Product-led growth: when the product sells itself
Product-led growth, short PLG, means the product sells itself. People try it first and pay later. There is a free plan or a trial, and no human is in the loop. The product does the converting.
Honestly, this is the motion almost every developer wants. No sales calls, no demos, just signups that turn into money. And exactly because of that it gets picked for the wrong reasons very often. So let me show you how it realy works and when you should better leave the finger from it.
How product-led growth works
PLG is self-serve, low touch, high volume. You win with how fast someone gets to value, with upgrade triggers inside the product and with loops that bring the next user in.
Nobody walks the buyer through a decision here. The buyer knows exactly what he wants, the problem hurts right now, so he signs up and solves it today. If your product can show its value fast and without somebody explaining it, then PLG can carry the selling. If not, it gets hard.
Where PLG enters the funnel
Every motion enters the funnel at a different point. PLG is bottom-up, it starts at Activation. At the top you get lots of broad and cheap signups, but the real work happens low in the funnel: activate, upgrade, loop.
Roughly it looks like this:
- ▸People find you through SEO, Reddit and content (Awareness)
- ▸A landing page gets them interested
- ▸Docs, a demo video and the free plan do the Consideration
- ▸Onboarding brings the "aha" moment, this is where PLG lives or dies
- ▸They pay with an in-app upgrade
- ▸Email and product loops keep them and bring new ones
The channels behind PLG
You win every user for almost nothing, so you need channels that are cheap and that compound over time.
- ▸SEO and content. Slow at the begining, cheap once it scales. For PLG this is the main Awareness channel.
- ▸Reddit and communities. Be useful where your users allready hang out. Trust first, links come later.
- ▸Product loops and virality, so shares, invites, collaboration. The product invites the next user by itself.
- ▸Lifecycle email to activate and keep people.
- ▸Paid ads work too, but it costs money and it stops the second you stop paying.
PLG pricing: low ARPU, a lot of volume
Your price is not something you just guess. It comes out of the motion. PLG normally sits at $10 to $50 per user per month, and a few dollars per user is already enough.
Why? Because no human touches the deal. Winning one user costs you almost nothing, so a small price works. But only when the volume is big. That means the product and the loops have to bring in the next user for free. Cheap seats only make sense with a lot of customers, there is no way around it.
When PLG does not work
PLG needs demand that is already there. It depends on people who already know they want something like this.
In a Blue Ocean, so a new or redefined market, there is simply no demand at the top. The funnel stays empty. And a product can not teach a market that does not even know it has the problem. Here you first have to create the demand with sales-led or top-down, PLG can come later when the ocean is not empty anymore.
In a Red Ocean, known market with clear competitors, PLG fits well. It catches the self-serve users who are shopping in that category right now anyway.
Can you actually pull off PLG?
From the outside PLG looks easy. It is not. Be honest with yourself here:
- ▸Is there a marketplace or a place where your users already are, so you can land in front of them?
- ▸Do you have an audience, or a real plan how to build one from zero?
- ▸Can you do SEO and content, and are you ok to grow slow while it compounds?
- ▸Does your product show its value fast, without a human explaining it?
- ▸Do you have patience? PLG is a long game, the curve comes late.
Test it before you build
PLG lives on existing demand. So find out if the pull is even there, long before you write the code.
- ▸Post the problem in the subreddit where your users hang out. When people pile in with "yes, this kills me too", the pain is real. When it stays quiet, thats also an answer.
- ▸Buy a little bit of search demand. A tiny Google Ads test on the keywords, or just open Google Trends. Nobody searches for it? Then there is no self-serve demand you can catch.