Product-led growth is one of the most effective ways for startups to grow, especially for companies with little to no marketing budget. This type of growth focuses on building a product that sells itself by solving users' problems and exceeding their expectations. In this article, I will discuss how you can start applying product-led growth in your startup.

Definition of PLG

Product-led growth (PLG) is a go-to-market strategy that provides access to your product right out of the gate, allowing users to experience value early on and decide if they want to stick around. In practice, this means that you have an active free trial or freemium model in place, allowing users to get a feel for your offering before making a commitment.

This approach has been key for many notable SaaS companies like Slack, Zoom, and Dropbox who have adopted PLG as their primary method of acquiring new customers. Based on these examples (and many others), it's clear that PLG can be extremely beneficial for your business.

When to consider PLG?

You should consider implementing PLG if:

  • You have a product that customers love. This is the most important thing - you need to ensure that your product is valuable before you move on to iterate on how you're getting new users.
  • You've built a product that is easy to use. No one wants to sign up for and use a complex app, so make sure yours is as intuitive and user-friendly as possible.
  • Your product is a freemium product. PLG is best suited for businesses that allow customers to try their products for free (e.g., Dropbox, Slack). Free trials are an effective way of enabling users to get hooked on your products without paying anything upfront and so help with customer acquisition
  • You have a product that has a low friction trial. If there's too much manual work in order for someone to try out your solution, then they're probably not going to do it even if they really want to give it a shot!

What product-led growth is not?

Product-led growth is not a silver bullet for your business. It’s not a buzzword, it’s not something you can just buy or adopt overnight.

If you think someone is selling it to you, they're wrong. If you think people in your department are doing it and you’re just supposed to follow along, run away as fast as possible.

Product-led growth isn't:

  • Somebody else telling you to do it (you can read about it online)
  • A marketing tactic (it's an organizational approach)
  • A product development strategy (we'll talk more about this next week)
  • A way to get you to buy things (it's a way for customers to find value in free products organically)
  • A way to get other people to buy things (it works hand-in-hand with freemium models, but if someone promises that product-led growth will help them sell more paid plans than free ones, they don't understand the concept)
  • A way to get rich quick

How to build a product-led company?

The beauty of PLG is the fact that it is fundamentally different from what most companies do. If you want to build a product-led company, you need to build a product that makes sense and solves real problems. That’s why your first step is to clearly define the problem you want your product to solve and then set ambitious goals for yourself.

When setting goals, remember not to worry about what others are doing or aiming for (unless they belong on this list). You're not competing with them, so focus on yourself and your own ambitions. Be ambitious but also realistic—if you need any help finding the perfect balance between these two things, let me know.

A classic example: if you're going through a fitness program and don't have any experience in it, set some tangible goals for yourself within three-to-six months. Maybe start out by getting a gym membership or buying some exercise equipment so that after three months, when those new muscles make your current wardrobe look silly, you'll have a good reason to go shopping!

How to prepare for the product-led transition?

The first step is to identify whether or not your product is suitable for the Product-Led strategy. You can ask yourself these questions:

  • Is your product inherently powerful and valuable to customers?
  • Is your product simple to use?
  • Can you leverage it as a sales and marketing tool?

If the answer to all of these questions is yes, then you have a good fit for a Product-Led Growth strategy.

The next step will be to understand the customer needs, how they are using the product and what their journey looks like. Understanding this will help you identify growth levers in your product that can help you drive up adoption, usage and expand revenue opportunities.

Future of product-led growth model

The future of the product-led growth model looks promising, as more and more companies are adopting this strategy to grow their businesses. The rise in sales of SaaS products is one of the biggest reasons why marketers are shifting towards this model.

It’s important to note that a PLG growth model isn’t limited to just SaaS companies; it can be used across industries with more than adequate results. For instance, Starbucks uses a freemium business model where customers get access to free Wi-Fi with the purchase of a drink or food item.