already found value in the product and are ready to upgrade or make a purchase. In other words, the product does the heavy lifting first, but humans step in at the right time to partner with PQLs and seal the–often much larger–deal.

If you're thinking PLG is hands-off, think again. It just reorders when and where your sales team comes into play.

2. Your Product ≠ Your Growth Strategy

We can all agree that having an amazing product is key and makes life a lot easier, but it's no guaranteed growth engine out-of-the-box. You need to carefully craft growth loops into the product and user journey that pull new users in and keep them on track to achieving value throughout their time with your product. Here are some examples:

• Viral loops:
  Loom's video sharing is a great way to convey your message in an empathetic way. But you know what else it's good at? Spreading the product on its own. Loom is a perfect example of a product that practically sells itself. People see a Loom video, they like it, and they get inspired. Loom's "Sign Up" button then becomes too tempting to resist...and just like that, a new user is added!
• Engagement loops:
  Some tools make it impossible not to invite your colleagues. Take Notion: one person signs up, takes their first notes, and creates a to-do. They quickly realize that working alone isn't as productive, so they invite their teammates. The more the team collaborates, the more valuable Notion brings to the table. Before you know it, they've built a Notion database that helps manage an entire factory – one user turned into a large team, and Notion's taking flight.
• Referral loops:
  Coinbase uses a referral program program to drive growth and adoption. When a user shares their personal referral link with a friend, both the new and existing user receive $10 in Bitcoin after the new user completes their first $100 trade. This creates a win-win situation; users are motivated to share their Coinbase link, new users get a head start and Coinbase is naturally accelerating user adoption and growth.
• Community effects:
  One of my favorites is the type of product that becomes more valuable as its community grows. Framer exemplifies this perfectly. Without a community, Framer was already a great website-building tool for designers. But once they launched the Framer Community, designers began contributing templates, remixes, and support. In Framer's case, the community did so much more than just support fellow users. Whether it was planned or not, all those remix links and design templates paved the way for non-designers to feel confident enough to adopt Framer. (Trust me, with a remix link, even a CS person can feel like a master designer!) And one website at a time one, they're eating into the incumbents' market share.

Takeaway: Just building an amazing product won't cut it. You need to design for growth on purpose. Expecting users will naturally spread the word is just wishful thinking.

3. PLG Is More Expensive Than You Think

Another stubborn myth floating around is that PLG is by definition a money-saver–"No marketing, no sales, we're golden!" This is, to be frank, complete bogus. Actually, companies that have a successful PLG strategy often reallocate costs and investments rather than eliminating them. So, where do these costs go?

• Higher R&D expenses: Your product has to do the heavy lifting in onboarding and converting. This means that there's no hiding a poor UI or lacking onboarding experience behind the smile and honest blue eyes of a CSM anymore. It requires a lot more design, development, love, and care.
• More data and analytics: Understanding how your customers use your product, where they get stuck or which features they adopt or skip is key to identify and improve points in the journey where users are likely to convert. You need some great analytics tools and a team that can interpret the numbers. Here, you often see that when you're pivoting from sales-led to product-led, CSMs become data wizards until you have the resources to hire full-on data scientists.
• Increased support and success: Users might be self-serving, but they still need guidance, troubleshooting, and self-serve training and education resources. Someone needs to understand what users need, and someone will have to develop all these resources. Researching and coming up with creative ideas for guides and tutorials costs time and effort. One thing is for certain, if you were camera-shy before pivoting to PLG, this gets fixed very quickly–Loom will be your best friend.

So while you might not be spending as much on traditional marketing and sales, you'll funnel those resources into other areas that support and make a PLG motion successful.

4. Monetization Shouldn't Happen Too Early

I get it–when you've built a product and people start using it and give you positive feedback, you want to make money and can't wait to throw up a paywall. But the most successful PLG companies focus on user adoption and activation first and monetization second. Research from OpenView shows that freemium products often take 18+ months before meaningful revenue kicks in. If you put up paywalls too soon, you might slow down growth by blocking that essential word-of-mouth and user excitement. And yes, it depends heavily on your product, but from experience, I can say that letting users experience the full scope of your product and reach actual value before they hit a paywall can work wonders. So, don't go Dutch and have a bit of patience–value first, monetization second.

Pro tip: Patience in freemium can pay off big time. Let users get hooked on your product's value first before you try to convert them. Once there's a feeling of "no way back"–which is much easier to achieve with freemium vs. trial by the way–your conversions will run a lot smoother.

5. The "Aha!" Moment Matters More Than the Onboarding Journey

Building a great onboarding journey into your product is important. It will help users get started smoothly and, ideally, put them on a path to value. However, all too often I've seen teams over-engineer their onboarding flows while losing sight of what really matters. And that is how quickly users are able to hit their first "aha!" moment and achieve first real value. A successful PLG strategy relies on reducing time-to-value (TTV) as much as possible, a slick sign-up process and onboarding flow are a means to an end, not the goal.

In practice, aim to get users to that moment of value ASAP. If they see immediate impact and can totally imagine how they can achieve such impact again and again, they'll keep coming back (and maybe for more!). When we built our onboarding flow in NEXT, we decided not to smack it onto our product as an afterthought, with tooltips and nudges with Intercom as bandaids from a cheap brand. Instead, we thoroughly analyzed what steps users had to go through in the product, cut out all unnecessary steps (left a few for good friction), and even flipped where users would land. In our case, uploading data was key to even starting the activation journey–so why would we add all kinds of screens, actions, and clutter before people land there? Just work as hard as possible with your product and design teams to make users land where they can take their first meaningful action towards value.

6. Churn Is the Biggest PLG Killer – Not Your Competitors

I often hear people obsess over competitors stealing their users or out-marketing them. But in reality, most product-led companies fail because they just can't control churn. In a sales-led model, a great sales team can put corks in the holes of a leaky bucket and mask more fundamental issues. They keep bringing in new deals that mask the bloodbath that's going on at the other end of the funnel. But in PLG, retention is king. If users aren't sticking around, you have no chance at scaling sustainably long-term, and there will be no investor who wants to write you a check.

Churn doesn't just mean losing a single user–it's a direct hit to your Customer Lifetime Value (LTV). The higher your churn, the lower your LTV, which means you either need to acquire users dirt cheap (good luck with that) or somehow make a ton of money upfront (which isn't how PLG works). And every churned user isn't just a lost subscription, they're one less person to invite a teammate, spread the word on social media, or evangelize your product. So in reality, you're not just losing one user, but a multiple of them.

Translation: Before you worry about the competition stealing your thunder, make sure you get your churn under control. No fancy marketing tactic or hiring a big sales team–even if they're all clones of Zig Ziglar–can save you if your retention figures are a disaster.

7. The Best PLG Products Have Hidden Sales Triggers

I love trying new tools and signing up for free trials–my 1Password is probably begging for mercy at this point, but that's a different problem. What gets me every time is hitting a paywall exactly when I'm just getting into a tool. Extremely annoying of course, but it's no coincidence.

These upgrade nudges are carefully designed moments in the activation journey. And when they're paired by a smart pricing model, they don't just drive conversions, they drive growth. The best PLG companies weave these triggers so well into the user experience that upgrading feels like a natural next step.

Here are a few examples:

• Loom: Record all the videos you want, but as soon as you hit viewer or time limits, upgrading starts looking really appealing.
• Dropbox: That "free" storage runs out fast, and suddenly, a paid plan feels like a no-brainer.
• Slack: Great for small teams, until your old messages start disappearing and you realize you actually needed them.

When done right, these nudges don't feel pushy. They just make sense.

8. PLG Gets More Personal as You Scale

Who doesn't like the idea that you build a product that virtually sells itself without the need for humans to get involved? A full-on self-serve PLG model sounds like a utopia to many–any who can blame them? Users simply sign up for free, try it out, see the value, and upgrade all on their own. It's fast, efficient, and scalable. But in reality, a full self-serve setup cannot work in every scenario.

In case your product is highly complex, requires technical setup before use, or handles sensitive data, you will encounter lots of hurdles that need to be overcome. Think of legal reviews, endless security assessments, and more, all of which don't get checked off automatically. You need to bring in people who can drive these processes and make it repeatable, so you can close larger deals faster. In this scenario, a PLG strategy can still work to create bottom-up traction, which can help accelerate some of these processes, but having the right people in place, like sales, legal, and CS, is unavoidable.

Just keep in mind, there are many situations where you simply cannot rely on the product to do all the work on its own–and that's totally fine!

9. PLG Can Work Even in Serious B2B Software

As we just explored, many situations require a human touch, even in companies with a great PLG strategy. And while this is true, this doesn't mean that a PLG model can't offer tremendous benefits in a B2B enterprise setting. If you manage to get enterprise users to sign up on their own and achieve value, they will become your internal champions that will create a bottom-up push, which can often help accelerate these enterprise processes. Look at Datadog, Snowflake, or HubSpot. They all offer complex and powerful software suites. Nevertheless, they let users get started on their own with free tiers, one-click signups, guided self-serve onboarding, and more. If you believe your product is "too enterprise", just think about these and you might just change your mind.

Final Thoughts

Changing your strategy into a product-led growth model is about more than slapping a free trial on your product and adding a few in-product tooltips. It's a go-to-market strategy that everyone in your company needs to be responsible for. Your product has to become your best salesperson, marketing channel, and customer ops team all at once. Done right, PLG can really help you accelerate growth. But don't think it will all come naturally. It's far from free, and sure isn't easy. Embrace the complexity, because if you do, your product can become a true growth engine.

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